Jangada Mines plc, a natural resources company developing South America’s largest and most advanced platinum group metals (‘PGM’) project, is pleased to announce its audited annual financial results for the year ended 30 June 2018. The Company will shortly be posting the annual report & accounts to Shareholders, together with a notice convening the annual general meeting.
Overview of activities during the year, and post year end
- Independently assessed, substantial JORC resource increases across commodity basket
o 50% increase in global ore volume to 34.5 million tonnes at 1.3 g/t PGM+Au o 53% increase in PGM resource to 1.45 million ounces
o 28% increase in nickel resource to 140 million pounds
o 11% increase in copper resource to 26 million pounds
o 4% increase in cobalt resource to 6.7 million pounds
- Metallurgical test work demonstrated that the inclusion of magnetic separation could positively impact the economics of the Project
o Addition of magnetic separation increased recoveries of PGM and yielded unexpectedly high gold and chrome grades in pre-concentrate
- PEA confirmed that the Project has the potential to become a robust, low CAPEX and OPEX, shallow, open pit operation yielding attractive financial returns and a short payback period
o NPV of US$192 million, IRR of 67% and 1.6-year payback
o Potential life-of-mine of 13 years at 64,000 ounces of PGM+Au, 2.2 Mlb of nickel, 1.2Mlb of copper, 44,000 lb of cobalt and 30,000t of chrome
o Low CAPEX requirement of US$64.4 million and low OPEX of US$17.31/t of ROM
- Issuance of the Environmental Licence required for trial mining
- High-grade economic nickel and copper sulphide mineralisation identified potentially enhancing the already strong project economics
- Successfully secured a funding package of £2.1 million enabling the Company to advance the Project towards a bankable feasibility study (‘BFS’), quantifying the value of the nickel sulphide deposit, additional hydrology and metallurgy test work and exploration drilling at the vanadium project.
B K McMaster, Director, commented: The last twelve months have, again, been a particularly productive period for the Company at the Pedra Branca multi-commodity project (‘Pedra Branca’ or ‘the Project’) in the north east of Brazil. Pedra Branca is the largest and most advanced stage PGM asset in South America. It hosts a JORC (2012) compliant mineral resource estimate of 1.45 million ounces of palladium, platinum and gold, in addition to 140 million pounds of nickel, 26 million pounds of copper and 6.7 million pounds of cobalt. The Project is located 280km from Fortaleza, a major Brazilian port city.
In May 2018, we upgraded the JORC (2012) compliant resources of the Project by 50% and, in June 2018, reported the positive flotation and magnetic separation results from the metallurgy programme. We immediately proceeded with the completion of a rescoped PEA which envisages a low cost, shallow open pit operation with an estimated 64,000 ounces of PGM and gold production per annum over a life of mine of 13 years. The planned mine has the potential to deliver an internal rate of return (‘IRR’) of 76%, with a net present value (‘NPV’) of US$192 million. These strong economics summarised in the PEA clearly highlight the exceptional potential of the Project. Finally, post-period end, we completed a review and update of our process flowsheet which has resulted in an estimated 32% reduction in capital expenditure for the development of the full operation. We anticipate that the updated figure will further enhance the already strong economics of the Project.
Over the reporting period, we have concluded several work streams that have advanced the Project towards development. These include a substantial upgrade in the precious metal and base metal mineral resource estimates and positive metallurgical test work resulting in the completion of a robust Preliminary Economic Assessment (‘PEA’) of the envisaged operation.
Over US$35 million of exploration work has been completed at Pedra Branca and a review of the database has led to the discovery of nickel and copper mineralisation immediately beneath the current PGM mining envelope.
Furthermore, we received environmental authorisation for trial mining at the Project and announced the discovery of significant high-grade nickel and copper sulphide anomalies in close proximity to our current PGM resources. Finally, we secured a funding package of £2.1 million at the end of Q3 2018. This included a placing that raised £1.05 million in cash and an agreement reached with South African metallurgical consulting firm, Consulmet, for the acceptance of shares in lieu of services rendered to the value of just over £300,000. Furthermore, we secured a 12-month unsecured loan facility from Celtic Capital Pty Limited of US$1.0 million, which we have not yet drawn down. The team has delivered key value creating events, thereby establishing a strong platform as we advance the Project into the next important stage of its growth.
We have established a clear strategy to further develop the Project and unlock shareholder value over the coming months. We are now in a position to finance and deliver our work programme for the next period, which will include advancing the Project toward a BFS, quantifying the value of the nickel sulphide deposit, additional hydrology and metallurgical test work and exploration drilling at our vanadium project.
We believe Pedra Branca is truly a remarkable multi-commodity asset with strong potential to sustain a highly profitable operation.
Finally, on behalf of the Board, I say thank you to the Jangada team for their hard work and to our shareholders for their continued support.