TIDMJLP
RNS Number : 7391E
Jubilee Metals Group PLC
10 November 2020
Jubilee Metals Group Plc
Registration number (4459850)
Altx share code: JBL
AIM share code: JLP
ISIN: GB0031852162
10 November 2020
Jubilee Metals Group Plc
("Jubilee" or the "Company")
Audited results for the year ended 30 June 2020
Notice of Annual General Meeting and availability of Annual
Financial Statements
Jubilee, the AIM and Altx traded metals processing company is
pleased to announce its audited results for the year ended 30 June
2020.
Financial Highlights
-- Total revenue for the year increased by a strong 132 %, to
GBP 54.8 million (ZAR 1.1 billion) (1) [2019: GBP 23.6 million (ZAR
432.6 million)]
-- Adjusted Group EBITDA increased sharply by 132 % to GBP 22.6
million (ZAR 446.4 million) (adjusted EBITDA excludes depreciation,
impairments and other non-cash charges and gains)
-- Earnings growth of 162 % to GBP 18.3 million (ZAR 361.1
million) [2019: GBP 7.00 million (ZAR 128.3 million)] and a return
on equity of 21.2 %, [2019: 10.5 %]
-- Earnings per share up 96 %, to 0.94 pence (ZAR 18.47 cents)
[2019: 0.48 pence (ZAR 8.75 cents)]
-- Jubilee delivered strong cash flows from its operating
activities of GBP 19.4 million (ZAR 415.4 million) [2019: positive
cash flow of GBP 4.76 million (ZAR 84.79 million)]
-- During the year under review, a total of GBP 26.1 million
(ZAR 557.9 million) was invested in acquisitions and purchases of
property, plant and equipment, nearly doubling the previous year's
total investment of GBP 13.5 million (ZAR 240 million), while at
the same time, a further GBP 4.2 million (ZAR 89.1 million) of
external debt obligations were repaid
-- Operating profit boosted by 226 %, to GBP 15.9 million (ZAR:
313.2 million) [2019: profit of GBP 4.87 million (ZAR89.38
million)], with an operating margin of 29 % (2019: 20.7 %)
-- Balance sheet strengthened substantially, with total assets
increasing by 28 %, to GBP 130.6 million (ZAR 2.8 billion) [2019:
GBP 102.0 million (ZAR 1.8 billion)]
-- Total equity increased to GBP 94.2 million (ZAR 2 billion),
from GBP 78.7 million (ZAR 1.4 billion) a year earlier, maintaining
a strong equity ratio of 72 % (2019: 77 %)
-- Overall, the Group's gearing remains low, with current
assets* covering 92.7% (2019: 126.74 %) of total short and long
term liabilities
* current assets include inventory, trade and other receivables
and cash and cash equivalents
Operational Highlights
-- PGM (2) Operations delivered a record production of 40 743
ounces (2019: 23 847 ounces) for the year, generating PGM revenue
of GBP 34.5 million (ZAR 681.9 million), compared to GBP 15.8
million (ZAR 288.9 million) in the previous year
-- Chrome Operations delivered 377 883 tonnes of chrome
concentrate (2019: 181 947 tonnes), generating chrome revenue of
GBP 17.2 million (ZAR 338.2 million) [(2019: GBP 7.8 million (ZAR
143.7 million)]
-- Jubilee completed the acquisition of the Sable Zinc Refinery
in Kabwe, Zambia for a cash consideration of GBP 9.2 million (US$
12.0 million) (ZAR 176.0 million). The refinery is situated
immediately adjacent to the large stock piles of zinc, lead and
vanadium that Jubilee has contracted from BMR Group Plc ("BMR")
Investment Highlights
-- Jubilee acquired 100 % of the rights to the PGM tailings
situated at Jubilee's Inyoni Operations (previously Hernic) located
in the Bushveld Complex, South Africa
-- Jubilee has also acquired 100% of all further rights to the
chrome contained in all of the historical tailings at Inyoni
Operations as described above
-- Jubilee implemented its option to acquire Enviro Mining
Limited from BMR. Enviro Processing Limited is a subsidiary of
Enviro Mining Limited that owns the small scale mining licence in
Zambia
-- Jubilee has secured the rights to approximately 150 million
tonnes of copper containing surface tailings, targeted to be
upgraded at site and refined at its Sable Refinery in Zambia. This
will be done through a joint operation with the mining rights
holder. Project Elephant alone holds the potential to produce
copper concentrates in excess of the total Sable Refinery capacity
of 14 000 tonnes per annum of copper cathode
-- Post the period under review Jubilee secured the rights to
approximately 2 million tonnes of copper run-of-mine ("ROM")
material with the potential of increasing the ROM material to 4
million tonnes, as well as a targeted 2.5 million tonnes of copper
containing tailings ("Project Roan")
-- Post the period under review Jubilee secured the rights to an
additional 115 million tonnes of copper and cobalt tailings. This
increases Jubilee's total secured rights to copper and cobalt
tailings to approximately 270 million tonnes
1= For income statement purposes conversions are at the average
GBP:ZAR rates for the period under review and for balance sheet
purposes at the spot rate as at year end. All other conversions are
at rates at the time announced.
2= 6 Element Platinum Group Metals (platinum, palladium,
rhodium, ruthenium, iridium + gold).
Operational Highlights post the period under review
-- PGM and chrome operations delivered record quarterly
operational earnings of GBP 15.17 million (ZAR 332.36 million),
surpassing the previous operational record set during the full H1
2020 period
-- Jubilee's PGM operations hit its highest quarterly PGM
production, reaching 15 044 PGM ounces produced during Q3 2020
-- PGM record production supported by 136 162 tonnes of chrome
concentrate produced under tolling agreements from third party ore
suppliers during Q3 2020
-- Chrome Operations improved its attributable earnings margin,
achieving 23 % for Q3 2020 compared to 7 % for H1 2020
Key financial and operational indicators
GROUP Unit 12m to 12m to
------------------------------------- ---------
30-Jun-20 30-Jun-19
----------------------------------------------- ---------------------- ------------------------
GROUP RESULT
---------------------- ------------------------
Revenue GBP'000 54 775 23 586
--------- ---------------------- ------------------------
Adjusted attributable earnings
(1) GBP'000 25 088 10 055
--------- ---------------------- ------------------------
Adjusted attributable earnings
margin % 46 43
--------- ---------------------- ------------------------
EBITDA GBP'000 22 664 12 546
--------- ---------------------- ------------------------
Adjusted EBITDA (2) GBP'000 22 643 8 952
--------- ---------------------- ------------------------
Adjusted EBITDA margin % 41 38
--------- ---------------------- ------------------------
PGM
---------------------- ------------------------
PGM GBP revenue GBP'000 34 590 15 750
--------- ---------------------- ------------------------
PGM $ revenue $'000 43 594 20 003
--------- ---------------------- ------------------------
Attributable PGM GBP earnings GBP'000 21 486 8 158
--------- ---------------------- ------------------------
Attributable PGM $ earnings $'000 27 079 10 361
--------- ---------------------- ------------------------
Attributable PGM earnings margin % 62 55
--------- ---------------------- ------------------------
Attributable PGM ounces produced oz 40 743 23 847
--------- ---------------------- ------------------------
PGM $ revenue per ounce $/oz 1 070 839
--------- ---------------------- ------------------------
PGM attributable $ earnings per
ounce $/oz 665 434
--------- ---------------------- ------------------------
Adjusted PGM production $ unit
cost (3) $/oz 541 471
--------- ---------------------- ------------------------
CHROME
---------------------- ------------------------
Chrome GBP revenue GBP'000 17 158 7 835
--------- ---------------------- ------------------------
Chrome $ revenue (4) $'000 21 624 9 950
--------- ---------------------- ------------------------
Attributable chrome GBP earnings GBP'000 803 1 309
--------- ---------------------- ------------------------
Attributable chrome $ earnings $'000 1 013 1 662
--------- ---------------------- ------------------------
Attributable chrome earnings margin % 5 17
--------- ---------------------- ------------------------
Attributable chrome tonnes produced tonnes 377 883 181 947
--------- ---------------------- ------------------------
Chrome $ revenue per tonne $/t 57 55
--------- ---------------------- ------------------------
Chrome attributable $ earnings
per tonne $/t 3 9
--------- ---------------------- ------------------------
1. Attributable earnings refers to earnings allocated to the
group based on the group's contractual rights in each project.
2. Adjusted EBITDA refers to EBITDA adjusted for non-cash
expenses including impairments, gain on bargain purchase, share
based payments and other non-cash charges and gains.
3. The adjusted PGM production unit cost includes all direct and
indirect costs attributable to the project including allocated
corporate charges. The costs for the period under review includes
all the operating costs for the Windsor PGM JV 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.
Chief Executive Officer's overview
This reporting period again showcases the strength and
resilience of Jubilee's business strategy with sustained, strong
growth in all aspects of the Company despite the unprecedented
challenges faced as a result of the COVID-19 pandemic.
