Final Results-JANGADA MINES PLC

Final Results-JANGADA MINES PLC

Final Results

Jangada Mines plc, a natural resources development company with interests in Brazil and elsewhere, is pleased to announce its audited results for the year ended 31 December 2022. The Annual Report & Accounts will today be made available on the Company's website and posted to Shareholders, where appropriate. The Company will shortly be posting out its Notice of AGM to Shareholders and a further announcement will be made in this regard.

GROUP STRATEGIC REPORT

INTRODUCTION

Jangada was incorporated as an acquisition vehicle for the purposes of acquiring mining concerns in Brazil.

The Company has subsequently focused its strategy on investing in mining assets with clear economic, geological, and environmental objectives. At the balance sheet date, the Company acted as a holding company for its subsidiary undertaking, VTF Mineração Ltda, which owns 100% of the Pitombeiras Vanadium Project and additionally the Company held investments in ValOre Metals Corp, Fodere Titanium Limited and Blencowe Resources Limited and a loan receivable from KEFI Gold and Copper PLC, which was converted to an equity investment after the year end.

The financial statements are presented in thousands of US Dollars ($'000). The financial statements have been prepared in accordance with the requirements of applicable law and UK-adopted International Accounting Standards ('UK IAS').

REVIEW OF THE BUSINESS

Pitombeiras Vanadium Project

During the year under review, the Company maintained its 100% ownership of the Pitombeiras Vanadium Project ('Pitombeiras' or 'the Project'), located in the state of Ceará, Brazil.

Further and as announced on 21 April 2022, the Company provided an updated technical report ('Technical Report') with the inclusion of the titanium component at its 100%-owned Pitombeiras Vanadium Titano-Magnetite ('VTM') Project ('the Project') in Ceará State, Brazil. The Technical Report was prepared by Brazilian based GE21 Consultoria Mineral ('GE21') and is compliant with National Instrument 43-101 ('NI 43-101'). The Technical Report supersedes the Preliminary Economic Assessment ('PEA') published in 2021. The financial figures include the production of  vanadium pentoxide('V2O5') concentrate and titanium dioxide ('TiO2') and are summarised below:

·      US$96.5 million NPV @ 8% discount rate

·      100.3% post-tax IRR

·      US$415.2 million total gross revenue

·      US$145.9 million post-tax, undiscounted operating cash flow

·      Post-tax payback period of 13 months

·      US$18.45 million CAPEX (US$2.25 million for TiO2)

·      US$1.26 per tonne mined average operating cost

·      US$19.39 per tonne of Fe V2O5 concentrate processed average operating cost

·      US$12.48 per tonne of TiO2 processed average operating cost

Subsequent to the release of the Technical Report, the Company evaluated financing options to progress development but given the uncertainty of markets that prevailed throughout 2022, and have continued into 2023, no plans have yet been finalised.

As announced on 13 April 2023, tests were carried out regarding the extraction of high-grade TiO2 and V2O5 from  the Project.  The tests were carried out by Zambian consulting firm, YCS Sustainable Solutions Limited, utilising the proprietary technology developed by Fodere Titanium Limited, in which Jangada holds a 7.78% interest. The work is part of the Company's strategy to optimise the value of the Project by applying innovative processing technology while also improving its Environmental, Social and Governance ('ESG') credentials.

Five samples, delivered by Jangada from various locations at Pitombeiras, were crushed, homogenised, and milled. The samples were then subjected to magnetic separation. Preliminary test works concentrated the Fe2O3, TiO2 and V2O5 with all upgrading well and excellent recovery and purity rates reported, the highest recovery rates being 86.73% TiO2, 91.19% Fe2O3, and 95.88% V2O5.

The Directors note that there is an ongoing court case in respect of a land ownership dispute where the Pitombeiras project is located. The Group is not party to the lawsuit, and as such cannot be held liable from any claim arising from the case.  The disputed ownership represents approximately 25% of the land covered by the mining license granted to the Group. The Group is authorised to develop its activities where the disputed land is located and has already conducted mineral research, exploration reports and has requested an extension of the Exploration Permit period, which has been granted by the National Mining Agency (Agencia Nacional de Minería). The Directors believe there to be no material impact on the operations of the Group, or the ongoing exploration at Pitombeiras.

