Bluejay Mining plc / EPIC: JAY / Market: AIM / Sector: Mining

21 March 2017

Bluejay Mining plc ('Bluejay' or the 'Company')

Interim Results and Change of Accounting Year End

 

Bluejay Mining plc, the AIM and FSE listed exploration company with projects in Greenland and Finland, is pleased to announce its interim results for the six months ended 31 December 2016.

 

Highlights

 

·     Advancing the Pituffik Titanium Project in Greenland towards large scale production targeted to commence in 2018

·     Results continue to demonstrate uniquely high in-situ grade of the deposit, underpinning potential to be within the top percentile of projects globally with respect to heavy mineral grade - maiden resource due shortly

·     Delivery of a proof of concept bulk sampling programme on track for H2 2017

·     Continued progress made on permitting of Pituffik - exploitation licence targeted for lodgement H2 2017

·     Appointed several accomplished professionals in the ilmenite sector to advance offtake discussions and market research

·     Additional upside opportunity - acquired two polymetallic assets in Greenland to be advanced once Pituffik is cash flow positive:

o  194sq km Disko-Nuussuaq Magmatic Massive Sulphide nickel-copper-platinum project

o  107sq km Kangerluarsuk Sed-Ex lead-zinc-silver project

·     Successful placing of new and existing shares to raise a total of £8.5million:

o  Funds of over £5 million attributable to the Company for the development of Pituffik; and

o  Existing shares were made available to new institutional shareholders by Western Areas

·     Post-period-end acquired 100% of Pituffik (from 60.67%) and changed Company name to Bluejay Mining plc (previously FinnAust Mining plc)

 

Chairman's Statement

 

It is my pleasure to be able to report to shareholders of such a positive outcome on the 6 months to December 2016. Bluejay owns the potentially world class Pituffik Titanium Project in Greenland ('Pituffik' or the 'Project') and we are pleased with progress made to date. Pituffik demonstrates many of the characteristics necessary for a globally significant ilmenite deposit with the maiden resource expected soon.

 

The six months to December was a solid period for the Company, with multiple work programmes completed both on and off site that continue to demonstrate the significance of Pituffik. The 2016 field season saw more than 500 holes drilled on and offshore and a metallurgical sample shipped to IHC Robbins in Queensland for pilot plant test work. We have continued the advancement of the Environmental Impact Assessment ('EIA') and Social Impact Assessment ('SIA') studies with no major issues having been identified to date, and ongoing Stakeholder engagement of the local communities indicates support for development. All drilling samples have now been processed by SGS Laboratories with SRK Exploration continuing to provide quality assurance/quality control services and analysing samples to deliver the initial mineral resource for the Project. Overall it was a very productive period and one that we hope shareholders will be pleased with.

 

All current work programmes are now nearing completion with the application for an exploitation licence being the next step in the evolution of the Project. It is expected that this will be lodged in H2 2017.

 

During the period, the Company managed to secure the services of several accomplished professionals in the ilmenite sector and set the stage for an exciting 2017. Work will continue on offtake and sales research, permitting for our activities on site and delivery of a proof of concept bulk sampling programme in H2 2017. We believe Pituffik is unique in many respects, with the homogenous chemistry of the ilmenite over the entire Project area, the low oxidation and impurity levels and the uniquely high in-situ grade of the deposit all providing a solid platform from which to progress the Project in 2017.

 

Work to date indicates that the mineralisation at Pituffik is prolific and with more than 30km of beach both on and offshore, the potential of increasing the resource over time is significant. Given the potential of the Project the Board decided to proceed with exercising the Company's Option to acquire 100% of the Project from 60.67%, which was achieved in March 2017. At the same time the Company changed its name to Bluejay Mining plc.

 

Corporate Strategy

 

Pituffik is our primary project and we are fully focused on developing a commercial operation. However, given our strong understanding of Greenland's prolific resource potential, gained from many years of operating in-country, we have a vision to become a significant, multi-project resource player in the Nordic region.  With this in mind, we are pleased to have bolstered our asset base during the period via the acquisition of Avannaa Exploration Limited. This transaction enabled us to take control of the 194sq km Disko-Nuussuaq Magmatic Massive Sulphide nickel-copper-platinum project ('Disko') and the 107sq km Kangerluarsuk Sed-Ex lead-zinc-silver project ('Kangerluarsuk').  Further details on these assets are provided below but in terms of strategy, we intend to commence exploration activities at these assets once Pituffik is cash flow positive.

 

We also hold polymetallic assets in Finland, which have been under review for the past six months.  Extensive analysis has been undertaken of both historic and company-data, which has refined our understanding of this very extensive land package and with more focused targets in hand, we are assessing the potential to conduct further drilling which could provide us with strengthened optionality going forward.

 

The Pituffik Titanium Project

150 sq km in North West Greenland

 

Pituffik sits within the "Thule black sand province" in North West Greenland, which is comprised of coastlines several hundred kilometres long that contain both ilmenite and magnetite-rich regions.  Bluejay is targeting the localised higher concentrations of ilmenite and has defined two primary project areas, Moriusaq and Interlak.  Three target areas, namely the Raised, Active and Drowned beaches, have been identified along 80km of coastline and importantly the highest-grade material from the entire region to date has been identified within Bluejay's licences. 

 

·     Active Beaches - refers to the area seaward of the frontal dunes, including the beach, tidal zones and surf zone - historically samples from this area have achieved 70% ilmenite by weight;

·     Raised Beaches - contain ilmenite accumulations over widths of more than 1km, of unknown depths, along more than 20km of coastline; and

·     Drowned Beaches - the areas seaward of active beaches which contain larger volumes of ilmenite bearing sediments located in less than 10m of water - expected to be very high grade ilmenite.

 

We are focused on capitalising on the significant resource potential of Pituffik by developing a commercial scale mining operation.  We have identified the opportunity to deliver production in the relative near term via a dredging operation within the marine environment.  This will be conducted using standard industry equipment and practices and will be dependent on the development of effective logistics and processing routes.  It is our intention to trial a bulk sampling campaign in H2 2017, which will include dredging a small amount of material from the drowned beach environment, thus providing the market and industry with sufficient comfort of our ability to execute on this exciting opportunity.  However, before we move into this phase, we need to complete a resource programme, a SIA and an EIA, once complete we will apply for the exploitation licence; we expect to commence the exploitation licence application process in H2 2017 subject to receipt of the resource, SIA and EIA.

 

To facilitate this, in July 2016 we commenced a work programme to deliver a JORC resource.  The Geological Survey of Greenland and Denmark ('GEUS') designed the programme in consultation with SRK Exploration who we appointed to undertake the analysis and provide calculations.  We have been very pleased with GEUS' rapid execution from July to September 2016, when they drilled more than 500 auger and vibracore holes and conducted extensive trenching and sampling across the Project area. 

 

We expect to be in a position to publish the resource soon and work completed to date has validated our previous categorisation of two distinct project areas, which will become the focus with respect to future studies. These are:

 

·     Moriusaq Bay and surrounding area, a low-medium tonnage target that encapsulates the bay and proximal active and raised beaches with grades in some areas estimated to be in excess of 85% ilmenite; and

·     Interlak, an area dominated by huge deltaic deposits with associated adjacent high grade beaches with grades in some areas estimated to be in excess of 70% ilmenite occurring as thick sedimentary bands.

 

Our SIA and EIA are both progressing to plan in association with key industry and regional bodies.  We have received authorisation for both assessments and look forward to providing these results in due course. 

 

Metallurgical testwork has also been a primary focus for Bluejay and the final results will form a key element of our internal feasibility study.  We are very happy with the early results received from the work to date, which has demonstrated the ability to produce a commercially pure, high-grade concentrate via gravity-separation.  This processing route is highly efficient in comparison to the path required for existing 'hard rock' sources of ilmenite and is expected to positively affect capital and operating requirements moving forward. 

 

We are now refining the process design; in October 2016, the Company engaged Allied Mineral Laboratories ('AML') to complete the next phase of process design and optimisations for large scale exploitation, and identify further refinements of the gravity circuit to generate a concentrate of the titanium rich minerals at Pituffik.  This consisted of representative samples being submitted for Scanning Electron Microscope analysis ('QEMSCAN') to determine mineral species present, grain size and degree of liberation, as well as other identifying physical characteristics.  In turn, the results were used to prepare a liquid separation process and this successfully produced a very pure ilmenite concentrate.  Analysis of the potential ilmenite product from this concentrate has continued to suggest its suitability for direct use in the sulphate process to upgrade sulphate slag and chloride slag.  Detailed chemical analysis so far completed also indicated low levels of deleterious trace elements and beneficial iron oxide (FeO/Fe2O3) ratios, which is very positive.  Looking ahead, bulk metallurgical samples collected from raised and active beaches during the 2016 field season have been dispatched to IHC Robbins in Brisbane as part of a design and pilot plant package.

 

Given our firm focus on production, we are keen to secure an offtake partner and have already commenced a marketing process with this in mind.  Firstly, we conducted a review of the potential markets and customers for our product.  Detailed market research indicated that global sulphate feedstock deficits are expected from 2018 onwards and the Company believes that this, coupled with reduced global inventories, should support ilmenite prices in the short to medium term.  Additionally, we have appointed Titanium Industry Global Advisory Pte Ltd ('TIGA') as marketing advisor to the Company.  TIGA is an advisory firm specialising in providing strategic and commercial direction to the mineral sands industry with a focus on titanium dioxide ('TiO2') feedstocks.  Bruno Cavalancia, Managing Director of TIGA, a mining professional with over 25 years of experience across the mineral sands industry, will help guide the Company closer to commercialisation and strategic partnering for Pituffik.

 

TIGA is another appointment the Company made during the period to support our progress.  We were pleased to welcome Hans Jensen to the Company as Chief Operating Officer and Eric Sondergaard as Manager of Geology.  Their appointments have had an immediate positive impact on the work programmes currently being designed and implemented, and given their strong experience of the country and projects of a similar kind, we see their engagements as a strong endorsement of Pituffik's potential. 

 

Additional Projects

In October 2016, the Company announced the 100% acquisition of Avannaa Exploration Limited, a mineral exploration company with several advanced projects in Greenland's south-west.  Two of the projects, which have previously had more than US$50 million of technical work undertaken by blue chip mining houses, are of particular interest:

 

Disko-Nuussuaq Magmatic Massive Sulphide nickel-copper-platinum project ('Disko')

194 sq km in south-west Greenland

 

The magmatic copper ('Cu'), nickel ('Ni') & platinum group elements ('PGE') project at Disko & Nuussuaq in West Greenland has been the subject of more than three decades of exploration; Cominco commenced activity in the 1980s, followed by Falconbridge in the 1990s and Vismand Exploration in the 2000s, all making the positive decision to invest in their discoveries.

 

Initial exploration identified strong similarities to Norilsk in Siberia and this model was confirmed when a 28 tonne boulder of massive sulphide of Ni, Cu and PGE bearing massive sulphide was identified on the licence area.  This boulder, discovered by Falconbridge in 1994, assayed at 7% Ni, 3% Cu, 2ppm PGE as an inclusion in a dyke interpreted to intersect the mineralisation at depth. The boulder of massive sulphide can be seen in the foyer of the Danish Geological Museum in Copenhagen and is the centrepiece of its mineralogical collection.

 

Picrite lavas are hot melts derived directly from the Earth's mantle and constitute the main source for nickel and PGE's globally as well as an important source of copper. West Greenland Igneous Province, comprising Disko & Nuussuaq, contains onshore accumulations of picrite lavas of a similar scale to the Siberian flood basalts that house the super-giant Norilsk Ni-Cu-PGE. Similar to Norilsk, analysis demonstrates that sulphide segregation has occurred at Disko where enormous volumes of ice melt have interacted with sedimentary sequences high in sulphur en-route to surface and have precipitated all contained Ni, Cu and PGM within the conduit system. These metal accumulations form the Ni, Cu and PGM exploration targets at Disko.

 

Kangerluarsuk SedEx lead-zinc-silver project ('Kangerluarsuk')

107 sq km in south-west Greenland

 

Kangerluarsuk is located in a major Palaeo‐Proterozoic sedimentary basin with abundant lead-zinc ('Pb‐Zn') showings, including the historic Black Angel Pb‐Zn mine and distinctive SedEx style mineralisation (Pb-Zn) exposed around the basin margin.

 

The area comprises the strongest zinc stream sediment anomaly cluster in Greenland in a geologically favourable, starved sub-basin. Geological and structural mapping of the basin with uninterrupted rock exposure allowed the creation of accurate structural models, including growth faults likely to provide a conduit for mineralising fluids. This model, coupled with conductors defined by ZTEM and soil geochemistry, has defined three targets for drilling at a later date.

 

Financials

 

As is to be expected with an exploration company, for the six month period ended 31 December 2016, the Company is reporting a pre-tax loss of £1,035,922 (six months ended 31 December 2015: £239,335).  The Group's net cash balances as at 31 December 2016 were £4,474,762 (six months ended 31 December 2015: £334,661).

 

Change of Accounting Year End

 

Bluejay has changed its accounting reference date from 30 June to 31 December, with immediate effect.

 

As a result of the change, the Company's reporting calendar will be as follows:

 

·     Unaudited results for the six months ended 30 June 2017 to be announced no later than 30 September 2017.

 

·     Audited results for the 18 months ended 31 December 2017 to be published no later than 30 June 2018.

 

Thereafter annual and interim reports will be published each year, in accordance with the AIM Rules for Companies, for the 12 months to 31 December and the 6 months to 30 June, respectively.

 

The Board considers that the change of the accounting reference date better aligns the Company's reporting period to the field season at its primary project, Pituffik.

 

The Board does not foresee any material financial implications on the Group as a result of the change in accounting reference date of the Company, nor is there any other matter of significance that needs to be brought to the attention of the shareholders of the Company in this regard.

 

Outlook

 

In summary, Pituffik represents a unique opportunity for both the industry and the market alike and we look forward to quantifying the scale of our deposit via the publication of a maiden JORC resource.  This, along with the results from our environmental and social impact studies will form the basis for our application for an exploitation licence and to deliver a bulk sampling campaign later this calendar year.  With offtake discussions also underway, 2017 has the potential to be defining for your Company.  

 

I would like to thank our Board, management team, advisers and, most importantly, our shareholders for their continued support.

 

 

Graham Marshall

Chairman

21 March 2017

 

 

 

For further information, please visit www.bluejaymining.com or contact:

Roderick McIllree	Bluejay Mining plc	+44 (0) 20 7907 9326
Graham Marshall	Bluejay Mining plc	+44 (0) 20 7907 9326
Ewan Leggat	Nominated Adviser and Broker SP Angel Corporate Finance LLP	+44 (0) 20 3470 0470
Laura Harrison	SP Angel Corporate Finance LLP	+44 (0) 20 3470 0470
Elisabeth Cowell	St Brides Partners Limited	+44 (0) 20 7236 1177
Charlotte Heap	St Brides Partners Limited	+44 (0) 20 7236 1177

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

	Notes	6 months to 31 December 2016 Unaudited £	6 months to 31 December 2015 Unaudited £
Continuing operations
Revenue		-	-
Administration expenses		(401,976)	(239,446)
Foreign exchange		282	-
Other gains		-	-
Operating loss		(401,694)	(239,446)
Finance income		97	151
Impairments	5	(634,295)	-
Finance costs		(30)	(40)
Loss before taxation		(1,035,922)	(239,335)
Corporate tax expense		-	-
Loss for the period		(1,035,922)	(239,335)
Loss attributable to
-     Owners of the Parent		(1,028,735)	(239,335)
-     Non-controlling interests		(7,187)	-
Loss for the period		(1,035,922)	(239,335)
Other comprehensive income
Items that may be reclassified to profit or loss
Currency translation differences		319,180	640,278
Total comprehensive income for the period		(716,742)	400,943
Total comprehensive income for the period attributable to
-     Owners of the Parent		(709,555)	400,943
-     Non-controlling interests		(7,187)	-
Total comprehensive income for the period		(716,742)	400,943
Loss per share from continuing operations attributable to the equity owners of the parent
Basic and diluted (pence per share)	6	(0.204)	(0.097)

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEET

 

                                                                                                                                                                                                                           

		Notes	31 December 2016 Unaudited £	30 June 2016 Audited £	31 December 2015 Unaudited £
Non-Current Assets
Property, plant and equipment			19,991	16,883	11,050
Intangible assets		5	13,122,167	12,627,680	9,266,014
			13,142,158	12,644,563	9,277,064
Current Assets
Trade and other receivables			441,661	175,685	84,984
Cash and cash equivalents			4,474,762	425,046	334,661
			4,916,423	600,731	419,645
Total Assets			18,058,581	13,245,294	9,696,709
Non-Current Liabilities
Deferred Tax Liabilities			373,343	373,343	-
			373,343	373,343	-
Current Liabilities
Trade and other payables			168,874	392,754	115,631
Borrowings			-	-	122,500
			168,874	392,754	238,131
Total Liabilities			542,217	766,097	238,131
Net Assets			17,516,364	12,479,197	9,458,578
Capital and Reserves Attributable to Equity Holders of the Company
Share capital			5,951,291	5,938,572	5,919,731
Share premium			21,890,866	16,183,675	14,274,528
Deferred shares			1,825,104	1,825,104	1,825,104
Reverse acquisition reserve			(8,071,001)	(8,071,001)	(8,071,001)
Other reserves			823,879	470,700	(334,226)
Retained losses			(5,487,149)	(4,458,414)	(4,155,558)
Total Equity			16,932,990	11,888,636	9,458,578
Non-controlling interest			583,374	590,561	-
Total Equity			17,516,364	12,479,197	9,458,578