Registered number: 05389216
BLUEJAY MINING PLC (PREVIOUSLY FINNAUST MINING PLC)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
31 DECEMBER 2017
BLUEJAY MINING PLC
CONTENTS
Company Information
Chairman’s Report
Strategic Report
Directors’ Report
Statement of Directors’ Responsibilities
Corporate Governance Report
Independent Auditor’s Report
Consolidated and Company Statement of Financial Position
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated and Company Statements of Cash Flows
Notes to the Financial Statements
Page
2
3
6
9
11
12
13
17
18
19
20
21
22
23
BLUEJAY MINING PLC
COMPANY INFORMATION
Directors
Michael Hutchinson (Non-Executive Chairman) – Appointed 4 September 2017
Gregory Kuenzel (Non-Executive Director)
Peter Waugh (Non-Executive Director) – Appointed 26 June 2017
Roderick McIllree (Executive Director)
Company Secretary
Garth Palmer CA
Registered Office
2nd Floor
7-9 Swallow Street
London
W1B 4DE
Company Number
05389216
Bankers
Nominated Adviser
& Broker
Independent Auditor
Solicitors
HSBC Bank plc
129 New Bond Street
London
W1J 2JA
S.P. Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
PKF Littlejohn LLP
Statutory Auditor
1 Westferry Circus
Canary Wharf
London
E14 4HD
Hill Dickinson LLP
The Broadgate Tower
20 Primrose Street
London
EC2A 2EW
2
BLUEJAY MINING PLC
CHAIRMAN’S REPORT
Bluejay’s change of financial year end meant that this is my first opportunity to comment as Chairman and I am delighted to
be able to present these results at such an exciting time in our development.
Bluejay is set to bring into production the world’s highest-grade ilmenite project in 2019, being the Dundas Ilmenite Project
'Dundas' or 'the Project') in north-west Greenland. Not only does this Project distinguish itself by grade, scale, legal jurisdiction
and strategic location, it looks set to be in the lowest quartile for production costs, making it commercially very attractive.
Having acquired an initial majority stake in the Project in December 2015, this has undoubtedly been a rapid rate of
development, which is testament to the commitment and skill set of our team along with the quality of our Project. With
multiple value triggers due in the coming year, we remain committed to maintaining this pace of progress to realise production
and deliver revenues for our shareholders in the near term.
We have strong confidence that our product will be highly sought after thanks to a number of key attributes. First being the
grade and size of the deposit. Post-period-end in April 2018 we delivered a 400% increase in the Project’s resource, defining
96 million tonnes at 6.9% ilmenite in-situ and a further exploration target of between 20-60 million tonnes at between 6% and
10% ilmenite. Of this, an Indicated Mineral Resource equal to 81 million tonnes at 6.1% ilmenite in-situ was defined at
Moriusaq, which was the target area where the incumbent resource had been identified the year before, in April 2017. These
results matched our internal expectations of size and grade for the Moriusaq target area, marking a great success. What we
did not expect, from both the 2017 field work and the resultant resource upgrade, was the discovery of Iterlak. This deposit
appears to host mineralisation of a similar size to Moriusaq but with much higher grades; initial sampling in 2017 of the active
beaches here showed extensive areas of up to 80% ilmenite in-situ. This is incredibly significant, given that with Moriusaq
alone we have already proven Dundas to be the world’s highest-grade ilmenite deposit; with Iterlak, we have the potential to
surpass this record, and our own expectations, highlighting just how exceptional our Project is and the further upside
opportunity.
The second defining factor that makes our Project attractive to end-users is the relatively simple and streamlined processing
required. To refer to Dundas as a “mining” play is arguably not representative of the methods that will be employed to extract
the high-grade ilmenite. Given that mineralisation is visible to the naked eye, only a very simple extraction and processing
method will be required, which aside from the positive cost implications, ensures low environmental impact. Furthermore, the
resource is chemically homogenous with low impurities, which means that wet gravity and dry magnetic circuits can produce
two homogeneous and consistent grade ilmenite ores suitable for sulphate pigment as well as for sulphate and chloride slag,
giving it multi-market application – something which we confirmed through the production of a bulk sample in 2017. We have
also identified an opportunity to upgrade the already high in-situ ilmenite grade by up to 30% via a simple oversize separation
step prior to processing, further enhancing run of mine (‘ROM’) grade and project economics. It is thanks to this simple
processing method that we believe our Project will be in the lowest quartile of production costs, further adding to its commercial
value and appeal.
Another aspect that will positively impact production costs is our location. Greenland is located such that it provides us with
an ability to sell to both European and North American markets, both of which show strong demand for ilmenite. This
accessible and strategic location means Bluejay’s ilmenite is set to be much cheaper to ship than the majority of current
ilmenite producers which are based in Africa, giving us significant competitive advantage.
In support of securing an offtake partner, in September 2017 ROM, heavy mineral concentrates, standard ilmenite and
premium ilmenite samples and specifications were shipped to prospective customers. Since then we have increased our
resource size and grade even further and our focus is now on securing final commercial agreements. To this end, we are
engaged in a number of positive discussions and another bulk sample will be taken from the active beaches at Moriusaq in
2018, where the current resource has been defined to supply final product parcels to customers.
The results of feasibility work currently underway will also be valuable in supporting these discussions as they will give a
clearer indication of the Project’s economics. The results of the preliminary feasibility study are due in the coming months,
which will then feed into the final feasibility report that is due to be completed later this year. We have appointed a number
of leading mining consultants to undertake these studies for us, including SRK Consulting (‘SRK’), who will prepare the mining
schedule and assess water management aspects as well as review the study as a whole; IHC Robbins who will complete the
process plant engineering & design study; Royal IHC who will finalise a dredging study, and; Amec Foster Wheeler Americas
Ltd who will undertake the infrastructure and services elements.
Aside from project economics, the final feasibility report will also form a part of the exploitation licence application that is due
for lodgement with the Government of Greenland in the coming months and which is expected to be approved this year. As
part of this licencing application we have already successfully finalised the "Terms of Reference" for both the Environmental
Impact Assessment ('EIA') and Social Impact Assessment ('SIA’) and completed a White Paper, which encompasses the
stakeholder consultation response period. I am pleased to report that we have had all documents accepted and approved by
3
BLUEJAY MINING PLC
CHAIRMAN’S REPORT
the Greenland Government (‘Government’) and the relevant licencing bodies so far, along with a high degree of support from
the local community. We enjoy a positive working relationship with and strong support from the Government of Greenland –
as evidenced by our award of "Prospector and Developer of the Year 2017" by the Government of Greenland in March 2018
– and we look forward to continuing to work closely with them and all of the relevant national and local authorities as we
finalise our licencing applications.
The Government has defined a new five year ‘Mineral and Oil Strategy 2018’, which feeds into a long-standing target of
opening five large scale mines in the near term, with the first opening last year and now producing gemstones, and Bluejay
vying to be the next off the block.
With additional bulk sampling for offtake as well as various civil and site works anticipated to be completed during 2018 we
anticipate the completion of the various studies currently underway to allow for an exploitation licence to be lodged at the end
of this field season. We continue to focus on the commencement of mining during 2019, which after just three years since the
project was acquired will be a fantastic achievement.
We intend to focus on the active and raised beach targets first, where we have defined the current resource and exploration
target which alone has demonstrated ability to support a large and long-life mining operation. Further expansion potential
exists both onshore and offshore, with an assessment of the shallow marine area due to be undertaken by SRK to evaluate
the additional resources available in this environment. This will form part of our 2018 field work season commencing in July
2018. Much of this field work will focus on the Iterlak Delta and surrounding area, with drilling, resource definition, and marine
bathymetric surveys to be undertaken to help build upon the area’s 20-60Mt exploration target. We are confident that
significant potential exists here and believe that the Iterlak Delta, at 2.65 million sq m, is a primary sediment (and thus ilmenite)
source for the broader licence area. The entire sediment package comprising the delta has been estimated at 78-145Mt.
Alongside Dundas, the Company is simultaneously advancing the Disko Nickel, Copper, Cobalt & Platinum Project in West
Greenland (‘Disko’), which is of significant interest due to its geological similarities to Norilsk-Talnakh, the world's largest
nickel/copper sulphide mine in northern Russia ("Norilsk"). Both Disko and Norilsk contain nickel-copper-cobalt-platinum rich
Magmatic Massive Sulphides (‘MMS’), with one 28-tonne boulder recovered from Disko being so significant that it is now
displayed in the foyer of the Danish Geological Museum in Copenhagen. Exploration at this asset is still early stage, but
results received from the 2017 field programme are overwhelmingly positive.
In Area 1 – The Kugg Project, located on the southern peninsular.
Surface sampling confirmed a working sulphide system with initial chemical assays in oxidised surface material
returning 2.02% nickel, 0.8% copper and 0.2% cobalt. Alongside this, handheld XRF sampling on fresh, polished material
returned values averaging between 4.6%-9.3% nickel and 1.5-2.8% copper, whilst a Moving Loop, High Powered Electro-
Magnetic survey tested a number of low resistivity targets that had been identified by previous licensee holders.
In Area 2 – The Illug Project, located on the northern peninsular.
Data compilation and interpretation has identified numerous prospective targets and confirmed the presence of historically
identified anomalies. These results are very encouraging and are being used to structure our 2018 work programme, which
is focussed on developing drill targets. To support our exploration efforts, we have several parties interested in partnering
with us and we will carefully evaluate these to determine the best way forward. Thankfully, due to the project’s relatively close
proximity to Dundas, we are able to undertake work at both projects cost-effectively.
As a result of the strong results we have received to date and our understanding of Disko and its potential, in May 2018 we
acquired an additional 1,616km2 to increase the project’s licence size to 2,586km2. To put this into perspective, this now
means the Disko project area is approximately the same size as Luxembourg. We believe this asset’s scale and potential is
yet to be reflected in our share price and accordingly believe Disko provides us with significant upside potential.
Looking at our wider portfolio, we continue to hold the Kangerluarsuk SedEx: Lead-Zinc-Silver Project in Greenland
(‘Kangerluarsuk’) and three high-grade, multi-element base metal deposits in southern Finland. We believe Kangerluarsuk
offers good development opportunity in the future. In Finland, our assets are cost sustainable for the long term whilst we
assess the best ways in which to realise value. To help us best determine this, a low cost work programme has been put in
place for the Outokumpu licence areas, which will include diamond drilling and ground geophysical surveys. The main
objective of this work programme to target the “Kuusjärvi depression zone”, which is a ~6km long section of the Outokumpu
belt. Work will be conducted in two stages, with the first consisting of approximately 1,800m of drilling and ground geophysical
surveys that will last approximately 2-3 months, whilst stage 2 will consist of approximately 2,000m of drilling and DHEM
surveys, again lasting 2-3 months.
4
BLUEJAY MINING PLC
CHAIRMAN’S REPORT
Financial Review
The loss before taxation of the Group for the 18-month period ended 31 December 2017 amounted to £2,680,708 (12 months
to 30 June 2016: £620,059).
The Group’s cash position at 31 December 2017 was £2,901,922 (30 June 2016: £425,046).
In February 2018 the group raised £17m by issuing 77,272,728 new ordinary shares of 0.01 pence at a price of 22 pence per
share. The funds raised is to primarily support the rapid advancement of the Dundas project and its fast track into production
and commercialisation. This will include completing an Environmental Impact Assessment and Social Impact Assessment,
commencing procurement of long lead items to support mine plant construction and supporting infrastructure, finalising the
pre-feasibility study, completing the exploitation application and lodgement and facilitating the offtake as well as other general
activities. Additionally the raise will help fund the 2018 work programme at Disko and other interests in the wider project
portfolio.
Outlook
We have a world class asset with numerous advantages. We anticipate meaningful news flow as we get closer to exploitation
licence approval and production at Dundas., Alongside this, our Disko project offers significant upside that could further
transform the value of our Company. Indeed, I believe we are in an incredibly strong position to have not one but two incredible
assets. Our focus is to commence mining at Dundas in 2019 and establish Bluejay as a highly profitable production company
whilst unlocking the value potential of Disko.
To be in the position we are today, is the result of a great deal of hard work and skill shown by all our employees, consultants
and partners. Their experience and focus has and is contributing to Bluejay creating a world class portfolio which has
positioned us for strong, long-term growth. I would like to thank our shareholders for their long-term support, we are lucky to
have a strong and supportive base of investors and we hope that the coming months and years will continue to be value
accretive for all our stakeholders.
Michael Hutchinson
Chairman
30 May 2018
5
BLUEJAY MINING PLC
STRATEGIC REPORT
The Directors of the Company and its subsidiary undertakings (which together comprise the “Group”) present their Strategic
Report on the Group for the period ended 31 December 2017.
Strategic Approach
The Group’s aim is to create value for shareholders through the discovery and development of economic mineral deposits.
The Group’s strategy is to continue to progress the development of its existing projects in Europe and to evaluate its existing
and new mineral resource opportunities with a view to potential joint venture arrangements and/or other corporate activities.
Organisation Overview
The Group’s business is directed by the Board and is managed on a day-to-day basis by the Chief Executive Officer. The
Board monitors compliance with objectives and policies of the Group through monthly performance reporting, budget updates
and periodic operational reviews.
The Board comprises of one Executive Director and three Non-Executive Directors.
The Corporate Head Office of the Group is located in London, UK, and provides corporate support services to the overseas
operations. Overseas operations are managed out of the Group’s office in Outokumpu, Finland and Nuuk, Greenland.
Review of Business
In January 2017, the Group completed the acquisition of 100% of the share capital of Avannaa Exploration Limited by way of
share consideration. In March 2017, the Group acquired the remaining non-controlling interest, 39.63% of the share capital,
of BJ Mining Limited by way of share consideration. As a result it now owns 100% of the interest of the company.
Throughout the year, the Dundas ilmenite project has been the primary focus of the Group. The 2017 work program provided
the Group with great insights to the grade and volume of ilmenite. The last part of the year’s focus for the project is to secure
a offtake partner and heavy mineral concentrates, standard ilmenite and premium ilmenite samples and specifications were
shipped to prospective customers. Currently feasibility studies are underway and will provide further support to exceptional
results already obtained.
Alongside Dundas, the Group has a wider portfolio of prospective assets situated in the Finland and Disko area of
Greenland. In Finland, the Group owns 100% of a portfolio of copper, zinc and nickel projects; the Hammaslahti Copper-
Gold-Zinc Project, the Outokumpu Copper Project and the Kelkka Nickel Project. During the period drilling has been
conducted on all Finnish licence areas and the Directors remain confident in the commercial potential of these projects. At
Disko, the Nickel, Copper, Cobalt & Platinum Project in West Greenland, the sample results have been exceptionally positive
and have exceeded the groups expectations. In May 2017, we acquired an additional 1,616km2 to increase the project’s
licence size to 2,586km2.
Financial Performance Review
The loss of the Group for the period ended 31 December 2017 before taxation amounts to £2,680,708 (30 June 2016:
£620,059).
The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based
on budget versus actual to assess the performance of the Group. The indicators set out below will continue to be used by the
Board to assess performance over the period to 31 December 2018.
The three main KPIs for the Group are as follows. These allow the Group to monitor costs and plan future exploration and
development activities:
KPI
Cash and cash equivalents
Administrative expenses as a percentage of total assets
Exploration costs capitalised during the period
2017
2016
£2,901,922
£425,046
9.5%
4.8%
£4,600,044
£845,261
Cash has been used to fund the Group’s operations and facilitate its investment activities (refer to the Statements of Cash
Flows on page 22).
6
BLUEJAY MINING PLC
STRATEGIC REPORT
Administrative expenses are the expenses related to the Groups ability to run the corporate functions to ensure they can
perform there operational commitments. The rise in these expenses for the year is due to the expansion of the Group via
acquisitions and increase in operational work as a result of the positive outcome at Dundas.
Exploration costs capitalised during the period consist of exploration expenditure on the Group’s exploration licences net of
foreign exchange rate movements.
Principal Risks and Uncertainties
The management of the business and the execution of the Group’s strategy are subject to a number of risks. The key business
risks affecting the Group are set out below.
Risks are formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. If more
than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on
the Group.
Exploration risks
The exploration and mining business is controlled by a number of global factors, principally supply and demand which in turn
is a key driver of global mineral prices; these factors are beyond the control of the Group. Exploration is a high-risk business
and there can be no guarantee that any mineralisation discovered will result in proven and probable reserves or go on to be
an operating mine. At every stage of the exploration process the projects are rigorously reviewed to determine if the results
justify the next stage of exploration expenditure ensuring that funds are only applied to high priority targets.
The principal assets of the Group comprising the mineral exploration licences are subject to certain financial and legal
commitments. If these commitments are not fulfilled the licences could be revoked. They are also subject to legislation defined
by the Government; if this legislation is changed it could adversely affect the value of the Group’s assets.
Dependence on key personnel
The Group and Company is dependent upon its executive management team and various technical consultants. Whilst it has
entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services
cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and
experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group
grows could have an adverse effect on future business and financial conditions.
Uninsured risk
The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that
cannot be insured against or third party claims that exceed the insurance cover. The Group may also be disrupted by a variety
of risks and hazards that are beyond control, including geological, geotechnical and seismic factors, environmental hazards,
industrial accidents, occupation and health hazards and weather conditions or other acts of God.
Funding risk
The only sources of funding currently available to the Group are through the issue of additional equity capital in the parent
company or through bringing in partners to fund exploration and development costs. The Company’s ability to raise further
funds will depend on the success of the Group’s exploration activities and its investment strategy. The Company may not be
successful in procuring funds on terms which are attractive and, if such funding is unavailable, the Group may be required to
reduce the scope of its exploration activities or relinquish some of the exploration licences held for which it may incur fines or
penalties.
Financial Risks
The Group’s operations expose it to a variety of financial risks that can include market risk (including foreign currency, price
and interest rate risk), credit risk, and liquidity risk. The Group has a risk management programme in place that seeks to limit
the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance
costs. The Group does not use derivative financial instruments to manage interest rate costs and, as such, no hedge
accounting is applied.
7
BLUEJAY MINING PLC
STRATEGIC REPORT
Details of the Group’s financial risk management policies are set out in Note 3 to the Financial Statements.
The Group Strategic Report was approved by the Board on 30 May 2018.
Roderick McIllree
CEO
8
BLUEJAY MINING PLC
DIRECTORS’ REPORT
The Directors present their annual report on the affairs of Bluejay Mining plc together with the audited Consolidated Financial
Statements for the period ended 31 December 2017.
On 10 March 2017, the Company changed its name from FinnAust Mining plc to Bluejay Mining plc.
On 13 March 2017, the group has revised their accounting period to be based on a calendar year (1 January to 31 December).
As a result of this, the 2017 financial year is extended to an 18-month period from 1 July 2016 to 31 December 2017.
Dividends
The Directors do not recommend the payment of a dividend for the period (30 June 2016: nil).
Directors & Directors’ Interests
The Directors who served during the period ended 31 December 2017 are shown below and had, at that time the following
beneficial interests in the shares of the Company:
Roderick McIllree
Greg Kuenzel (1)
Graham Marshall (2)
Peter Waugh (3)
Michael Hutchinson (4)
31 December 2017
1 July 2016
Ordinary
Shares
94,577,778
Options
Ordinary
Shares
Options
-
42,966,685
-
36,738,715
1,500,000
17,395,791
3,600,000
-
-
40,385
1,950,000
-
1,800,000
-
-
-
-
-
-
(1) Greg Kuenzel’s shares are held by Fitel Nominees Limited. Greg Kuenzel’s options are held by Heytesbury Corporate LLP of which Greg is a partner.
(2) Graham Marshall resigned on 16 October 2017.
(3) Peter Waugh was appointed on 26 June 2017.
(4) Michael Hutchinson was appointed on 4 September 2017.
Further details on options can be found in Note 14 to the Financial Statements.
Substantial Shareholders
The substantial shareholders with more than a 3% shareholding at 31 December 2017 are shown below:
Roderick McIllree
Jeremy Whybrow
Sandgrove Capital Management LLP
Prudential plc
Gregory Kuenzal
Shaun Bunn
Mark McDowell
Corporate Responsibility
31 December 2017
Holding
Percentage
94,577,778
92,411,111
77,301,294
75,000,000
36,738,715
27,241,915
24,295,300
12.26%
11.98%
10.02%
9.72%
4.76%
3.53%
3.15%
Environmental
Bluejay undertakes its exploration activities in a manner that minimises or eliminates negative environmental impacts and
maximises positive impacts of an environmental nature. Bluejay is a mineral explorer, not a mining company. Hence, the
environmental impact associated with its activities is minimal. To ensure proper environmental stewardship on its projects,
Bluejay conducts certified baseline studies prior to all drill programmes and ensures that areas explored are properly
maintained and conserved.
9
BLUEJAY MINING PLC
DIRECTORS’ REPORT
Health and safety
Bluejay operates a comprehensive health and safety programme to ensure the wellness and security of its employees. The
control and eventual elimination of all work related hazards requires a dedicated team effort involving the active participation
of all employees. A comprehensive health and safety programme is the primary means for delivering best practices in health
and safety management. This programme is regularly updated to incorporate employee suggestions, lessons learned from
past incidents and new guidelines related to new projects with the aim of identifying areas for further improvement of health
and safety management. This results in continuous improvement of the health and safety programme. Employee involvement
is regarded as fundamental in recognising and reporting unsafe conditions and avoiding events that may result in injuries and
accidents.
Internal Controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control
environment and any related shortfalls during the period. Since the Group was established, the Directors are satisfied that,
given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware
that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and
proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are
adequate and effective.
Further details of corporate governance can be found in the Corporate Governance Report on page 12.
Going Concern
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future and, therefore, continue to adopt the going concern basis in preparing the Annual Report and Financial
Statements. Further details on their assumptions and their conclusion thereon are included in the statement on going concern
included in Note 2.4 to the Financial Statements.
Directors’ and Officers’ Indemnity Insurance
The Group has made qualifying third-party indemnity provisions for the benefit of its Directors and Officers. These were made
during the period and remain in force at the date of this report.
Events after the reporting period
Events after the reporting period are set out in Note 27 to the Financial Statements.
Future Developments
Details of future developments for the Group are disclosed in the Chairman’s Report on page 3.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
•
•
there is no relevant audit information of which the Company's auditor is unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in office as auditor.
This report was approved by the Board on 30 May 2018 and signed on its behalf.
Greg Kuenzel
Director
10
BLUEJAY MINING PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
elected to prepare the Group and Parent Company Financial Statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company, and
of the profit or loss of the Group for that period. In preparing these Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent; and
• prepare the Financial Statements on a going concern basis unless it is inappropriate to presume the Company
will continue in business
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company, and enable
them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and Company, and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the Financial
Statements may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company’s website.
The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.
11
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
The Board of Directors currently comprises three Non-Executive Directors, one of whom is the Chairman. The Company is
not required to comply with the UK Code of Corporate Governance. However, the Directors recognise the importance of
sound corporate governance and the Board intends, to the extent it considers appropriate in light of the Group’s size, stage
of development and resources, to implement certain corporate governance recommendations.
The Directors have responsibility for the overall corporate governance of the Group and recognise the need for the highest
standards of behaviour and accountability. The Board has a wide range of experience directly related to the Group and its
activities and its structure ensures that no one individual or group dominates the decision making process.
Board Meetings
The Board meets regularly throughout the year. The Board is responsible for formulating, reviewing and approving the Group's
strategy, financial activities and operating performance.
Board Committees
The Group has established an Audit Committee and a Remuneration Committee. In light of the size of the Board, the Directors
do not consider it necessary to establish a Nomination Committee. However, this will be kept under regular review.
Audit Committee
The Audit Committee, comprising Peter Waugh, Michael Hutchinson and Greg Kuenzel, reviews the Group's annual and
interim financial statements before submission to the Board for approval. The Committee also reviews regular reports from
management and the external auditor on accounting and internal control matters. Where appropriate, the Committee monitors
the progress of action taken in relation to such matters. The Committee also recommends the appointment, and reviews the
fees, of the external auditor. The Committee keeps under review the cost effectiveness and the independence and objectivity
of the external auditor. A formal statement of independence is received from the external auditor each year.
Remuneration Committee
The Remuneration Committee, comprising Peter Waugh, Michael Hutchinson and Greg Kuenzel, is responsible for reviewing
the performance of the Chief Executive Officer and for setting the scale and structure of his remuneration, determining the
payment of bonuses, considering the grant of options under any share option scheme and, in particular, the price per share
and the application of performance standards which may apply to any such grant, paying due regard to the interests of
shareholders as a whole and the performance of the Group.
Internal Controls
The Directors acknowledge their responsibility for the Group’s systems of internal controls and for reviewing their
effectiveness. These internal controls are designed to safeguard the assets of the Group and to ensure the reliability of
financial information for both internal use and external publication. Whilst they are aware that no system can provide absolute
assurance against material misstatement or loss, in light of the increased activity and further development of the Group,
continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.
Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives. Project milestones and timelines
are regularly reviewed.
Securities Trading
The Group has adopted a share dealing code for dealings in shares by directors and senior employees which is appropriate
for an AIM quoted company. The Directors will comply with Rule 21 of the AIM Rules for Companies relating to Directors’
dealings and will take all reasonable steps to ensure compliance by the Group’s applicable employees.
Relations with Shareholders
The Board is committed to providing effective communication with the Shareholders of the Group. Significant developments
are disseminated through stock exchange announcements and regular updates of the Group’s website. The Board views the
AGM as a forum for communication between the Group and its shareholders and encourages their participation in its agenda.
12
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
Opinion
We have audited the Financial Statements of Bluejay Mining plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for
the period ended 31 December 2017 which comprise the Consolidated and Company Statement of Financial Position, the
Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Company
Statement of Changes in Equity, the Consolidated and Company Statements of Cash Flows and the notes to the Financial
Statements, including a summary of significant accounting policies. 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 and as regards the Parent Company Financial Statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
•
•
•
•
the Financial Statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as
at 31 December 2017 and of the Group’s and Parent Company’s loss for the period then ended;
the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the European
Union;
the Parent Company Financial Statements have been properly prepared in accordance with IFRSs as adopted by
the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the Financial Statements 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 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 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 the 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.
Emphasis of matter
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure
made in note 23 to the Financial Statements and within the Critical Accounting Estimates and Judgements concerning the
ongoing dispute with HMRC regarding the recovery of input VAT. The dispute will be heard at tribunal, the outcome of which
is uncertain and this along with the other matters explained in note 23 to the Financial Statements, indicates the existence of
a material uncertainty. The financial statements do not include the adjustments that would result if the Company was
unsuccessful with its case at the tribunal.
Our application of materiality
Group
materiality
2017
Group
materiality
2016
for
Basis
materiality
£400k
£345k
of
2%
gross
assets
Our calculation of materiality increased from 2016 along with the increase in the Group’s gross assets. We consider gross
assets to be the most significant determinant of the Group’s financial position and performance used by shareholders.
Whilst materiality for the Financial Statements as a whole was £400k, each significant component of the Group was audited
to a level of materiality ranging between £30k - £400k. We apply the concept of materiality both in planning and performing
13
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
our audit, and in evaluating the effect of misstatements. At the planning stage materiality is used to determine the financial
statement areas that are included within the scope of our audit and the extent of sample sizes during the audit.
We agreed with the audit committee that we would report to the committee all individual audit differences identified during the
course of our audit in excess of £20k (2016: £17k). There were no misstatements identified during the course of our audit that
were individually, or in aggregate, considered to be material.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular we looked at areas involving significant accounting estimates and judgements by the Directors and
considered future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.
Of the 8 reporting components of the group, a full scope audit was performed on the complete financial information of 5
components and, for the other components, a limited scope review was performed because they were not material to the
Group.
Of the 8 reporting components of the group, 2 are located in Finland and audited by a component auditor operating under
our instruction, 1 component is located in Greenland and audited by a PKF network firm operating under our instruction and
the audit of the remaining components were principally performed in London, conducted by PKF Littlejohn LLP using a team
with specific experience of auditing mining exploration entities and publicly listed entities. The Senior Statutory Auditor
interacted regularly with the component audit teams during all stages of the audit and was responsible for the scope and
direction of the audit process. This, in conjunction with additional procedures performed, gave us appropriate evidence for
our opinion on the Group and Parent Company financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, 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.
Carrying value of intangible assets
How the scope of our audit responded to the key audit
matter
The Group holds exploration and evaluation assets
of £17.97m which relate to the Dundas Titanium
Project in Greenland and a portfolio of copper, zinc
and nickel projects in Finland.
We have obtained and reviewed the Directors impairment
review of intangible assets which considered the areas listed as
indicators of impairment under IFRS 6. Our work included the
following:
There is a risk that the exploration and evaluation
assets are impaired.
• Obtaining the exploration licenses and ensuring they
remain valid;
• Performing substantive testing on certain components
capitalised additions;
• Reviewing the responses of component auditors to
our instructions and reviewing their working papers;
• Reviewing the basis for valuation of exploration
assets acquired through business combinations for
compliance with IFRS;
• Reviewing key external reports for indicators of
impairment;
• Considering the Group’s future plans for the
exploration projects and that activity and expenditure
thereto was planned; and
• Considering whether there was an indicator that the
carrying amount of capitalised expenditure was not
recoverable.
14
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
Investments
(including in intercompany receivables)
investments
in
in subsidiaries
How the scope of our audit responded to the key audit
matter
The Parent Company’s net
subsidiaries is £19,717,873.
investment
in
We have obtained and reviewed the Directors impairment
review of the carrying value of the Parent Company’s net
investment in the subsidiaries. Our work included:
investment
The carrying value of the net
in
subsidiaries is ultimately dependent on the value of
the underlying assets. Many of the underlying assets
are exploration projects which are at an early stage
of exploration making it difficult to determine their
value. Valuations for these sites are therefore based
on judgments and estimates made by the Directors -
which leads to a risk of misstatement.
• Reviewing the impairment indicators listed in IFRS 6
including specific consideration regarding the renewal
of the exploration licenses;
• Obtaining and reviewing available key external
reports;
• Reviewing the audit working papers of certain
components to assess impairment considerations of
exploration assets made by their auditors; and
• Discussing with management the basis for
impairment or non-impairment of investment in
subsidiaries and loans receivable from subsidiaries.
Other information
The other information comprises the information included in the annual report, other than the Financial Statements and our
auditor’s report thereon. The directors are responsible for the other information. Our opinion on the Group and Parent
Company 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 period 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 Statement of Directors’ Responsiblities, the directors are responsible for the preparation of the
Group and Parent Company 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 Group and Parent Company Financial Statements, the directors are responsible for assessing the Group’s
and the 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.
15
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
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: http://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.
Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
30 May 2018
1 Westferry Circus
Canary Wharf
London E14 4HD
16
BLUEJAY MINING PLC
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2017
Non-Current Assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Current Assets
Trade and other receivables
Cash and cash equivalents
Company number: 05389216
Group
Company
31 December
2017
Note
£
30 June
2016
£
31 December
2017
£
30 June
2016
£
6
7
8
631,054
17,971,795
-
16,883
12,627,680
-
8,333
-
19,717,873
4,577
-
13,505,274
18,602,849
12,644,563
19,726,206
13,509,851
9
10
642,870
2,901,922
175,685
425,046
620,891
2,820,884
111,176
371,485
3,544,792
600,731
3,441,775
482,661
Total Assets
22,147,641
13,245,294
23,167,981
13,992,512
Non-Current Liabilities
Deferred Tax Liabilities
Current Liabilities
12
496,045
373,343
496,045
373,343
-
-
-
-
Trade and other payables
11
564,471
392,754
358,306
368,403
Total Liabilities
1,060,516
766,097
358,306
368,403
Net Assets
21,087,125
12,479,197
22,809,675
13,624,109
Equity attributable to owners of the Parent
Share capital
Share premium
Deferred shares
Reverse acquisition reserve
Other reserves
Retained losses
13
13
15
5,967,268
27,220,576
1,825,104
(8,071,001)
1,121,097
(6,975,919)
5,938,572
16,183,675
1,825,104
(8,071,001)
470,700
(4,458,414)
5,967,268
27,220,576
1,825,104
-
312,045
(12,515,318)
5,938,572
16,183,675
1,825,104
-
355,809
(10,679,051)
Total equity attributable to owners of the
Parent
Non-controlling interest
Total Equity
21,087,125
11,888,636
22,809,675
13,624,109
-
590,561
-
-
21,087,125
12,479,197
22,809,675
13,624,109
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent
Company Income Statement and Statement of Comprehensive Income. The loss for the Company for the period ended 31
December 2017 was £1,999,470 (year ended 30 June 2016: £10,247).
The Financial Statements were approved and authorised for issue by the Board of Directors on 30 May 2018 and were signed
on its behalf by:
Greg Kuenzel
Director
The Notes on pages 23 to 48 form part of these Financial Statements.
17
BLUEJAY MINING PLC
CONSOLIDATED INCOME STATEMENT
For the period ended 31 December 2017
Continued operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Foreign exchange
Operating Loss
Impairments
Finance income
Other income
Loss before Income Tax
Income tax expense
Loss for the Period
Loss attributable to
- Owners of the Parent
- Non-Controlling interests
Loss for the Period
Note
21
7
18
19
Period ended
31 December
2017
Year ended
30 June
2016
£
-
-
-
£
-
-
-
(2,111,312)
70,953
(2,040,359)
(643,168)
1,717
1,102
(2,680,708)
-
(629,046)
8,737
(620,309)
-
250
-
(620,059)
-
(2,680,708)
(620,059)
(2,680,708)
(613,849)
-
(6,210)
(2,680,708)
(620,059)
Basic and Diluted Earnings Per Share attributable to owners of the parent
during the period (expressed in pence per share)
20
(0.408) p
(0.172) p
The Notes on pages 23 to 48 form part of these Financial Statements.
18
BLUEJAY MINING PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 December 2017
Loss for the period
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Currency translation differences
Other comprehensive income for the period, net of tax
Total Comprehensive Income for the Period Attributable to
- Owners of the Parent
- Non-Controlling interests
Total Comprehensive Income
Period ended
31 December
2017
Year ended 30
June
2016
£
£
(2,680,708)
(620,059)
694,161
1,487,405
(1,986,547)
867,346
(1,986,547)
873,556
-
(6,210)
(1,986,547)
867,346
The Notes on pages 23 to 48 form part of these Financial Statements.
19
BLUEJAY MINING PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2017
Attributable to owners of the Parent
Share
capital
Share
premium
Deferred
shares
Other
reserves
Retained
losses
Note
£
£
£
£
£
Total
£
Balance as at 1 July 2015
5,919,731
14,274,528
1,825,104
(9,045,505)
(3,916,223)
9,057,635
Non-
controlling
interest
£
-
Total
equity
£
9,057,635
Loss for the period
Other comprehensive income
for the period
Items that may be
subsequently reclassified to
profit or loss
Currency translation differences
Total comprehensive income
for the period
-
-
-
-
-
-
Proceeds from share issues
Issue costs
Share based payments
13
13
5,807
1,155,537
-
13,034
(44,108)
797,718
Issued options
Expired options
Non-controlling interest arising
on business combination
Total transactions with
owners, recognised directly in
equity
-
-
-
-
-
-
18,841
1,909,147
-
-
-
-
-
-
-
-
-
-
-
(613,849)
(613,849)
(6,210)
(620,059)
1,487,405
-
1,487,405
-
1,487,405
1,487,405
(613,849)
873,556
(6,210)
867,346
-
-
-
29,457
(71,658)
-
-
-
-
1,161,344
(44,108)
810,752
29,457
71,658
-
-
-
-
-
-
-
-
-
1,161,344
(44,108)
810,752
29,457
-
596,771
596,771
(42,201)
71,658
1,957,445
596,771
2,554,216
Balance as at 30 June 2016
5,938,572
16,183,675
1,825,104
(7,600,301)
(4,458,414)
11,888,636
590,561
12,479,197
Balance as at 1 July 2016
5,938,572
16,183,675
1,825,104
(7,600,301)
(4,458,414)
11,888,636
590,561
12,479,197
Loss for the period
Other comprehensive income
for the period
Items that may be
subsequently reclassified to
profit or loss
Currency translation differences
Total comprehensive income
for the period
Proceeds from share issues
Issue costs
Share based payments
Issued options
Exercised options
Acquisition of non-controlling
interest on business combination
Total transactions with
owners, recognised directly in
equity
Balance as at 31 December
2017
-
-
-
-
-
-
13
13
14
14
14
24
28,596
11,645,757
-
(678,756)
100
69,900
-
-
-
-
-
-
28,696
11,036,901
-
-
-
-
-
-
-
-
-
-
-
(2,680,708)
(2,680,708)
-
(2,680,708)
694,161
-
694,161
694,161
(2,680,708)
(1,986,547)
-
-
-
119,439
-
-
-
-
11,674,353
(678,756)
70,000
119,439
(163,203)
163,203
-
-
-
-
-
-
-
-
-
-
-
694,161
(1,986,547)
11,674,353
(678,756)
70,000
119,439
-
(590,561)
(590,561)
(43,764)
163,203
11,185,036
(590,561)
10,594,475
5,967,268
27,220,576
1,825,104
(6,949,904)
(6,975,919)
21,087,125
-
21,087,125
The Notes on pages 23 to 48 form part of these Financial Statements.
20
BLUEJAY MINING PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2017
Share
capital
£
Share
premium
£
Deferred
shares
£
Other
reserves
£
Retained
losses
£
Total equity
£
Note
Balance as at 1 July 2015
5,919,731
14,274,528
1,825,104
398,010
(10,740,462)
11,676,911
Attributable to equity shareholders
Loss for the period
Total comprehensive income for the
period
Proceeds from share issues
Issue costs
Share based payments
Issued options
Expired options
Total transactions with owners,
recognised directly in equity
13
13
-
-
-
-
5,807
1,155,537
-
13,034
(44,108)
797,718
-
-
-
-
18,841
1,909,147
-
-
-
-
-
-
-
-
-
-
-
-
-
(10,247)
(10,247)
(10,247)
(10,247)
-
-
-
1,161,344
(44,108)
810,752
29,457
-
29,457
(71,658)
71,658
(42,201)
71,658
1,957,445
Balance as at 30 June 2016
5,938,572
16,183,675
1,825,104
355,809
(10,679,051)
13,624,109
Balance as at 1 July 2016
5,938,572
16,183,675
1,825,104
355,809
(10,679,051)
13,624,109
Loss for the period
Total comprehensive income for the
period
Proceeds from share issues
Issue costs
Share based payments
Issued options
Exercised options
Total transactions with owners,
recognised directly in equity
13
13
14
14
14
-
-
-
-
28,596
11,645,757
-
100
-
-
(678,756)
69,900
-
-
28,696
11,036,901
-
-
-
-
-
-
-
-
-
-
-
-
-
119,439
(163,203)
(1,999,470)
(1,999,470)
(1,999,470)
(1,999,470)
-
-
-
-
163,203
11,674,353
(678,756)
70,000
119,439
-
(43,764)
163,203
11,185,036
Balance as at 31 December 2017
5,967,268
27,220,576
1,825,104
312,045
(12,515,318)
22,809,675
The Notes on pages 23 to 48 form part of these Financial Statements.
21
BLUEJAY MINING PLC
STATEMENTS OF CASH FLOWS
For the period ended 31 December 2017
Cash flows from operating activities
Loss before income tax
Adjustments for:
Depreciation
Share options expense
Share based payments
Intercompany management fees
Impairment on Assets
Foreign exchange
Changes in working capital:
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Cash consideration for subsidiaries net of cash
Purchase of property plant and equipment
Purchase of software
Loans granted to subsidiary undertakings
Loans granted to third parties
Repayment of borrowings
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Transaction costs of share issue
Repayment of borrowings
Group
Company
Period ended
31 December
2017
Year ended
30 June 2016
Period ended
31 December
2017
Year ended
30 June 2016
Note
£
£
£
£
6
14
14
9
11
6
6
7
13
13
(2,680,708)
(620,059)
(1,999,470)
(10,247)
46,868
119,439
70,000
-
643,168
(70,953)
(145,345)
127,963
5,037
29,457
129,302
-
-
(2,541)
(99,323)
(25,000)
9,504
119,439
70,000
1,547
29,457
129,302
(280,628)
(120,855)
646,319
(15,915)
-
(522,341)
(82,277)
4,142
(72,652)
94,583
(1,889,568)
(583,127)
(1,528,886)
(471,206)
-
(653,568)
(7,352)
-
(54,000)
-
4,182
(2,307)
(5,312)
-
-
-
(4,600,044)
(845,261)
-
(5,909)
(7,352)
-
-
(5,312)
(5,631,501)
(984,816)
(54,000)
-
-
-
-
-
(5,314,964)
(848,698)
(5,698,762)
(990,128)
10,355,803
1,161,344
10,355,803
1,161,344
(678,756)
-
(44,108)
(62,500)
(678,756)
(44,108)
-
-
Net cash generated from financing activities
9,677,047
1,054,736
9,677,047
1,117,236
Net decrease/(increase) in cash and cash equivalents
2,472,515
(377,089)
2,449,399
(344,098)
Cash and cash equivalents at beginning of period
425,046
795,368
371,485
715,583
Exchange gain on cash and cash equivalents
4,361
6,767
-
-
Cash and cash equivalents at end of period
10
2,901,922
425,046
2,820,884
371,485
Major non-cash transactions
During the year, the Group entered into the following major non-cash transactions:
•
•
•
The acquisition of Avannaa Resources Limited for consideration of £500,000 which was settled wholly by issuing
shares in the Parent Company; and
The acquisition of the non-controlling interest in Bluejay Mining Limited for £594,393 which was settled wholly by
issuing shares in the Parent Company.
The deferred consideration due on the acquisition of Bluejay Mining Limited in the prior year for £224,157 which was
settled wholly by issuing shares in the Parent Company.
Further details on these acquisitions can be found in Note 24 to the Financial Statements.
The Notes on pages 23 to 48 form part of these Financial Statements.
22
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
1. General information
The principal activity of Bluejay Mining plc (the ‘Company’) and its subsidiaries (together the ‘Group’) is the exploration and
development of precious and base metals. The Company’s shares are listed on the AIM of the London Stock Exchange and
the Frankfurt Stock Exchange. The Company is incorporated and domiciled in England.
The address of its registered office is 7-9 Swallow Street, London, W1B 4DE.
The group has revised their accounting period to be based on a calendar year (1 January to 31 December). As a result of
this, the 2017 financial year is extended to an 18-month period from 1 July 2016 to 31 December 2017.
2. Summary of Significant Accounting Policies
The principal Accounting Policies applied in the preparation of these Consolidated Financial Statements are set out below.
These Policies have been consistently applied to all the periods presented, unless otherwise stated.
2.1. Basis of Preparation of Financial Statements
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(‘IFRS’) and IFRS Interpretations Committee (‘IFRS IC’) as adopted by the European Union, the Companies Act 2006 that
applies to companies reporting under IFRS and IFRS IC interpretations. The Consolidated Financial Statements have also
been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on
business combination.
The Financial Statements are presented in Pound Sterling rounded to the nearest pound.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated
Financial Statements are disclosed in Note 4.
2.2. New and Amended Standards
(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 July 2016
The following IFRSs or IFRIC interpretations were effective for the first time for financial periods beginning on or after 1 July
2016. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial
statements.
Standard
IAS 1
IFRS 12
Impact on initial application
Amendments to Disclosure Initiative
Annual Improvements 2012 -2014 cycle
Effective date
1 January 2016
1 January 2016
(b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
Standard
IFRS 9
IFRS 15
IFRS 16
IFRS 2 (Amendments)
Annual Improvements
IFRIC Interpretation 22
IFRIC 23
Impact on initial application
Financial Instruments
Revenue from Contracts with Customers
Leases
Share-based payments – classification and
measurement
2014-2016 Cycle
Foreign currency transactions and advanced
consideration
Uncertainty over Income tax treatments
Effective date
1 January 2018
1 January 2018
*1 January 2019
1 January 2018
1 January 2018
*1 January 2018
*1 January 2018
* Subject to EU endorsement
The Group is evaluating the impact of the new and amended standards above. The Directors believe that these new and
amended standards are not expected to have a material impact on the Group’s results or shareholders’ funds.
23
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
2.3. Basis of Consolidation
The Consolidated Financial Statements consolidate the financial statements of the Company and its subsidiaries made up to
31 December. Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee;
•
• Rights arising from other contractual arrangements; and
The Group's voting rights and potential voting rights
•
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the
Group gains control until the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within the parent company financial statements. Where
necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with
those used by other members of the Group. All significant intercompany transactions and balances between Group
enterprises are eliminated on consolidation.
2.4. 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 Chairman’s Report on pages 3-5. In addition, Note 3 to the Consolidated Financial Statements includes the
Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its
financial instruments and its exposure to market, credit and liquidity risk.
The Consolidated Financial Statements have been prepared on a going concern basis. Although the Group’s assets are not
generating revenues and an operating loss has been reported, the Directors are of the view that the Group has sufficient
funds to undertake its operating activities over the next 12 months from the date these financial statements are approved
including any additional payments required in relation to its current exploration projects. The Group has financial resources
which the Directors consider will be sufficient to fund the Group’s committed expenditure both operationally and on various
exploration projects for this time period. However, in order to complete other exploration work over the life of existing projects
and as additional projects are identified, additional funding will be required. The amount of funding cannot be forecast with
any certainty at the point of approval of these Financial Statements and the Group will be required to raise additional funds
either via an issue of equity or through the issuance of debt. The Directors are reasonably confident that funds will be
forthcoming if and when they are required. Should additional funding not be forthcoming the Directors have agreed, if
circumstances require, to defer payment of their fees until such time as adequate funding is received and if necessary scale
back exploration activity.
The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in
operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in
preparing the Group and Company Financial Statements.
2.5. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes strategic decisions.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
2.6. Foreign Currencies
(a) Functional and presentation currency
Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the ‘functional currency’). The functional currency of the UK parent
24
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
entity and UK subsidiary is Pound Sterling, the functional currency of the Finnish and Austrian subsidiaries is Euros and
the functional currency of the Greenlandic subsidiaries is Danish Krone. The Financial Statements are presented in
Pounds Sterling which is the Company’s functional and Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
• assets and liabilities for each period end date presented are translated at the period-end closing rate;
•
income and expenses for each Income Statement are translated at average exchange rates (unless this average is
not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of
monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the
foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange
differences are recognised in the Income Statement as part of the gain or loss on sale.
2.7. Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be
successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation
assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological,
geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical
feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when
the mining property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation, but are assessed annually for impairment. The assessment
is carried out by allocating exploration and evaluation assets to cash generating units (“CGU’s”), which are based on specific
projects or geographical areas. The CGU’s are then assessed for impairment using a variety of methods including those
specified in IFRS 6.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of
commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the
associated expenditures are written off to the Income Statement.
Exploration and evaluation assets recorded at fair-value on business combination
Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS
3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset
and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any
excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.
2.8. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment
provision.
2.9. Property, Plant and Equipment
Property, Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset
over its expected useful economic life on a straight line basis at the following annual rates:
25
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
Office Equipment – 20% straight line
Machinery and Equipment – 10% straight line
Software – 50% straight line
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged
to the income statement during the financial period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within
‘Other (losses)/gains’ in the Income Statement.
2.10.
Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not ready to use, and goodwill, are not subject to
amortisation and are tested annually for impairment. Property, plant and equipment is reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets
that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
2.11.
Financial Assets
(a) Classification
The Group classifies its financial assets as loans and receivables. The classification depends on the purpose for which
the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than 12 months after the end of the
reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise trade and other
receivables and cash and cash equivalents.
(b) Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade date – the date on which the Group commits
to purchasing or selling the asset. Financial assets are derecognized when the rights to receive cash flows from the assets
have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of
ownership. Loans and receivables are subsequently carried at amortised cost using the effective interest method.
(c) Impairment of financial assets
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a
group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired, and impairment losses
are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the
initial recognition of the asset (a “loss event”), and that loss event (or events) has an impact on the estimated future cash
flows of the financial asset, or group of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:
• significant financial difficulty of the issuer or obligor;
• a breach of contract, such as a default or delinquency in interest or principal repayments;
•
the disappearance of an active market for that financial asset because of financial difficulties;
• observable data indicating that there is a measureable decrease in the estimated future cash flows from a portfolio of
financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the
individual financial assets in the portfolio;
26
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
For loans and receivables, the amount of the impairment loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred),
discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced, and the loss is
recognised in the Income Statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to
an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal
of the previously recognised impairment loss is recognised in the Income Statement.
2.12.
Financial Liabilities
Financial liabilities comprise trade and other payables in the Statement of Financial Position and are held at amortised cost.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest
method.
2.13.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.14.
Equity
Equity comprises the following:
•
•
•
“Share capital” represents the nominal value of the Ordinary shares;
“Share Premium” represents consideration less nominal value of issued shares and costs directly attributable to
the issue of new shares;
“Other reserves” represents the merger reserve, foreign currency translation reserve, redemption reserve and
share option reserve where;
o
o
o
o
“Merger reserve” represents the difference between the fair value of an acquisition and the nominal
value of the shares allotted in a share exchange;
“Foreign currency translation reserve” represents the translation differences arising from translating the
financial statement items from functional currency to presentational currency;
“Redemption reserve” represents a non-distributable reserve made up of share capital;
“Share option reserve" represents share options awarded by the group;
•
“Retained earnings” represents retained losses.
2.15.
Share capital, share premium and deferred shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity, as a deduction, net of tax, from the proceeds provided there is sufficient premium available. Should sufficient
premium not be available placing costs are recognised in the Income Statement.
Deferred shares are classified as equity. Deferred shares have no rights to receive dividends, or to attend or vote at general
meetings of the Company and are only entitled to a return of capital after payment to holders of new ordinary shares of
£100,000 per each share held.
2.16.
Share Based Payments
The Group operates a number of equity-settled, share-based schemes, under which the Group receives services from
employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value
of the third party suppliers’ services received in exchange for the grant of the options is recognised as an expense in the
Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services
received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:
•
•
•
including any market performance conditions;
excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a specified time period); and
including the impact of any non-vesting conditions (for example, the requirement for employees to save).
The fair value of the share options and warrants are determined using the Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total
expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions
27
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are
expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if
any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.
When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable
transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.
2.17.
Taxation
No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in respect of temporary differences arising from differences between
the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in
the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition
of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including
those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only
to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available
against which the temporary difference can be used.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in except where the Group is
able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of
financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax
liability is settled.
Deferred tax assets and liabilities are not discounted.
3. Financial Risk Management
3.1. Financial Risk Factors
The Group’s activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group’s financial performance. None of these risks are
hedged.
Risk management is carried out by the London based management team under policies approved by the Board of Directors.
Market Risk
(a) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the Euro, Danish Krone and the British Pound. Foreign exchange risk arises from future commercial
transactions, recognised assets and liabilities and net investments in foreign operations.
The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds, Euros or Danish
Krone. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not
deemed sufficient to enter into forward contracts as most of the foreign exchange movements result from the retranslation of
inter company loans. The Group has not sensitised the figures for fluctuations in foreign exchange rates as the Directors are
of the opinion that these fluctuations, apart from the retranslation of intercompany loans at the closing rate, would not have a
significant impact on the financial statements of the Group. However, the Directors acknowledge that, at the present time, the
foreign exchange retranslations have resulted in rather higher than normal fluctuations which are separately disclosed, and
28
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
is predominantly due to the exceptional nature of the Euro exchange rate in the last two years in the current economic climate.
The Directors will continue to assess the effect of movements in exchange rates on the Group’s financial operations and
initiate suitable risk management measures where necessary.
(b) Price risk
The Group is not exposed to commodity price risk as a result of its operations, which are still in the exploration phase. The
Directors will revisit the appropriateness of this policy should the Group’s operations change in size or nature.
The Group has no exposure to equity securities price risk, as it has no listed or unlisted equity investments other than
investments in wholly owned subsidiaries.
Credit Risk
Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any
losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a
limit, which is assessed by the Board.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
Liquidity Risk
In keeping with similar sized mineral exploration groups, the Group’s continued future operations depend on the ability to
raise sufficient working capital through the issue of equity share capital or debt. The Directors are reasonably confident that
adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.
With exception to deferred taxation, financial liabilities are all due within one year.
3.2. Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to enable
the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost
of capital. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce
debts.
At 31 December 2017 the Group had borrowings of £nil (30 June 2016: £nil) and defines capital based on the total equity of
the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation
activities and may issue new shares in order to raise further funds from time to time.
Given the Group’s level of debt versus its cash at bank and cash equivalents, the gearing ratio is immaterial.
3.3. Sensitivity Analysis
On the assumption that all other variables were held constant, and in respect of the Group and the Company’s expenses the
potential impact of a 10% increase/decrease in the UK Sterling:Euro and UK Sterling:DKK Foreign exchange rates on the
Group’s loss for the period and on equity is as follows:
Potential impact on euro expenses: 2017
Effect on loss before tax
for the period ended
Group
Company
Effect on equity before tax
for the year ended
Group
Company
Increase/(decrease) in foreign exchange rate
£
£
£
£
Potential impact on DKK expenses: 2017
10%
-10%
(2,752,612)
(2,608,804)
(2,680,708)
(2,680,708)
22,427,782
19,746,470
13,624,108
13,624,108
Effect on loss before tax
for the period ended
Group
Company
Effect on equity before tax
for the year ended
Group
Company
Increase/(decrease) in foreign exchange rate
£
£
£
£
10%
-10%
(2,709,050)
(2,652,366)
(2,680,708)
(2,680,708)
21,092,538
21,081,714
13,624,108
13,624,108
29
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
4. Critical Accounting Estimates and Judgements
The preparation of the Financial Statements in conformity with IFRS requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of expenses during the period. Actual results may vary from the
estimates used to produce these Financial Statements.
Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Items subject to such estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial years, include but are not limited to:
Impairment of intangible assets – exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 31 December 2017 of £17,971,795 (2016: £12,627,681). Such
assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised
once extraction of the resource commences. Management tests for impairment annually whether exploration projects have
future economic value in accordance with the accounting policy stated in Note 2.7. Each exploration project is subject to an
annual review by either a consultant or senior company geologist to determine if the exploration results returned during the
period warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes
into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a
project does not represent an economic exploration target and results indicate there is no additional upside a decision will be
made to discontinue exploration; an impairment charge will then be recognised in the Income Statement. The Directors have
reviewed the estimated value of each project prepared by management and have concluded that the Austrian exploration
asset be impaired in full.
Share based payment transactions
The Group has made awards of options and warrants over its unissued share capital to certain Directors as part of their
remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and
suppliers for various services received.
The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future
dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in
Note 14.
VAT receivable
At 31 December 2017, the Group and Company have recognised an amount of £287,731 within trade and other receivables
which relates to VAT receivable. The amount is subject to an on-going dispute with HMRC, further details of which can be
found in Note 23. The Directors believe that the amount will be recovered in full and therefore have not recognised any
impairment to the carrying value of this amount.
30
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
5. Segment Information
Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to
make strategic decisions. During the period the Group had interests in four geographical segments; the United Kingdom,
Greenland, Austria, and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Austria and
Finland relate to exploration and evaluation work.
The Group had no turnover during the period.
2017
Revenue
Administrative expenses
Foreign Exchange
Finance Income
Other Income
Impairment on intangible asset
Loss before tax per reportable
segment
Additions to PP&E
Additions to intangible asset
Reportable segment assets
Reportable segment liabilities
2016
Revenue
Administrative expenses
Foreign Exchange
Finance Income
Other Income
Loss before tax per reportable
segment
Additions to PP&E
Additions to intangible asset
Reportable segment assets
Reportable segment liabilities
Greenland
£
-
27,846
1,791
-
1,102
-
Austria
£
-
(13,317)
71,421
-
-
(643,168)
Finland
£
-
(97,633)
(8)
15
-
-
UK
£
-
(2,028,208)
(2,251)
1,702
-
-
Total
£
-
(2,111,312)
70,953
1,717
1,102
(643,168)
30,739
(585,064)
(97,626)
(2,028,757)
(2,680,708)
647,660
3,986,730
6,982,095
713,940
Greenland
£
-
(3,629)
196
-
-
-
-
11,666
4,194
-
2,000,553
11,867,293
147,594
13,260
-
3,286,587
194,787
660,920
5,987,283
22,147,641
1,060,515
Austria
£
-
(69,858)
(394)
-
-
Finland
£
-
(34,630)
9690
11
-
UK
£
-
(520,929)
(755)
239
-
Total
£
-
(629,046)
8,737
250
-
(3,433)
(70,252)
(24,929)
(521,445)
(620,059)
993
2,265,857
2,302,853
1094
-
93,313
612,887
2,116
-
1,836,448
9,812,573
21,140
3,563
-
473,790
741,747
4,556
4,195,618
13,202,103
766,097
31
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
6. Property, Plant and Equipment
Group
Cost
As at 1 July 2015
Exchange differences
Additions
As at 30 June 2016
As at 1 July 2016
Exchange Differences
Additions
Machinery
&
equipment
Office
equipment
£
£
Software
£
-
-
5,312
5,312
5,312
-
7,352
18,567
3,183
-
21,750
21,750
1,602
647,659
3,124
-
2,307
5,431
5,431
-
5,909
Total
£
21,691
3,183
7,619
32,493
32,493
1,602
660,920
As at 31 December 2017
12,664
671,011
11,340
695,015
Depreciation
As at 1 July 2015
Charge for the year
Exchange differences
As at 30 June 2016
As at 1 July 2016
Charge for the period
Exchange differences
As at 31 December 2017
Net book value as at 30 June 2016
-
734
-
734
734
7,379
-
8,113
4,578
7,052
2,177
1,209
10,438
10,438
36,371
1,483
48,292
11,312
2,312
2,126
-
4,438
4,438
3,118
-
7,556
993
9,364
5,037
1,209
15,610
15,610
46,868
1,483
63,961
16,883
Net book value as at 31 December 2017
4,551
622,719
3,784
631,054
Depreciation expense of £46,868 (30 June 2016: £5,037) for the Group has been charged in administration expenses.
32
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
Company
Cost
As at 1 July 2015
Additions
As at 30 June 2016
As at 1 July 2016
Additions
Software
Office
equipment
£
£
-
5,312
5,312
5,312
7,352
3,124
-
3,124
3,124
5,909
Total
£
3,124
5,312
8,436
8,436
13,261
As at 31 December 2017
12,664
9,033
21,697
Depreciation
As at 1 July 2015
Charge for the year
As at 30 June 2016
As at 1 July 2016
Charge for the period
As at 31 December 2017
Net book value as at 30 June 2016
Net book value as at 31 December 2017
-
734
734
734
7,379
8,113
4,577
4,550
2,311
813
3,124
3,124
2,126
5,250
-
3,783
2,311
1,547
3,858
3,858
9,505
13,363
4,577
8,333
Depreciation expense of £9,505 (30 June 2016: £1,547) for the Company has been charged in administration expenses.
33
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
7.
Intangible Assets
Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated.
Exploration & Evaluation Assets - Cost and Net Book Value
As at 1 July
Additions
Acquired through acquisition (at fair value) (Note 24)
Exchange differences
Impairments
As at end of period
Group
31 December
2017
£
12,627,680
4,600,044
622,702
764,537
(643,168)
17,971,795
30 June
2016
£
8,432,062
842,281
1,912,886
1,440,451
-
12,627,680
Exploration projects in Finland and Greenland are at an early stage of development and there are JORC (Joint Ore Reserves
Committee) or non-JORC compliant resource estimates are available to enable value in use calculations to be prepared. The
Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of
impairment:
• The Group’s right to explore in an area has expired, or will expire in the near future without renewal;
• No further exploration or evaluation is planned or budgeted for;
• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a
commercial level of reserves; or
• Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.
Following their assessment the Directors concluded that impairment charge of £643,168 was necessary for the period ended
31 December 2017 as the asset was not leading to the discovery of commercially viable quantities of mineral resources.
8.
Investments in Subsidiary Undertakings
Shares in Group Undertakings
At beginning of period
Additions in period (see note 24)
At end of period
Loans to Group undertakings
Total
Company
31 December
2017
£
8,605,609
1,094,393
9,700,002
30 June
2016
£
7,700,002
905,607
8,605,609
10,017,871
4,899,665
19,717,873
13,505,274
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment
provision.
34
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
Subsidiaries
Name of subsidiary
Registered office address
Country of
incorporation
and place of
business
Proportion of
ordinary
shares held
by parent (%)
Proportion of
ordinary shares
held by the
Group (%)
Nature of
business
Centurion Mining
Limited
2nd Floor 7-9 Swallow Street,
London, England, W1B 4DE
United
Kingdom
Centurion Universal
Limited
2nd Floor 7-9 Swallow Street,
London, England, W1B 4DE
United
Kingdom
100%
100%
Dormant
100%
100%
Holding
Centurion Resources
GmbH
Schottenring 14 /525
1010 Vienna, Austria
Austria
Nil
100%
Exploration
Finland Investments
Limited
2nd Floor 7-9 Swallow Street,
London, England, W1B 4DE
United
Kingdom
100%
100%
Holding
FinnAust Mining
Finland Oy
FinnAust Mining
Northern Oy
BJ Mining Limited
Kummunkatu 23,
FI-83500 Outokumpu, Finland
Finland
Kummunkatu 23,
FI-83500 Outokumpu, Finland
Finland
2nd Floor 7-9 Swallow Street,
London, England, W1B 4DE
BVI
Nil
Nil
100%
Exploration
100%
Exploration
100%
100%
Exploration
Disko Exploration
Limited
2nd Floor 7-9 Swallow Street,
London, England, W1B 4DE
United
Kingdom
100%
100%
Exploration
Dundas Titanium A/S
c/o Nuna Advokater ApS,
Qullilerfik 2, 6, Postboks 59,
Nuuk 3900, Greenland
All subsidiary undertakings are included in the consolidation.
Greenland
Nil
100%
Exploration
The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the
proportion of ordinary shares held.
9. Trade and Other Receivables
Current
Trade receivables
Amounts owed by Group undertakings
Amounts owed by Directors (see note 25)
Prepayments
VAT receivable (See note 23)
Other receivables
Total
Group
Company
31 December
2017
30 June
2016
31 December
2017
30 June
2016
£
30,614
-
41,623
55,587
346,274
168,772
£
-
-
-
72,510
78,142
25,033
£
30,614
163,519
41,623
43,404
287,731
54,000
£
-
-
-
33,362
77,814
-
642,870
175,685
620,891
111,176
The fair value of all receivables is the same as their carrying values stated above.
At 31 December 2017 all trade and other receivables were fully performing. No ageing analysis is considered necessary as
the Group has no significant trade receivable receivables which would require such an analysis to be disclosed under the
requirements of IFRS 7.
35
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following currencies:
UK Pounds
Euros
Danish Krone
Group
31 December
2017
£
463,315
82,615
96,940
30 June
2016
£
140,666
35,019
-
Company
31 December
2017
£
620,891
-
-
30 June
2016
£
111,176
-
-
642,870
175,685
620,891
111,176
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
The Group does not hold any collateral as security.
10. Cash and Cash Equivalents
Group
31 December
2017
£
30 June
2016
£
Company
31 December
2017
£
30 June
2016
£
Cash at bank and in hand
2,901,922
425,046
2,820,884
371,485
All of the UK entities cash at bank is held with institutions with an AA- credit rating. The Finland & Greenland entities cash at
bank is held with institutions whose credit rating is unknown.
The carrying amounts of the Group and Company’s cash and cash equivalents are denominated in the following currencies:
UK Pounds
Euros
Danish Krone
11. Trade and Other Payables
Trade payables
Other creditors
Accrued expenses
Group
31 December
2017
£
2,820,998
68,491
12,433
30 June
2016
£
377,998
47,048
Company
31 December
2017
£
2,820,884
-
-
30 June
2016
£
371,485
-
-
2,901,922
425,046
2,820,884
371,485
Group
31 December
2017
£
424,372
76,422
63,677
30 June
2016
£
136,559
229,361
26,834
Company
31 December
2017
£
297,504
8,657
52,145
30 June
2016
£
124,786
224,159
19,458
564,471
392,754
358,306
368,403
Trade payables include amounts due of £322,716 in relation to exploration and evaluation activities.
36
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
12. Deferred Tax
An analysis of deferred tax liabilities is set out below.
Group
2017
£
Company
2016
£
2017
£
2016
£
Deferred tax liabilities
- Deferred tax liability after more than 12 months
496,045
373,343
Deferred tax liabilities
496,045
373,343
-
-
-
-
The movement in the deferred tax account is as follows:
At 1 June 2016
Acquisition of subsidiary (Note 23)
As at 31 December
Group
Company
2017
£
373,343
122,702
2016
£
-
373,343
496,045
373,343
2017
2016
£
-
-
-
£
-
-
-
The Group has additional capital losses of approximately £643,168 (2016: £nil) and other losses of approximately £5,728,559
(2016: £4,752,742) available to carry forward against future taxable profits. No deferred tax asset has been recognised in
respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be
offset.
13. Share capital and premium
Group and Company
Issued and fully paid
At 30 June 2016
Issue of new shares – 13 July 2016 (1)
Issue of new shares – 8 December 2016 (2 & 3)
Issue of new shares – 4 January 2017 (4)
Exercise of Options – 22 February 2017
Exercise of Options – 27 February 2017
Number of shares
Ordinary
shares
£
Share premium
£
Total
£
484,400,804
5,938,572
16,183,675 22,122,247
10,000,000
117,184,457
7,584,238
1,000,000
2,000,000
1,000
11,719
758
100
200
479,100
480,100
5,228,092
5,239,811
499,242
500,000
19,900
20,000
144,800
145,000
Issue of new shares – 13 March 2017 (5)
108,071,388
10,807
583,586
594,393
Exercise of Options – 31 March 2017
Exercise of Options – 4 April 2017
Exercise of Options – 20 April 2017
Exercise of Options – 8 May 2017
Exercise of Options – 24 May 2017
1,333,333
1,625,000
2,766,667
250,000
1,500,000
133
163
277
25
150
99,867
100,000
52,338
52,501
228,473
228,749
18,725
18,750
112,350
112,500
Issue of new shares – 9 June 2017 (6)
29,166,667
2,917
3,172,574
3,175,490
Exercise of Options – 28 July 2017
Exercise of Options – 31 October 2017
Exercise of Warrants – 1 November 2017
Exercise of Warrants – 18 December 2017
1,550,000
1,284,366
1,000,000
640,946
155
128
100
64
154,845
155,000
128,308
128,436
69,900
44,802
70,000
44,866
As at 31 December 2017
771,357,866
5,967,268
27,220,576 33,187,843
37
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
(1)
(2)
(3)
(4)
(5)
(6)
Includes issue costs of £19,900
Issue of shares for deferred cash consideration for BJ Mining Limited.
Includes issue costs of £334,347
Issue of shares for acquisition of Avannaa Exploration Limited
Issue of shares for remaining ownership in BJ Mining Limited
Includes issue costs of £324,509
On 13 July 2016 the Company raised £500,000 via the issue and allotment of 10,000,000 new ordinary shares of 0.01 pence
each fully paid (‘Ordinary Shares’) at a price of 5 pence per share.
On 8 December 2016 the Company issued and allotted 40,755,885 new Ordinary Shares at a price of 0.55 pence per share
as deferred consideration for a business acquisition. On the same date the Company raised £5,350,000 via the issue and
allotment of 76,428,572 new Ordinary Shares at a price of 7 pence per share.
On 4 January 2017 the Company issued and allotted 7,584,238 new Ordinary Shares at a price of 6.59 pence per share as
consideration for a business acquisition.
On 22 February 2017 the Company issued and allotted 1,000,000 new Ordinary Shares at a price of 2 pence per share as
an exercise of options.
On 27 February 2017 the Company issued and allotted 1,000,000 new Ordinary Shares at a price of 7.5 pence per share as
an exercise of options. On the same date the Company issued and allotted 1,000,000 via the issue and allotment of
10,000,000 new Ordinary Shares at a price of 7 pence per share.
On 13 March 2017 the Company issued and allotted 108,071,388 new Ordinary Shares at a price of 0.55 pence per share as
consideration for business acquisition.
On 31 March 2017 the Company issued and allotted 1,333,333 new Ordinary Shares at a price of 7.5 pence per share as an
exercise of options.
On 4 April 2017 the Company issued and allotted 625,000 new Ordinary Shares at a price of 2 pence per share as an exercise
of options. On the same date the Company issued and allotted 1,000,000 new Ordinary Shares at a price of 4 pence per
share as an exercise of options.
On 20 April 2017 the Company issued and allotted 1,916,667 new Ordinary Shares at a price of 7.5 pence per share as an
exercise of options. On the same date the Company issued and allotted 850,000 new Ordinary Shares at a price of 10 pence
per share as consideration for services provided
On 8 May 2017 the Company issued and allotted 250,000 new Ordinary Shares at a price of 7.5 pence per share as an
exercise of options.
On 24 May 2017 the Company issued and allotted 1,500,000, new Ordinary Shares at a price of 7.5 pence per share as
consideration for services provided
On 9 June 2017 the Company raised £3,175,490 via the issue and allotment of 29,166,667 new Ordinary Shares at a price
of 12 pence per share.
On 28 July 2017 the Company issued and allotted 1,550,000 new Ordinary Shares at a price of 10 pence per share as an
exercise of options.
On 31 October 2017 the Company issued and allotted 1,284,366 new Ordinary Shares at a price of 10 pence per share as
an exercise of options.
On 1 November 2017 the Company issued and allotted 1,000,000 new Ordinary Shares at a price of 7 pence per share as
an exercise of warrants.
On 18 December 2017 the Company issued and allotted 640,946 new Ordinary Shares at a price of 7 pence per share as an
exercise of warrants.
38
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
14. Share Based Payments
Shares issued to employees
On 27 February 2017 the company issued and allotted 1,000,000 Ordinary Shares to employees at a price of 7 pence per
share.
Share options
Share options and warrants outstanding and exercisable at the end of the period have the following expiry dates and exercise
prices:
Grant Date
Expiry Date
Exercise price in £ per share
29 November 2013
12 November 2012
29 November 2013
4 March 2016
4 March 2016
4 March 2016
15 April 2016
17 December 2016
9 June 2017
17 October 2017
17 October 2017
17 October 2017
29 May 2017
12 November 2017
29 May 2019
3 March 2017
3 March 2018
3 March 2019
14 April 2021
17 December 2021
9 June 2022
17 October 2020
17 October 2020
17 October 2020
0.075
0.10
0.10
0.02
0.04
0.06
0.02
0.07
0.165
0.20
0.25
0.30
Options & Warrants
31 December
2017
-
-
6,000,000
-
-
1,000,000
-
2,689,768
1,025,000
5,350,000
5,350,000
5,350,000
30 June
2016
6,000,000
3,684,366
6,000,000
1,000,000
1,000,000
1,000,000
625,000
-
-
-
-
-
26,764,768
19,309,366
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters
used are detailed below:
2013 Options
2016 Options
2016 Options
2017 Options
Granted on:
Life (years)
Share price (pence per share)
Risk free rate
Expected volatility
Expected dividend yield
Marketability discount
Total fair value (£000)
Granted on:
Life (years)
Share price (pence per share)
Risk free rate
Expected volatility
Expected dividend yield
Marketability discount
Total fair value (£000)
29/11/2013
5.5 years
5.7p
2.25%
26.41%
-
20%
4
4/3/2016
3 years
3.03p
0.81%
48.40%
-
20%
3
17/12/2016
5 years
7p
0.81%
17.64%
-
20%
17
9/6/2017
5 years
15.5p
0.56%
31.83%
-
20%
34
2017 Options
2017 Options
2017 Options
17/10/2017
3 years
17.75p
0.5%
13.85%
-
20%
42
17/10/2017
3 years
17.75p
0.5%
13.85%
-
20%
8
17/10/2017
3 years
17.75p
0.5%
13.85%
-
20%
1
The expected volatility of the 2013, 2016 and 2017 options is based on historical volatility for the six months prior to the date
of granting.
The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.
39
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
A reconciliation of options and warrants granted over the period to 31 December 2017 is shown below:
Outstanding at beginning of period
Expired
Exercised
Granted
Outstanding as at period end
Exercisable at period end
2017
2016
Weighted
average
exercise price
(£)
0.1347
-
0.1347
0.2210
0.1900
0.1900
Number
19,309,366
-
(13,950,312)
21,405,714
26,764,768
26,764,768
Weighted
average
exercise price
(£)
0.1237
0.0043
-
0.0366
0.1347
0.1347
Number
17,366,296
(1,681,930)
-
3,625,000
19,309,366
19,309,366
2017
2016
of
Range
exercise
prices (£)
Weighted
average
exercise
price (£)
Number of
shares
Weighted
average
remaining
life
expected
(years)
Weighted
average
remaining
life
contracted
(years)
Weighted
average
exercise
price (£)
Number of
shares
Weighted
average
remaining
life
expected
(years)
Weighted
average
remaining
life
contracted
(years)
0 – 0.05
-
-
0.05 – 2.00
0.1900
26,764,768
-
2.61
-
2.61
0.37
0.15
3,625,000
15,684,366
2.20
1.78
2.20
1.78
During the period there was a charge of £119,439 (2016: £29,457) in respect of share options.
15. Other Reserves
Group
Foreign
currency
translation
reserve
Redemption
reserve
Share option
reserve
£
£
£
Merger
reserve
£
Total
£
At 30 June 2016
166,000
114,891
36,463
153,346
470,700
Currency translation differences
Issued options
Exercised options
-
-
-
694,161
-
-
-
-
-
-
694,161
119,439
119,439
(163,203)
(163,203)
At 31 December 2017
166,000
809,052
36,463
109,582 1,121,097
At 30 June 2016
Issued options
Exercised options
At 31 December 2017
Company
Merger
reserve
Redemption
reserve
Share option
reserve
£
£
£
Total
£
166,000
36,463
153,346
355,809
-
-
-
-
119,439
119,439
(163,203)
(163,203)
166,000
36,463
109,582
312,045
40
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
16. Employee benefit expense
Staff costs (excluding Directors)
Salaries and wages
Social security costs
Retirement benefit costs
Group
Company
Period ended
31 December
2017
£
242,059
18,656
700
261,415
Year ended
30 June
2016
£
134,781
3,679
40,018
178,478
Period ended
31 December
2017
Year ended
30 June
2016
£
216,984
16,476
700
234,160
£
19,831
-
-
19,831
The average monthly number of employees for the Group during the period was 11 (30 June 2016: 6) and the average monthly
number of employees for the Company was 6 (30 June 2016: 3).
Of the above Group staff costs, £135,513 (30 June 2016: £169,846) has been capitalised in accordance with IFRS 6 as
exploratory related costs and are shown as an intangible addition in the period.
17. Directors' Remuneration
Executive Directors
Roderick McIllree
Non-executive Directors
Greg Kuenzel
Graham Marshall (1)
Peter Waugh
Michael Hutchinson
Period ended 31 December 2017
Post-
employment
benefits
Share based
payments
£
106
109
-
94
-
309
£
-
-
-
6,278
5,795
12,073
Short-term
benefits
£
34,524
49,328
-
12,328
8,334
104,514
Total
£
34,630
49,437
-
18,700
14,129
116,896
Of the above Group Directors Remuneration, £18,075 (30 June 2016: £19,865) has been capitalised in accordance with IFRS
6 as exploratory related costs and are shown as an intangible addition in the period.
Executive Directors
Roderick McIllree
Non-executive Directors
Greg Kuenzel
Graham Marshall (1)
Peter Waugh
Michael Hutchinson
(1) Graham Marshall resigned on 16 October 2017
Year ended 30 June 2016
Post-
employment
benefits
Share based
payments
£
-
-
-
-
-
-
£
-
-
-
-
-
-
Total
£
11,370
12,000
-
-
-
23,370
Short-term
benefits
£
11,370
12,000
-
-
-
23,370
41
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have
been disclosed in Note 25.
The remuneration of directors and key executives is determined by the remuneration committee having regard to the
performance of individuals and market trends.
18. Finance Income
Group
Period ended
31 December
2017
£
1,717
1,717
Year ended
30 June
2016
£
250
250
Interest received from cash and cash equivalents
Finance Income
19. Income Tax Expense
No charge to taxation arises due to the losses incurred.
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax
rate applicable to the losses of the consolidated entities as follows:
Loss before tax
Tax at the applicable rate of 21.82% (2016: 19.20%)
Effects of:
Expenditure not deductible for tax purposes
Depreciation in excess of/(less than) capital allowances
Net tax effect of losses carried forward
Tax charge
Group
Period ended
31 December
2017
£
Year ended
30 June
2016
£
(2,680,708)
(620,059)
(584,943)
(119,065)
5,120
(593)
580,416
-
1,401
967
116,696
-
The weighted average applicable tax rate of 21.82% (2016: 19.20%) used is a combination of the 19% standard rate of
corporation tax in the UK, 20% Finnish corporation tax, 25% Austrian corporation tax and 30% Greenlandic corporation tax.
The Group has a potential deferred income tax asset of approximately £2,079,073 (2016: £1,498,657) due to tax losses
available to carry forward against future taxable profits. The Company has tax losses of approximately £5,067,761 (2016:
£4,752,742) available to carry forward against future taxable profits. No deferred tax asset has been recognised on
accumulated tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.
20. Earnings per Share
Group
The calculation of the total basic earnings per share of (0.408) pence (30 June 2016: (0.172) pence) is based on the loss
attributable to equity holders of the parent company of £2,680,708 (30 June 2016: £613,849) and on the weighted average
number of ordinary shares of 656,936,094 (30 June 2016: 357,925,047) in issue during the period.
In accordance with IAS 33, basic and diluted earnings per share are identical for the Group as the effect of the exercise of
share options would be to decrease the earnings per share. Details of share options that could potentially dilute earnings per
share in future periods are set out in Note 14.
42
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
21. Expenses by nature
Directors’ fees
Employee salaries
AIM related costs (including Public Relations)
Establishment expenses
Auditor remuneration
Auditor fees for other services
Travel & subsistence
Professional & consultancy fees
Insurance
Depreciation
Share Option expense
Other expenses
Total administrative expenses
Group
Period ended
31 December
2017
£
Year ended
30 June
2016
£
81,914
211,175
461,770
111,308
57,981
127,096
160,549
496,622
57,102
46,868
119,439
179,488
3,505
8,632
164,811
30,000
16,000
1,000
60,787
253,783
17,238
5,037
-
68,253
2,111,312
629,046
Services provided by the Company’s auditor and its associates
During the period, the Group (including overseas subsidiaries) obtained the following services from the Company’s auditors
and its associates:
Fees payable to the Company’s auditor and its associates for the audit of the Parent
Company and Consolidated Financial Statements
Fees payable to the Company’s auditor for tax compliance & other services
Group
Period ended
31 December
2017
£
44,500
92,235
Year ended
30 June
2016
£
16,000
1,000
22. Commitments
(a) Royalty agreements
As part of the contractual arrangement with Magnus Minerals Limited (‘Magnus’) the Group has agreed to pay royalties on
revenue from mineral sales arising from mines developed by the Group. Under the terms of the respective Royalty
Agreements between Magnus and the Company, the Group shall pay the following:
•
•
•
•
0.5% of net smelter returns over mineral production from the Kainuu Schist Belt tenements;
1.0% of net smelter returns over mineral production from the Outokumpu Savonara Mine Belt tenements;
1.5% of net smelter returns over mineral production from the Enonoski Area tenements; and
2.5% of net smelter returns over mineral production from the Hammaslahti Area tenements.
The Enonoski and Hammaslahti Royalty Agreements further provide that royalty entitlements may be extended to future rights
with the respective areas of influence defined with the agreements.
Additionally, under the terms of the Kainuu Schist Belt Royalty Agreement and the Outokumpu Savonara Mine Belt Royalty
Agreement the Group is obligated to pay SES Finland Limited a 0.5% net smelter royalty in respect of production from the
associated tenements and Western Areas Limited (“Western Areas”) 0.5% of net smelter returns over mineral production of
the tenements using a biological leaching technology owned by Western Areas.
43
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
(b) License commitments
Bluejay now owns 4 mineral exploration licenses in Greenland. Licence 2015/08 was acquired via the acquisition of BJ Mining
Limited in 2016. On 4 January 2017, via the acquisition of Disko Exploration Limited, the Group acquired another 2 mineral
exploration licenses, 2011/31 and 2012/29 in Greenland. These licences include commitments to pay annual licence fees and
minimum spend requirements.
As at 31 December 2017 these are as follows:
Group
Not later than one year
Later than one year and no later than five years
Total
(c) Operating lease commitments
Group
Minimum
spend
requirement
£
Total
£
334,438
449,230
2,637,800 2,909,710
License
fees
£
114,792
271,910
386,702
2,972,238 3,358,941
The Group leases office premises under a non-cancellable operating lease agreement. The lease is on an initial fixed term of
two years from 31 July 2017. The lease expenditure charged to the Income Statement during the period is disclosed in Note
21 and is included within establishment expenses.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year but not later than five years
Total lease commitment
23. Contingent liabilities
Group
31 December
2017
£
60,000
35,000
95,000
30 June
2016
£
36,000
-
36,000
The Directors are in the process of appealing an assessment made by HMRC which relates to the Company’s ability to claim
input VAT because, in the view of HMRC, the Company does not technically constitute a business for the purposes of VAT
and is not eligible to make such claims in connection with services it supplied to the Company’s subsidiaries. The initial
assessment raised by HMRC is for an amount of £255,492 and relates to input VAT claimed and repaid by HMRC between
2012-2015. At the point the assessment was raised, HMRC ceased to repay any further claims for input VAT made by the
Company. The Company has continued to submit the appropriate returns to HMRC and as a result, the Company has a
receivable from HMRC of £287,731 at 31 December 2017 which is included within trade and other receivables. HMRC has
made a further protective assessment for this amount, bringing the total amount of the dispute at 31 December 2017 to
£543,223.
The Directors strongly refute the view of HMRC that the Company does not constitute a business for VAT purposes. The case
is proceeding to Tribunal and resolution is not expected any earlier than Q4 2018. The Company has engaged professional
services of legal counsel who will be representing it before the Tribunal. Counsel confirms the Company has a strong case.
Accordingly, the Directors believe that the amount of £543,223 will be recovered in full and therefore have not recognised any
impairment to the carrying value of this amount.
44
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
24. Business Combinations
i)
Disko Exploration Limited (formerly Avannaa Exploration Limited)
On 4 January 2017, the Group acquired 100% of the share capital of Disko Exploration Limited (‘Disko’) for £500,000. Disko
is registered in United Kingdom and holds 3 mineral exploration licences in Greenland. As a result of this acquisition the
Group is expected to increase its presence in this market and commodity.
The following tables summarise the nature of the acquisition, the consideration paid for Disko and the amounts of the assets
acquired and liabilities assumed recognised at the acquisition date.
Disko was acquired so as to continue the expansion of the Group’s operations in the exploration of mineral assets in
Greenland.
Consideration at 4 January 2017
Equity instruments (76,428,572 ordinary shares at 6.59262 pence per share)
Total consideration
£
500,000
500,000
Acquisition related costs amounting to £88,642 have been excluded from the consideration transferred and have been
recognised in profit or loss in the current period.
Recognised amounts of identifiable assets acquired and liabilities
assumed
Book value
FV adj.
Cash and cash equivalents
Exploration assets (included within Intangible Assets) (Note 7)
Other identifiable assets and liabilities
Deferred tax liability
Total identifiable net assets
Goodwill
Total consideration
-
9,193
-
-
9,193
Total
£
-
622,702
-
(122,702)
-
613,509
-
(122,702)
490,807
500,000
-
500,000
The fair value of the 76,428,572 Ordinary Shares for the Company was based on the agreed price of 6.59262 pence and
0.001 pence per Ordinary Share respectively.
The fair value of the exploration assets of £500,000 was estimated by applying a number of valuation metrics which include;
geological upside potential, mineralogy, market benchmarks and the application of local market factors. In the Directors’
opinion, the value of the consideration paid to effect the acquisition related primarily to the value of the exploration licences
and upside potential representing a price agreed between willing and knowledgeable parties on an arm’s length basis.
Therefore, the fair value of the consideration transferred, after consideration of tax implications and the removal of the fair
value of other identifiable assets acquired, has been used as a basis for valuing the exploration assets acquired
Since 4 January 2017 Disko contributed a loss of £132,301. No revenue was recognised in the consolidated statement of
comprehensive income in respect of Disko.
Had Disko been consolidated from 1 July 2016, the consolidated statement of income would show a loss of £187,310 and
revenue would remain unchanged.
ii) BJ Mining Limited (formerly Bluejay Mining Limited)
a)
Initial acquisition in the year ended 30 June 2016
On 8 March 2016, the Group acquired 60.37% of the share capital of BJ Mining LImited (‘BJM’) for £905,607 (the ‘BJM
Acquisition’). BJM is registered in the British Virgin Islands and held a 126km sq. mineral exploration licence in Greenland.
As a result of this acquisition the Group increased its presence in this market and commodity.
45
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
Gregory Kuenzel and Roderick McIllree were both shareholders in BJM and received consideration shares resulting from the
BJM Acquisition. Refer to Note 25 for more details.
The following table summarises the consideration paid for BJM and the amounts of the assets acquired and liabilities assumed
recognised at the acquisition date.
Consideration at 8 March 2016
Deferred Equity Consideration (40,755,885 ordinary shares at 0.55 pence per share)
Equity instruments (123,900,000 ordinary shares at 0.55 pence per share)
Total consideration
Recognised amounts of identifiable assets acquired and liabilities
assumed
Book value
FV adj.
Cash and cash equivalents
Exploration assets (included within Intangible Assets)
Other identifiable assets and liabilities
Deferred tax liability
-
46,171
(37,165)
-
-
1,866,715
-
(373,343)
£
224,157
681,450
905,607
Total
£
-
1,912,886
(37,165)
(373,343)
Total identifiable net assets
Goodwill
Non-controlling interest
Total consideration
9,006
1,493,372
1,502,378
-
(596,771)
905,607
The fair value of the 40,755,885 Ordinary Shares and 123,900,000 Ordinary shares issued as consideration for Bluejay was
based on the agreed price of 0.55 pence and 0.0055 pence per Ordinary Share respectively.
The fair value of the exploration assets of £1,912,886 was estimated by applying a number of valuation metrics which include;
geological upside potential, mineralogy, market benchmarks and the application of local market factors. In the Directors’
opinion, the value of the consideration paid to effect the acquisition related primarily to the value of the exploration licences
and upside potential representing a price agreed between willing and knowledgeable parties on an arm’s length basis.
Therefore, the fair value of the consideration transferred, after consideration of tax implications and the removal of the fair
value of other identifiable assets acquired, has been used as a basis for valuing the exploration assets acquired.
b) Acquisition of NCI in the period ended 31 December 2017
On 10 March 2017, the Group acquired the remaining non-controlling interest (‘NCI’) in BJM (being 39.63% of the total shares
in the Company). As a result the Group now owns 100% of the interest of BJM, consolidating its already controlling interest.
Consideration at 10 March 2017
Cash
Equity instruments (108,071,388 ordinary shares at 0.55 pence per share)
Total consideration
The consideration equalled the value of the NCI held at the date of acquisition.
£
-
594,393
594,393
46
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
25. Related Party Transactions
Loans to Group undertakings
Amounts receivable as a result of loans granted to subsidiary undertakings are as follows:
Centurion Universal Limited
Centurion Resources GmbH
Finland Investments Ltd
FinnAust Mining Finland Oy
Centurion Mining Limited
BJ Mining Limited
Dundas Titanium A/S
Disko Exploration Limited
At 31 December (Note 8)
Company
31 December
2017
£
-
-
310,452
5,087,869
195
1,155,963
3,256,326
207,067
30 June
2016
£
564,300
85,155
289,153
3,515,060
195
445,802
-
-
10,017,871
4,899,665
The loans due from Centrurian Universal Limited and Centurian Resources GmbH were impaired during the period in line
with the impairment to the Austrian exploration assets following the Directors impairment assessment.
Loans granted to subsidiaries have increased during the period due to additional loans being granted to the subsidiaries, and
foreign exchange losses of £338,674, given that no loans were repaid during the period.
These amounts are unsecured, interest free and repayable in Euros when sufficient cash resources are available in the
subsidiaries.
All intra Group transactions are eliminated on consolidation.
Other Transactions
The Group defines its key management personnel as the Directors of the Company as disclosed in the Directors’ Report.
Heytesbury Corporate LLP, a limited liability partnership of which Gregory Kuenzel is a partner, was paid a fee of £126,000
for the 18 month period ended 31 December 2017 (12 months to 30 June 2016: £84,000) for the provision of corporate
management, accounting and consulting services to the Company. There was no balance outstanding at the period-end.
RM Corporate Limited (formerly Tabasco Consulting Limited), a limited company of which Roderick McIllree is a director, was
paid a fee of £97,500 for the 18 month period ended 31 December 2017 (12 months to 30 June 2016: £55,930) for the
provision of corporate management and consulting services to the Company. There was no balance outstanding at the period-
end.
Greenland Gas & Oil Limited, a limited company of which Roderick McIllree and Gregory Kuenzel are directors, was paid a
fee of £45,400 for the 18 month period ended 31 December 2017 (12 months to 30 June 2016: £9,300) for geological
information systems consulting services to the Company. There was no balance outstanding at the period-end.
JW Geological Limited, a limited company of which Jeremy Whybrow,is a director, was paid a fee of £63,988 for the 18 month
period ended 31 December 2017 (12 months to 30 June 2016: £20,000) for consulting services to the Company. Jeremy
Whybrow is a substantial shareholder of the Company. There was no balance outstanding at the period-end.
Gregory Kuenzel, had a balance of £41,662 outstanding to the Company (2016: £nil) for exercise of option funds in the
2017 period which was paid subsequent to year end.
26. Ultimate Controlling Party
The Directors believe there is no ultimate controlling party.
47
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2017
27. Events after the Reporting Date
On 1 February 2018 the Company raised £17,000,000 via the issue and allotment of 77,272,728 new ordinary shares of
0.0001 pence each fully paid at a price of 22 pence per share.
48