ValOre Metals Corp

As announced in August 2019, the Company divested its 100% interest in Pedra Branca Brasil Mineração Ltda, the entity that held the Pedra Branca Project in Brazil, to ValOre Metals Corp (TSX-V:VO).  The consideration received on the divestment was CAD$3,000,000 alongside the issue of 25,000,000 ValOre common shares to Jangada (of which 22,000,000 shares were received on completion and 3,000,000 deferred consideration shares were received over three years).

During the year, the Company sold part of the investment in ValOre to support its working capital requirements, allowing it to progress the development of Pitombeiras, including the technical reports and identification of a NI 43-101 compliant resource. At the end of the reporting year, the Company held 1,000,000 shares representing a 0.58% interest in ValOre's share capital.

Fodere Titanium Limited

As previously announced, the Company has made a strategic investment in Fodere Titanium Limited ("Fodere"), which continues to make excellent progress as it focuses on the production of titanium dioxide and vanadium from waste materials. Its highly energy efficient technology maximises resource recovery, improves processing effectiveness, reduces costs compared to regular processing routes and, minimises waste to improve environmental credentials and enhance corporate ESG performance.

Its pilot plant in South Africa is due to be operational in late 2023 targeting the production of concentrates including titanium dioxide, vanadium pentoxide along with alumina oxide and magnesium sulphate as by-products. Jeffry N. Quinn, the former head of Tronox, an international vertically integrated producer of titanium dioxide and inorganic chemicals, has joined the board of Fodere as a Director.

One of the Company's Non-Executive Directors, Nick von Schirnding, is Chairman of Fodere.

At the end of the reporting year, the Company held 1,774 shares being a 7.78% interest in Fodere's share capital.

Blencowe Resources PLC

Blencowe is advancing its Orom-Cross graphite project in Uganda where a Definitive Feasibility Study is on track to complete by the end of the year. The Project has a JORC resource of 24.5Mt @ 6.0% TCG based on drilling undertaken on less than 5% of the project area, part of which already benefits from a 21-year mining licence. The estimate of graphite is 2-3 billion tonnes.  A Pre-Feasibility Study reported a Net Present Value of US$482m based on the existing 14-year mine life and outlined capex to first production of US$62m, average EBITDA of US$100m per annum and a return of US$1.1bn in free cash over the 14-year life.  

 

Metallurgical testwork reported concentrate grades consistently ranging between 95-98%, which are battery grade.  Further testing is underway in the USA and China and international funding negotiations are on-going. During the year, the Company purchased 16,550,000 shares in Blencowe Resources PLC (LSE: BRES) ('Blencowe') and paid £652,250 (USD 789,000) at £0.04 per share and received a further 7,625,000 warrants with an exercise price of £0.08 per share and expiry date of 31 October 2025. Blencowe holds a portfolio of key battery metals projects located in northern Uganda, see blencoweresourcesplc.com. Following a period of due diligence, the directors assessed that the Blencowe assets were being substantially undervalued by the market and we considered the investment to be a short to medium-term value accretive opportunity with exposure to both the graphite and nickel sulphide markets and consistent with Jangada's strategy of being involved in the development of "battery metals".

At the end of the reporting year, the Company held 20,050,000 shares being a 10.2% interest in Blencowe's share capital.

KEFI Gold and Copper PLC

During the year, the Company advanced an unsecured loan receivable of £200,000 (USD 242,000) to KEFI Gold and Copper Plc ('KEFI') for working capital requirements. The loan receivable is short-term in nature and carries a fixed rate of interest at 25%.

Post year end, the loan has been repaid in full by way of the issue of 35,714,285 shares in KEFI, equating to a holding currently of 0.756%.

Financial Results

The progress during the financial year of advancing the Pitombeiras project resulted in the Group incurring an Operating Loss from Continuing Operations of $0.9 million (2021: profit of $0.1 million). Overall, the reported Total Comprehensive Loss attributable to the Group for the reporting year was $1.3 million (2021: $0.3 million).

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