Naturally, Jubilee was not immune to the pandemic as South
Africa declared a nationwide lockdown to fight the spread of the
virus, forcing the temporary suspension of all operations in March,
with a gradual restart of the operations permitted over the
following two months. During this period, Jubilee implemented the
required safety measures for the protection of all staff in strict
adherence with lockdown rules and regulations as set out by the
South African Government.
For the reporting period, Group Revenue increased sharply by 132
%, to GBP 54.8 million (ZAR 1.1 billion) and adjusted Group EBITDA
increased 153 % to GBP 22.6 million (ZAR 446.4 million) (adjusted
EBITDA excludes depreciation, impairment and other non-cash charges
and gains).
Jubilee's results reinforce the Company's confidence in what it
refers to as "The Jubilee Way", continuously striving to translate
leading in-house processing and metals recovery excellence into
industry leading operational efficiencies. Jubilee's achievements
in the chrome industry in particular, with the introduction of its
in-house developed Fine Chrome recovery plant and its state of the
art Inyoni PGM recovery plant, are examples of "The Jubilee Way" in
action.
As a product of these achievements, Jubilee is also seeing an
increase in approaches from established industry players looking to
partner and work with Jubilee in order to improve overall
operational efficiencies and target previously discarded metal
values. This is evidence that Jubilee's brand as a leading metals
recovery company has travelled across metal groups and mining
jurisdictions and holds the potential to contribute significantly
to future growth.
During the period under review, Jubilee further diversified its
operations across metals and mining jurisdictions. Notably, the
Company added copper and cobalt to its existing chrome and PGM
operations. Jubilee has set a bold target of reaching 25 000 tonnes
of copper units per annum, and as such has concluded several
strategic agreements in this regard.
In Zambia, the Company is seeking to replicate the success of
its PGM and Chrome operations, and this has been a significant
period seeing rapid growth. Jubilee has already secured the rights
to vast copper and cobalt tailings resources following its
acquisition of the Sable Refinery, which are in addition to the
rights that the Company holds over the Kabwe zinc, lead and
vanadium tailings in Zambia. Jubilee is targeting to establish the
Sable Refinery as a multi metal refinery in Zambia on the back of
its surface held tailings rights.
In August 2019, Jubilee acquired the Sable Refinery from
Glencore in Zambia and commenced with the commissioning of the
copper refinery circuit in December 2019. This was followed by
three key transactions in Zambia, whereby Jubilee secured access to
approximately 270 million tonnes of historical copper and cobalt
tailings material, which will be upgraded and refined at the Sable
Refinery as well as third party partnered refiners. Jubilee is
committed to rapidly building its copper production profile,
ensuring it is perfectly poised to take a commanding role in the
copper space in Zambia.
In June 2020, Jubilee implemented its option to acquire Enviro
Mining Limited from BMR. Enviro Processing Limited is a subsidiary
of Enviro Mining Limited that owns the small-scale mining licence
in Zambia.
Jubilee's South African operations continued to deliver further
growth, despite the operational interruptions experienced during
the lockdown period, delivering 40 743 6E PGM ounces (increase of
71 % on the previous period). During the period Windsor PGM
Operations reached full operational capacity and in November 2019,
Jubilee concluded the acquisition of all rights to the historical
PGM and chrome tailings at Inyoni Operations. The chrome
operations, which further enable the PGM business by firstly
recovering the chrome from the ore to deliver a PGM rich feed
stream to the PGM recovery plants, also excelled, producing 377 883
tonnes of chrome concentrate (increase of 108 % on the previous
period) thanks to Jubilee's industry leading chrome recovery
efficiencies. This performance facilitated Jubilee's ability to
successfully contract third party run-of-mine chrome feed, coupled
with secure offtake agreements for chrome concentrate, ensuring
that the production capacity at its Windsor Chrome Operations will
be fully utilised throughout the next three years, with the option
to further extend the supply agreement. This contract alone
significantly increases Jubilee's access to PGM rich chrome
tailings which are in addition to the large tailing resources
already owned by the Company.
Post period end, Jubilee continued to expand its chrome
operations with the addition of a further 35 000 tonnes of
processing capacity through another joint operation agreement,
whereby Jubilee takes control of the management of a previously
under utilised chrome facility named Windsor 8. Jubilee also
entered into a further management and processing agreement, under
which Jubilee has been appointed to manage and operate an
additional chrome beneficiation plant adjacent to its Inyoni PGM
operations. This additional processing includes the processing of a
minimum of 40 000 tonnes of chrome ore per month for a 3 year
period, which may be extended.
Under each of these agreements Jubilee retains ownership of the
PGM containing discard from the chrome operations. While the chrome
operations, on their own, now form a notable profit contributing
segment of the overall business and continue to grow, at the same
time, they ensure a long term, ongoing and sustainable supply of
additional high quality PGM rich feed material for the PGM
operations, over and above the existing tailing resource already
owned by the Company.
The continued growth in operations is further demonstrated by
the unaudited operational results achieved for Q3 2020, producing
record 15 044 6E PGM ounces and 136 162 tonnes of chrome
concentrate for the 3 month period.
As has been evidenced, Jubilee's South African business has
matured substantially, with operations continuing to grow on the
back of improved efficiencies and the full contribution of its
Windsor PGM operations. The Company has shifted its focus from
rapid growth to sustained performance and quality earnings through
extended longevity and the strong potential to grow organically, as
well as through strategic partnering and acquisitions.
Chairman's statement
The year under review has again been very strong, with new
records being broken, productivity improvements implemented and the
acquisition of major new projects in South Africa and in Zambia
expanding our operational, jurisdictional and earnings footprint.
We have significantly increased our portfolio of operations in
Southern Africa and continue with our exposure to a broad commodity
basket that includes PGMs, chrome, copper, lead, zinc, vanadium and
cobalt, seeing another impressive increase in earnings of 162 % to
GBP18.3 million (ZAR 361 million).
With the increasing awareness globally of the need to reduce
mine waste exposure and the vast amount of historic on-surface
waste material globally, governments and corporate mining entities
have an obligation to implement a mine waste treatment solution.
There is the recognition of the potential value of such mine waste,
although few companies have the abilities or expertise to implement
mine waste recovery projects. This is where Jubilee, with its
proven technical know-how, comes in. We turn potential waste
liabilities into assets through implementing our bespoke
environmentally conscious metal recovery solutions that ensure a
zero-effluent policy. Importantly the projects have defined
reserves with the tonnage and a grade known in advance, and do not
have the expenses related to traditional mining techniques. Our
specialised solutions have exceptionally low capital intensity and
operating costs, which delivers robust margins that we can see this
year.
The Jubilee business has gone through a period of significant
maturity during the period and in the immediate months post-period
end. We have expanded our project portfolio in both South Africa
and, importantly, in Zambia. The expansion into Zambia is
significant for us, where we continue to establish our multi-metal
recovery and refining operations, and is proof that the know-how
and experience we have accumulated from operating in South Africa
can be translated into other jurisdictions across the African
continent, and beyond.
Our operations in South Africa have all performed to expectation
and often above, this being achieved during a period of fluctuating
commodity prices where we have seen distressed chrome prices and
depressed PGM prices, notwithstanding the high palladium and
rhodium prices. Despite the overall lower metal prices, the
Company's strategy of having a diversified commodity basket and
integrating PGMs and chrome has paid off handsomely.
The expansion of the operations in South Africa and in Zambia is
testament to the team's proven technical abilities and exceptional
hard work during the period. Further details of each of our
projects can be found in the Chief Executive's Report, but with the
exception of the Windsor PGM and Chrome projects, most of our
acquisitions in South Africa have been in and around expanding
existing projects, where, given our knowledge of the operational
and financial risks, acquisition and implementation risks have been
well managed and mitigated. The year under review, has seen the
South African output of PGMs nearly doubling to 40 743 ounces on a
6E basis and reaching 377 883 tonnes of chrome concentrate.
In Zambia, the completion of our acquisition of the Sable
Refinery has allowed the Company to become a copper producer, early
on after acquisition. The acquisition of the Sable Refinery,
brought into operation in December and January, adjacent to our
Kabwe tailings resource, has provided Jubilee with the opportunity
to enter the copper arena in the country, where primary deposits
are still readily available from third parties on various scales
and in excess of 1 billion tonnes of dump and tailings material
exists. We produced and sold our first copper cathode from tails in
March 2020 and has since brought the cobalt steam on-line. The
refinery has reached full operational readiness to step up
production in-line with the commissioning of our copper tailings
projects.
Securing the rights to 150 million tonnes of copper containing
surface tailings in June was a further significant step in Zambia
for us. This project together with our Project Roan holds the
potential to produce copper concentrates in excess of the Sable
Refinery's capacity and the potential result of this on our
earnings will be significant. In addition, the joint operation
agreement signed in August this year, post period end, secures the
rights to process a further feed-stock of 2 million tonnes of
copper run-of-mine material. This was followed in November by the
very significant agreements to collectively secure a further 115
million tonnes of copper and cobalt tailings. Jubilee has now
amassed a total of 270 million tonnes of copper and cobalt
tailings. This enables Jubilee to rapidly roll out its strategy of
having a decentralised facility feeding capacity at the Sable
Refinery and partnering with further refiners to process the
quantum of copper targeted to be produced by Jubilee. This further
diversifies our revenue streams and most importantly, is very
profitable for us.
The copper acquisitions described above take Jubilee into the
realm of a significant Zambian producer, well in excess of the
aforementioned 2021 build-up. The zinc circuit construction at the
Sable Refinery has been delayed due to the COVID-19 pandemic
restrictions, but we are planning to recommence construction once
border sanctions are lifted. We are expecting to recommence the
construction in Q1 2021.
During the year, we have built on our local and global
reputation as a maturing specialist dump recovery company and this
has brought many potential opportunities to the Company. We are
fully engaged in pursuing these opportunities and increasing our
cashflows at a pace commensurate with our opportunities. Our brand
"The Jubilee Way" is gaining respect from the trade and investment
industries and over the last year our space has attracted much
attention and we are well placed to take advantage of that
attention. Copper prices are currently very strong and are
forecasted to be even stronger in the coming years. We feel that
chrome has seen an unprecedented bottom, and the fundamentals for
PGMs remain good in the mid-term. Our operational, research and
business development teams have shown considerable resilience and
tenacity during a year of exceptional growth, accompanied by
exceptional challenges and we feel well prepared to accept new
challenges and increase the rate of growth of the business.
Like most businesses, we have not escaped the challenges of the
COVID-19 pandemic and I am personally saddened by the tragic
consequences of this pandemic, both to individuals and business
undertakings in general. Our employees are our most important asset
and the management at Jubilee has applied maximum thought and
implementation to schemes directed toward limiting the effect on
our employees and our business overall.
I would like to take this opportunity to thank all management
and employees, who remain positive during this period of
uncertainty which unfortunately is still with us. Global business
resumption is likely to be stop start, and the only economy
currently performing well is China. They, of course, are dependent
on the rest of the world to kickstart their economies in order to
have global supply demand fundamentals evident before the outbreak
of the pandemic. We as a company are on a strong footing to face
the challenges that the remainder of the year will present and are
hopeful for an environment which is more stable and therefore more
predictable.
Finally, I would like to thank our CEO, Leon Coetzer, for his
resilience for maintaining and increasing operational levels and
overseeing new business acquisitions. Leon has continued to put
together an excellent team of likeminded individuals, who I know
will respond well to all of the challenges that our rapid growth
presents.
Colin Bird
Non-executive Chairman
9 November 2020
Notice of Annual General Meeting and availability of the Group's
Annual Financial Statements
The Company also hereby gives notice of its 2020 Annual General
Meeting , which will be held on 3 December 2020 at 9:00 am UK time
at the Company's South African offices at Ground Floor, Support
Services Place, Jigsaw Office Park, 7 Einstein Street, Highveld
Techno Park, Centurion, Gauteng, South Africa to transact the
business as stated in the notice of Annual General Meeting. The
Group's Annual Financial Statements for the year ended 30 June 2020
has been posted to the website, www.jubileemetalsgroup.com together
with the notice of the Company's 2020 Annual General Meeting .
Shareholders are advised that the Notice of Annual General Meeting
, for the year ended 30 June 2020 has been posted to Jubilee
shareholders today, 10 November 2020.
In light of current restrictions on public gatherings and to
ensure shareholders can comply with the government measures, the
Company has concluded that shareholders will not be permitted to
attend in person. The Company therefore requests that shareholders
cast their votes by proxy to be received 48 hours (excluding
non-business days) in advance of the time of the Annual General
Meeting.
Instructions on how shareholder can cast their votes for the
Annual General Meeting are included in the Notice of Annual General
Meeting.
Salient Dates:
Record date to determine which shareholders
on the register are entitled to receive the Friday, 30 Oct
notice of AGM (SA) 2020
Notice of AGM posted to shareholders Tuesday, 10 Nov
2020
Last date to trade in order to participate in Tuesday, 24 Nov
and vote at the AGM (SA) 2020
Record date to determine which shareholders
are entitled to participate and vote at the Friday, 27 Nov
AGM (SA) 2020
Record date to determine which shareholders
are entitled to participate and vote at the Tuesday, 1 Dec
AGM (UK) 2020
Latest time date for receipt of proxy forms
and other uncertificated instructions 09h00 Tuesday, 1 Dec
(UK) 11h00 (SA) 2020
Annual General Meeting 09h00 (UK) 11h00 (SA) Thursday, 3 Dec
2020
Results of AGM released on SENS and RNS Thursday, 3 Dec
2020
Group statements of financial position at 30 June 2020
30 June 30 June
Figures in Sterling 2020 2019
----------------------------- ----------- ---------------
Assets
Non-current assets
Property, plant and
equipment 20 076 448 17 901 768
Intangible assets 72 901 175 46 937 992
Investments in associates 450 598 1 895 477
Loans to Group companies - -
Other financial assets 3 406 644 5 709 324
----------- ---------------
96 834 865 72 444 561
----------- ---------------
Current assets
Inventories 2 140 239 1 660 691
Deferred tax asset 3 223 254 -
Trade and other receivables 13 083 307 4 864 399
Contract assets 5 408 622 4 207 330
Cash and cash equivalents 9 947 822 18 865 288
----------- ---------------
33 803 244 29 597 708
----------- ---------------
130 638 102 042
Total assets 109 269
----------- ---------------
Equity and liabilities
Equity attributable
to equity holders of
parent
Share capital and share 114 585 105 820
premium 392 411
Reserves 10 317 560 22 319 022
(33 201 (51 842
Accumulated loss 211) 702)
----------- ---------------
91 701 741 76 296 731
Non-controlling interest 2 479 277 2 393 081
----------- ---------------
94 181 018 78 689 812
----------- ---------------
Liabilities
Non-current liabilities
Other financial liabilities 10 428 719 10 396 736
Deferred tax liability 10 944 698 6 018 620
Provisions 694 358 -
----------- ---------------
22 067 775 16 415 356
----------- ---------------
Current liabilities
Other financial liabilities 1 460 968 2 272 459
Trade and other payables 12 422 880 4 664 642
Contract liabilities 505 468 -
----------- ---------------
14 389 316 6 937 101
----------- ---------------
Total liabilities 36 457 091 23 352 457
----------- ---------------
130 638 102 042
Total equity and liabilities 109 269
----------- ---------------
The financial statements were authorised for issue and approved
by the Board on 9 November 2020 and signed on its behalf by:
Leon Coetzer
Chief Executive Officer
Company number: 04459850
Group statements of comprehensive income for the year ended 30
June 2020
Figures in Sterling 30 June 30 June
2020 2019
-------------------------------------- ------------- ------------
Continuing operations
Revenue 54 774 818 23 585 845
Cost of sales (29 687 220) (10 709 445)
------------- ------------
Gross profit 25 087 598 12 876 400
Other income 1 470 631 385 000
Operating expenses (10 670 041) (8 388 378)
------------- ------------
Operating profit 15 888 188 4 873 022
Investment revenue 125 264 30 058
Fair value adjustments (5 021 585) 5 021 585
Gain on bargain purchase through
business combinations 6 606 755 -
Impairments - -
(1 112 909
Finance costs (2 420 875) )
Share of loss from associates (1 444 879) (865 489)
------------- ------------
Profit before taxation 13 732 868 7 946 267
Taxation 4 495 716 (969 971)
------------- ------------
Profit for the year 18 228 584 6 976 296
Earnings for the year
Attributable to:
Owners of the parent 18 320 392 6 993 587
Non-controlling interest (91 808) (17 291)
------------- ------------
18 228 584 6 976 296
------------- ------------
Earnings per share (pence) 0.94 0.48
Diluted earnings per share
(pence) 0.93 0.47
Reconciliation of other comprehensive
income:
Profit for the year 18 228 584 6 976 296
Other comprehensive income:
Exchange differences on translation
foreign operations (12 388 588)* 679 636
------------- ------------
Total comprehensive profit 5 839 996 7 655 932
------------- ------------
Total comprehensive profit
attributable to:
Owners of the parent 6 317 824 7 626 600
Non-controlling interest (477 828) 29 332
------------- ------------
5 839 996 7 655 932
------------- ------------
* This amount arose on translation of foreign operations and is
excluded when calculating earnings per share.
Group statements of changes in equity for the year ended 30 June
2020
Total
Convertible attributable
notes to equity
Share Share- reserve holders
capital based of the Non-
Figures in and share Translation Merger payment Total Accumulated Group/ controlling Total
Sterling premium reserve reserve reserve reserves loss Company interest equity
----------------- ---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
Group
Balance at 1 July 94 065
2018 073 (4 220 464) 23 184 000 2 468 578 - 21 432 114 (59 057 860) 56 439 327 2 363 401 58 802 728
Changes in equity
Profit for the
year - - - - - - 6 993 589 6 993 589 29 332 7 022 921
Other
comprehensive
income - 633 013 - - - 633 013 - 633 013 - 633 013
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -------------
Total
comprehensive
income
for the year - 633 013 - - - 633 013 6 993 589 7 626 602 29 332 7 655 932
Issue of share
capital net 11 765
of costs 355 - - - - - - 11 765 355 - 11 765 355
Share warrants
issued (10 017) - - 231 593 - 231 593 - 221 575 - 221 575
Share warrants
expired - - - (180 736) - (180 736) 180 736 - - -
Equity component
of convertible
loan note - - - - 203 040 203 040 - 203 040 - 203 040
Changes in fair
value of NCI
interest -
control not lost - - - - - - 40 835 40 835 - 40 835
Changes in
ownership
interest
- control not
lost - - - - - - - - 348 348
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
11 755
Total changes 338 633 013 - 50 857 203 040 886 908 7 215 159 19 857 405 29 680 19 887 085
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
Balance at 30 105 820 22 319
June 2019 411 (3 587 451) 23 184 000 2 519 435 203 040 022 (51 842 700) 76 296 733 2 393 081 78 689 812
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
Changes in equity
Profit for the
year - - - - - - 18 320 392 18 320 392 (477 828) 17 842 564
Other
comprehensive (12 002 (12 002 (12 002 (12 002
income - 568) - - - 568) - 568) - 568)
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
Total
comprehensive
income (12 002 (12 002
for the year - 568) - - - 568) 18 320 392 6 317 824 (477 828) 5 839 996
Issue of share
capital net
of costs 8 764 981 - - - - - 8 764 981 - 8 764 981
Share warrants
issued - - - 205 903 - 205 903 - 205 903 - 205 903
Share options
exercised/lapsed - - - (324 597) - (324 597) 321 097 (3 500) - (3 500)
Share options
issued - - - 119 800 - 119 800 - 119 800 - 119 800
Business
Combinations - - - - - - - - 564 024 564 024
(12 002 (12 001
Total changes 8 764 981 568) - 1 106 - 462) 18 641 489 15 405 008 86 196 15 491 204
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
Balance at 30 114 585 (15 590 10 317
June 2020 392 019) 23 184 000 2 520 541 203 040 560 (33 201 211) 91 701 741 2 479 277 94 181 018
---------- ------------ ----------- ---------- ------------ ----------- ---------------- ------------- ------------ -----------
Group statements of cash flows for the year ended 30 June
2020
30 June 30 June
Figures in Sterling 2020 2019
------------------------------- ------------ -----------
Cash flows from operating
activities
Cash generated from operations 21 734 025 5 514 036
Interest income 125 264 30 058
Finance costs (2 420 875 (787 390)
------------ -----------
Net cash from operating
activities 19 438 414 4 756 704
------------ -----------
Cash flows from investing
activities
Purchase of property, plant
and equipment (1 389 730) (4 496 478)
Sale of property, plant
and equipment 246 783 17 060
(16 713
Purchase of intangible assets 185) (2 181 981)
Business combinations (8 008 355) (6 826 281)
Receipt of loans - 49 368
Net cash from investing (25 864 (13 438
activities 467) 312)
------------ -----------
Cash flows from financing
activities
Net proceeds on share issues 5 696 282 10 671 831
Decrease in other financial
liabilities (4 168 296) (630 693)
Proceeds from other financial
liabilities - 10 933 550
------------ -----------
Net cash from financing
activities 1 527 986 20 974 688
------------ -----------
Total cash movement for
the year (4 898 066) 12 293 080
Total cash at the beginning
of the year 18 865 288 6 376 153
Effect of exchange rate
movement on cash balances (4 019 400) 196 055
------------ -----------
Total cash at end of the
year 9 947 822 18 865 288
------------ -----------
Notes to the Group financial statements for the year ended 30
June 2020
1. Statement of accounting policies
Jubilee Metals Group PLC is a public company listed on AIM of
the LSE and Altx of the JSE, incorporated and existing under the
laws of England and Wales, having its registered office at 1st
Floor, 7/8 Kendrick Mews, London, SW7 3HG, United Kingdom.
The Group and Company results for the year ended 30 June 2020
have been prepared using the accounting policies applied by the
Company in its 30 June 2020 annual report, which are in accordance
with International Financial Reporting Standards ("IFRS") and IFRC
interpretations, as issued by the International Accounting
Standards Board ("IASB") and adopted for use in the EU (IFRS),
including the SAICA financial reporting guides as issued by the
Accounting Practices Committee and the Companies Act 2006 (UK).
The financial statements are presented in Pound Sterling. For
income statement purposes conversions are at average exchange rates
and for balance sheet purposes at the closing rate as at the period
end. All other conversions are at rates as at the time
announced.
2. Earnings per share
Group
Figures in Sterling 30 June 2020 30 June 2019
Earnings attributable to ordinary equity
holders of the parent (GBP) 18 320 392 6 993 587
----------- ---------
Weighted average number of shares for 1 955 965 1 466 127
basic earnings per share 289 746
Effect of dilutive potential ordinary
shares
Share options and warrants 19 299 151 9 570 223
----------- ---------
Diluted weighted average number of shares 1 975 264 1 475 697
for diluted earnings per share 440 969
----------- ---------
Basic earnings per share (pence) 0.94 0.48
Diluted basic earnings per share (pence) 0.93 0.47
The Group reported a net asset value of 4.46 pence (ZAR 95.26
cents) (2019: 4.24 pence (ZAR 75.60 cents)) per ordinary share.
Tangible net asset value for the period under review was 1.01 pence
(ZAR 21.52 cents) (2019: 1.71 pence (ZAR 30.51 cents)).
The total number of ordinary shares in issue as at 30 June 2020
was 2 112 509 573 (2019: 1 855 300 673) shares.
There have been no other transactions involving ordinary shares
or potential ordinary shares between the reporting date and the
date of this announcement. There were no share transactions post
year end to the date of this announcement that could have impacted
earnings per share had it occurred before year end.
3. Share Capital, Share Premium and Warrants
Share capital and share premium
Authorised
The share capital of the Company is divided into an unlimited
number of ordinary shares of GBP0.01 each.
Group
30 June 2020 30
June 2019
-------------------------------------------- -------------------------
Ordinary shares of 1 pence each (GBP) 21 125 096 18 553 007
Share premium (GBP) 93 460 296 87 267 404
------------ -----------
114 585 105 820
Total issued capital (GBP) 392 411
------------ -----------
The Company issued the following shares during the period and up
to the date of this announcement:
Issue price
-
Date issued Number of shares pence Purpose
---------------------------- ------------------- ----------- -------
Opening balance 1 855 300 673
20 November 2019 162 208 900 4.00 Placing
24 June 2020 95 000 000 3.40 Debt
Closing balance at year-end 2 112 509 573
-------------------
The Company did not issue any shares after year-end to the date
of this announcement. During the year cash transaction costs
accounted for as a deduction from the share premium account
amounted to GBP 655 322 (2019: GBP 612 805). The company recognised
a share-based payment expense in the share premium account in an
amount of GBP 205 903 (2019: GBP 10 017) in accordance with section
610 (2) of the United Kingdom Companies Act 2006. The charge
relates to the issue of new Jubilee shares and the amount was
accounted for as a deduction from the share premium account.
Warrants
At year-end and at the date of this announcement the Company had
the following warrants outstanding:
Issue Number of Subscription Expiry date Share price
date warrants price (pence) at issue
date (pence)
1/19/2018 65 277 778 6.12 1/19/2023 3.55
------------------- --------------- ------------ ------------------
12/28/2018 32 362 460 3.86 1/19/2023 2.40
------------------- --------------- ------------ ------------------
3/20/2019 1 473 055 3.38 3/20/2021 2.45
------------------- --------------- ------------ ------------------
11/19/2019 8 429 195 4.00 11/3/2022 4.13
------------------- --------------- ------------ ------------------
6/22/2020 4 750 000 3.40 6/22/2023 3.90
------------------- --------------- ------------ ------------------
112 292 488
------------------- --------------- ------------ ------------------
Reconciliation of the number of warrants
in issue Group
30 June 30 June
2020 2019
---------- -----------
Opening balance 99 113 293 77 114 345
---------- -----------
Issued during the year (1) 13 179 195 33 835 515
---------- -----------
(11 836
Expired during the year - 567)
---------- -----------
112 292
Closing balance 488 99 113 293
---------- -----------
1= The warrants issued are subject to the Company renewing its
authority to issue convertible equity instruments at its next
Annual General Meeting.
4. Business Combinations
4.1 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
for a cash consideration of GBP 9.2 million (US$ 12 million) (ZAR
176 million) (the "Acquisition"). The Acquisition was funded
through a combination of debt and equity. Jubilee secured a
convertible loan note for GBP 6.1 million (US$ 8 million) (ZAR
117.3 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 GBP 11.1 million (US$ 14.5 million) (ZAR 212.6
million) before expenses.
The fair value of the purchase consideration, assets and
liabilities acquired are as follows:
Group
30 June 2020
Figures in Sterling
Fair value of the purchase consideration paid
in cash 10 093 925
----------------------
On 23 August 2019 the Acquisition became unconditional ("Closing
Date"), Jubilee gained control and commenced with the
implementation of a fully integrated multi-metal refinery in
Zambia.
The purchase consideration for the Acquisition was paid in cash,
in stages as follows:
-- US$6 000 000 on 23 August 2019 ("Closing Date");
-- US$ 3 000 000 (US$2 825 786 plus interest on the present
value of future payments in an amount of US$ 174 214) 23 February
2020; and
-- US$ 3 000 000 (US$ 2 661 689 plus interest on the present
value of future payments in an amount of US$ 338 311) on 23 August
2020.
The purchase consideration payable was measured at fair value as
were the assets and liabilities acquired. The portion of the
purchase consideration paid post the period under review is
included in other financial liabilities in an amount of GBP 2 393
437 (US $ 2 950 126). During the period under review interest in an
amount of GBP 367 114 (US$ 462 652) was recognised in profit and
loss.
The following table summarises the recognised amounts of assets
acquired and liabilities assumed at the date of the
acquisition:
Group
Figures in Sterling 30 June 2020
Land and Buildings 1 233 019
------------------
Property, Plant and Equipment 9 157 329
------------------
Trade Receivables 184 800
------------------
Inventories 389 288
------------------
Other current assets 2 433 660
------------------
Cash and Cash Equivalents 136 526
------------------
Long term liabilities (3 858 713)
------------------
Trade payables (440 079)
------------------
Other current liabilities (36 360)
------------------
Fair value of assets acquired 9 199 470
------------------
Goodwill recognised at acquisition 894 455
------------------
Total net assets at acquisition 10 093 924
------------------
The only fair value adjustment was made to property, plant and
equipment with a resultant upward fair value adjustment of GBP 9.6
million recognised on the acquisition date. The goodwill is
attributable mainly to the synergies expected to be achieved from
integrating Sable Zinc into the group's existing mine-to-metals
operations in Zambia. The Integrated Kabwe Project seeks to
establish a fully integrated metal recovery and refining
operational footprint in Zambia. The Kabwe Project combines access
to large surface material with the adjacent multi-metal refining
capabilities.
There were no acquisitions made by Sable Zinc Limited in the
previous period. There were also no transactions recognised that
would require separate disclosure from the assets and liabilities
acquired. The acquired assets contributed to the Group's revenue
for the period under review in an amount of GBP 1.9 million and
earnings in an amount of GBP 1.7 million.
4.2 Acquisition of Enviro Mining Limited (Mauritius)
During 2018 Jubilee executed a shareholders and operating
agreement with BMR and Kabwe Operations Limited ("KOL"). In terms
of these agreements, Jubilee provided funding in amount of GBP 0.3
million in exchange for an initial 15% interest in KOL. These
agreements were updated ("Updated Agreements") to better align with
Jubilee's role as operator and provider of a processing plant.
In terms of the Updated Agreements, Jubilee's nominated
subsidiary BHM also acquired 100% of the issued shares of EML
(comprising 2 ordinary shares of US$1 each), a subsidiary of BMR
which owns EPL and E-Props, for a contingent consideration of GBP 2
803 434 . The transfer of ownership of 100% in EML was completed in
June 2020, the date that Jubilee gained control over EML. Pursuant
to this transaction Jubilee gained 100% shareholding in KOL
effective June 2020 and in addition to this BMR and Jubilee agreed
on the following:
-- BMR be issued with Royalty Instrument by Jubilee which will
entitle BMR to a 12.5% royalty interest in the distributable
earnings generated by the Kabwe Operations, but only after Jubilee
has secured at minimum a 20% return on its investment into the
Kabwe Operations and all costs, taxes, liabilities and depreciation
of the Kabwe Operations have been accounted for, save that the
aforementioned royalty shall be diluted to 11% of earnings in the
event that Jubilee's capital investment into Kabwe Operations
exceeds US$ 15 million;
-- BMR novating all its shareholders' loans it currently has
with EML/EPL/E-Props to BHM; and
-- BMR shall immediately after the transfer of ownership
commence with the demerger from EML of all assets not covered by
the Operating Agreement.
The following table summarises the recognised amounts of assets
acquired and liabilities assumed at the date of the
acquisition:
Group
30 June
Figures in Sterling 2020
Intangibles 14 105 859
------------
Land and buildings 344 909
------------
Property, plant and equipment 288 996
------------
Other receivables 10 590
------------
Cash and cash equivalents 2 594
------------
Deferred tax (4 024 447)
------------
Trade and other payables (101 154)
------------
10 627 347
------------
Non-controlling interest (564 024)
------------
Fair value of contingent consideration (2 803 434)
------------
Pre-existing contractual relationships settled (653 137
------------
Gain on bargain purchase 6 606 752
------------
The only fair value adjustment was made to intangibles with a
resultant upward fair value adjustment of GBP13.4 million
recognised on the acquisition date.
The gain on bargain purchase arose following on an acquisition
by Jubilee of 100% of Kabwe Operations Limited and taking full
control over the operational and financial management of the
Integrated Kabwe Project. The assets and liabilities acquired
enhances the commercial performance of Jubilee's Integrated Kabwe
Project. Furthermore the assets that the seller retained are being
demerged from the assets and liabilities of Enviro Mining
Limited.
There were no acquisitions made by Enviro Mining Limited in the
previous period. There were also no transactions recognised that
would require separate disclosure from the assets and liabilities
acquired. The acquired assets did not contribute to the group's
revenue and earnings for the period under review.
5. Segmental analysis
In the opinion of the Directors, the operations of the Group
companies comprise of four reporting segments being:
- the beneficiation of precious metals through operating
processing plants for the recovery of metals and minerals,
currently recovering PGMs and Chrome and targeting base metals
including lead, zinc, vanadium and copper from (mainly) the waste
material produced as part of the mining cycle ("Base metals
beneficiation");
- a combination of targeted process consulting and developing,
focussed on the development and implementation of process
solutions, specifically targeting both liquid and solid waste
streams from mine processes. This includes existing pilot
operations as part of the process development cycle to provide
mature solutions which includes extractive-metallurgy,
pyro-metallurgy and hydro-metallurgy ("Business Development");
- the exploration and mining of PGMs (Exploration and mining); and
- the parent company operates a head office based in the United Kingdom, which incurs certain administration and corporate costs. ("Corporate").
The Group's operations span six countries, South Africa,
Australia, Madagascar, Mauritius, Zambia and the United Kingdom.
There is no difference between the accounting policies applied in
the segment reporting and those applied in the Group financial
statements. Mauritius and Madagascar do not meet the qualitative
threshold under IFRS 8, consequently no separate reporting is
provided.
Segment report for the year ended 30 June 2020
Figures in Base metal Business Exploration
Sterling beneficiation development and mining Corporate Total
Total revenues 54 774
(1) 54 774 818 - - - 818
--------------- ------------------------- ------------ ---------- ----------
(29 683 (29 687
Cost of sales 413 ) (3 807) - - 220)
--------------- ------------------------- ------------ ---------- ----------
Forex profits/(losses) 723 787 - - (65 433) 658 354
--------------- ------------------------- ------------ ---------- ----------
Profit/(loss) (10 093 (6 363 13 732
before taxation 20 107 447 ) (956 ) 527 ) 871
--------------- ------------------------- ------------ ---------- ----------
Taxation 3 541 615 - - 954 101 4 495 716
--------------- ------------------------- ------------ ---------- ----------
Profit/(loss) (10 093 (5 409 18 228
after taxation 23 649 062 ) (956) 427) 586
--------------- ------------------------- ------------ ---------- ----------
Interest received 101 214 - 167 23 883 125 264
--------------- ------------------------- ------------ ---------- ----------
(2 420
Interest paid (2 245 776) - 35 (175 134) 875)
--------------- ------------------------- ------------ ---------- ----------
Depreciation (6 501
and amortisation (6 501 760) - - - 760)
--------------- ------------------------- ------------ ---------- ----------
33 507 130 638
Total assets 90 719 255 3 159 299 643 3 251 912 109
--------------- ------------------------- ------------ ---------- ----------
(32 402 (3 601 (36 457
Total liabilities 376) - 416) (453 299) 091)
--------------- ------------------------- ------------ ---------- ----------
1 =South Africa contributed to 94% of total revenue, with Zambia
and Mauritius contributing 3% each of total revenue.
Segment report for the year ended 30 June 2019
Base metals Exploration
Figures in Sterling beneficiation Business development and mining Corporate Total
Total revenues 23 585 846 - - - 23 585 846
-------------- -------------------- ------------- ----------------- -------------
Cost of sales (10 709 444) - - - (10 709 444)
-------------- -------------------- ------------- ----------------- -------------
Forex losses (8 163) (6 711) - 246 226 231 352
-------------- -------------------- ------------- ----------------- -------------
Interest received 21 802 - 207 8 050 30 059
-------------- -------------------- ------------- ----------------- -------------
Interest paid (933 307) - - (179 604) (1 112 911)
-------------- -------------------- ------------- ----------------- -------------
Loss before taxation 4 357 520 (229 145) (231 989) 4 049 881 7 946 266
-------------- -------------------- ------------- ----------------- -------------
Taxation ( 15 870) - - (954 101) (969 971)
-------------- -------------------- ------------- ----------------- -------------
Loss after taxation 4 341 649 (229 145) (231 989) 3 095 780 6 976 295
-------------- -------------------- ------------- ----------------- -------------
Depreciation,
amortisation
and impairments (3 400 232) (70 359) (231 568) - (3 702 159)
-------------- -------------------- ------------- ----------------- -------------
Total assets 43 389 556 15 872 277 25 885 711 16 894 725 102 042 269
-------------- -------------------- ------------- ----------------- -------------
(3 343 970)
Total liabilities (15 602 932) 970 (1 398 627) (3 006 927) (23 352 457)
-------------- -------------------- ------------- ----------------- -------------
6. Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Group Annual Report which is available on
www.jubileemetalsgroup.com .
Jubilee operates several chrome-Platinum Group Metal ("PGM")
operations in South Africa and is constructing a zinc-lead
(vanadium) plant at Kabwe in Zambia after already commissioning the
copper and cobalt circuits (the 'Sable' refinery). The Company has
a growth pipeline identified and significant opportunities to find
new projects in Africa (or globally); more specifically it is
looking to increase its copper (cobalt) production in Zambia to
make full use of its Sable Refinery. The company model is to treat
its own waste materials and to supplement these with third party
ores and wastes where possible. This year has been nothing if not
eventful for Jubilee, but further progress and material catalysts
are expected over the course of 2020. Jubilee has a high-margin
business with cash on hand, and there are plenty of opportunities
for Jubilee to capitalise on its robust business model through the
global COVID-19 crisis and beyond.
Jubilee's business strategy is based on three core business
pillars:
1. Process Research and development
a. Consists of a combination of targeted process consulting and
research and development, focussed on the development and
implementation of process solutions, specifically targeting both
liquid and solid waste streams from mine processes.
b. Our research and development includes existing pilot
operations as part of the process development cycle to provide
mature solutions which includes extractive-metallurgy,
pyro-metallurgy and hydro-metallurgy.
c. This process has led to many previously non-viable
environmental and metals recovery projects becoming commercially
viable. With the growing demand for solutions to mining wastes and
the growing requirement for 'Environmental, Social & Corporate
Governance' ("ESG") in mining investments the pedigree, experience
and ability of Jubilee will be of increasing importance.
d. Following a very strong demand in Africa, Jubilee has
concluded two acquisitions in Zambia to advance its footprint in
other jurisdictions.
2. Operations
a. Jubilee owns and operates recovery plants for the recovery of
metals and minerals, currently recovering precious metals including
PGMs and Chrome and targeting base metals including lead, zinc,
vanadium and copper.
b. Jubilee has a low-cost, high-margin business that capitalises
on Jubilee's experienced, technical management team which has
developed innovative processing techniques to generate cash from
(mainly) the waste material produced as part of the mining cycle;
"the Jubilee Way".
3. Project Funding
a. We are able to provide funding to support our partners within
smaller or larger companies to implement the waste recovery
projects. Such funding would be aimed at especially assisting in
instances where the company holding the mineral right prefers to be
a passive investment partner.
b. Our successful research and development work has set the pace
for the Company to partner with strategic owners of rights and
waste material to form joint operations where Jubilee plays the
important role of operator and in some instances funder.
The Group meets its day -- to -- day working capital
requirements through cash generated from operations. The Group's
current operational projects are all fully funded and
self-sustaining.
The current global economic climate creates to some extent
uncertainty particularly over:
(a) the trading price of metals; and
(b) the exchange rate fluctuation between the US$ and the ZAR
and thus the consequence for the cost of the company's raw
materials as well as the price at which product can be sold.
In January 2020, an outbreak of a coronavirus, now classified as
COVID-19, was detected in China's Hubei province. During the
following months, COVID-19 has spread steadily throughout the World
and on 11 March 2020, The World Health Organisation ("WHO")
declared the outbreak a global pandemic. In order to stem the
spread of the virus, Governments around the World are taking
drastic steps which include compulsory closure of various
businesses, shops and schools and are also heavily restricting of
movement of people with lockdown.
The outbreak of COVID-19 has resulted in business disruption and
stock market volatility. On 23 March 2020, the President of South
Africa announced a 21 day nationwide lockdown in the country to
combat the potential rapid rise of COVID-19 infection rates. As a
result Jubilee was forced to put its South African operations under
care and maintenance for the 21 day period. There were no such
restrictions imposed in Zambia. The Group had anticipated the
lockdown decision and measures were put in place identifying high
risk situations and personnel. Management had been proactive in
minimising cost and maximising production and saleable stocks were
liquidated to minimise any negative financial effects on
operations.
Following this 21 day nationwide lockdown, Jubilee announced on
17 April 2020 that certain operations in South Africa had
recommenced production under strict health and safety measures to
ensure that its employees and team were, and remain to be,
adequately and appropriately protected. On 7 May 2020, Jubilee
announced that all of its operations in South Africa and Zambia had
recommenced operations.
There has been minimal financial impact of COVID-19 on the
underlying operations in Zambia, and although the Company has faced
challenges in South Africa, the business model is robust and
benefits from a broad commodity basket providing resilience with
fluctuating metals prices.
That said, due to the continuing global development of COVID-19,
the degree of uncertainty involved and the unprecedented nature of
the challenges posed by the coronavirus situation, the Directors
will continue monitoring the situation closely.
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, commodity
prices and currency fluctuations, indicates that the Group should
be able to operate within the level of its current cash flow
earnings forecasted for the next twelve months.
The Group is adequately funded and has access to further equity
placings, which together with contracts with a number of high
profile customers strengthens the Group's ability to meet its
day-to-day working capital requirements, including its capital
expenditure requirements. As a consequence, the directors believe
that the Group is suitably funded and placed to manage its business
risks successfully despite identified economic uncertainties.
The directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future, thus continuing to adopt the going concern
basis of accounting in preparing the annual financial
statements.
7. Events after the reporting period
7.1 Copper tailings resource secured (Zambia)
On 6 August 2020, Jubilee signed a joint venture agreement with
a private Zambian company (the "JV Agreement") securing the rights
to process 2 million tonnes copper Run-Of-Mine material containing
in excess of 2% copper (the "ROM Material"). Under the JV
Agreement, there is a further potential to increase the supply of
copper ore to approximately 4 million tonnes with an additional 2.5
million tonnes of copper containing tailings available for
processing (together "the Project" or "Project Roan"). The Project
will target the near-term production of copper concentrate through
a dedicated newly constructed copper concentrating facility (the
"Processing Facility") for which Jubilee has completed the design
for the construction at a targeted brownfield site adjacent to the
tailings (the "Site"). The Processing Facility will be commissioned
in two phases with the first copper concentrate and revenues
expected within four months.
Jubilee will construct, own and operate the Processing Facility
while its JV Partner will deliver the ROM Material and Tailings at
no cost to the JV. The JV Partner is tasked with producing the
copper concentrates, which will be sold on an arms-length basis
with Jubilee's Sable Refinery holding a first right to such
concentrate. The participation in the earnings received by Jubilee
and the JV Partner is linked to the source of the processed
material while Jubilee retains 100% of all earnings generated
through the refining of the copper concentrate at its Sable
Refinery. A typical market analysis indicates the targeted copper
concentrate produced by the JV attracts in the order of 38% of
contained copper value prior to being refined to copper cathode at
the Sable Refinery which is sold at London Metal Exchange prices.
Jubilee may also under the JV Agreement secure and process its own
third-party ROM ("Jubilee ROM") for processing at the Processing
Facility. Jubilee will implement the Project in phases to
accelerate the production of a saleable, intermediate product
within four months prior to completion of the full scope of the
Processing Facility.
7.2 Supply of Chrome and PGM ROM Feed secured
On 24 August 2020 Jubilee has executed a processing agreement
whereby Jubilee has been appointed as operator to re-commission and
operate the existing run of mine ("ROM") chrome beneficiation plant
(the "Chrome Plant"') adjacent to its Inyoni Operations ("Inyoni")
(together the "Processing Agreement"). The Processing Agreement is
backed by a guaranteed supply of a minimum of 40 000 tonnes per
month of chrome and PGM containing ROM which has the potential to
be increased to 80 000 tonnes per month. The PGM bearing tails
produced by the Chrome Plant will be further processed at Jubilee's
adjacent Inyoni PGM recovery plant. The PGM rich tails, which will
be produced under the Processing Agreement and supplied to Inyoni,
are in addition to the existing PGM tailings resources already
owned by Jubilee and the PGM tails produced by its Windsor
operations. The Processing Agreement not only significantly extends
the life of the existing PGM resource but also offers the potential
for Jubilee to significantly expand its Inyoni Operations.
As part of the Processing Agreement Jubilee will fund an
estimated GBP 1.34 million (ZAR 30 million) capital required to
upgrade the chrome ore beneficiation plant whereby capital plus
interest will be recovered by Jubilee under a fixed charge per ROM
ton processed over the first three years of the Processing
Agreement. Jubilee will fund the capital required from its own cash
reserves.
The additional ROM feed processed by the chrome ore
beneficiation plant to firstly recover the chrome will produce new
PGM enriched tailings which is fed directly to the Inyoni PGM
recovery plant. To accommodate this additional PGM feed Inyoni will
reduce the rate at which it is reclaiming PGM feed material solely
from its existing PGM surface tailings resources, thereby extending
the life of its existing PGM resources. The additional tailings
offers Jubilee the opportunity for a modest capital investment, to
expand the Inyoni Operations increasing its monthly PGM ounce
production to 3 500 PGM ounces per month. The designs for the
expansion are currently being considered by Jubilee and if approved
will be funded by the Company.
7.3 Kabwe mining licence renewed
The Company has received notification from the Minister of Mines
and Mineral Development in Zambia of the approval of the Company's
application for the renewal of Small Scale Mining Licence
7081-HQ-SML in Kabwe, Zambia (the "Licence"). The Licence is in
respect to the minerals lead, zinc, copper and cobalt.
The Licence renewal has been approved for a period of ten years
and is subject to a number of customary conditions specified by the
Minister of Mines and Mineral Development.
7.4 Conclusion of copper cobalt tailings supply and development agreements - Zambia
On 5 November 2020, Jubilee has successfully concluded further
copper tailings transactions to secure the rights to an additional
approximately 115 million tonnes of copper and cobalt containing
surface tailings in Zambia (the "Tailings"). Jubilee has secured
the exclusive processing rights to the material through its
subsidiary Braemore Platinum Limited ("Braemore") by entering into
tailings supply and process development agreements (the
"Agreements") with a number of privately held entities who
collectively hold both the mining rights to the tailings and the
property title on which the tailings are located (the "Tailings
Partners"). The Agreements include both the formation of a
development partnership with a well-established Zambian private
entity who has invested in securing various tailings assets, as
well as securing the rights to the processing of the Tailings from
the resource owners.
The Agreements secure Braemore the exclusive right to process
the approximately 115 million tonnes of copper containing tailings
through the implementation of a copper and cobalt processing
facility (the "Project"). In addition, the Project benefits from
detailed resource analyses and vast historical process test
programmes performed by the Tailings Partners through the
appointment of various independent well established consulting
firms. This affords Jubilee the opportunity to interpret these
results and incorporate its in-house expertise and IP to
significantly accelerate the Project development cycle.
Key Terms of the Agreements
Under the terms of the Agreements, Braemore secures the
exclusive right to gain free unrestricted access to the tailings
resources and to uplift and process the tailings to recover copper
and cobalt for on-sale into the market. Braemore is appointed as
the exclusive operator and solution provider to bring to account
the Tailings. In recognition of this right afforded to Braemore,
the Tailings Partners are entitled to a future earnings share from
the processing of their respective tailings by Braemore ranging
from 17% to 30%. Such earnings share includes a capital charge
allocated to each Tailings Partner by Braemore in respect of the
capital expended by Braemore for the implementation and
commissioning of the processing facility for the respective
Tailings.
The partnership with the Tailings Partners affords Braemore
immediate access to the information derived from numerous sampling
and test campaigns undertaken by the Tailings Partners, as well as
their continued support in the implementation of the Project. In
part recognition of the investment undertaken by the Tailings
Partners, Braemore has in addition agreed to a milestone based
investment in relation to the development of the Project. The
Agreements combine Jubilee's proven track record of implementing
and operating projects through its in-house expertise, with
established and locally respected presence in Zambia of the
Tailings Partners.
*Ends*
For further information visit www.jubileemetalsgroup.com ,
follow Jubilee on Twitter (@Jubilee_Metals) or contact:
Jubilee Metals Group PLC
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/James Keeshan
Tel: +44 (0) 20 3368 3555
Joint Broker - Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel +44 (0) 20 7186 9900
Joint Broker - WHIreland
Harry Ansell/Katy Mitchell
Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618
JSE Sponsor - Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
PR & IR Adviser - St Brides Partners Limited
Catherine Leftley/Beth Melluish
Tel +44 (0) 20 7236 1177
Annexure 1
Audit Opinion
Independent auditor's report to the members of Jubilee Metals
Group Plc
Opinion
We have audited the financial statements of Jubilee Metals Group
plc (the 'parent company') and its subsidiaries (the 'group') for
the year ended 30 June 2020 which comprise the Group and Company
Statements of Financial Position, the Group and Company Statements
of Comprehensive Income, the Group and Company Statements of
Changes in Equity, the Group and Company Statements of Cash Flows
and notes to the financial statements, including a summary of
significant accounting policies set out on pages 45 to 100 of the
financial statements. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of affairs of the
group and of the parent company as at 30 June 2020 and of the
group's and parent company's profit for the period then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard as applied to SME listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the group's or parent company's ability to continue to
adopt the going concern basis of accounting for a period of at
least twelve months from the date when the financial statements are
authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How our audit addressed the
key audit matter
Revenue recognition Our audit procedures included
Revenue for the year was GBP54.8m, the following:
representing a significant * Obtaining a sample of sales contracts and
increase from 2019. 2020 saw understanding the key performance conditions and
the acquisition of Sable Zinc pricing terms;
Kabwe Limited resulting in
new copper revenue as well
as additional material at Windsor. * Evaluating the Group's revenue recognition policy and
Revenue has been derived from management's application of the policy to the
the sale of copper, chrome recording of revenue;
and platinum group metals.
The Group recorded revenues
at Sable Zinc Kabwe Limited, * Understanding how the Group's revenue recognition
being its first surface processing policy was applied to revenue streams at Kabwe,
revenues generated outside Zambia;
of South Africa.
The Group applies IFRS 15 and
therefore approaches its revenue * Observing the sales processes during a site visit at
recognition policy by reference Kabwe, Zambia, and Inyoni, South Africa;
to the performance obligations
inherent in its contracts.
The Group's revenue recognition * Comparing exchange rates used in management's
accounting policy is set out calculations by reference to external sources;
in note 1.12.1.
Due to the significance and
growth of revenue in the financial * Substantive tests agreeing sales invoices to
statements, revenue recognition underlying concentrates analyses and pricing to
is a key audit matter. external sources; and
* Testing around the period end to review the treatment
of sales around the year end.
Based on our procedures, we
noted no material exceptions
and consider management's key
assumptions to be within reasonable
ranges. We consider that revenue
recognition has been recognised
appropriately and in accordance
with the Group's revenue recognition
policy and IFRS 15.
------------------------------------------------------------------
Acquisition of Sable Zinc Kabwe Our audit procedures included
Limited the following:
In August 2019 the purchase * Obtaining the Share Purchase Agreement setting out
of 100% of the share capital the key terms of the transaction;
of Sable Zinc Kabwe Limited,
a Zambian company, became effective
following the satisfaction * Discussing with management their view of the
of conditions precedent. appropriate accounting treatment of the overall
The Board determined the transaction transaction, including the rationale underlying the
meets the definition of a business recognition of the transaction as a business
as defined in IFRS 3. The assets combination;
and liabilities acquired were
therefore measured at fair
value at the acquisition date. * Testing the basis upon which the effective date of
The principal asset acquired the acquisition was determined;
in the business combination
was a processing plant located
at Kabwe, Zambia, which was * Reviewing the basis upon which the fair values of
recognised on acquisition date assets and liabilities acquired were determined,
at its fair value of GBP9.2m. including by reference to external valuation reports
The total consideration for performed by third parties;
the transaction was $11.5m
(GBP10.1m) paid in three tranches.
The business combination accounting * Reviewing evidence of impairment of resulting
resulted in the recognition goodwill;
of goodwill of GBP0.9m. The
Board determined that goodwill
was not impaired at 30 June * Ensuring that the Group's results for the year under
2020. review reflect only revenues generated post
Due to the significance of acquisition;
the transaction we consider
this acquisition to be a key
audit matter. * Testing the legal basis for the assignment of debt
from the acquiree's former parent company to the
Group; and
* Performing an onsite visit in Kabwe, Zambia, to
verify the existence of assets and understand the
operation.
Based on our procedures, we
noted no material exceptions
and consider management's key
assumptions to be within reasonable
ranges.
------------------------------------------------------------------
Acquisition of Enviro Mining Our audit procedures included
Limited the following:
At 30 June 2019, the Group * Obtaining the formal agreement with BMR Group Plc
held an option to acquire 100% which set out the terms of the option exercise and
of the issued share capital royalty;
of Enviro Mining Limited, a
Mauritian company. That option
was subsequently exercised * Obtaining documentary evidence of the Group's
and the Group gained control exercise of the option;
of Enviro Mining Limited and
its Zambian subsidiaries.
The option carried no exercise * Challenging management on their judgement of the date
price, and the exercise resulted from which the Group gained control of Enviro Mining
in the derecognition of the Limited;
option asset and a loss on
derecognition of GBP5m.
The Board determined that the * Testing management's assessment of whether the
acquired operations constituted acquisition of Enviro Mining Limited constituted a
a business. Therefore, it considered business combination and making enquiries of
the fair value of the consideration management about the acquiree's activities at the
as well as the assets and liabilities acquisition date;
acquired.
On exercise of the option,
Jubilee simultaneously acquired * Obtaining and examining management's cash flow
the 12.5% of Kabwe Operations forecasts in support of the fair value of the mining
Limited not previously held licence and royalty and challenging key assumptions
by the Group and granted a in the model;
royalty to BMR Group Plc. The
royalty relates to the future
earnings of the Kabwe Project * Obtaining a summary of the Group's acquisition
relating to zinc, lead and accounting and underlying workings;
vanadium. The value of the
royalty depends on a number
of factors, such as the amount * Challenging the assumptions applied in a cash flow
of capital expended by the model of the Kabwe Project and assessing the
Group, the timing of cash flows appropriateness of the methodology applied in
and earnings, future metals identifying the fair value of the small-scale mining
prices, and the time value licence;
of money. The fair value of
the contingent consideration
was therefore a significant * Challenging management on the justification and
judgement made by the Directors. rationale for the recognition of a gain on bargain
Similarly, when assessing the purchase arising from the transaction; and
fair values of the assets and
liabilities acquired in the
business combination, the Board * Considering the relevant tax base and rate based on
identified that a subsidiary the expected future realisation of the small-scale
of Enviro Mining Limited, Enviro licence intangible asset.
Processing Limited, a Zambian
company, holds the small-scale
mining licence associated with Based on our procedures, we
the Kabwe Project. The fair noted no material exceptions
value of this licence was assessed and consider management's key
and valued by reference to assumptions to be within reasonable
future cash flows and therefore ranges.
subject to significant judgement.
For these reasons, the acquisition
of Enviro Mining Limited and
its subsidiaries is considered
a key audit matter.
------------------------------------------------------------------
Impairment of intangibles assets Our audit procedures included
The carrying value of intangible the following:
assets included in the Group's * Assessing whether the methodology used by the
Statement of Financial Position Directors to calculate recoverable amounts is in
at 30 June 2020 was GBP73m. accordance with IAS 36;
Of this total, GBP36.4m is
attributable to the Group's
mining right associated with * Assessing the available evidence in support of the
the Tjate project in South recoverable amount in relation to the Tjate Project,
Africa. including in support of value in use calculations,
The Directors assess at each and determining whether the assumptions applied are
reporting period whether there reasonable and supportable given the current
is any indication that an asset macroeconomic climate;
may be impaired. The Group's
intangible assets with an indefinite
useful life are tested for * Performing sensitivity analyses on key assumptions
impairment at each reporting and testing the mathematical accuracy of models;
date, including goodwill.
The determination of recoverable
amount, being the higher of * Challenging inputs to models including comparison
value-in-use and fair value with external data sources;
less costs to dispose, requires
judgement on the part of management
in both identifying and then * Reviewing correspondence and other sources for
valuing the relevant Cash Generating evidence of impairment;
Units, especially for projects
where there is an uncertain
timeframe. * Reviewing the recoverability of intercompany loans
Any impairment in these CGUs within the Company and indicators of impairment in
could lead to consequent impairments investments in subsidiaries;
of the Company's investments
in subsidiaries or intercompany
loans. These were carried at * Obtaining management's IFRS 9 Expected Credit Loss
GBP36.9m and GBP65.8m respectively analysis in respect of intercompany loans and
at 30 June 2020. examining the assumptions being applied;
Deferred tax liabilities are
recognised on certain intangible
assets following business combinations * Assessing the appropriateness and completeness of the
and these liabilities are reassessed related disclosures in note 9, intangible assets, of
at each reporting period by the Group financial statements;
reference to expectations as
to how these assets will be
realised and the tax base and * Performing an examination of cash flow forecasts for
rate in the relevant jurisdiction. all material projects to understand the expected
Due to the significance of future cash flows; and
the intangible assets to Group
financial statements, the significant
judgements involved in these * Reviewing the treatment and correct classification of
assessments and the potential newly acquired intangible assets. Based on our
impact on the Company's investments procedures, we noted no material exceptions and
and intercompany loans, the consider management's key assumptions to be within
potential impairment of intangible reasonable ranges.
assets is a key audit matter.
------------------------------------------------------------------
Acquisition of intangible assets Our audit procedures included
at Inyoni the following:
The Group has operated the * Obtaining the purchase documentation to determine
Inyoni Project (formerly Hernic) whether the Group had acquired physical material as
for a number of years, where inventory or legal rights as intangible assets;
it has historically processed
waste material under a series
of access and earnings sharing * Testing consideration to the asset purchase agreement
agreements. and subsequent cash payments;
During the year the Group purchased
full earnings rights to both
platinum group metals and chrome * Agreeing the accounting entries though to the
at Inyoni. consolidated financial statements and the recognition
The total consideration for of the purchase as an addition to intangible assets;
the purchases was ZAR 284.67m
(GBP13.4m). This purchase has
been recorded as an addition * Examining the basis for the amortisation policy
to intangible assets. applied to the asset; and
Management determined an appropriate
amortisation policy by reference
to the quantum of material * Reviewing the suitability of disclosures associated
remaining. with the transaction.
Due to the size of the addition,
the acquisition of these rights
is a key audit matter. Based on our procedures, we
noted no material exceptions
and consider management's key
assumptions to be within reasonable
ranges.
------------------------------------------------------------------
Loan to Horizon Our audit procedures included
In June 2020, Jubilee entered the following:
into a joint operation with * Obtaining the Joint Venture Agreement which governs
Star Tanganika Limited in respect the arrangement and identifying key terms;
of Project Elephant. As part
of the agreement, Jubilee agreed
to advance a loan to Horizon * Obtaining management's assessment of the key
Corporation Limited, Star Tanganika judgements and resulting accounting presentation;
Limited's parent company, of
$5m.
Under the terms of the loan * Obtaining and challenging management's latest project
agreement, the loan is repayable model to support the timeframe for recovery of the
on a date contingent upon the loan and in support of impairment and credit loss
commencement of the project assessment;
and other factors.
Of the $5m facility, GBP3.2m
was drawn during the period * Confirming the share issue to records; and
to 30 June 2020, by way of
an equity issue to Horizon
Corporation. * Reviewing the suitability of disclosures associated
The loan represents a financial with the transaction. Based on our procedures, we
asset carried at fair value. noted no material exceptions and consider
This required significant management management's key assumptions to be within reasonable
judgement and therefore the ranges.
issue is key audit matter.
------------------------------------------------------------------
Our application of materiality
We apply the concept of materiality in planning and performing
our audit, in evaluating the effect of any identified misstatements
and in forming our audit opinion. Our overall objective as auditor
is to obtain reasonable assurance that the financial statements as
a whole are free from material misstatement, whether due to fraud
or error. We consider a misstatement to be material where it could
reasonably be expected to influence the economic decisions of the
users of the financial statements.
We have determined a materiality of GBP2,000,000 (2019:
GBP1,000,000) for both the Group and Company financial statements.
This is based on 2 % of net assets per draft financial information
at the planning stage. We did not consider there to be any reason
to revise materiality during the audit.
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we obtained
sufficient evidence to support our opinion on the financial
statements as a whole, taking into account the structure of the
Group and the Parent Company, the accounting processes and controls
and the industry in which the Group operates.
As Group auditors we carried out the audit of the Company
financial statements and, in accordance with ISA (UK) 600, obtained
sufficient evidence regarding the audit of 8 subsidiaries
undertaken by component auditors in South Africa, Zambia and
Mauritius. These 8 subsidiaries were deemed to be significant to
the Group financial statements either due to size or their risk
characteristics. The Group audit team directed, supervised and
reviewed the work of the component auditors in South Africa, Zambia
and Mauritius, which involved issuing detailed instructions,
holding regular discussions with component audit teams and
performing detailed review of working papers. Audit work in South
Africa, Zambia and Mauritius was performed at materiality levels of
GBP250,000 which is lower than Group materiality.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information; we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the Strategic Report and the Directors' Report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and their environment obtained in the course of
the audit, we have not identified material misstatements in the
Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities
Statement set out on page 36, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and parent company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Jamie Cassell (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
9 November 2020
Annexure 2
Headline earnings per share
1. Accounting policy
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:
2. Reconciliation of headline earnings per share
30 June 30 June
2020 2019
------- -------- ------- ---------
Gross Net Gross Net
GBP'000 GBP'000 GBP'000 GBP'000
Earnings for the period attributable to
ordinary shareholders 18 320 6 994
De-recognition of other financial assets
through profit or loss 5 021 4 067 - -
Gain on bargain purchase (6 607) (6 607) - -
Share of impairment loss from equity accounted
associate 1 964 1 375 783 564
Fair value adjustments of other financial
assets - - (5 022) (3 616)
Impairment of intangible assets - - 231 166
------- -------- ------- ---------
Headline earnings from continuing operations 17 155 4 108
------- -------- ------- ---------
Weighted average number of shares in issue 1 955
('000) 965 1 466 128
Diluted weighted average number of shares 1 975
in issue ('000) 264 1 475 698
Headline earnings per share from continuing
operations (pence) 0.88 0.28
Headline earnings per share from continuing
operations (ZAR cents) 17.30 5.14
Diluted headline earnings per share from
continuing operations (pence) 0.87 0.28
Diluted headline earnings per share from
continuing operations (ZAR cents) 17.13 5.11
Average conversion rate used for the period
under review GBP:ZAR 0.0507 0.0545
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