Jangada Mines Regulatory News (JAN)

NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Jangada Mines Limited / Index: LSE / Epic: JAN / Sector: Mining

27 September 2018

Jangada Mines plc

("Jangada" or the "Company")

Fundraise Package of £2.1 Million Agreed

and

Notice of General Meeting

Jangada Mines plc, a natural resources company developing South America's largest and most advanced platinum group metals ('PGM') project, is pleased to announce that it has agreed a Total Fundraise package of £2.1 million including a placing to raise £1.05 million before expenses to advance its Pedra Branca Project.

Overview

· Total Fundraise package of £2.1 million finalised to progress bankable feasibility study ('BFS') at Pedra Branca polymetallic project ('the Project') and for general working capital comprising:

o A placing to raise £1.05 million, before expenses;

o Agreement with a leading minerals processing consultancy firm, Consulmet, to accept shares in lieu of fees on completion of work undertaken at the Project including part of the plant design and metallurgy study; and

o A draw down 12-month unsecured loan facility from Celtic Capital Pty Limited, as trustee for Celtic Capital Trust ("Celtic Loan") for up to $1 million.

· Value-driving activity expected in the coming months to fully realise potential of the project, which has a net present value ('NPV') of US$192 million, Internal Rate of Return ('IRR') of 67% and 1.6-year payback

· BFS to support earlier studies that estimates average annual production of 64,000 ounces of PGM+Au, 2.2 Mlb of nickel, 1.2Mlb of copper, 44,000 lb of cobalt and 30,000 t of chrome

Jangada's Executive Chairman, Brian McMaster, said, "This £2.1 million package represents a further step forward for the Company as it continues to focus on the development of the Pedra Branca PGM Project in Brazil. Pedra Branca is the largest underdeveloped PGM project in South America with an exciting polymetallic spread and we are confident that there is further value yet to be realised. The success of this placing is testament to the compelling economic potential of the project as confirmed by both the scoping study and the preliminary economic assessment.

"The funds raised via the placing will enable us to complete various upcoming surveys and to progress a robust bankable feasibility study. We are confident that this work will further confirm the potential of the project to be a world class polymetallic project. I would like to take this opportunity to welcome our new shareholders and to thank existing shareholders for their commitment to Jangada."

TRANSACTION DETAILS

Background to and reasons for the Capital Raising

Jangada is a natural resources company focused on the development of the Pedra Branca Project, a platinum group metals project unique in South America with additional nickel credits. The project is located 280km from the port city of Fortaleza in northeast Brazil and holds three mining licences and 42 exploration licences over an area of 50,000 ha.

Previous operators have spent more than $35 million on exploration and development activities, which include 30,000 metres of diamond core drilling, geophysical surveys and metallurgical tests. The current resources are at surface and are amenable to shallow, open pit mining and conventional processing methods.

On 15 May 2018, the Company announced a substantial increase of the JORC compliant mineral resources across the commodity basket including:

· 50% increase in global ore volume to 34.5 million tonnes at 1.3 g/t PGM+Au;

· 53% increase in PGM resource to 1.45 million ounces;

· 28% increase in nickel resource to 140 million pounds;

· 11% increase in copper resource to 26 million pounds; and

· 4% increase in cobalt resource to 6.7 million pounds

The results of recent metallurgical tests - announced on 11 June 2018 - demonstrated that the inclusion of magnetic separation could positively impact the economics of the Pedra Branca PGM project. In test work the addition of magnetic separation increased recoveries of PGM and yielded unexpectedly high gold and chrome grades in pre-concentrate with samples demonstrating:

· Pre-concentrate PGM grades up to 8.1 g/t

· Average gold grades of 15 g/t, with the highest being 75.5 g/t

· Pre-concentrate chrome ('Cr2O3') grades of 42%

Magnetic pre-concentration is being incorporated in to an optimised process flow sheet expected to result in significant efficiencies including reduced plant size, CAPEX and OPEX.

In June 2018, the Company announced the results of a Preliminary Economic Assessment ("PEA") that confirmed the findings of the 2017 Scoping Study that Pedra Branca has the potential to become a robust, low CAPEX and OPEX, shallow, open pit operation yielding attractive financial returns and a short payback period. Highlights include:

· Robust project economics: NPV of US$192 million; IRR of 67%; and 1.6-year payback

· Potential life of mine of 13 years at 1.2 strip ratio from a Mineral Inventory

· 100% increase in production scale to 2.2Mt per year following recent 53% uplift in JORC resources

· Estimated average annual production of 64,000 ounces of PGM+Au, 2.2 Mlb of nickel, 1.2Mlb of copper, 44,000 lb of cobalt and 30,000 t of chrome

· Conventional sulphide flotation plant producing two concentrates: a saleable multi-element sulphide concentrate and a chrome concentrate

· Low CAPEX requirement of US$64.4 million and low OPEX of US$17.31/t of ROM

Placing

The Company has completed a placing to raise £1.05 million, before expenses, through the issue of 34,999,996 new Ordinary Shares (the "Placing Shares") at the Placing Price (being £0.03 per Placing Share); and 34,999,996 Warrants (the "Placing Warrants") to the Placees on a 1 for 1 basis, exercisable in whole or in part at 6p until 15 October 2020. The issue of Placing Warrants is conditional on the passing of the Resolutions at the General Meeting.

Additionally, the Company has signed an agreement with Consulmet, a leading minerals processing consultancy firm, which will undertake part of the plant design and the metallurgy study, to accept the 10,363,585 new Ordinary Shares (the "Adviser Shares") and 10,363,585 Warrants (the "Adviser Warrants") in lieu of fees, with such Adviser Shares and Adviser Warrants to be issued at completion of that work (overall, the "Consulmet Agreement"). The issue of the Adviser Shares and Adviser Warrants is also conditional on the passing of the Resolutions at the General Meeting.

The Board intends on using the net proceeds of the Placing to:

· Continue to develop Pedra Branca project including the completion of necessary studies to progress a bankable feasibility study;

· Provide general working capital to the Company.

Brandon Hill Capital Ltd ("Brandon Hill") and Arden Partners plc ("Arden Partners") are acting as joint brokers to the Company in relation to the Placing. Brandon Hill and Arden Partners will receive, in aggregate, 1,500,000 new Ordinary Shares (the "Broker Shares") in connection with the Placing which will be admitted to AIM at the same time as the Placing Shares.

The Placing Shares are not being offered or otherwise made available to the public.

Loan facility

The Company has entered into a loan agreement with Celtic Capital Pty Limited ("Celtic"), as trustee for Celtic Capital Trust under which it will have access to up to $1,000,000 for a period of 12 months from entering into the agreement. The Company may drawdown in tranches between $10,000 and $100,000 at any time it wishes, subject to two business days' notice first being given. Only once a draw down has taken place will any interest start accruing on the drawn down sum at a rate of 10 per cent per annum. An arrangement fee of $50,000 is payable to Celtic which shall be satisfied through the issue of 1,266,666 new Ordinary Shares at £0.03 each (the "Celtic Shares"), which will be admitted to AIM at the same time as the Placing Shares.

Director Participation, Substantial Shareholder Participation and Related Party Transactions

The following Directors have agreed to participate in the Placing as follows:

· Mr Brian McMaster for 1,666,667 Placing Shares, equating to an investment of £50,000; and

· Mr Luis Azevedo for 1,666,667 Placing Shares, equating to an investment of £50,000

Mr Matthew Wood, a Substantial Shareholder in the Company as defined under the AIM Rules, has also agreed to participate for 1,666,667 Placing Shares, equating to an investment of £50,000.

The participation in the Placing by Mr Brian McMaster and Mr Luis Azevedo as Directors, and Mr Matthew Wood as a Substantial Shareholder, are classified as related party transactions under the AIM Rules. The Directors independent of the Placing, being Mr Louis Castro and Mr Nicholas von Schirnding, having consulted with Strand Hanson Limited as the Company's nominated adviser, consider that the terms of the participation by Mr Brian McMaster, Mr Luis Azevedo and Mr Matthew Wood are fair and reasonable insofar as the Company's shareholders are concerned.

Non-Executive Directors Fees

The Board of Directors are committed to pursuing the development of the Pedra Branca project and as a gesture of support for the Company, the two Non-Executive Directors have each recently offered to take $10,000 of their directors' fees in shares at £0.03 per share. In aggregate, the two Non-Executive Directors will therefore be issued 506,666 new Ordinary Shares (the "NED Shares") which will be admitted to AIM at the same time as the Placing Shares.

Admission and Total Voting Rights

Application will be made for the 34,999,996 Placing Shares, 1,266,666 Celtic Shares, 506,666 NED Shares and 1,500,000, Broker Shares to be admitted to trading on the AIM market of the London Stock Exchange plc. In aggregate, 38,273,328 new Ordinary Shares will be admitted to trading on AIM.

The Placing Shares to be issued pursuant to the Placing will rank pari passu with the existing Ordinary Shares by reference to a record date on or after the date of admission to AIM of the Placing Shares to trading on AIM ("Admission")

The Placing Shares, Celtic Shares, NED Shares and Broker Shares will represent, in aggregate, approximately 16.2 per cent. of the Enlarged Share Capital.

Admission and commencement of dealings in the Placing Shares, Celtic Shares, NED Shares and Broker Shares is expected to take place on or around 8.00 a.m. on 3 October 2018.

Following the issue of the above new Ordinary Shares, the total issued share capital of the Company consists of 235,788,928 Ordinary Shares with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights in the Company is 235,788,928 and this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

As noted below in "Dealing and Settlement", upon Admission, the new Placing Shares will be held in the CREST system with the ISIN GB00BZ11WQ61.

The Placing Warrants and the Adviser Warrants will not be admitted to trading on AIM.

Concert Party

Following completion of the Placing and the issue of the other new Ordinary Shares referred to above, Mr Brian McMaster, Mr Luis Azevedo and Mr Matthew Wood (and his close family members) will have a beneficial interest in 20.3, 19.8 and 20.3 per cent, respectively, of the Enlarged Share capital. The Concert Party also consists of a fourth member, Mr Mark Sumner, and, in aggregate, the Concert Party will have a beneficial interest in 66.7 per cent. of the Company's share capital as enlarged by the Placing. For further information on the Concert Party, please refer to the Company's AIM Admission Document dated 23 June 2017.

US Securities Law Restrictions

This Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This Announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. This announcement is not for publication or distribution, directly or indirectly, in or into, Australia, Canada, Japan, South Africa or any other jurisdiction in which such release, publication or distribution would be unlawful.

Circular and Notice of General Meeting

The Company expects to publish and post to shareholders the Circular today in connection with the Fundraise, which will contain a notice convening the General Meeting in order to approve the Resolutions. A copy will be made available on the Company's website www.jangadamines.com.

The General Meeting is expected to be convened for 10.00 am on 15 October 2018 and will take place at the offices of the Company's solicitors, Bird & Bird LLP, 12 New Fetter Lane, London EC4A 1JP. The actions that shareholders should take to vote on the Resolutions will be set out in the Circular, along with recommendations of the Directors, which is to vote in favour of the Resolutions as they intend to do so in respect their own beneficial shareholdings, currently amounting in aggregate to 91,177,800 existing Ordinary Shares, which represents approximately 46.2 per cent. of the Company's existing issued share capital.

Expected Timetable of Events

The times and dates above refer to London time and are subject to change by the Company. Any such change will be notified to shareholders by an announcement through a Regulatory Information Service. 

Capitalised terms used but not defined in this Announcement shall have the meanings given to such terms in the section headed "Definitions" below.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

ENDS

For further information please visit www.jangadamines.com or contact:

Notes:

The Pedra Branca Project is the largest and most advanced PGM project in South America and currently has a JORC (2012) compliant resource of approximately 1.45 million ounces of PGM resource at a grade of 2.37 g/t Pd Eq, 140 Mlbs of Ni 26 Mlbs of Cu and 6.7 Mlbs of Co. The project is located 280 km from the port city of Fortaleza in the northeast of Brazil and holds three mining licenses and 43 exploration licences over an area of 50,000 ha. Previous operators have spent more than $35 million on exploration and development activities, which include 30,000 metres of diamond core drilling, geophysical surveys and metallurgical tests. The current resources are at surface and are amenable to shallow, open pit mining and conventional processing methods.

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires: