Jangada Mines Regulatory News (JAN)

Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector: Mining

30 October 2020

Jangada Mines plc ('Jangada' or the 'Company')

Second Unaudited Interim Results for the year ended 30 June 2020

Jangada Mines plc, a natural resources company, is pleased to announce its second unaudited Interim Results for the year ended 30 June 2020. Post period end, the Company changed its year end to 31 December. This change is driven by cost efficiencies in aligning its financial year end to that of ValOre Metals Corp ('ValOre'), in which Jangada has a current 17.68 per cent interest and representation on the ValOre board, as well as that of Jangada's Brazilian subsidiaries. In line with accounting standards, these interim results capture the 12 months ended 30 June 2020.

In line with the guidance issued by AIM Regulation in an Inside AIM notification dated 9 June 2020, and the ongoing COVID-19 related disruption to processes, the Company availed of the one month extension to 31 October 2020 by which it is required under AIM Rule 18 to publish its interim accounts for the twelve months ended 30 June 2020.

Thereafter, Jangada commits to releasing its audited financial statements and annual report for the eighteen months ended 31 December 2020 by the end of Q1 2021. From then on, the Company's financial reporting will be in line with AIM Rules 18 and 19.

Chairman's Statement

We began 2020 with our focus on continuing to realise value at our 100% owned Pitombeiras Vanadium Project ('Pitombeiras' or 'the Project'), located in the state of Ceará, Brazil and I am pleased to confirm that we have had great success in this regard.

As announced on 22 April 2020, a drilling programme at the Pitombeiras North and Goela targets was completed for a total of 1,360.80 metres and 19 drillholes. Two additional assay results were also received, being 18.00 metres at 0.49% vanadium pentoxide ('V2O5'), 10.02% titanium dioxide ('TiO2') and 49.61% ferric oxide ('Fe2O3') and 35.66 metres at 0.56% V2O5, 11.04% TiO2 and 54.39% Fe2O3. The purpose of this drilling was to evaluate the structural corridor associated with the known vanadium titanomagnetite ('VTM') mineralisation, within our licence and as a result of the consistency of returned grades, widths and continuity, the programme was deemed an overwhelming success, underpinning the significant prospectivity of Pitombeiras.

Final drilling results were announced in June and July 2020, with results including:

· Pitombeiras North Target:

o 25.25 metres at 0.56% V2O5, 10.81% TiO2 and 54.01% Fe2O3, including 7.00 metres at 0.73% V2O5, 14.14% TiO2 and 68.91% Fe2O3 on drillhole DD20PI2

· Goela Target:

o 27.75 metres at 0.65% V2O5, 12.95% TiO2 and 63.69% Fe2O3, including 9.50 metres at 0.77% V2O5, 15.19% TiO2 and 72.44% Fe2O3 on drillhole DD20PI24

Based on the results of the 2020 and 2019 drill work, in August 2020, the Company reported its initial National Instrument 43-101 compliant resource estimate for the Pitombeiras Project. This comprised a total Resource estimate of 5.70Mt million tonnes at an average grade of 0.51% V2O5, 10.09% TiO2 and 50.42% of Fe2O3 for a contained resource of 28,990 tonnes V2O5, with a breakdown as follows:

· Indicated Resource estimate of 1.47 million tonnes at an average grade of 0.50% V2O5, 9.85 % TiO2 and 49.78% of Fe2O3 for a contained resource of 7,297 tonnes V2O5

· Inferred Resource estimate of 4.23 million tonnes at an average of 0.51% V2O5, 10.17% TiO2 and 50.64% of Fe2O3 for a contained resource of 21,693 tonnes V2O5

Given the strength of the results from the drilling programme and the significant further upside identified as the resource remains open in all directions and only two out of eight known targets were drilled, Jangada announced its intention to conduct a further 2,000 metre drilling programme as infill and step out drilling for the Pitombeiras North and Goela targets, whilst also targeting the Pitombeiras South target. This programme is designed to upgrade the confidence of the current resource base as well as to expand its overall size, with the objective of delineating a further approximate 10Mt of resource. Results from this programme will be released as they become available.

Alongside the current drilling programme work continues to advance on other key development aspects, and in September 2020 the Company announced it had commissioned GE21 Consultoria Mineral ('GE21') to produce a Preliminary Economic Assessment report (the 'PEA') on the Pitombeiras Project. The decision to appoint GE21 was based upon a further review of results achieved to date that the Company considered to support a fast track approach to production. As part of the planning for production, additional metallurgical tests commenced in September 2020 with the objective being that by the time the drilling programme is complete, and expanded mineral resources estimated, the metallurgical tests will be readily available for the preparation of the PEA.

Financials

During August 2020, the Company sold 7,000,000 ValOre common shares for total gross proceeds of CAD$1,750,000 and also received the second tranche of 500,000 deferred consideration ValOre common shares.

The Company currently holds a 17.68% interest in ValOre, with the remaining 2,000,000 ValOre common shares due to Jangada payable in six-monthly instalments of 500,000 shares each. The consideration will support the Company's working capital requirements, allowing us to substantially progress the development of Pitombeiras. As at 30 September 2020, the Company had cash reserves of US$912,441.

Impact of COVID-19

On 31 January 2020, the World Health Organisation ('WHO') announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China ('COVID-19 outbreak') and the risks to the international community as the virus spread globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.

The full impact of the COVID-19 outbreak continues to evolve at the date of this report. Management is actively monitoring the global situation and its impact on the Company's financial condition, liquidity, operations, suppliers, industry, and workforce for the upcoming financial year and beyond.

Outlook

We are focussed on unlocking the value of Pitombeiras for the benefit of all stakeholders. To this end, we have a clear development path thanks to a defined exploration programme, which is naturally being conducted in a COVID compliant way. The ramp up of activity at Pitombeiras is timely given the favourable market dynamics that are placing increasing demand on clean energy materials such as vanadium and we look forward to sharing more exploration results in due course.

Finally, I would like to take this opportunity to thank shareholders for their continuing support and our team for their consistent hard work. As an active investor in the Company myself, my interests are firmly aligned with shareholders and I truly believe the growth prospects of Jangada are excellent.

Brian McMaster

Executive Chairman

30 OCTOBER 2020

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE TWELVE MONTHS ENDED 30 JUNE 2020

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE TWELVE MONTHS ENDED 30 JUNE 2020

CONDENSED UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

FOR THE TWELVE MONTHS ENDED 30 JUNE 2020

NOTES TO THE UNAUDITED FINANCIAL INFORMATION

FOR THE TWELVE MONTHS ENDED 30 june 2020

1. General Information

The Company is a public limited company limited by shares, incorporated in England and Wales on 30 June 2015 with the registration number 09663756 and with its registered office at 20 North Audley Street, London W1K 6WE. The Company's principal activities are the exploration and development of mining assets in Brazil.

2. Accounting Policies

Basis of preparation

During the period, the Company changed its Accounting Reference Date to 31 December. The second interim unaudited financial information for the year ended 30 June 2020 has been prepared in accordance with IAS 34 Interim Financial Reporting. The results for the year ended 30 June 2020 are unaudited.

The condensed unaudited consolidated financial information for the year ended 30 June 2020 has been prepared on a basis consistent with, and on the basis of, the accounting policies set out in the financial information in the Company's published results for the year to 30 June 2019. The unaudited interim financial statements of the Company have been prepared on the basis of the accounting policies, presentation, methods of computation and estimation techniques expected to be adopted in the financial information by the Company in preparing its annual report as at 31 December 2020.

The Board have conducted a review of forecast earnings and cash over the next twelve months, considering various scenarios and sensitivities given the COVID-19 situation and uncertainty around the future economic environment. The Board have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim financial statements.

The consolidated financial information is presented in United States Dollars ($), which is also the functional currency of the Company. Amounts are rounded to the nearest thousand ($'000), unless otherwise stated.

Changes in accounting principles and adoption of new and revised standards

In the year ended 30 June 2020, the Directors have reviewed all the new and revised Standards. The only relevant new standard that is effective for this year's financial statements is IFRS 16 "Leases", but this does not have a material impact on the financial statements.

There are no standards in issue but not yet effective which could have a material impact on the financial statements.

Going concern

As disclosed in the 30 June 2019 financial statements, there exists a material uncertainty, which may cast doubt about the Company's ability to continue as a going concern. Given the proceeds from the sale of the Pedra Branca project and based on the Company's planned expenditure on the Pitombeiras vanadium deposit and the Company's working capital requirements, the Directors have a reasonable expectation that the Company will have adequate resources to meet its capital requirements for the foreseeable future. For that reason, the Directors have concluded that the financial statements should be prepared on a going concern basis.

The financial statements do not include the adjustment that would result if the Company were unable to continue as a going concern.

Financial assets

All of the Company's financial assets are held within a business model whose objective is to collect contractual cash flows which are solely payments of principals and interest and therefore classified as subsequently measured at amortised cost.

The Company's financial assets include cash and other receivables. The Company assesses on a forward-looking basis the expected credit losses, defined as the difference between the contractual cash flows and the cash flows that are expected to be received.

Financial liabilities

Financial liabilities include the other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Exploration and evaluation assets

Exploration and evaluation assets represent the costs of pre-feasibility studies, field costs, government fees and the associated support costs at the Company's Pitombeiras project and formerly the Pedra Branca project.

Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the Statements of Profit or Loss and Other Comprehensive Income. Only material expenditures incurred after the acquisition of a license interest are capitalised. Historically, the expenditures related to exploration and evaluation have not been material, as the Company is active in areas where there are minimal and immaterial exploration and evaluation costs and therefore the costs in previous years have been expensed.

Interests in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies.

The results and assets and liabilities of associates are incorporated using the equity method of accounting. Under the equity method, an investment in an associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Company's share of profit or loss and other comprehensive income of the associate.

3. Critical accounting estimates and judgements

The Company makes certain estimates and assumptions regarding the future. Judgements, estimates and assumptions are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Judgements

As discussed in Note 2 there exists a material uncertainty which may cast significant doubt about the Company and Company's ability to continue as a going concern. Given the proceeds from the sale of the Pedra Branca project and based on the Company's planned expenditure on the Pitombeiras vanadium deposit and the Company's working capital requirements, the Directors have a reasonable expectation that the Company will have adequate resources to meet its capital requirements for the foreseeable future.

The Directors have considered the criteria of IFRS 6 regarding the impairment of exploration and evaluation assets and have decided based on this assessment that there is no basis to impair the carrying value of its exploration assets for the Pitombeiras project (2020: $346,000, 2019: $41,000) at this time.

Estimates and assumptions

In arriving at the carrying value of investments in associates, the Company determines the need for impairment based on the level of geological knowledge and confidence of the mineral resources. Such decisions are taken on the basis of the exploration and research work carried out in the period utilising expert report.

The Company measures share options at fair value. For more detailed information in relation to the fair value measurement of such items, please refer to Note 13.

4. Segment information

The Company evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS 8. In the Directors' opinion, the Company only operates in one segment: mining services. All non-current assets have been generated in Brazil.

The Directors believe that the Company's operations are not subject to any significant seasonality.

5. Tax expense

Factors that may affect future tax charges 

Apart from the losses incurred to date, there were no factors that may affect future tax charges. 

6. Earnings per share

There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements.

On 14 August 2019, the Company completed the disposal of Pedra Branca do Brasil Mineracao S/A ('Pedra Branca') to ValOre Metals Corp ('ValOre' or the 'Purchaser') pursuant to the share purchase agreement dated 16 July 2019 ('Share Purchase Agreement'). The subsidiary was reported in the annual report for the year ended 30 June 2019 as a discontinued operation.

Financial information relating to the discontinued operation for the period to the date of disposal is set out below.

(a) Consideration received or receivable

The financial performance and cash flow information presented reflects the operations for the period ending 14 August 2019.

The Company received the final cash payment of CAD$1,000,000 and 500,000 Deferred Consideration Shares on 10 February 2020. As at 30 June 2020, the Company was due to receive the remaining 2,500,000 ValOre common shares over the next 2 years (Deferred Consideration Shares). As at 30 June 2020 the fair value of the Deferred Consideration Shares was determined to be $495,000.

(b) Financial performance and cash flow information

The financial performance and cash flow information presented reflects the operations for the period ending 14 August 2019.

(c) Net assets as at date of sale

The carrying amounts of assets and liabilities as at the date of sale on 14 August 2019 were:

8. Exploration & evaluation assets

Exploration and evaluation assets represent the costs of pre-feasibility studies, field costs, government fees and the associated support costs at the Company's Pitombeiras West vanadium deposit project.

