Unaudited interim results

RNS Number : 6876H

Jubilee Metals Group PLC

26 March 2020

 

Jubilee Metals Group PLC

Registration number (4459850)

AltX share code: JBL

AIM share code: JLP

ISIN: GB0031852162

("Jubilee" or "the Company")

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR). Not for release, publication or distribution in whole or in part in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.

UNAUDITED INTERIM RESULTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

Our thoughts and best wishes go out to all during these unprecedented times.

Jubilee Metals Group ("Jubilee" or the "Company" or the "Group") , the AIM and Altx traded metals processing company   is pleased to announce its unaudited interim results of the Group for the six months ended 31 December 2019.

HIGHLIGHTS

Financial highlights

· Group earnings increased 778 % to £ 6.67 million (ZAR 115.2 million) (2018: £  0.76 million (ZAR 13.2 million))

· Cash generated from operations up 570 % to £ 4.89 million (ZAR 84.7 million) (2018: £ 0.73 million (ZAR  12.5 million))

· Revenue increased 205 % to £ 25.40 million (ZAR 439.4 million) (2018: £ 8.32 million (ZAR 143.9 million))

· Attributable group earnings  increased 146 % to £ 9.85 million (ZAR 170.4 million) (2018: £ 4.0 million (ZAR 69.9 million))

· The group balance sheet strengthened further on the back of the strong financial performance and large strategic investments, with total assets standing at £ 118.8 million, up from £ 102 million at the end of June 2019, total equity increasing by 12 % to £ 88 million, for the same period, maintaining a high 74 % equity ratio (30 June, 2019: 77 %)

· The group paid a substantial £ 17.7 million in cash for investments made during the period under review, whilst at the same time reducing external debt by £ 2.2 million, keeping the net gearing ratio at a low 0.3 %

· Backed by a strong £ 4.89 million cash generated from operating activities and proceeds of £ 6.5 million from an oversubscribed capital raise, the cash and cash equivalents stood at £ 10.2 million, with short term assets covering a healthy 166 % of short term liabilities

· Basic earnings per share for the period 0.35 pence (ZAR 6.09 cents⁽ⁱ⁾) (2018: 0.06 pence (ZAR 99 cents))

(i)  Conversion rates used for revenue and earnings are at the average conversion rate for the period and for balance sheet at the spot rate at period end. Conversion rates used for capital expenditure and acquisitions are at current spot rates

Operational and projects highlights

· PGM⁽ⁱⁱ⁾ production up 72 % to 21 082 ounces (2018: 12 288 ounces)  

· PGM revenue up 130 % to £ 16.28 million (ZAR 281.6 million) (2018: £ 7.09 million (ZAR 130.6 million))

· PGM attributable earnings up 137 % to £ 9.70 million (ZAR 167.7 million) (2018: £ 4.09 million (ZAR 75.60 million))

· Chrome revenue up 707 % to £ 9.12 million (ZAR 157.8 million) (2018: £ 1.13 million (ZAR 19.5 million))

· 186 249 tonnes (2018: 17 011 tonnes) of saleable coarse chromite concentrate produced

· Completed the acquisition of the Sable Zinc Refinery in Zambia and produced first high grade copper metal in December 2019 while also commencing with the construction of the zinc refinery circuit

· Inyoni Operations acquired 100 % of current PGM surface tailings (estimated at 3.33 million tonnes) as well as future PGM tails, further extending the project life and taking full control of all operational aspects and gaining 100 % economic rights

· Inyoni Operations also secured rights to all chrome contained in estimated 3.33 million tonnes of surface tailings and produced first chrome concentrate for own sales in November 2019

· Oversubscribed placing of £ 6.5 million to support targeted growth

(ii)  Platinum Group Metals (6E platinum, palladium, rhodium, iridium, osmium, and gold)

Leon Coetzer, CEO says: "It is a challenging time to express one's appreciation and satisfaction to a team for delivering an outstanding performance The Jubilee team has delivered yet another exceptional set of results during the period under review. We call it 'the Jubilee Way', which focusses on translating leading in-house technical excellence and innovation into industry leading operational efficiencies.

"We have made some very significant progress, including the completion of two strategic transactions, and the results as a whole, demonstrate the robustness of our business model generating significant cash flow for the Group. Despite volatile metal prices, including in particular the volatility we have seen in chrome prices, our diversity across commodities has meant we have delivered record earnings on the back of increased production.

"We have continued to invest significantly in our business having advanced in excess of £ 17 million into our future growth with the acquisition of the Zambian based Sable Zinc Refinery, which completed in August 2019, and the acquisition in November 2019 of 100 % of the PGM and chrome surface rights at our Inyoni Operations. The Sable Zinc Refinery has further enhanced the Company's operational earnings capability, expanding Jubilee's operations to other geographical areas and metals.  These strategic investments are quickly translating Group investments into cash generation.

"In addition, and to assist with the financing of these transactions, we were very grateful for the support from investors which raised £ 6.5 million in an oversubscribed placing. 

"In what has been an incredibly fast moving and evolving situation, as a group we are not immune to the current global COVID-19 pandemic. The safety of our team and employees is our highest priority at this time and we therefore applaud the pro-active decision taken by the South African government to enforce a 21-day nationwide lockdown. Whilst we are aware that the COVID-19 situation is evolving, we have a robust business model and are confident that the business will be able to withstand this disruption having, in anticipation, already taken proactive measures to minimise costs and maximise production leading up to this guidance. Furthermore, whilst work on the ground has been temporarily halted, we will continue to work remotely where possible, to progress operations and continue to advance our growth strategy.

"We would like to take this opportunity to send our thoughts and best wishes to all at this unprecedented and difficult time."

KEY STATISTICS

GROUP	Unit	6m to Dec-19	6m to Dec-18	12m to Jun-19
Revenue	£'000	25 403	8 327	23 586
Adjusted attributable earnings 1	£'000	9 849	4 040	10 055
Adjusted attributable earnings margin	%	39	49	43
EBITDA	£'000	10 269	2 419	12 546
Adjusted EBITDA 2	£'000	8 679	2 809	8 952
Adjusted EBITDA margin	%	34	34	38
PGM
PGM £ revenue	£'000	16 280	7 093	14 855
PGM $  revenue	$'000	20 516	9 290	18 866
Attributable PGM £ earnings	£'000	9 695	4 093	8 158
Attributable PGM $ earnings	$'000	12 218	5 361	10 361
Attributable PGM earnings margin	%	60	58	55
Attributable PGM ounces produced	oz	21 082	12 288	23 847
PGM $ revenue per ounce	$/oz	973	756	791
PGM attributable $ earnings per ounce	$/oz	580	436	434
Adjusted PGM production $ unit cost3	$/oz	519	422	470
CHROME
Chrome £ revenue	£'000	9 123	1 126	7 725
Chrome $ revenue4	$'000	11 497	1 475	9 811
Attributable chrome £ earnings	£'000	271	(267)	1 309
Attributable chrome $ earnings	$'000	341	(350)	1 662
Attributable chrome earnings margin	%	3	(24)	17
Attributable chrome tonnes produced	tonnes	186 249	17 011	181 947
Chrome $ revenue per tonne	$/t	62	87	54
Chrome attributable $ earnings per tonne	$/t	2	(21)	9

1= Attributable earnings refers to earnings attributable to the group based on its contractual rights in each project.

2= Adjusted EBITDA refers to EBITDA adjusted for non-cash expenses including impairments, gain on bargain purchase

and foreign exchange differences on transactions.

3= The adjusted PGM production unit cost includes all direct and indirect costs attributable to the project including allocated corporate charges. The Dec 19 period includes all operating costs for the Windsor PGM Joint Venture allocated to the Jubilee attributable PGM ounces.

4= The chrome revenue is recognised on an ex-works basis after costs of export logistics including freight, shipping and marketing.

TRANSACTIONS		6m to Dec-19	6m to Dec-18	12m to Jun-19
		£ '000	£ '000	£ '000
Acquisition of chrome plant (South Africa)
Fair value of the assets acquired				8 289
Fair value of  purchase consideration				(8 289)
Acquisition of Sable Zinc Limited (Zambia)
Fair value of the assets acquired		12 253
Fair value of the purchase consideration		(9 944)
Gain on bargain purchase		2 309
Purchase consideration outstanding at period end		2 275
Acquisition of PGM and chrome rights (Mauritius)
Fair value of the assets acquired		14 472
Fair value of the purchase consideration		(14 472)
Purchase consideration outstanding at period end 1		4 531
Total purchase consideration of acquisitions		26 726	-	8 289
Funded from external loans		(10 303)	-	-
Funded from share placings		(9 209)	-	(1 463)
Funded from own cash		(7 214)	-	(6 826)
GROUP CASH
Opening balance		18 865	6 376	6 376
Cash from operations		4 895	726	4 757
Acquisition of chrome plant (South Africa)		-	-	(6 826)
Acquisition of PGM and chrome rights (Mauritius)		(11 129)	-	-
Acquisition of Sable Zinc Limited (Zambia)		(5 295)	-	-
Purchase of intangible assets		-	(636)	(2 182)
Purchase of property plant and equipment		(1 101)	(2 379)	(4 496)
Issue of Jubilee ordinary shares		5 902	-	10 672
Net proceeds/(repayment) of loan funding		(2 154)	1 595	10 303
Other		263	86	262
Closing balance		10 247	5 768	18 865

1= Post the period under review a further payment of £ 3.3 million was made towards the PGM and chrome rights acquisition as announced on 4 November 2019. The final payment on the transaction was made on 19 March 2020. In terms of the acquisition agreement the final payment was adjusted for certain PGM and chrome variables which, resulted in a downward adjustment to the total purchase consideration of £ 2.2 million. The total foreign exchange conversion difference for the transaction amounted to a gain of £ 0.004 million. At current conversion rates the foreign exchange gain on the transaction would have been £ 0.77 million.

Chairman's Statement

Dear Shareholder,

This interim period has, again, produced exceptional results arising from maturing operations, strategic acquisitions, productivity improvements and an austere approach to our business activities.  At the time of writing this statement we, like every other company and individual, are facing the challenges of the COVID-19 pandemic.  We remain very optimistic for the long-term outlook but are mindful of short-term risk.  On 24 March 2020 we provided an update to our shareholders relating to the announcement by the South African government of a 21-day nationwide lockdown and its potential immediate impact on our operations.  The measures that have implemented by the Group are focussed on preserving the Company's liquidity and ensuring that we are able to rapidly restart operations following the enforced stoppage.  At the time of writing this statement, our operations in Zambia remain unaffected by the COVID-19 virus. However, the guidance being given in respect of the COVID-19 outbreak is evolving and the Company will continue to monitor the situation closely.

Our longer-term vision for the Company remains and has been clearly demonstrated with the expansion of the business during the period under review, having grown and diversified our earnings base.  On 23 August 2019, we announced the completion of the acquisition of the Sable Zinc Refinery in Kabwe (the 'Refinery').  This acquisition presents Jubilee with a very well-placed platform from which to enjoy the various base metal opportunities presented by Zambia. The Refinery expands our commodity basket to include copper, vanadium, zinc and lead. Having a diversified commodity basket, such as we now have, provides us with considerable resilience in the face of fluctuating metals prices, some of which we have seen of late - both very strong, and much weaker.  In addition we have acquired a facility that was brought in part into operation within 4 months of the acquisition therefore reducing our lead time to production. The copper circuits are advanced with a capacity of some 15 000 tonnes of contained copper per annum so we are accelerating our copper endeavours, whilst updating the zinc facility.

In July 2019, our Windsor PGM project in South Africa commenced operations and by the end of August 2019 all circuits were functional with productivity initiatives being implemented, during this interim period to date. 

On 4 November 2019, we announced that we had acquired 100 % of the earnings of the Inyoni Operation in South Africa (previously named Hernic). The objective of this acquisition was to transform Jubilee from a contracting joint venture partner to a full owner of 100 % of the economic rights, without additional risk.  In acquiring full control, Jubilee has increased its flexibility and now has the opportunity to increase throughput, respond to market conditions and optimise certain aspects of the operation to its ultimate benefit. 

To support these acquisitions and to assist in financing targeted expansion plans both in Zambia and South Africa, we completed an oversubscribed placing of some £ 6.5 million in mid-November 2019.

Looking forward, the Board is convinced that the long-term fundamentals for copper are exceptional and as such have put focus on the Kabwe copper project to ensure that maximum production capability is achieved.  Our presence in Zambia has demonstrated and re-asserted that many opportunities exist to expand our business model into all aspects of copper production in the country.  We are currently exploring and prioritising these opportunities and will continue to advance due diligence on potential acquisition or partnership opportunities with a view to expand future earnings in a sustainable manner.

With our sustainable business model, Jubilee and our brand is now well recognised globally. With the ever increasing requirement across all continents for legacy environmental clean-up and a cleaner planet, we are known as being a company able to deliver on this need. We are unique with in-house technical excellence, high technological capabilities, and vast knowledge in the field of reprocessing mine waste and metals recovery across a broad basket of metals.

With so much opportunity for growth from our current business activities alone, the Company will be focussing on maximising this benefit from current operations in the medium term, where we know the risks and where we believe incremental benefit can be substantial. We will of course, however, continue to assess strategic business and acquisition opportunities for the long-term benefit of Jubilee and all shareholders. Despite the current volatile economic climate globally, we continue developing our business activities, consistent with our mission, and remain positive that our unique position in the industry will be exploited for the benefit of all our shareholders.

Colin Bird

Non-Executive Chairman

INTERIM PERIOD OVERVIEW 

The continued growth of Jubilee's operations and overall business is testament to 'the Jubilee Way' which is built on technical excellence and innovation translating into operational and metallurgical efficiencies. 

During the 6 month period under review ending 31 December 2019, Jubilee acquired the multi metal refinery Sable Zinc Refinery in Zambia, commenced operations at its Windsor PGM project and completed the acquisition of the PGM and chrome rights of more than 3 million tonnes of surface material.  These activities boosted the PGM operations delivering an increase of 72 % in produced PGM ounces while diversifying Jubilee's metal portfolio across geographical areas and into base metals such as copper, zinc, vanadium and lead.

Since acquiring the Refinery, the Company has commenced with the construction of the zinc refinery circuit and has brought the copper refinery circuit into operation producing its first high grade copper metal in November 2019.

Beyond growth in revenue and earnings Jubilee has also strengthened its asset base by significantly increasing its access to chrome and PGM surface material with acquisition of all historical and future PGM tailings and all historical chrome rights at the Inyoni Operations. The acquisition transformed the operation from a co-operation processing agreement to full ownership of the economic rights, without additional risk to the Company. 

Platinum Group Metals (PGM) Operations update - South Africa

Jubilee's PGM operations consist of the Inyoni and Windsor PGM operations.

The PGM operations showed a significant growth in output delivering 21 082 ounces of PGM concentrate for H2 2019, up 72 % from H2 2018. The majority of the growth in output came from the Group's Windsor PGM project coming into operation during August 2019 and reaching stable production for the month of November 2019.  The Windsor PGM operations ("Windsor") is a Joint Venture Project ("JV") with Eland Platinum ("Eland") under which the platinum processing plant at Eland is used for the processing of Windsor PGMs material.  Under the terms of the JV the PGM earnings generated from the project are shared between the JV partners with the majority of the earnings returned to Windsor.  The Jubilee attributable PGM ounces reported for the Windsor PGM project account for approximately 60 % of total ounces produced under the JV.  Jubilee's unit cost to produce a PGM ounce remained below US$ 520 per ounce.  The unit cost accounts for 100 % of the operating cost for the JV allocated to only the PGM ounces attributed to Jubilee.

As announced on 24 October 2019, Jubilee acquired 100 % of the rights to PGM earnings from the current and future tailings produced at the Inyoni Operations. In addition to the current unprocessed 1.70 million tonnes of historical tailings at the Inyoni Operations and the 630 000 tonnes of previously processed tailings, Jubilee has acquired the rights to a further circa one million tonnes of PGM rich material. As reported under Inyoni Chrome, at the time of reporting the Company had completed the recapitalisation of the Inyoni feed systems to reach the targeted 50 000 tonnes per month feed rate.  The new feed system will be ramped up during Q1 2020.

PGM revenue for H2 2019 increased by 107 % to £ 16 million (ZAR 298 million) compared to H1 2019.

The table below presents the combined operational revenue and earnings performance for PGMs for the period under review. The figures represent the final results based on reconciled production inputs and the allocation of costs have been standardised to fully account for all in sustainable costs:

PGMs	Tailings processed tonnes	PGM ounces delivered	Project revenue (£ '000)	Project revenue  (ZAR'000)	Jubilee attributable earnings (£ '000)	Jubilee attributable earnings (ZAR'000)	Unit cost/ PGM oz (US$)1
6m to 31 Dec 2018	267 183	12 288	7.093	130.592	4.093	75.601	422
6m to 31 Dec 2019	553 672	21 082	16.280	297.530	9.695	167.718	519
12m to 30 Jun 2019	504 218	23 847	14 855	273.278	8.158	150.407	470

1= The unit cost per PGM ounce produced excludes any inter-company charges for the production of the PGM containing tailings material. In the case of the Windsor JV all operating cost is allocated to the Jubilee attributable ounces.

2= Attributable earnings refers to project earnings allocated to the group based on the group's contractual rights in each project.  

The PGM basket price has appreciated during the period driven by the shortfall in the supply of PGMs to meet industry demand and with no new significant supplies of PGMs targeted in the short term.  Post the period under review the PGM basket price saw a sharp reduction in price linking to the uncertainty caused by the COVID-19 epidemic. 

Chrome Operations update - South Africa

Jubilee's chrome operations include the DCM Chrome, Windsor Chrome and Inyoni Chrome (following the acquisition by Inyoni of the chrome rights in November 2019). The DCM Chrome operation includes the leading Jubilee Fine Chrome facility, successfully extracting fine chrome from previously discarded chrome wastes.

Jubilee now holds a total chrome ore processing capacity of 145 000 tonnes per month of feed material, which delivered 186 249 tonnes of chrome concentrate during H2 2019. This new production record reflects only two months' worth of chrome production at Inyoni, the impact of which will be better reflected during H1 2020.

Since the acquisition of the Windsor Operation in January 2019, Jubilee has invested into improved processing technology and significantly improved operational efficiencies, which strengthened the operations ability to react to weakening metal prices. The chrome operations are well positioned to capitalise on any recovery in the chrome market and to deliver PGM rich tails to the PGM operations. 

As announced on 5 November 2019, Jubilee acquired 100 % of all further chrome rights to the chrome contained in all the historical tailings at Inyoni.  In addition, Jubilee has increased the scope of its Inyoni Operations to take control of the re-mining of tailings to control the feed supply, targeting to increase feed rate to 50 000 tonnes per month. 

The table below presents the combined operational revenue and earnings performance for chrome for the period under review. The figures represent the final results based on reconciled production inputs and the allocation of costs have been standardised to fully account for all in sustainable costs:

CHROME	Chromite concentrate produced Tonnes	Project revenue (£ '000)	Project revenue  (ZAR'000)	Jubilee attributable earnings (£ '000)	Jubilee attributable earnings (ZAR'000)
6m to 31 Dec 2018	17 011	1.126	20.664	(267)	(4.906)
6m to 31 Dec 2019	186 249	9.123	157.821	271	4.686
12m to 30 Jun 2019	181 947	7.725	141.852	1.309	24.001

Integrated Kabwe Operations, Zambia - Copper, zinc, lead and vanadium update

The Company's Kabwe Project combined with its multi-metal Sable Zinc Refinery, establishes Jubilee's fully integrated multi-metal recovery and refining operational footprint in Zambia. The Sable Zinc Refinery, which acts as a central processing facility for third party material in the region, gives access to a current resource comprising of an estimated 6.4 million tonnes of surface waste assets containing 356 843 tonnes of zinc, 351 386 tonnes of lead and 1.26 % equivalent vanadium pentoxide.

During the period under review, the copper refinery circuit was brought on-line to process historical copper tailings as well as third party sourced run-of-mine material. The first high grade copper metal commenced production in December 2019, with the completion of the solvent extraction circuit.  The accelerated ramp-up of the copper circuit remains a strong focus and at present has not been impacted by the COVID-19 epidemic.

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

Consolidated Statement of Comprehensive Income for the six months ended 31 December 2019

	Unaudited	Unaudited	Audited
	Group	Group	Group
	6 months	6 months	12 months
	ended 31 December	ended 31 December	ended 30 June
	2019	2018	2019
	£ '000	£ '000	£ '000
Sales revenue	25 403	8 327	23 586
Cost of sales	(15 554)	(4 286)	(10 709)
	9 849	4 041	12 876
Operating costs	(4 260)	(2 662)	(8 338)
Operating profit	5 589	1 379	4 538
Other income	60	-	385
Gain on bargain purchase	2 309	-	-
Investment income	50	14	30
Finance costs	(1 324)	(463)	(1 113)
Share of loss from associates	(121)	(168)	(865)
Impairment of intangible assets	-	-	5 022
Profit before taxation	6 563	762	7 946
Taxation	-	-	(970)
Profit for the period	6 563	762	6 976
Other comprehensive income
- (Loss)/profit on translation of foreign subsidiaries	(3 112)	(460)	680
Total comprehensive profit	3 451	302	7 656
Attributable to:
Owners of the parent:
Profit for the period attributable to owners of the parent	6 660	756	6 994
Non-controlling interest
(Loss)/profit for the period - non controlling interest	(97)	6	(17)
Profit for the period	6 563	762	6 976
Total comprehensive income attributable to:
Owners of the parent	3 634	321	7 627
Non-controlling interest	(183)	(19)	29
	3 451	302	7 656
Weighted average number of shares ('000)	1 891 445	1 314 013	1 466 128
Diluted weighted average number of shares ('000)	1 909 126	1 314 013	1 475 698
Earnings per share (pence)	0.35	0.06	0.48
Diluted earnings per share (pence)	0.35	0.06	0.47

Consolidated Statement of Financial Position as at 31 December 2019

	Unaudited	Unaudited	Audited
	Group	Group	Group
	6 months	6 months	12 months
	ended 31 December	ended 31 December	ended 30 June
	2019	2018	2019
	£ '000	£ '000	£ '000
Assets
Non-current assets
Property, plant and equipment	26 946	11 578	17 902
Intangible assets	60 431	44 304	46 938
Investments in associates	1 774	2 593	1 895
Other financial assets	5 848	834	5 709
Total non-current assets	95 000	59 309	72 445
Current assets
Inventories	1 605	1 432	1 661
Trade and other receivables	11 948	4 069	9 072
Current tax receivable	-	16	-
Other financial assets	-	172	-
Cash and cash equivalents	10 247	5 768	18 865
Total current assets	23 800	11 457	29 598
Total assets	118 800	70 766	102 042
Equity and liabilities
Share capital	111 723	93 844	105 820
Reserves	19 293	21 218	22 319
Accumulated loss	(45 183)	(58 302)	(51 843)
Total equity before non-controlling interest	85 833	56 760	76 297
Non-controlling interest	2 211	2 345	2 393
Total equity	88 044	59 105	78 690
Non-current liabilities
Other financial liabilities	7 197	2 036	10 397
Long term provisions	531	-	-
Deferred tax liability	8 700	5 011	6 019
Total non-current liabilities	16 428	7 047	16 415
Current liabilities
Other financial liabilities	12 327	2 630	2 272
Trade and other payables	2 001	1 984	4 665
Total current liabilities	14 328	4 614	6 937
Total liabilities	30 756	11 661	23 352
Total equity and liabilities	118 800	70 766	102 042

Consolidated Statement of Changes in Equity as at 31 December 2019
Figures in pound sterling (£ '000)	Share capital	Merger reserve		Share based payment reserve	Convertible instrument reserve		Currency translation reserve		Total reserves	Accumulated loss		Total attributable to parent of equity holders		Non-controlling interest		Total equity
Balance at 30 June 2018	94 065	23 184		2 469	-		(4 221)		21 432	(59 058)		56 439		2 363		58 802
Total comprehensive income for the period							633		633	6 994		7 627		29		7 656
Issue of share capital net of costs	11 765											11 765		-		11 765
Share warrants issued	(10)			232					232			222		-		222
Share warrants expired				(181)					(181)	181		-		-		-
Equity component of convertible loan note					203				203			203		-		203
Changes in fair value - control not lost										41		41		-		41
Changes in ownership- control not lost														1		1
Total changes	11 755			51	203		633		887	7 215		19 857		30		19 888
Balance at 30 June 2019	105 820	23 184		2 520	203		(3 587)		22 319	(51 843)		76 297		2 393		78 690
Total comprehensive income for the period							(3 025)		(3 025)	6 660		3 634		(183)		3 452
Issue of share capital net of costs	5 902											5 902		-		5 902
Total changes	5 902						(3 025)		(3 025)	6 660		9 536		(183)		9 354
Balance at 31 December 2019	111 723	23 184		2 520	203		(6 613)		19 293	(45 183)		85 833		2 211		88 044

Consolidated Statement of Cash flow for the six months ended 31 December 2019

			Unaudited	Unaudited	Audited
			Group	Group	Group
			6 months	6 months	12 months
			ended 31 December	ended 31 December	ended 30 June
			2019	2018	2019
			£ '000	£ '000	£ '000
Cash flows from operating activities
Profit before taxation			6 564	762	7 946
Adjustments for:
Depreciation and amortisation			2 382	1 381	3 487
Impairment of intangible assets			-	-	232
Fair value adjustments			-	-	(5 022)
Gain on bargain purchase			(2 309)	-	-
Provisions			-	(172)	-
Share based payments			-	-	222
Results of equity accounted investments			121	168	865
Investment income			(50)	(14)	(30)
Finance cost			1 173	204	787
Working capital changes
Increase in inventories			440	(126)	637
	Increase in receivables		811	(845)	(5 777)
	Decrease in payables		(3 113)	(948)	2 167
Cash generated from operations			6 018	1 175	5 514
Investment income			50	14	30
Finance cost			(1 173)	(204)	(787)
Net cash from operating activities			4 895	726	4 757
Cash flows from investing activities
Purchase of intangible assets			(11 129)	(636)	(2 182)
Business combinations			(5 295)	-	(6 826)
Purchase of property, plant and equipment			(1 101)	(2 379)	(4 496)
Investment in associate			(173)	-	-
Sale of property, plant and equipment			-	-	17
Loans repaid			-	-	49
Loans received			-	100	-
Net cash used in investing activities			(17 698)	(2 916)	(13 438)
Cash flows from financing activities
Proceeds from share issues net of costs			5 902	-	10 672
Proceeds from other financial liabilities			-	1 595	10 934
Repayment of other financial liabilities			(2 154)	-	(631)
Net cash generated from financing activities			3 749	1 595	20 975
Net (decrease)/increase in cash and cash equivalents			(9 054)	(595)	12 293
Cash and cash equivalents at beginning of the period			18 865	6 376	6 376
Effects of foreign exchange			436	(13)	195
Cash and cash equivalents at the end of the period			10 247	5 768	18 865

NOTES TO THE UNAUDITED INTERIM RESULTS

1.    Basis of preparation

The Group unaudited interim results for the 6 months ended 31 December 2019 have been prepared using the accounting policies applied by the company in its 30 June 2019 annual report which are in accordance with International Financial Reporting Standards (IFRS and IFRC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU ("IFRS, including the SAICA financial reporting guides as issued by the Accounting Practices Committee, IAS 34 - Interim Financial Reporting, the Listings Requirements of the JSE Limited, the AIM rules of the London Stock Exchange and the Companies Act 2006 (UK)). This condensed consolidated interim financial report does not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2019 and any public announcements by Jubilee Metals Group PLC. All monetary information is presented in the presentation currency of the Company being Great British Pound. The Group's principal accounting policies and assumptions have been applied consistently over the current and prior comparative financial period. The financial information for the year ended 30 June 2019 contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

2.    Financial review

Earnings per share for the six months ended 31 December 2019 are presented as follows:

	Unaudited	Unaudited	Audited
	Group	Group	Group
	6 months	6 months	12 months
	ended 31 December	ended 31 December	ended 30 June
	2019	2018	2019
	£ '000	£ '000	£ '000
Earnings for the period	6 660	756	6 993
Weighted average number of shares in issue ('000)	1 891 445	1 314 013	1 466 128
Diluted weighted average number of shares in issue ('000)	1 891 445	1 314 013	1 475 698
Earnings per share (pence)	0.35	0.06	0.48
Diluted earnings per share (pence)	0.35	0.06	0.47
Earnings per share (ZAR cents)	6.09	0.99	8.75
Diluted earnings per share (ZAR cents)	6.03	0.99	8.69

The Group reported a net asset value of 4.36 pence (2018: 4.33) per share (ZAR 80.69 (2018: ZAR 74.92) cents per share)) and a net tangible asset value per share of 1.37 (2018: 1.09) pence per share (ZAR 25.31 (2018: ZAR 19.92 cents per share)). The total shares in issue as at 31 December 2019 were   2 017 510 million (2018: 1 363 486 million).

3.    Business Combinations

3.1 Acquisition of Sable Zinc Limited (Zambia)

As announced on 21 March 2019, Jubilee executed the acquisition of 100% of the issued capital of Sable Zinc Kabwe Limited in Zambia from two subsidiaries of Glencore plc "Glencore" for a consideration of £ 9.16 million (US$ 12 million) (ZAR 175.97 million) (the "Acquisition"). The Acquisition was funded through a combination of debt and equity. Jubilee secured a convertible loan note for £ 6.11 million (US$ 8 million) (ZAR 117.31 million) with ACAM LP and successfully completed a placing of 491 814 444 new Jubilee shares at an issue price of 2.25 pence per share to raise £ 11.07 million (US$ 14.50  million) (ZAR 212.57 million) before expenses. On 23 August 2019 the Acquisition became unconditional ("Closing Date"), Jubilee obtained control and commenced with the implementation of a fully integrated multi-metal refinery in Zambia.

The fair value of the purchase consideration, net assets acquired and gain on bargain purchase are as follows:

Acquisition of Sable Zinc Limited (Zambia)
Fair value of the assets acquired	12 253
Fair value of the purchase consideration	(9 944)
Gain on bargain purchase	2 309

Assets acquired
Land and Buildings	1 087
Property, Plant and Equipment	11 395
Long term liabilities	(3 339)
Trade Receivables	183
Inventories	385
Other current assets	3 505
Cash and Cash Equivalents	135
Trade payables	(167)
Other current liabilities	(930)
Fair value of assets acquired	12 253
Fair value of consideration	(9 944)
Gain on bargain purchase	2 309

There were no acquisitions made by Sable Zinc Limited in the previous period.

The acquired assets did not contribute to revenue or profit for the period under review.

3.2 Acquisition of PGM and chrome rights

Jubilee owns and operates a chrome and PGM processing facility at Inyoni with a processing capacity of 55 000 tonnes per month. Previously, Jubilee had a Co-Operation Agreement ("Hernic Agreement") with Hernic Ferrochrome (Pty) Ltd ("Hernic Ferrochrome"), whereby Jubilee had the rights to all PGM earnings from the tailings at Hernic until it secured a 30 % return on investment, where after Hernic secured the majority of earnings. Under the Hernic Agreement, all of the chrome concentrate produced is returned to Hernic Ferrochrome for its own use or sale to the market. As announced on 24 October 2019, Jubilee has entered into a Framework and Tailings Purchase Agreement ("Tailings Agreement") with K2018239983 (SOUTH AFRICA) (PTY) LTD ("NewCo"), a subsidiary of one of the world's largest ferrochrome producers to acquire 100 % of the rights to PGM earnings from the current and future tailings produced at Jubilee's Inyoni Operations (previously Hernic) located in the Bushveld Complex, South Africa. In addition to the current unprocessed 1.70 million tonnes of historical tailings at the Hernic Operations and the 630 000 tonnes of previously processed tailings, Jubilee has acquired the rights to a further c. 1 million tonnes of PGM rich material.

As announced on 5 November 2019, NewCo has exercised its rights in terms of the Exclusive Agreement announced on 24 October 2019, to sell all further chrome rights to the chrome contained in all of the historical tailings at Inyoni to Jubilee. Under the Exclusive Agreement, Jubilee has acquired 100 % of all further chrome rights to the chrome contained in all of the historical tailings at Inyoni.

Acquisition of PGM and chrome rights to earnings (Mauritius)	£ '000
Fair value of the rights acquired	14 472
Fair value of the purchase consideration	(14 472)

The purchase consideration was paid in tranches the last of which were made on 19 March 2020. In terms of the acquisition agreement the final payment was adjusted for certain PGM and chrome variables which, resulted in a downward adjustment to the total purchase consideration of £ 2.2 million. The total foreign exchange difference for the transaction resulted in a gain of £ 0.004 million. At current conversion rates the foreign exchange gain on the transaction would have been £ 0.77 million.  

4.    Dividends

No dividends were declared during the period under review (2018: nil).

5.    Business segments

In the opinion of the Directors, the operations of the Group companies comprise four reporting segments for the period under review, being:

• the recovery of metals from surface mine waste and tailings ("Operations");

• the evaluation of various mine waste opportunities and the development of suitable metal   recovery processes to d iversify across multiple commodities and in different countries including   platinum, chrome, cobalt, copper, zinc, lead, vanadium and gold to hedge income risk and to   align with global trends.  ("Business Development");

• the parent  company  operates  a  head  office  based  in  the  United  Kingdom  which  incurs    administration and corporate overhead costs ("Corporate").

Segment report for the 6 months ended 31 December 2019

Figures in pound sterling ( £ '000 )	Operations	Business Development	Corporate	Total Group
Total revenues	25 403	-	-	25 403
Cost of sales	(15 554)	-	-	(15 554)
Forex losses	(417)	-	(181)	(598)
Share of loss from associates	-	-	(121)	(121)
Profit/(loss) before taxation	7 339	-	(776)	6 564
Taxation	-	-	-	-
Profit/(loss) after taxation	7 339	-	(776)	6 564
Interest received	39	-	11	50
Interest paid	(1 245)	-	(79)	(1 324)
Depreciation and amortisation	(2 382)	-	-	(2 382)
Total assets	73 098	37 349	8 354	118 800
Total liabilities	(23 675)	(3 328)	(2 290)	(30 756)

Segment report for the 6 months ended 31 December 2018

Figures in pound sterling ( £ '000 )	Base metals beneficiation	Business Development	Corporate	Total Group
Total revenues	8 324	3	-	8 327
Cost of sales	(4 226)	-	-	(4 226)
Forex losses	(167)	-	(31)	(198)
Share of loss from associates	-	-	(169)	(169)
Profit/(loss) before taxation	1 691	(116)	(813)	762
Taxation	-	-	-	-
Profit/(loss) after taxation	1 691	(116)	(813)	762
Interest received	11	-	3	14
Interest paid	(326)	-	(137)	(463)
Depreciation and amortisation	(1 210)	-	-	(1 210)
Total assets	25 720 (25,720)	39 938	5 108	70 766 (70,766)
Total liabilities	(4 392 )	(4 639)	( 2 630)	(11 661)

Segment report for the year ended 30 June 2019

Figures in pound sterling ( £ '000 )	Base metals beneficiation	Business development	Exploration and mining	Corporate	Total Group
Total revenues	23 585	-	-	-	23 585
Cost of sales	(10 709)	-	-	-	(10 709)
Forex losses	(8)	(7)	-	246	231
Share of loss from associate	-	-	-	(865)	(865)
Interest received	22	-	-	8	30
Interest paid	(933)	-	-	(180)	(1 113)
Profit before taxation	4 358	(229)	(232)	4 050	7 946
Taxation	( 16)	-	-	(954)	(970)
Profit after taxation	4 342	(229)	(232)	3 096	6 976
Depreciation, amortisation and impairments	(3 400)	(70)	(232)	-	(3 702)
Total assets	43 390	15 872	25 886	16 895	102 042
Total liabilities	(15 603)	(3 344)	(1 399)	(3 007)	(23 352)

6.    Share Capital and warrants

Share Capital

During the period under review the Company issued 162 208 900 new Jubilee shares at a price of 4 pence share to raise £ 6.5 million before expenses. Following the issue the Company's total issued share capital comprises 2 017 509 573 ordinary shares.

Warrants

At the period end and at the time of publishing these results the Company had the following warrants outstanding:

Number of warrants	Issue date	Subscription price (pence)	Expiry date	Volatility %	Spot at Issue date pence
1 473 055	2019-03-21	3.38	2021-03-21	58.17	2.25
8 429 195	2019-11-14	4.00	2022-11-14	57.55	4.12
32 362 460	2018-12-28	3.86	2023-12-28	58.17	2.40
65 277 778	2018-01-19	6.12	2023-01-19	83.90	3.83
107 542 488

7.    Going concern

The directors have adopted the going-concern basis in preparing the interim financial statements.

8.    Unaudited results

These interim results have not been reviewed or audited by the Group's auditors.

9.    Interim report

Printed copies of the interim report are available to the public free of charge from the Company at 1^st Floor 7/8 Kendrick Mews London SW7 3HG, United Kingdom Tel: [phone]  Fax: [phone] and from Jigsaw Office Park, Ground Floor, Support Services Place, 7 Einstein Street, Highveld Techno Park, Centurion, 0157, Gauteng during normal office hours for 30 days from the date of this report and are also available for download from www.jubileemetalsgroup.com .

The financial information in this announcement is unaudited.

United Kingdom

26 March 2020

**ENDS**

For further information visit www.jubileemetalsgroup.com   or contact:

Jubilee Metals Group PLC

Colin Bird/Leon Coetzer
Tel [phone] / Tel [phone]

Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/James Keeshan
Tel: [phone]

Broker - Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel [phone]

Joint Broker - WHIreland

Harry Ansell/Katy Mitchell 

Tel: [phone]

JSE Sponsor - Sasfin Capital (a member of the Sasfin group)

Sharon Owens
Tel [phone]

PR & IR Adviser - St Brides Partners Limited

Catherine Leftley/Juliet Earl

Tel [phone]

Annexure 1

Headline earnings per share ("HEPS") is calculated using the weighted average number of shares in issue during the period under review and is based on earnings attributable to ordinary shareholders, after excluding 
those items  as required by Circular 1/2019 issued by the South African Institute of Chartered Accountants (SAICA).

In compliance with paragraph 18.19 (c) of the JSE Listings Requirements the table below represents the Group's Headline 
earnings and a reconciliation of the Group's loss reported and headline earnings used in the calculation of headline 
earnings per share:

Reconciliation of headline earnings per share	Unaudited	Unaudited	Audited
	Dec-19	Dec-18	Jun-19
	'000	'000	'000
Profit attributable to ordinary equity holders of the parent	6 660	756	6 994
Less gain on bargain purchase	(2 309)	-	-
Less fair value adjustment of other financial assets	-	-	(5 022)
Plus impairment of intangible assets	-	-	231
Plus share of impairment loss of equity accounted associate	-	-	783
Total  tax effects of adjustments	-	-	1 122
Headline earnings	4 350	756	4 108
Weighted average number of shares in issue ('000)	1 891 445	1 314 013	1 466 128
Diluted weighted average number of shares in issue ('000)	1 909 126	1 314 013	1 475 698
Headline earnings per share  (pence)	0.23	0.06	0.28
Headline earnings per share (ZAR cents)	3.98	0.99	5.14
Diluted headline earnings per share (pence)	0.23	0.06	0.28
Diluted headline earnings per share (ZAR cents)	3.98	0.99	5.11

 

END

 

 

IR VQLBLBXLLBBX