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Final Results

28th Oct 2005 07:00

Jubilee Platinum PLC28 October 2005 28 October 2005 AIM: JLP Jubilee Platinum Plc ("Jubilee" or "the Company") AUDITED PRELIMINARY RESULTS FOR THE YEAR TO 30 JUNE 2005 HIGHLIGHTS: • Net assets at 30 June 2005 totalled £7.290m (2004: £3.409m) • Loss per fully diluted share 0.45p (2004: 1.15p) • Strategic interest purchased in Tjate's inferred 65 million oz PGM asset • Drilling at Tjate confirms presence of PGM-bearing reefs • Geophysics in Madagascar extends PGM-nickel-copper anomalies • Drilling commenced in Madagascar POST YEAR END HIGHLIGHTS: • Developing geological model suggests Londokomanana has the potential to become a mining region • Drilling from third hole at Tjate continues to intersect Merensky and UG2 reefs Commenting on the results, Jubilee Platinum's Chief Executive Officer Colin Birdsaid; "It has been both a productive and exciting year for Jubilee. We aredelighted with our discoveries in Madagascar which we believe have hugepotential and we will progress our activities out there as quickly as possible.Our results at Tjate have also confirmed our belief that the project could be avery substantial PGM resource. We are pleased to present a company which hassolid development potential with extensive upside in exploration." For further information please contact: Colin Bird Cathy Malins / Annabel LeatherJubilee Platinum plc Parkgreen Communications LtdTel 020 7584 2155 Tel 020 7493 3713 CHAIRMAN'S STATEMENT Dear Shareholder Your directors take much pleasure in reporting a very successful year ofachievement for your Company. The results we are generating from our leadprojects in Madagascar and South Africa are very promising. A combination ofclosely-monitored expenditure and a focussed mission has seen your Companycomplete the year with above-average performance from all its properties. Weare now involved in nickel and copper, the key metals driving the robustresource market on a global scale, as well as platinum group metals. Ourprojects are both balanced in country and commodity risk and as an emergingmining company form an excellent basis for further development. During the period under review, the Board concluded two successful fund raisingstotalling £4.7 million. The first tranche totalling £3.1 million was completedin July 2004 followed by a second round of fund raising amounting to £1.6million in April 2005. In South Africa, the Company's most significant activity was securing inDecember 2004, a 35% interest in the Tjate platinum project in the easternBushveld for ZAR49 million, of which ZAR35 million purchased a direct 25%interest in the holding company Tjate Platinum Corporation (Pty) Ltd (Tjate). Afurther ZAR14 million was committed to a convertible note to earn-in a further10% interest, part funding towards a full feasibility study. The commencementof drilling on the flagship Tjate property is yielding substantial results atthe time of writing. In February 2005, the Company commenced drilling on the Dsjate farm, one ofthree contiguous farms comprising the Tjate property (an area of 5143 hectares).By year- end two boreholes had been drilled on the property, both of whichintersected the Merensky and the UG2 chromitite platinum-bearing reefs. Thepleasing results are reported in the chief executive officer's operating review.Since the financial year-end, the Company has drilled a third borehole, whichconfirmed these results. This prompted management to commence a pre-feasibilitystudy. The Tjate property, which is located downdip of Impala Platinum's operatingMarula platinum mine and Anglo Platinum's new Twickenham mine project, isinferred to host 282 million tonnes of resource containing 65.8 million ozplatinum group metals and gold, of which 22.8 million oz are attributable tothe Company. The Tjate resource is believed to be one of the largest unminedblocks of platinum group metals in the world, close to infrastructure and maturemining operations. During the period under review the Company commenced lithological drilling ontwo of its other properties in the Bushveld Complex. The results are reported inour operating review herein. The Company awaits imminent new-order prospectingrights for its Bokfontein and Elandsrift properties, which are believed tocontain near surface chromitite reefs, and for several properties nearGroblersdal and Marble Hall in the eastern limb of the Bushveld Complex. In Madagascar, the Company consolidated its position and increased the pace ofexploration comprising reconnaissance, geochemical soil sampling, trenching andgeophysics on its three main properties Londokomanana, Ambodilafa and Lanjanina(incorporating Pachoud). All the properties are showing above average results. In Londokomanana, the area of main activity, the Company completed a verysuccessful geophysics programme in Lavatrafo (southern Londokomanana) andAntsahabe (northern Londokomanana); the two areas being some 35 kilometresapart. In Lavatrafo, the geophysics results identified structural features thatcorrelated closely with the Company's previous trenching and sampling work andprovided excellent targets for drilling. Since the financial year-end, theCompany has completed drilling two boreholes in Lavatrafo and has started athird. The Company recently announced a major discovery from its first twoboreholes LAV1 and LAV2, which intersected respectively a 70 and 92 metres-widenickel-copper-platinum-palladium formation containing up to 0.26% nickel, 0.14%copper and between 0.66 to 1.05g/t platinum palladium and gold. The metalstogether represent copper equivalents of up to 1.36% copper at current metalprices. At Antsahabe, the geophysical programmes identified two new structural anomaliesparallel and close to known PGM-nickel-copper mineralised formation, and a newarea of geophysical anomalies, in all totalling 22 kilometres of strike length.These anomalies suggest the presence of a potential major new mineralisedsystem. The structural anomalies have been scheduled for drilling immediatelyafter completion of the programme at Lavatrafo. The Company's developing geological model for Londokomanana suggests theintriguing possibility that the mineralisation at Lavatrafo and at Antsahabecould be related if not the same, with the implication that we may be looking ata major regional mining system as opposed to disparate deposits. The potentialfor a very large world-class resource is therefore a very exciting prospect. Reconnaissance in Ambodilafa, south of the capital Antananarivo, identified amajor ultrabasic intrusive some 20 kilometres long by 4 kilometres wide, whereprevious limited drilling intersected a 93-metre thickness of disseminatednickel-copper sulphides with a 1% copper equivalent. In view of the Company'ssuccess with geophysics in Londokomanana, it intends to fast track a geophysicsprogramme on Ambodilafa closely followed up with a drilling programme in thecoming year. During this reconnaissance and based on archival data, a visit was made to theold Bebasy gold mine in the concession. Reconnaissance sampling identified apossibly significant gold resource with chip samples showing 42g/t and 108g/tgold. In Lanjanina, the results of a follow-up soil sampling and geophysics programme,is being reviewed, with a view to carrying out further infill sampling andgeophysics to target locations for drilling. The exciting results that continue to emerge from Madagascar support ourconviction that Madagascar is under explored and offers huge potential for majornew discoveries. In Sierra Leone, in order to establish viable grades, we continued to identifythe platinum-bearing horizons on the York Platinum project, a joint venture inpartnership with AIM-listed Golden Prospect plc. The success of our activities is generating strong institutional and retailsupport for investment in the Company, which has seen its share price andtrading volumes increase steadily during the year. The directors continue toseek growth in shareholder value by means of focussed exploration activity andacquisitions. Finally, I would like to thank my fellow directors and the diligent staff fortheir valuable support and loyalty in this our third year since listing on AIMand I look forward to another successful year of progress and development in allour exciting and rewarding projects. Malcolm Burne Chairman OPERATING REVIEW 2004 - 2005 MAJOR PROGRESS IN SOUTH AFRICA AND MADAGASCAR MADAGASCAR • Geophysics extends platinum group metal-nickel-copper ("PGM-Ni-Cu") anomalies • Targets for drilling established and drilling commenced • Developing geological model suggests Londokomanana has the potential to become a mining region Between October and December 2004, the Company completed a geophysical InducedPolarization (IP) survey over two areas in its Londokomanana concession, namelyAntsahabe (northern Londokomanana) and Lavatrafo (southern Londokomanana), whichare some 35 kilometres apart. The results of this survey confirmed/identified: • the previously established 15 kilometres strike of geochemical and trenching anomalies in Antsahabe and extended this anomaly trend in the area to some 22 kilometres with a width of up to 3 kilometres; • two new parallel structures, respectively 1.7 and 1.3 kilometres long, running parallel and directly northeast of the mineralised Antsahabe hill; and • in Lavatrafo, a minimum 2.7 kilometres strike length of ultramafic rocks, a rock type usually associated with nickel and platinum. This geophysics, which covered areas where the Company had previously recordedencouraging nickel, copper, PGM and gold values, identified highly prospectivetargets for drilling. The Company followed this up with a second geophysics programme comprising ofgradient and Dipole-Dipole (DPDP) array surveys over Lavatrafo. The geologicalmodel that the Company has developed from these results indicates that thePGM-Ni-Cu mineralisation could be controlled by and appears to be located at thecontact between zones of near zero chargeability and high chargeabilityrespectively. The DPDP array data correlated directly with both high PGM-Ni-Cu values obtainedin previous trenching by the Company and with associated disseminated sulphidesintersected in earlier but incomplete drilling by the Bureau de RechercheGeologiques et Minieres (BRGM). Similar DPDP array responses were obtained overthe contact zones of four more ultramafic formations investigated in Lavatrafo.In some cases, both the western and eastern contact zones of these formationsappear to be prospective for disseminated sulphides. These results have led to a better understanding of the geophysical responseobtained in Antsahabe. The Lavatrafo model has been applied to themineralisation and geophysics identified in Antsahabe and the Company nowbelieves that it and Lavatrafo may be of similar genesis, which would suggestthe intriguing possibility of some 35 kilometres strike of a mineralizedformation leading to a major mining region. On the basis of the above robust data, Jubilee commenced a total 2000-metredrilling programme in June 2005, for Lavatrafo and Antsahabe. Since the financial year-end, the Company has drilled two boreholes, LAV1 andLAV2A in Lavatrafo and made a major discovery. The two boreholes some 150 metresapart along strike, intersected a multi-metal (platinum, palladium, nickel andcopper) mineralised formation, 70 metres and 92 metres wide respectively. Theborehole results (including higher grade intercepts) are shown in the tablesbelow. Borehole LAV1 From metres To metres Intercept metres Nickel % Copper % 3E* g/t %Cu equiv. ** 37.7 108.4 70.7 0.23 0.11 1.05 1.35 72.8 108.4 35.7 0.31 0.19 0.99 1.65 89.4 108.4 19.1 0.34 0.20 1.05 1.78 75.3 83.5 8.3 0.32 0.23 1.15 1.80 102.3 108.4 6.1 0.47 0.24 1.02 2.25 Borehole LAV2A From metres To Intercept Nickel Copper% 3E* g/t % Cu equiv. metres metres % ** 72.35 164.05 91.7 0.26 0.14 0.66 1.32 82.35 162.05 79.7 0.29 0.16 0.73 1.45 115.0 158.8 43.9 0.40 0.25 0.80 1.93 136.1 156.2 20.1 0.52 0.33 0.92 2.48 * 3E = platinum, palladium and gold ** at gold $465/oz; platinum $918/oz;palladium $198/oz; nickel $13,250/tonne and copper $3,950/tonne This formation discovery not only confirmed the Company's developing geologicalmodel, but also provided further support for a potentially large mining regionin Londokomanana, since Antsahabe exhibits very similar characteristics based onthe combination of geophysics and sampling results. The thickness of theintercepts is considered ideal for bulk open-pit mining. On the Company's Ambodilafa property, to the south of the capital Antananarivo,a reconnaissance programme identified a major ultrabasic intrusive some 20kilometres long by 4 kilometres wide. Previous limited drilling by others in thearea reported a 93-metre intersection of disseminated nickel-copper sulphideswith a 1% copper equivalent assay. In view of the Company's success withgeophysics in Londokomanana, it intends to fast track a geophysics programme onAmbodilafa followed closely by drilling. Also in Ambodilafa and based on archival data, the Company visited the oldBebasy gold mine in the area and identified a possible significant goldresource. Chip samples, taken during reconnaissance from newly exposed quartzveins nearby, assayed in the range 42g/t to 108g/t gold. In Lanjanina, follow-up soil sampling and geophysics, comprising of inducedpolarisation and ground magnetometry, identified significant copper and nickelanomalies of up to 2800 ppm copper and 550 ppm nickel. The Company is reviewingthe data with a view to further infill sampling and geophysiscs to targetdrilling. SOUTH AFRICA • Strategic interest purchased in Tjate's inferred 65 million oz PGM asset • Three drill holes intersected Merensky and UG2 reefs • Pre-feasibility study to be undertaken following encouraging results During the year, Jubilee purchased a strategic 25% interest inblack-economic-empowered Tjate Platinum Corporation (Pty) Ltd ("Tjate") forZAR35 million, with the right to subscribe for a further 10% interest onexpending ZAR14 million towards exploration and a feasibility study. Tjate holds old-order prospecting rights on three contiguous farms in theeastern Bushveld Complex, namely Dsjate, Fernkloof and Quartz Hill, which arelocated downdip of Impala Platinum's operating Marula mine and Anglo Platinum'sdeveloping Twickenham project. The Tjate property is inferred to contain 65million oz PGMs plus gold, of which 22.8 million oz are attributable to Jubilee.An application for conversion of the old-order rights to new-order rights hasbeen accepted by the Department of Minerals and Energy of South Africa andgranting of the conversion is believed to be imminent. The Company commenced drilling in February 2005 on the 2162 hectare Dsjate farm.By year-end it had drilled two boreholes, DT1 and DT2, both of which intersectedthe platinum-bearing Merensky and the UG2 chromitite reefs at projected depthsand reef thicknesses, and with grades consistent with expectations. The full results for the two boreholes are shown in the tables below: Borehole DT1 Merensky reef Width 4E Pt g/t Pd g/t Rh g/t Au g/t Ni Cu % Pt:Pd cm g/t % ratioMotherhole 99 7.78 4.45 2.49 0.22 0.62 0.33 0.19First deflection 110 7.37 4.36 2.30 0.19 0.52 0.24 0.05Second deflection 139 10.95 5.98 3.64 0.28 1.05 0.34 0.25Weighted average 116 8.91 5.03 2.89 0.23 0.76 0.33 0.16 1.74 Borehole DT1 UG2 reef Width 4E Pt Pd Rh Au Pt:Pd cm g/t g/t g/t g/t g/t ratioMotherhole 96 5.40 2.64 2.10 0.58 0.08Deflection 90 6.66 2.98 2.95 0.63 0.10Weighted average 93 6.01 2.80 2.51 0.60 0.10 1.12 Borehole DT2 Merensky reef Width 4E Pt g/t Pd g/t Rh g/t Au g/t Ni Cu % Pt:Pd cm g/t % ratioMotherhole 62 3.44 2.19 0.89 0.13 0.23 0.22 0.11Deflection 1 60 1.52 1.00 0.34 0.03 0.15 0.11 0.07Deflection 2 60 6.53 3.80 2.16 0.17 0.40 0.34 0.16Weighted average 61 3.83 2.33 1.13 0.11 0.26 0.22 0.11 2.1 Borehole DT2 UG2 reef Width 4E Pt Pd Rh Au Pt:Pd cm g/t g/t g/t g/t g/t ratioMotherhole 96 7.34 3.29 3.24 0.67 0.14Deflection 1 92 7.44 3.43 3.15 0.73 0.13Deflection 2 97 9.23 3.54 4.82 0.71 0.16Weighted average 95 8.01 3.42 3.75 0.70 0.14 0.9 Since the financial year-end, the Company has drilled a third step-out borehole,the results for which are shown in the tables below. Borehole DT3 Merensky Reef Width 4E Pt g/t Pd g/t Rh g/t Au g/t Ni Cu % Pt:Pd cm g/t % ratioMotherhole 63 5.05 3.18 1.39 0.13 0.35 0.28 0.21Deflection 1 60 6.85 4.10 2.11 0.20 0.44 0.40 0.19Deflection 2 61 8.93 5.10 2.96 0.24 0.63 0.36 0.19Weighted average 61 6.92 4.11 2.14 0.19 0.48 0.35 0.20 1.92 Borehole DT3 UG2 reef Width 4E Pt Pd Rh Au Pt:Pd Cm g/t g/t g/t g/t g/t ratioMotherhole 76 7.54 3.13 3.35 0.77 0.29Deflection 1 83 7.40 3.27 3.26 0.76 0.11Deflection 2 87 7.42 4.14 2.62 0.57 0.09Weighted average 82 7.49 3.55 3.08 0.70 0.16 1.16 The Company is to commence pre-feasibility studies on the Tjate property. On its Mapochsgronde/Houtenbek property in the eastern Bushveld, the Companycompleted its first diamond drill borehole DP001 (final depth 700 metres) onportion 800 of the Mapochsgronde farm 500JS, to establish the property'sstratigraphic position in the Bushveld Complex. Two intervals of PGMs indisseminated pyrite and chalcopyrite were intersected in rock comprisedpredominantly of gabbronorites. The first intersection, 1.43 metres thick at285.3 metres depth, assayed a weighted average of 1.31g/t platinum pluspalladium with minor copper and nickel. The second intersection, 0.2 metresthick at 287.7metres depth, assayed 2.88g/t platinum plus palladium and 0.09%copper and 0.12% nickel. Strontium isotope analysis on core samples, undertakenby the University of the Witwatersrand, confirmed that the drilling was in theBushveld Complex and close to the Upper Critical Zone, which hosts the Merenskyand UG2 reefs. The Company will be plotting the site for a new borehole in thearea, as suggested by the results. On its Vlaklaagte/Zwartdoorns property, the Company carried out a shallowlithological percussion drilling programme to follow up previously identifiedchrome-in-soil sample anomalies on Vlaklaagte. The results showed that theCritical Zone of the Bushveld Complex was not developed on Vlaklaagte, and onZwartdoorns the property is underlain by hornfels within the Transvaal sequence.Following these results, the Company subordinated Vlaklaagte/Zwartdoorns to itsother more encouraging properties. In respect of its Elandsdrift JQ467 and Bokfontein JQ448 properties in thewestern limb of the Bushveld Complex, and Buffelsvallei/Zaaiplaats farms(Groblersdal) and the Sallie Sloot/Swartkoppies farms near Marble Hall in theeastern limb, the Company awaits the granting of new-order prospecting rights,which is believed to be imminent. SIERRA LEONE • Focus remains on establishing mineable grades on the York Platinum project The Company is in a joint venture agreement (80% interest and manager) withAIM-listed Golden Prospect plc (20% interest) on its 105.3 square kilometre YorkPlatinum project in Sierra Leone. The project is located around the village ofYork some 37 kilometres south of the capital Freetown. The licence covers the central part of the Freetown Layered Gabbro Complex. Thisis a layered sequence of gabbroic and troctolitic rocks with some of thecyclical units having anomalous platinum, palladium, chromium, vanadium, nickeland copper mineralisation. Previous exploration by the Company and others havetraced this mineralisation, with anomalous platinum soil sampling values of upto 0.84g/t over a strike length of 8.5 kilometres. During the first half of the year, the Company reviewed and evaluated theexploration data to date and prepared an exploration programme aimed atestablishing the viability of platinum grades at depth. The programme, which wascompleted towards the end of the year, comprised of trenching totalling 131metres in length dug along anomalous soil sample lines and traversed theanomalous soil sample locations beginning and ending in areas of backgroundmineralisation. Preliminary results are inconclusive and although the focus onthe project has been subordinated to South Africa and Madagascar, the projectnevertheless remains intriguing. Colin Bird Chief Executive Officer REPORT OF THE DIRECTORS The Directors present their report together with the financial statements forthe year ended 30 June 2005. Principal activities The Group and Company are principally engaged in exploration and exploitation ofnatural resources. Business review A review of the Group's operations during the year ended 30 June 2005 and futuredevelopments is contained in the Chairman's Statement. There was a loss for the year after taxation amounting to £334,065 (2004:£539,071). The Directors do not recommend the payment of a dividend. Corporate governance The Board supports the principles of good governance contained in the CombinedCode appended to the Listing Rules of the Financial Services Authority. Itcomplies where this is commercially justified, allowing for the practicallimitations relating to the Company's size. The Management Team meets regularly and the Full Board when appropriate in orderto determine the strategy and policy of the Group and the allocation of itsfinancial resources and has a schedule of matters specifically reserved to itfor decision. The Company has three non-executive Directors, M A Burne, C Molefe and J DParker. Given the size of the Group's operations it is not consideredappropriate to have separate audit, remuneration and nomination committees. Internal control The Board is responsible for maintaining an appropriate system of internalcontrols to safeguard shareholders' investment and Group assets. The Directors monitor the operation of internal controls. The objective of thesystem is to safeguard Group assets, maintain proper accounting records andensure that the financial information used within the business and forpublication is reliable. Any such system of internal control can only providereasonable but not absolute assurance against material misstatement or loss. Internal financial control procedures undertaken by the Board include: • Review of quarterly financial reports and monitoring performance.• Prior approval of all significant expenditure including all major investment decisions.• Review and debate of treasury policy. Risk assessment and the review of internal controls are undertaken by the Boardin the context of the Group's overall strategy. The review covers the keybusiness operational, compliance and financial risks facing the Group. Inarriving at its judgement of what risks the Group faces, the Board hasconsidered the Group's operations in the light of the following: • The nature and extent of risks which it regards as acceptable for the Group to bear within its overall business objective• The threat of such a risk becoming a reality• The Group's ability to reduce the incidence and impact of risk on its performance• The cost and benefits to the Group of operating the relevant controls. The Board has reviewed the operation and effectiveness of the Group's system ofinternal control for the financial year and the period up to the date ofapproval of these financial statements. Relations with shareholders Communication with shareholders is given a high priority by the Board and theDirectors are available to enter into dialogue with shareholders. Allshareholders are encouraged to attend and vote at the Annual General Meetingduring which the Board is available to discuss issues affecting the Company. Going concern After making enquiries, the Directors have a reasonable expectation that theGroup has adequate resources to continue its operational existence for theforeseeable future. For this reason they have adopted the going concern basisin preparing the financial statements. Directors The Directors who served during the year and their interests in the shares ofthe Company as at beginning and end of the year were as follows: Ordinary shares Share options 30 June 2005 30 June 2004 30 June 2005 30 June 2004 C Bird 6,585,048 6,585,048 1,000,000 750,000M A Burne - - 450,000 200,000J D Parker - - 100,000 100,000C Molefe - - 250,000 - Mr C Molefe was appointed a Director on 23 September 2004. Directors' responsibilities for the financial statements Company law in the United Kingdom requires the Directors to prepare financialstatements for each financial year which give a true and fair view of the stateof affairs of the Company and the Group and of the profit or loss of the Groupfor that period. In preparing those financial statements, the Directors arerequired to: • select suitable accounting policies and then apply them consistently • make judgements and estimates that are reasonable and prudent • state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. The Directors are responsible for keeping proper accounting records, whichdisclose with reasonable accuracy at any time the financial position of theCompany and Group and to enable them to ensure that the financial statementscomply with the Companies Act 1985. The Directors are responsible for ensuringthat the Directors' Report and other information included in the Annual Reportis prepared in accordance with Company Law in the United Kingdom and forensuring that the Annual Report includes information required by the AIM Rules.They are also responsible for safeguarding the assets of the Group and hence fortaking reasonable steps for the prevention and detection of fraud and otherirregularities. The Directors are also responsible for the maintenance and integrity of theCompany's website. Substantial shareholders The Directors are aware of the following substantial shareholdings of 3% or moreof the current issued share capital of 69,922,828 shares at 30 June 2005. Ordinary shares of 1p each Number Percentage Golden Prospect plc 9,747,388 13.94Framlington Investment Management 6,674,242 9.54C Bird 6,585,048 9.41Gartmore Investment Management 5,020,945 7.66Fidelity Managed Funds 4,837,821 6.91JP Morgan Fleming Asset Management 4,730,265 6.76Artemis Fund Managers 4,276,250 6.11Resource Capital Group Ltd 4,000,000 5.72 Share issues Details of the shares issued in the year are detailed in Note 13 to theFinancial Statements. Post balance sheet events Details of post balance sheet events are disclosed in Note 26 of the FinancialStatements. Payment policy and practice It is the Company's policy to pay suppliers on the terms agreed with them.There were no trade creditors at the year end. Auditors The Directors review the terms of reference for the auditors and obtain writtenconfirmation that the firm has complied with its ethical guidance on ensuringits independence. Saffery Champness provides audit and accountancy services tothe Company in connection with its annual audit as well as corporation taxcompliance services. The level of fees charged is reviewed by the Board toensure they remain competitive and to ensure no conflicts of interest arise. A resolution proposing their appointment as auditors in accordance with Section385 of the Companies Act 1985 will be placed at the forthcoming Annual GeneralMeeting. ON BEHALF OF THE BOARD C BirdChief Executive Officer21 October 2005 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF JUBILEE PLATINUM PLC We have audited the financial statements of Jubilee Platinum plc for the yearended 30 June 2005, which comprise the principal accounting policies, theconsolidated profit and loss account, the balance sheets, the consolidated cashflow statement and notes 1 to 26. These financial statements have been preparedunder the accounting policies set out therein. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS The Directors' responsibilities for preparing the annual report and thefinancial statements in accordance with United Kingdom law and accountingstandards are set out in the statement of Directors' responsibilities. Our responsibility is to audit the financial statements in accordance withrelevant legal and regulatory requirements and United Kingdom auditingstandards. This report is made solely to the Company's members, as a body, in accordancewith Section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the Company's members those matters we are required tostate to them in an auditors' report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother 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. We report to you our opinion as to whether the financial statements give a trueand fair view and are properly prepared in accordance with the Companies Act1985. We also report to you if, in our opinion, the Directors' report is notconsistent with the financial statements, if the Company has not kept properaccounting records, if we have not received all the information and explanationswe require for our audit, or if information specified by law regardingDirectors' remuneration and transactions with the Group is not disclosed. We read other information contained in the annual report, including thecorporate governance statement, and consider whether it is consistent with theaudited financial statements. This other information comprises only theChairman's Statement and the Report of the Directors. We consider theimplications for our report if we become aware of any apparent misstatements ormaterial inconsistencies with the financial statements. We are not required toconsider whether the Board's statements on internal control cover all risks andcontrols, or form an opinion on the effectiveness of the Group's corporategovernance procedures or its risk and control procedures. Our responsibilitiesdo not extend to any other information. BASIS OF OPINION We conducted our audit in accordance with United Kingdom auditing standardsissued by the Auditing Practices Board. An audit includes examination, on atest basis, of evidence relevant to the amounts and disclosures in the financialstatements. It also includes an assessment of the significant estimates andjudgements made by the Directors in the preparation of the financial statements,and of whether the accounting policies are appropriate to the Group'scircumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion, we also evaluated the overalladequacy of the presentation of information in the financial statements. OPINION In our opinion the financial statements give a true and fair view of the stateof affairs of the Company and the Group at 30 June 2005 and of the loss of theGroup for the year then ended and have been properly prepared in accordance withthe Companies Act 1985. SAFFERY CHAMPNESSREGISTERED AUDITORSCHARTERED ACCOUNTANTSLONDON25 October 2005 Note 1 The maintenance and integrity of the Jubilee Platinum plc website is the responsibility of the Directors: the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. 2 Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions. Principal Accounting Policies The financial statements have been prepared under the historical cost conventionand in accordance with applicable Accounting Standards and the Statement ofRecommended Practice "Accounting for Oil and Gas Exploration, Development,Production and Decommissioning Activities" (the SORP). The principal accounting policies, which have been reviewed by the Directors inthe light of FRS 18 and are considered the most appropriate to the Group'scircumstances, are set out below. Basis of consolidation The Group financial statements consolidate those of the Company and of itssubsidiary undertakings (see Note 9) for the year ended 30 June 2005. Goodwill arising on consolidation, representing the excess of the fair value ofthe consideration given over the fair values of the identifiable net assetsacquired, is capitalised and is amortised on a straight line basis over itsestimated useful economic life. Goodwill arising on the acquisition of ResourceDevelopment Corporation Limited has been written off on disposal of thatsubsidiary. Depreciation Depreciation is calculated to write down the cost less estimated residual valueof all tangible fixed assets by equal annual instalments over their expecteduseful economic lives. The rates generally applicable are: Office equipment 25% on costComputer equipment 33% on costMotor vehicles 25% on cost Exploration expenditure In accordance with the full cost method as set out in the SORP, expenditureincluding related overheads on the acquisition, exploration and evaluation ofinterests in licences not yet transferred to a cost pool is capitalised underintangible assets. Cost pools are established on the basis of geographic area.When it is determined that such costs will be recouped through successfuldevelopment and exploitation or alternatively by sale of the interest,expenditure will be transferred to tangible assets and depreciated over theexpected productive life of the asset. Whenever a project is considered nolonger viable the associated exploration expenditure is written off to theprofit and loss account. Fixed asset investments Fixed asset investments are carried at cost less provision for diminution invalue. Current asset investments Current asset investments are carried at the lower of cost and net realisablevalue. Foreign currencies Transactions in foreign currencies are translated at the exchange rate ruling atthe date of the transaction. Monetary assets and liabilities in foreigncurrencies are translated at the rates of exchange ruling at the balance sheetdate. The financial statements of foreign subsidiaries are translated at therate of exchange ruling at the balance sheet date. The exchange differencesarising from the retranslation of the opening net investment in subsidiaries andcertain long-term loans are taken directly to reserves. All other exchangedifferences are dealt with through the profit and loss account. Deferred taxation Deferred tax is recognised on all timing differences where the transactions orevents that give the Group an obligation to pay more tax in the future, or aright to pay less tax in the future, have occurred by the balance sheet date.Deferred tax assets are recognised when it is more likely than not that theywill be recovered. Deferred tax is measured using rates of tax that have beenenacted or substantively enacted by the balance sheet date. Financial instruments The Group uses financial instruments to manage exposures to fluctuations ininterest rates. Financial assets are recognised in the balance sheet at thelower of cost and net realisable value. Provision is made for diminution invalue where appropriate. Interest receivable and payable is accrued and credited/charged to the profitand loss account in the period to which it relates. Liquid resources Liquid resources comprise funds on deposit at not less than 24 hours notice. Operating leases Rentals payable under operating leases are charged on a straight line basis overthe term of the lease. CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 June 2005 Year ended 30 Year ended 30 June June 2005 2004 Note £ £ Administrative expenses (558,563) (431,154) Operating loss (558,563) (431,154) Loss on disposal of subsidiary 1 - (191,795) Interest receivable and similar income 230,401 83,878 Share of operating loss in associate 10 (5,903) - Loss on ordinary activities before taxation 2 (334,065) (539,071) Tax on loss on ordinary activities 4 - - Loss on ordinary activities after taxation 5 (334,065) (539,071)Minority interests: Equity 34,210 2,422 Loss on ordinary activities attributable to members of Jubilee (299,855) (536,649)Platinum Plc Basic loss per share 6 (0.46p) (1.19p) Fully diluted loss per share 6 (0.45p) (1.15p) All of the Group's activities are classed as continuing. The accompanying accounting policies and notes form an integral part of thesefinancial statements. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Year ended 30 Year ended 30 June 2005 June 2004 £ £ Loss for the financial year (299,855) (536,649)Translation differences on foreign currency net investments (233,320) 3,476 Total recognised gains and losses for the year (533,175) (533,173) The accompanying accounting policies and notes form an integral part of thesefinancial statements. CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2005 Year ended 30 Year ended 30 June 2005 June 2004 Note £ £Fixed assetsIntangible assets 7 909,204 328,846Tangible assets 8 24,513 7,694Investment in associate 10 2,900,438 - 3,834,155 336,540 Current assetsDebtors 11 195,122 54,957Cash at bank and in hand 4,635,153 3,112,561 4,830,275 3,167,518Creditors: amounts falling due within one year 12 (1,374,244) (95,225) Net current assets 3,456,031 3,072,293 Total assets less current liabilities 7,290,186 3,408,833 Minority interestsEquity interests 43,929 2,379 7,334,115 3,411,212 Capital and reservesCalled up share capital 13 699,228 491,600Share premium account 14 8,256,314 4,007,864Profit and loss account 15 (1,621,427) (1,088,252) Shareholders' funds 16 7,334,115 3,411,212 The financial statements were approved by the Board of Directors on 21 October2005 C BirdDirector The accompanying accounting policies and notes form an integral part of thesefinancial statements. COMPANY BALANCE SHEET AS AT 30 JUNE 2005 Year ended 30 Year ended 30 June 2005 June 2004 Note £ £Fixed assetsIntangible assets 7 30,925 23,578Tangible assets 8 2,889 4,584Investments 9 388 273 34,202 28,435 Current assetsDebtors 11 4,049,453 412,412Cash at bank and in hand 3,681,894 3,074,330 7,731,347 3,486,742Creditors: amounts falling due within one year 12 (86,136) (39,397) Net current assets 7,645,211 3,447,345 Total assets less current liabilities 7,679,413 3,475,780 Capital and reservesCalled up share capital 13 699,228 491,600Share premium account 14 8,256,314 4,007,864Profit and loss account 15 (1,276,129) (1,023,684) Shareholders' funds 16 7,679,413 3,475,780 The financial statements were approved by the Board of Directors on 21 October2005. C BirdDirector The accompanying accounting policies and notes form an integral part of thesefinancial statements. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2005 Year ended 30 Year ended 30 June June 2005 2004 Note £ £ Net cash outflow from operating activities 17 (869,591) (303,577) Returns on investments and servicing of financeInterest received 230,401 83,878Foreign exchange difference 9,925 - 240,326 83,878 Capital expenditure and financial investmentPurchase of intangible fixed assets 7 (596,807) (305,202)Purchase of tangible fixed assets 8 (24,669) (8,026) Net cash outflow from capital expenditure and financial investment (621,476) (313,228) Acquisitions and disposalsInvestment in associate (2,906,977) - Movement in liquid resourcesFunds placed on deposit (4,079,481) (3,050,000)Funds removed from deposit 3,050,000 600,000Sale of current asset investment - 475,882 (1,029,481) (1,974,118) FinancingIncrease in loans 19 1,224,233 27,503Issue of shares and warrants 13 4,766,295 2,594,800Expenses of share issues 14 (310,218) (69,740) Net cash inflow from financing 5,680,310 2,552,563 Increase in cash 18 493,111 45,518 The accompanying accounting policies and notes form an integral part of thesefinancial statements. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005 1 LOSS ON DISPOSAL OF SUBSIDIARY During 2004 the Group was restructured and Resource Development CorporationLimited dissolved giving rise to a loss as follows: 2005 2004 £ £ Acquired goodwill written off - 153,230Project costs written off - 38,565 - 191,795 2 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION The loss on ordinary activities is stated after: 2005 2004 £ £ Auditors' remuneration - statutory audit services 10,977 9,896 - tax compliance fees 1,500 1,500Payments under operating leases - land and buildings 24,500 18,750Depreciation 7,670 2,845 3 DIRECTORS AND EMPLOYEES Staff costs during the year were as follows: 2005 2004 £ £ Wages and salaries 225,457 145,971Social security costs 21,962 15,238 247,419 161,209 Remuneration in respect of Directors was as follows: 2005 2004 £ £ Emoluments 134,118 88,842 The average monthly number of employees during the year was seven including thefour Directors, none of whom participate in company pension schemes. 4 TAX ON LOSS ON ORDINARY ACTIVITIES 2005 2004 £ £ Loss for the year (334,065) (539,071) Loss for the year multiplied by standard rate of UK corporation tax 30% (100,220) (161,721)Effect of:UK expenses not deductible for tax purposes 4,630 18,417Increase in UK tax losses 71,104 137,374South African losses at 30% 24,486 5,930 Tax charge - - Unprovided deferred tax asset:UK tax losses carried forward multiplied by standard rate of UK corporation 239,576 237,784tax 30%, recoverable only when the Company has generated taxable profits 5 LOSS FOR THE FINANCIAL YEAR The Company has taken advantage of Section 230 of the Companies Act 1985 and hasnot included its own profit and loss account in these financial statements. TheCompany loss for the year was £19,125 (2004: £583,743). 6 LOSS PER SHARE The calculation of the basic loss per share is based on the loss for thefinancial year divided by the weighted average number of shares being 64,687,342(2004: 45,118,634) in issue during the year. The fully diluted loss per share is based on the loss for the financial yeardivided by the weighted average number of shares and potential shares being66,463,756 (2004: 48,129,838) in issue during the year. 2005 2004 £ £ Ordinary shares 64,687,342 45,118,634Effect of options issued at fair value 1,776,414 3,011,204 66,463,756 48,129,838 7 INTANGIBLE FIXED ASSETS The Group Exploration Expenditure £CostAt 1 July 2004 328,846 Foreign exchange difference (16,449)Additions 596,807 At 30 June 2005 909,204 The Company Exploration expenditure £CostAt 1 July 2004 23,578Additions 7,347 At 30 June 2005 30,925 8 TANGIBLE FIXED ASSETS The Group Office equipment £CostAt 1 July 2004 11,377Foreign Exchange Difference (180)Additions 24,669 At 30 June 2005 35,866 DepreciationAt 1 July 2004 3,683Charge for the year 7,670 At 30 June 2005 11,353 Net book amount at 30 June 2005 24,513 Net book amount at 30 June 2004 7,694 The Company Office equipment CostAt 1 July 2004 7,230Additions 909 At 30 June 2005 8,139 DepreciationAt 1 July 2004 2,646Charge for the year 2,604 At 30 June 2005 5,250 Net book amount at 30 June 2005 2,889 Net book amount at 30 June 2004 4,584 9 FIXED ASSET INVESTMENTS The Company Shares in Shares in Group Group undertakings undertakings 2005 2004 £ £CostAt 1 July 2004 273 250,000Additions 141 273Disposals (26) (250,000) At 30 June 2005 388 273 At 30 June 2005 the Company held more than 20% of the following subsidiaryundertakings: Name of undertaking Country of Principal Proportion of equity capital incorporation activity held By the Company By the Group Dullstroom Plats (Pty) Ltd South Africa Mineral 90% explorationMaude Mining and Exploration South Africa Mineral - 81%(Pty) Ltd explorationMineral Resources of Madagascar Madagascar Mineral 85% -Sarl explorationWindsor Platinum Investments South Africa Mineral 90% -(Pty) Ltd explorationEmanuel Mining and Exploration South Africa Mineral 90% -(Pty) Ltd explorationMokopane Mining and Exploration South Africa Mineral 90% -(Pty) Ltd exploration 10 INVESTMENT IN ASSOCIATE Tjate Platinum Corporation (Proprietary) Limited 2005 £ Share of turnover - Share of operating loss for the year (5,903) Share of AssetsShare of current assets 20Share of non-current assets 2,941,080 2,941,100 Share of LiabilitiesShare of current liabilities 3,718Share of non-current liabilities 36,944 40,662 Share of net assets 2,900,438 Jubilee Platinum plc owns 25% of the issued ordinary share capital ofTjate Platinum Corporation (Proprietary) Limited which is engaged inthe exploration and exploitation of natural resources. The associate has an unsecured loan from Windsor Platinum Investments(Pty) Limited, a subsidiary within the Jubilee group, of £148,068with no fixed repayment terms, bearing an interest rate of 2% abovethe prime lending rate. 11 DEBTORS Group Company 2005 2004 2005 2004 £ £ £ £ Amounts due from Group undertakings - - 4,010,748 372,508Other debtors 176,324 32,280 21,656 19,083Prepayments and accrued income 18,798 22,677 17,049 20,821 195,122 54,957 4,049,453 412,412 12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Company 2005 2004 2005 2004 £ £ £ £ Other loan 1,274,325 50,092 - -Social security and other - 2,288 5,297 2,000taxesOther creditors 24,839 18,329 7,981 14,690Accruals and deferred income 75,080 24,516 72,858 22,707 1,374,244 95,225 86,136 39,397 The other loan represents cash advanced by New Africa Mining Fund (NAMF) and isunsecured. It is part of a ZAR11,400,000 loan that has been advanced by NAMF tothe South African Group companies for a participation of 10% (at par) of WindsorPlatinum Investments (Pty) Limited (Windsor). From 1 July 2004 Windsor has heldthe Group's investments in Maude Mining and Exploration (Pty) Limited andDullstroom Plats (Pty) Limited and also holds the 25% stake in Tjate PlatinumCorporation (Pty) Limited (Tjate) acquired during the year. The issued sharecapital of Windsor is 100,000 1 cent shares currently issued 90,000 to theCompany and 10,000 to NAMF. NAMF has an option to subscribe for a further 2.52%of the entire issued share capital of Windsor for ZAR3,800,000. On allotment ofthe additional shares, NAMF has a further option to convert its Windsor sharesinto the Company's shares in the ratio of 1% of the entire issued share capitalof the Company (on a fully diluted basis) for each 1.252% of the entire sharecapital of Windsor. Consequently, NAMF may convert its 12.52% (10% currentlyowned plus 2.52% to be allotted to NAMF) of Windsor into a 10% ownership of theCompany (on a fully diluted basis). NAFM has agreed to assign its ZAR11,400,000 loan to the Company for a nominal consideration of ZAR1 on theconversion of its Windsor shares to the Company's shares. 13 SHARE CAPITAL Group and Company 2005 2004 £ £Authorised500,000,000 ordinary shares of 1p each 5,000,000 5,000,000 Allotted, called up and fully paid 699,228 491,60069,922,828 (2004: 49,160,000) ordinary shares of 1p each The Company made allotments of ordinary 1p shares with an aggregate nominalvalue of £207,628 during the year as follows: Price Number of shares Aggregate per share considerationDate of issue £30 July 2004 20p 15,500,000 3,100,00025 February 2005 16p 414,343 66,2958 April 2005 33p 4,848,485 1,600,000 20,762,828 4,766,295 The Company has granted options to subscribe for ordinary 1p shares as follows: Date granted Period exercisable Exercise price Number of per share (pence) options 24 July 2002 24 July 2004 to 24 July 2012 16 1,770,00024 October 2003 24 October 2005 to 24 October 2013 20 175,00024 October 2003 24 October 2005 to 24 October 2013 28 100,0009 February 2004 9 February 2004 to 9 February 2007 31 650,0002 August 2004 2 August 2004 to 1 August 2009 20 646,60020 December 2004 20 December 2006 to 20 December 2014 28 1,100,000 414,343 options were exercised during the year and 1,000,000 options lapsedduring the year. The highest and lowest price of the Company's shares during the year was 46.8pand 19.5p respectively. The share price at the year end was 34p. 14 SHARE PREMIUM ACCOUNT Group and Company 2005 2004 £ £At 1 July 2004 4,007,864 1,586,904Premium on allotments in the year 4,558,668 2,490,700Expenses of share issues (310,218) (69,740) At 30 June 2005 8,256,314 4,007,864 15 PROFIT AND LOSS ACCOUNT Group Company £ £ At 1 July 2004 (1,088,252) (1,023,684)Loss for the year (299,855) (19,125)Translation differences on foreign currency net (233,320) (233,320)investments At 30 June 2005 (1,621,427) (1,276,129) 16 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Group Company 2005 2004 2005 2004 £ £ £ £ Loss for the financial year (299,855) (536,649) (252,445) (583,743) Foreign exchange difference (233,320) 3,476 - - Issue of shares (net of expenses) 4,456,078 2,525,060 4,456,078 2,525,060 Net increase in shareholders' funds 3,922,903 1,991,887 4,203,633 1,941,317Shareholders' funds at 1 July 2004 3,411,212 1,419,325 3,475,780 1,534,463 Shareholders' funds at 30 June 2005 7,334,115 3,411,212 7,679,413 3,475,780 17 NET CASH OUTFLOW FROM OPERATING ACTIVITIES Group 2005 2004 £ £ Operating loss (558,563) (431,154)Depreciation 7,670 2,845Amounts written off exploration expenditure - 137,057Exchange movement (233,320) -Increase in debtors (140,164) (15,868)Increase in creditors 54,786 3,543 Net cash outflow from continuing operating activities (869,591) (303,577) 18 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Group 2005 2004 £ £ Increase in cash in the year 493,111 45,518Increase in liquid resources 1,029,481 2,450,000Increase in loans (1,224,233) (27,503)Translation difference - 340 Increase in net funds 298,359 2,468,355Net funds at 1 July 2004 3,062,469 594,114 Net funds at 30 June 2005 3,360,828 3,062,469 19 ANALYSIS OF NET FUNDS Group 2005 Cash Movement 2004 £ £ £ Cash at bank 4,635,153 1,522,592 3,112,561Other loans (1,274,325) (1,224,233) (50,092) Net funds 3,360,828 298,359 3,062,469 20 FINANCIAL INSTRUMENTS The Group uses financial instruments, other than derivatives, comprisingborrowings, cash, liquid resources and various items such as sundry debtors andcreditors that arise directly from its operations. The main purpose of thesefinancial instruments is to raise finance for the Group's operations. The main risks arising from the Group's financial instruments are liquidity riskand currency risk. The Directors review and agree policies for managing theserisks and these are summarised below. Short-term debtors and creditors have been excluded from all the followingdisclosures. Liquidity risk The Group seeks to manage financial risk, to ensure sufficient liquidity isavailable to meet foreseeable needs and to invest cash assets safely andprofitably. This is achieved by placing surplus funds on deposit. At thebalance sheet date the Group had £175,000 on seven-day deposit at an interestrate of 3.99% and £3,400,000 on monthly deposit at an interest rate of 4.45%. Currency risk The Group is exposed to transaction related foreign exchange risk. Borrowing facilities and interest rate risk The Group finances its operations through the issue of equity share capital.There is no significant borrowing and therefore no exposure to interest ratefluctuations. Fair values The fair values of the Group's financial instruments are considered equal to thebook value. 21 CAPITAL COMMITMENTS Neither the Group nor the Company had any capital commitments at 30 June 2005 or30 June 2004. 22 FINANCIAL COMMITMENTS The Company had the following commitments under non-cancellable operating leasesas at 30 June 2005: Land and buildings 2005 2004 £ £ Within 1 year 18,250 12,500Between 1 and 2 years - 6,250 23 CONTINGENT LIABILITIES There were no contingent liabilities at 30 June 2005 or 30 June 2004. 24 TRANSACTIONS WITH DIRECTORS No Director had, during or at the end of the year, a material interest in anycontract which was significant in relation to the Group's business. 25 CONTROL The Directors consider the Company to have no ultimate controlling party. 26 POST BALANCE SHEET EVENTS (1) The Company has granted options to subscribe for ordinary 1p shares asfollows: Date granted Period exercisable Exercise price Number of per share options (pence) 20 July 2005 20 July 2007 to 20 July 2015 38p 110,000 (2) On 5 September 2005, the Company announced the results of its first boreholeLAV1 in Madagascar, drilled on the Lavatrafo property (Londokomanana Project),which is located approximately 150 kilometres north of the capital Antananarivo.The borehole intersected a 70-metre wide multi-metal(nickel-copper-platinum-palladium) mineralised formation at shallow depth (38metres). The intersection over the entire mineralised width (from 38 metres to108 metres) grades 0.23% nickel; 0.11% copper and 1.05g/t 3E (platinum,palladium and gold). (3) On 6 October 2005, the Company announced the results of its second boreholeLAV2A, which was stepped out 150 metres southeast of borehole LAV1. Theborehole intersected a 92- metre wide mineralization consistent with thatintersected in borehole LAV1. (4) Since the financial year-end, the Company has drilled a third step-outborehole on the Dsjate farm , one of three contiguous farms comprising itsTjate property in South Africa. The borehole showed a weighted average grade of6.92 g/t 4E (platinum, palladium, rhodium and gold); 0.35% nickel and 0.20%copper for the Merensky reef and 7.49g/t 4E for the UG2 reef. -------------------------- This information is provided by RNS The company news service from the London Stock Exchange

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Jubilee Metals
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