9. Investments

On 3 October 2019, the Company acquired shares in the share capital of Fodere Titanium Limited for $100,000 (2019: $nil). Fodere Titanium Limited is a United Kingdom registered minerals technology company which has developed innovative processes for the titanium, vanadium, iron and steel industries.

10. Investments in associates

On 14 August 2019 pursuant to the Share Purchase Agreement following the completion of the disposal of Pedra Branca to ValOre, the Company received the initial Consideration Shares in ValOre, totalling 22,000,000 common shares, equating to the Company owning 26 percent of ValOre's then enlarged share capital. As at 30 June 2020 the Company held 24.9% of ValOre's share capital.

During the period, the Company received the first tranche of 500,000 Deferred Consideration Shares in February 2020. Post period end, the Company will receive the remaining Deferred Consideration Shares totalling 2,500,000 payable in five equal tranches of 500,000 each tranche. Post balance date, in August 2020, the second tranche of 500,000 Deferred Consideration Shares were received by the Company. Currently, the Company has a 17.68% interest in ValOre's share capital, however, is still considered an associate as Brian McMaster and Luiz Azevedo are both on the board of directors of ValOre.

Refer to Note 7 for more information relating to the disposal of Pedra Branca. Refer to Note 15 for more information relating to subsequent events.

ValOre is a Vancouver based company with a portfolio of high-quality uranium and precious metal exploration projects in Canada and Brazil that is listed on the Toronto Stock Exchange ("TSX") Venture Exchange.

11. Other receivables

Other receivables includes accrued income totalling $495,000 relating to the disposal of Pedra Branca as follows:

(a) 2,500,000 Deferred Consideration Shares in ValOre with fair value determined to be $495,000 at balance date.

12. Share capital

Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.

13. Share options and warrants

In December 2019, as part of the new award of the Director/Consultant Options, all of the individuals concerned, together with the other Directors of the Company who were not receiving new share options surrendered their existing holdings of share options, which in total aggregated 8,000,000 share options. These share options were awarded at the time of the Company's IPO on AIM in June 2017, with an exercise price of 5 pence per share option (6.5 US cents), and an expiry date of 31 December 2019. All other options currently outstanding in the Company, which in total aggregated 7,250,000, were on the same terms and expired unexercised on 31 December 2019.

Share warrants outstanding at the end of the period have the following expiry date and exercise prices:

The warrants were valued using the Black Scholes Model with inputs noted in the above table and further inputs as follows:

Share options granted during the twelve month period ended 30 June 2020 have the following expiry date and exercise prices:

The fair value at grant date is independently determined using an adjusted form of the Black Scholes Model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk free interest rate for the term of the option and the correlations and volatilities of the peer group companies. In addition to the inputs in the table above, further inputs as follows:

The model inputs for options granted during the period included:

(a) options are granted for no consideration and vested options are exercisable for a period of five years after the grant date: 6 December 2019.

(b) expiry date: 31 December 2024.

(c) share price at grant date: 1.75 pence.

(d) expected price volatility of the company's shares: 50%.

(e) risk-free interest rate: 1.0%.

13. Related Party Transactions

During the period the Company entered into the following transactions with related parties:

Garrison Capital Partners Limited is a related party to the company due to having a director in common. At the period end, it was owed $2,000 (2019: $62,000).

Lauren McMaster is a related party to the Company due to being married to the Chairman. At the period end, the amount owed was $nil (2019: $8,000).

FFA Legal Ltda is a related party to the Company due to having a director in common with Company. At the period end it was owed $nil (2019: $nil).

14. Subsequent Events

a) On 10 August 2020, the Company announced that it had sold 7,000,000 of its ValOre Metals Corp common shares at CAD$0.25 per share for total gross proceeds of CAD$1,750,000..

b) On 14 August 2020, the Company received 500,000 Deferred Consideration Shares from ValOre, being the second instalment due under the terms of the Share Purchase Agreement.

c) Jangada's remaining shareholding position in ValOre now stands at 16,000,000 common shares, which is equivalent to 17.68% of the total basic common ValOre shares outstanding.

d) Refer to Notes 7 and 10 for information relating to the disposal of Pedra Branca.

15. Nature of Financial Information

The unaudited consolidated interim financial information presented above does not constitute statutory financial statements for the period under review.

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: