REVIEW OF THE BUSINESS
Pitombeiras Vanadium Project
During the period under review, the Company continued to develop its 100% owned Pitombeiras Vanadium Project (‘Pitombeiras’ or ‘the Project’), located in the state of Ceará, Brazil and I am pleased to confirm that we have made great progress in this regard.
Consistent vanadium-titanium-iron grades and widths confirmed; new drilling targets delineated; an initial National Instrument 43-101 (‘NI 43-101’) compliant resource estimate of 5.70Mt released; and post period end, a Preliminary Economic Assessment (‘PEA’) defining robust economics and remarkable potential for further growth delivered. We are rapidly ticking boxes as we look to fast-track the exciting Pitombeiras Vanadium Project (‘Pitombeiras’ or ‘the Project’) in Brazil to production, realise its potential and, in the process, generate value for all our shareholders.
The 18-month period under review saw us embark on a plethora of activity at Pitombeiras including drilling programmes, metallurgical tests, and airborne magnetic surveys to delineate vanadium titanomagnetite (‘VTM’) drilling targets. The positive data generated from these activities enabled us to report an initial National Instrument 43-101 (‘NI 43-101’) compliant resource estimate for the Project mid 2020:
· Total Resource estimate of 5.70Mt at an average grade of 0.51% vanadium pentoxide (‘V2O5’), 10.09% titanium dioxide (‘TiO2’) and 50.42% of ferric oxide (‘Fe2O3’) for a contained resource of 28,990 tonnes V2O5
· Indicated Resource estimate of 1.47Mt at an average grade of 0.50% V2O5, 9.85 % TiO2 and 49.78% of Fe2O3 for a contained resource of 7,297 tonnes V2O5
· Inferred Resource estimate of 4.23Mt at an average of 0.51% V2O5, 10.17% TiO2 and 50.64% of Fe2O3 for a contained resource of 21,693 tonnes V2O5
Post period end, using this estimate, we were delighted to deliver an initial PEA that confirmed our own confidence in the economic viability of the Project and its excellent potential to become a profitable producer of Ferro-Vanadium concentrate (62%/65% iron (‘Fe’), plus V2O5 credit).
The PEA, prepared by GE21 Consultoria Mineral (‘GE21’) and compliant with National Instrument 43-101 (‘NI 43-101’), projected a $9.5m initial capital cost and post-tax payback period of 3 months. It also reported an estimated post-tax NPV (at a 8% discount rate) and IRR of $106.5 million and 317.8%, respectively.
Notably, the PEA suggests a simple processing route providing opportunity to a fast-track approach to production and cash flow. Furthermore, the total resource considered in the PEA is based on just two out of 20 known targets selected based on a ground magnetic survey.
ValOre Metals Corp
Our investment in ValOre Metals Corp (TSX-V:VO) (‘ValOre’) has yielded positive results.
As previously advised, in August 2019, we divested our 100% interest in our former subsidiary, Pedra Branca Brasil Mineracao Ltda, the entity that held the advanced palladium, platinum, and nickel project, the Pedra Branca Project in Brazil (‘Pedra Branca’), to ValOre whilst retaining a strategic upside exposure through a significant shareholding in ValOre. The consideration received on the divestment was CAD$3,000,000 alongside the issue of 25,000,000 ValOre common shares to Jangada (of which 22,000,000 shares were received on completion and 3,000,000 deferred consideration shares over 3 years). The divestment resulted in a reported profit on disposal of $6.2 million for the reporting period.
During the period, we have sold down part of the investment in ValOre to support the Company’s working capital requirements, allowing us to substantially progress the development of Pitombeiras, including the PEA and identification of the JORC resource.
At the end of the reporting period, the Company had a 17.23% interest in ValOre’s share capital. As Brian McMaster and Luiz Azevedo are both on the board of directors of ValOre, it is considered an associate for the purposes of preparing these financial statements.
ValOre continues to generate notable results from Pedra Branca. With a reported maiden NI 43-101 compliant inferred resource of 1,067,000 ounces PGE+Au at an average grade of 1.22 g/t PGE+Au, ValOre’s focus in 2020 was to increase the resource and undertake discovery drilling. To this end, a 6,000 metre two phase diamond drill programme was undertaken with the bulk aimed at expanding specific zones, which form part of the inferred resource, namely Trapia (Trapia 1 and Trapia 2) and Santo Amaro. Results reported so far indicate that the “ore body thickens at depth and that mineralisation remains open in all directions”.
Furthermore, work related to mineralogy, processing and metallurgy has provided very positive initial results and some additional options which warrant immediate follow up. We are expecting continued newsflow throughout the year as ValOre continues with a property-wide exploration programme at Pedra Branca.
Fodere Titanium Limited
By channelling capital in a responsible way towards companies that innovate and address global challenges to create a more sustainable world, investing can make a difference. With this in mind, the decision was made to take a 3.6% interest in Fodere Titanium Limited (‘Fodere’), a company that is making great strides towards commercialising the production of titanium dioxide and vanadium from waste materials.
Fodere is rapidly advancing the commercialisation of its environmentally sustainable and highly innovative technology to extract high value metals from the titanium, vanadium, iron, and steel industries. Fodere is currently in discussion with industrial offtakers as it moves toward building an initial plant to commence production. One of the Company’s Non-Executive Directors, Nick von Schirnding, is Chairman of Fodere.
COVID-19
The directors note that COVID-19 has had a significant negative impact on the global economy during 2020 with disruption felt globally. The Group has thankfully seen its inherent value signi?cantly increase from its value in 2019 because of our successful exploration programme and project development initiatives. On a wider level COVID-19 has highlighted to the world the importance of sustainability across every aspect of life. With a portfolio of assets and investments that support the drive towards greater sustainability, Jangada is well placed to contribute to the world’s needs without compromising the ability of future generations to meet their own needs.
Financial Results
The progress during the financial year of advancing the Pitombeiras project resulted in the Group incurring an operating Loss from Continuing Operations of $1.6 million (2019: $1.6 million). As stated above, the reported profit on the disposal of the Pedra Branca project was $6.2 million (2019: loss of $0.09 million).
Overall and pleasingly, the reported Total Comprehensive Profit attributable to the Group for the 18-month reporting period was $3.9 million (2019: loss of $1.7 million).
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