Registered number: 05389216
BLUEJAY MINING PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2018
BLUEJAY MINING PLC
CONTENTS
Company Information
Chairman’s Report
Strategic Report
Directors’ Report
Statement of Directors’ Responsibilities
Corporate Governance Report
Independent Auditor’s Report
Statements of Financial Position
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Statements of Cash Flows
Notes to the Financial Statements
Page
2
3
6
8
10
11
16
20
21
22
23
24
25
26
BLUEJAY MINING PLC
COMPANY INFORMATION
Directors
Michael Hutchinson (Non-Executive Chairman)
Peter Waugh (Non-Executive Director)
Roderick McIllree (Chief Executive Officer)
Ian Henderson (Non-Executive Director) – appointed 13 August 2018
Garth Palmer (Non-Executive Director) – appointed 5 June 2018
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
Hannam & Partners (Advisory) LLP
2 Park Street
London
W1K 2HX
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
This has been another positive period for Bluejay Mining plc (‘Bluejay’ or the ‘Company’ and together with its subsidiaries the
‘Group’) as we continue to advance the development of our portfolio, in particular our flagship asset, the Dundas Ilmenite
Project (‘Dundas’ or the ‘Project’) in Greenland, which continues to go from strength to strength. Importantly, we have
achieved a number of significant milestones since my last report, all focussed on advancing Dundas towards the granting of
an exploitation licence to facilitate production as soon as practicable. The recently announced agreement with Rio Tinto Iron
and Titanium Canada Inc. (‘Rio Tinto’ or ‘RTIT’) paired with the recently updated onshore and maiden offshore resource at
Dundas is a clear indication of the outstanding potential of the Project and work completed to date by the Group.
Signing an agreement with one of the world’s largest mining groups is a key achievement in the history of Bluejay as part of
our “discover, develop and deliver” strategy in Greenland. We believe that working with RTIT will provide an opportunity for
both operational and economic optimisation as we jointly evaluate the Project through a bulk sample to be shipped to the
Sorel-Tracy plant in Quebec, Canada, which is RTIT’s major ilmenite processing facility.
In the period, following extensive drilling and trenching at the primary Moriusaq area, we published a >400% increase of the
resource to 96 million tonnes at 6.9% ilmenite (in-situ), solidifying Dundas’ position as the most significant, highest grade
mineral sand ilmenite deposit in the world. Additionally, the potential of the economics and life-of-mine of Dundas was further
enhanced by the delineation of an Exploration Target of 20 to 60 million tonnes of 6 to 10% ilmenite (in-situ) at the Iterlak
Delta target, an area of similar size to the Moriusaq zone. Further work at Dundas, conducted by international mining
consultants SRK Exploration Services LTD (‘SRK’), has proved transformational as the Project now possesses a Total Mineral
Resource of 117Mt at 6.1% ilmenite in situ, in addition to a JORC Maiden offshore Exploration Target of between 300 million
tonnes and 570 million tonnes with an average grade range of 0.4-4.8 ilmenite in situ. SRK’s ongoing work at Iterlak East
and Iterlak West will continue to underpin the Project’s scale and quality.
As part of the mining exploitation licence application we completed the Environmental Impact Assessment (‘EIA’) and Social
Impact Assessment (‘SIA’). The EIA, submitted to The Ministry of Nature and Environment, Government of Greenland in April
2019, presented three years of extensive environmental surveys and baseline studies agreed between the Group,
stakeholders and the relevant Greenlandic authorities, represented by the Ministry of Mineral Resources & Labour, Ministry
of Nature and Environment and its advisors, the Greenland Institute of Natural Resources and the Danish Centre for
Environment & Energy at Aarhus University.
The EIA was prepared based upon the development scenario outlined in the optimised Pre-Feasibility Study (‘PFS’), which
anticipates annual production of 440,000 tonnes of ilmenite concentrate from the Project, and was prepared by Orbicon A/S,
one of the most experienced environmental service providers with respect to mining and permitting related studies for mining
operations in Greenland. The three year term for the EIA was agreed due to the limited existing understanding of the
biodiversity in this environment, and allows the authorities to understand the impact of exploitation of the ilmenite-bearing
sand within the licence area, as well as the broader region and forms a critical cornerstone in the application for an exploitation
permit.
Importantly, the findings highlighted that there were no major issues identified at Dundas, repeatedly drawing attention to the
feasibility of simple and low-impact mining and processing.
We have also completed and submitted the SIA to the Ministry of Industry, Energy & Research, Government of Greenland.
This represents the completion of another core module in the application for an exploitation permit for Dundas, and we were
delighted that the key findings were again highly positive.
The SIA constitutes three years of surveys and baseline studies and was built on the requirements determined in the Terms
of Reference for the SIA, approved following public consultation with the various Greenlandic Authorities and stakeholders.
It was prepared by international, multidisciplinary engineering consultancy company NIRAS Gruppen A/S (‘NIRAS’), one of
the most experienced SIA service providers with respect to mining and permitting related studies for operations in Greenland.
The SIA had a number of major positive findings. These included the creation of up to 175 direct employment positions, the
increasing of skills within the workforce and an elevation in the level of training among the workforce within the mining sector
in Greenland. It also anticipated a positive impact on local and national economy through the provision of goods and services
from local companies and through payment of royalties, corporate taxes and income taxes. This is extremely important as
Dundas is in an area of Greenland that currently has few job opportunities. We are therefore delighted to be able to contribute
to this region and Greenland as a whole.
The PFS for Dundas is currently at a final draft stage and will be published as soon as practicable. The delay in the publication
can be attributed to the significantly high level of detail that has been undertaken in producing this study. Looking ahead, this
extended and in-depth PFS will result in both significant time and cost efficiencies, as this mitigates some of the test work
3
BLUEJAY MINING PLC
CHAIRMAN’S REPORT
required by Bluejay when it advances into the definitive feasibility stage. This will occur once the licence application has been
lodged.
On a wider Project level, and as mentioned in the 2018 interim financial statements, we have also completed numerous work
programmes including key geotechnical and surveying requirements, hydrogeology installations around the licence area,
establishment of a year-round weather monitoring station, and geotechnical assessments for infrastructure locations.
Infrastructure at the site has also been enhanced, including installation of a 350kVA power generation facility, completion of
a 30-man camp to expand residential capacity, and an upgraded mining fleet.
As you can see, Dundas has maintained momentum towards production through our goal of finalising and submitting the
relevant exploitation licence to the Government of Greenland. The last remaining components are the mineral reserve, mine
plan and impact benefit agreement all of which we are working on.
Bluejay is not a one project company. Although the focus has been on Dundas, the Group is also advancing the 2,586 sq.
km Disko-Nuussuaq Magmatic Massive Sulphide ('MMS') nickel-copper-platinum project ('Ni-Cu-PGM') (‘Disko’). This has
shown its potential to host mineralisation similar to the world's largest nickel/copper sulphide mine Norilsk-Talnakh. Disko is
a working sulphide system with initial chemical assays in oxidised surface material returning 2.02% nickel, 0.8% copper and
0.2% cobalt. As a result of the prospectivity, Bluejay increased the licence size in May 2018 to 2,586km2, which is
approximately the same size as Luxembourg. We believe the scale and potential of this asset is globally significant, and
whilst Dundas has been our primary development focus, work is underway to refine drill targets to better determine Disko's
development potential. As we secure development partners for Dundas, we envisage significantly increased activity at Disko
whose potential value we don’t believe is yet recognised by the market.
Also in Greenland, the Group continues evaluating the prospectivity of the 107sq km Kangerluarsuk Sed-Ex lead-zinc-silver
project, where historical work has recovered grades of 41% zinc, 9.3% lead and 596 g/t silver and has identified four large-
scale drill ready targets. We are also maintaining our Finnish projects; the Outokumpu copper project, Hammaslahti copper-
zinc project and the Enonkoski nickel-copper PGE project. It is expected that the agreement with Rio Tinto will enable the
Group to direct more attention on to the development of these additional assets in its portfolio.
On a corporate level, during the period, there were a number of changes to the Board; we welcomed Garth Palmer as a Non-
Executive Director, who as Company Secretary already had a deep understanding of the business and Ian Henderson as a
Non-Executive Director. We also said goodbye to Non-Executive Director Greg Kuenzel who stepped down to pursue other
interests. Additionally, early in the period, we raised £17 million via the placing of 77,272,728 new ordinary shares in the
Company. The funds raised from existing and new shareholders strengthened our institutional base which now includes
Prudential M&G (12.12%) and Sand Grove Capital Management (9.91%).
Financial review
The loss before taxation of the Group for the year ended 31 December 2018 amounted to £10,776,686 (18 months to 31
December 2017: £2,680,708).
The Group’s cash position at 31 December 2018 was £8,843,709 (31 December 2017: £2,901,922).
Outlook
Dundas is a confirmed world class project – it is a high-grade, defined and scalable deposit with a low capex simple processing
route, in a strategic and supportive jurisdiction. Its potential has been noted internationally, most recently by RTIT. The
delivery of a large bulk-sample to RTIT’s Sorel-Tracy plant in Quebec is the initial operational focus within the agreement and
we are confident that ilmenite sourced from Dundas will be shown to be valuable material for RTIT’s operation.
The Project not only has the potential to provide significant value to the Company, its strategic partners and its shareholders,
but also to the local region and to Greenland as a whole. This potential has been recognised by the Greenlandic authorities
and Government who have consistently demonstrated their support for Bluejay and for this we are sincerely grateful. We
realise the importance of this project to Greenland, and as such we are delighted with the close cooperation we are receiving
from the relevant local authorities and national ministries to develop Dundas for the benefit of all stakeholders.
I am grateful for the support of shareholders and the Company will continue to provide updates regarding our operational
progress and ongoing negotiations as regularly as possible. I would like to reiterate our thanks to the local community, the
Greenlandic authorities and government, our dedicated team of staff, our advisors, our strategic partner and shareholders for
their continued patience and support. I look forward to what I believe will be a transformational 2019/2020.
4
BLUEJAY MINING PLC
CHAIRMAN’S REPORT
Michael Hutchinson
Chairman
3 June 2019
5
BLUEJAY MINING PLC
STRATEGIC REPORT
The Directors of the Company present their Strategic Report on the Group for the year ended 31 December 2018.
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 Greenland 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 four 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
Throughout the year, the Dundas ilmenite project continued to be the primary focus of the Group. The 2018 work program
resulted in a 5 million tonne resource upgrade and improved ilmenite grade at Mourisaq, with maiden resource areas for
Iterlak pending technical verification. Further work streams included installation of hydrogeology, establishment of a year-
round weather monitoring station and geotechnical assessments for infrastructure locations. Currently feasibility studies are
nearing completion with a view to submitting an exploitation licence to the Government of Greenland in 2019.
Alongside Dundas, the Group has a wider portfolio of prospective assets situated in the Finland and Disko area of
Greenland. At Disko, the Nickel, Copper, Cobalt & Platinum Project in West Greenland, work focused on refining drill targets.
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 while the Directors remain confident in the commercial potential of these projects, they have taken the
conservative approach to impair the carrying value of the exploration assets down to £3,983,108.
Financial performance review
The loss of the Group for the year ended 31 December 2018 before taxation amounts to £10,776,686 (31 December 2017:
£2,680,708). This includes a non-cash impairment adjustment of £8.9 million in relation to the Finnish exploration assets.
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 2019.
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
2018
2017
£8,843,709
£2,901,922
6.37%
9.5%
£6,251,969
£4,600,044
Cash has been used to fund the Group’s operations and facilitate its investment activities (refer to the Statements of Cash
Flows on page 25).
Administrative expenses are the expenses related to the Group’s ability to run the corporate functions to ensure they can
perform their operational commitments.
6
BLUEJAY MINING PLC
STRATEGIC REPORT
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, occupational 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.
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 3 June 2019.
Roderick McIllree
CEO
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BLUEJAY MINING PLC
DIRECTORS’ REPORT
The Directors present their Annual Report on the affairs of Bluejay Mining plc together with the Financial Statements for the
year ended 31 December 2018.
Dividends
The Directors do not recommend the payment of a dividend for the year (31 December 2017: £nil).
Directors & Directors’ interests
The Directors who served during the year ended 31 December 2018 are shown below and had, at that time the following
beneficial interests in the shares of the Company:
Roderick McIllree
Greg Kuenzel (1)
Peter Waugh
Michael Hutchinson
Garth Palmer (2)
Ian Henderson (3)
31 December 2018
31 December 2017
Ordinary
Shares
94,677,778
n/a
Options
-
n/a
Ordinary
Shares
94,577,778
Options
-
36,738,715
1,500,000
74,127
1,950,000
40,385
1,950,000
-
1,800,000
633,831
-
-
-
-
n/a
n/a
1,800,000
n/a
n/a
(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.
Greg resigned on 5 June 2018.
(2) Garth Palmer was appointed on 5 June 2018.
(3) Ian Henderson was appointed on 13 August 2018.
Further details on options can be found in Note 16 to the Financial Statements.
Substantial shareholders
The substantial shareholders with more than a 3% shareholding at 3 June 2019 are shown below:
Prudential plc
Roderick McIllree
Deutsche Bank
Sandgrove Capital Management LLP
Jeremy Whybrow
Gregory Kuenzel
Shaun Bunn
Corporate responsibility
3 June 2019
Holding
Percentage
103,635,316
94,677,778
85,187,497
84,748,052
38,530,019
36,738,715
27,241,915
12.12%
11.07%
9.96%
9.91%
4.51%
4.30%
3.19%
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.
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
8
BLUEJAY MINING PLC
DIRECTORS’ REPORT
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 11.
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.
Financial Risk Management Objectives
The Group has disclosed the financial risk management objectives within note 3 to these Financial Statements.
Events after the reporting period
Events after the reporting period are set out in Note 29 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 3 June 2019 and signed on its behalf.
Roderick McIllree
Director
9
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.
10
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
The Board of Bluejay Mining plc had adopted the QCA Corporate Governance Code (‘the Code’) as its code of corporate
goverance. The Code is published by the Quoted Companies Allicance (“QCA”) and is available at www.theqca.com. The key
governance related matter that occurred during the financial year ended 31 December 2018 was the formal adoption of the
QCA code.
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how
the Company applies each of the principles:
Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be delivered to its shareholders by the adoption
of a single strategy for the Company. The principal activity of the Group is the exploration and development of precious and
base metals and the aim is to create value for shareholders through the discovery and development of economic resource
deposits.
The Board implements this strategy by focusing investment into the exploration of world-class mineralised domains,
establishing a strict criteria for project selection, utilising industry recognised methods of exploration, developing a results-
driven exploration approach, actively monitoring operational and financial performance, measured against deliverable targets
and budgets and considering alternative commercial options for projects which no longer meet the established criteria of the
Group. This can be summarised as follows:
• Continued development of the Dundas ilmenite project in Greenland toward commercialisation. Key milestones
recently achieved include completion of environmental and social impact assessment studies. Continued work on
the pre-feasibility study. Resource upgrade and maiden offshore exploration target. Further detail is included in the
Chairman’s Report on pages 3-5.
• Exploration of Disko-Nuussuaq and Kangerluarsuk projects also in Greenland. Expanded licence holding and
identified drill targets.
• Maintenance of Finnish projects in order to determine the best way to continue their development and realise value
for shareholders.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The
Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company’s Annual General Meeting. Investors also have access to current information on the
Company though its website, www.bluejaymining.com, and via Kevin Shiel, Head of Investor Relations who is available to
answer investor relations enquiries.
Principle Three
Considering Wider Stakeholder and Social Responsibilities
The Board recognises that the long term success of the Company is reliant upon the efforts of the employees of the Company
and its contractors, suppliers, regulators and other stakeholders. The Board has put in place a range of processes and
systems to ensure that there is close oversight and contact with its key resources and relationships. For example, all
employees of the Company participate in a structured Company-wide annual assessment process which is designed to ensure
that there is an open and confidential dialogue with each person in the Company to help ensure successful two way
communication with agreement on goals, targets and aspirations of the employee and the Company. These feedback
processes help to ensure that the Company can respond to new issues and opportunities that arise to further the success of
employees and the Company. The Company has close ongoing relationships with a broad range of its stakeholders and
provides them with the opportunity to raise issues and provide feedback to the Company.
As part of the pre-feasibility studies currently underway at the Group’s Dundas Titanium project in Greenland, a detailed social
impact assessment study is being undertaken. This has involved completing a white paper, which included a public
stakeholder consultation process. The results of this public consultation and engagement process were overwhelmingly
positive and a high degree of support was received from the relevant stakeholders
Principle Four
Risk Management
In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that procedures
are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the
Company. The risk assessment matrix below sets out those risks, and identifies their ownership and the controls that are in
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BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
place. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them.
The Audit Committee reviews the risk matrix and the effectiveness of scenario testing on a regular basis. The following
principal risks and controls to mitigate them, have been identified:
Activity
Operation
Risk
Injury to staff
Regulatory adherence
Breach of rules
Strategic
Market downturn
Failure to deliver
commerciality
Impact
Control(s)
Injury to staff whilst
operating heavy
machinery in remote
location
Censure or withdrawal of
authorisation
Change in Macro
economic conditions
Creating a safe working
environment through
strict procedures and
regular training.
Strong compliance
regime instilled at all
levels of the Company
Ongoing monitoring of
economic events and
markets.
Inability to secure offtake
agreements
Active marketing and
experienced
management
Financial
Misappropriation of
Funds
Fraudulent activity and
loss of funds
Robust financial controls
and split of duties.
IT Security
Loss of critical financial
data
Regular back up of data
online and locally.
The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal
control. An internal audit function is not considered necessary or practical due to the size of the Company and the close day
to day control exercised by the executive Directors. However, the Board will continue to monitor the need for an internal audit
function. The Board works closely with and has regular ongoing dialogue with the outsourced finance function and has
established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.
Principle Five
A Well Functioning Board of Directors
As at the date hereof the Board comprised, the CEO Roderick McIllree, the Chairman Michael Hutchinson and three Non-
Executive Directors, Peter Waugh, Ian Henderson and Garth Palmer. Biographical details of the current Directors are set out
within Principle Six below. Executive and Non-Executive Directors are subject to re-election at intervals of no more than three
years. The letters of appointment of all Directors are available for inspection at the Company’s registered office during normal
business hours.
The Board meets at least four times per annum. It has established an Audit Committee, Remuneration Committee and AIM
Compliance Committee, particulars of which appear hereafter. The Board has agreed that appointments to the Board are
made by the Board as a whole and so has not created a Nominations Committee. The Non-Executive Directors are considered
to be part time but are expected to provide as much time to the Company as is required. The Board considers that this is
appropriate given the Company’s current stage of operations. It shall continue to monitor the need to match resources to its
operational performance and costs and the matter will be kept under review going forward. Michael Hutchinson, Peter Waugh
and Ian Henderson are considered to be Independent Directors.
The Company shall report annually on the number of Board and committee meetings held during the year and the attendance
record of individual Directors. In order to be efficient, the Directors meet formally and informally both in person and by
telephone. To date there have been at least quarterly meetings of the Board, and the volume and frequency of such meetings
is expected to continue at this rate.
Details of the Directors’ attendance at the Board meetings are set out below:
Roderick McIllree
Michael Hutchinson
Peter Waugh
Garth Palmer
Ian Henderson
Meetings eligible to
attend
4
4
4
3
2
Meetings Attended
4
4
4
3
2
12
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of five Directors and, in addition, the Company has employed the services of Garth Palmer to
act as the Company Secretary. The Company is satisfied that given its size and stage of development, between the Directors,
it has an effective and appropriate balance of skills and experience across technical, commercial and financial disciplines.
The Director’s experience and skills are listed on the companies website, www.bluejaymining.com,
The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal
or informal.
Roderick McIllree
Chief Executive Officer
Micheal Hutchinson
Chairman and Non-Executive Director
Member of the Audit Committee, Remuneration Committee and AIM Compliance Committee.
Peter Waugh
Independent Non-Executive Director
Chairman of the Remuneration Committee and member of the AIM Compliance Committee.
Ian Henderson
Independent Non-Executive Director
Chairman of the Audit Committee and member of the Remuneration Committee.
Garth Palmer
Non-Executive Director
Chairman of the AIM Compliance Committee and member of the Audit Committee.
Where necessary the Board has engaged external professional consultants on an ongoing basis to ensure the Company is
meeting it’s strategies. The key advisers to the Company are SP Angel Corporate Finance LLP, H&P Advisory Ltd, St Brides
Partners Ltd and Hill Dickinson.
The Board engages external geologists, environmental speciailists and a number of other specialised consultants to produce
the required surverys and reports for the Environmental Impact Assessment, Social Impact Assessment and Pre-Feasibility
Study. The key advisers to the Group were SRK Exploration, Orbicon A/S, KeypointE Pty Ltd, Quedtech Pty Ltd, Wood
Canada Ltd and Titanium Industry Global Advisory.
The Board have ensured that the all external advisers are knowledgable and provide the required skillset.
Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, the Committees and individual Directors is to be undertaken on an annual basis and on a
three-yearly cycle the evaluations may be facilitated by an independent evaluator. Whilst the Board has not yet had any
internal reviews, they are scheduled to take place in Q3 2019. The internal reviews will be in the form of peer appraisal and
discussions to determine the effectiveness and performance of the various governance components, as well as the Directors’
continued independence.
The results and recommendations that come out of the appraisals for the Directors shall identify the key corporate and
financial targets that are relevant to each Director and their personal targets in terms of career development and training.
Progress against previous targets shall also be assessed where relevant.
Principle Eight
Corporate Culture
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Company as a
whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the
Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The corporate
governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term value to
its shareholders and that shareholders have the opportunity to express their views and expectations for the Company in a
manner that encourages open dialogue with the Board. The Board recognises that their decisions regarding strategy and risk
will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The
Board is acutely aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole
13
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
and the way that employees behave. A large part of the Company’s activities are centred upon what needs to be an open and
respectful dialogue with employees, clients and other stakeholders.
Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully
achieve its corporate objectives. The Board places great import on this aspect of corporate life and seeks to ensure that this
flows through all that the Company does. The Directors consider that at present the Company has an open culture facilitating
comprehensive dialogue and feedback and enabling positive and constructive challenge. The Company has adopted, with
effect from the date on which its shares were admitted to AIM, a code for Directors’ and employees’ dealings in securities
which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the
Market Abuse Regulation which came into effect in 2016.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the
Chairman and Chief Executive Officer arising as a consequence of delegation by the Board. The Board has adopted
appropriate delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible for
the effectiveness of the Board, while management of the Company’s business and primary contact with shareholders has
been delegated by the Board to the Chief Executive Officer.
Audit Committee
The Audit Committee comprises Peter Waugh and Garth Palmer, and Ian Henderson chairs this committee. This committee
has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the
Company is properly measured and reported. It receives reports from the executive management and auditors relating to the
interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit and
Committee shall meet not less than twice in each financial year and it has unrestricted access to the Company’s auditors.
Remuneration Committee
The Remuneration Committee comprises Michael Hutchinson and Ian Henderson, and Peter Waugh chairs this committee.
The Remuneration Committee reviews the performance of the executive Directors and employees and makes
recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration
Committee also considers and approves the granting of share options pursuant to the share option plan and the award of
shares in lieu of bonuses pursuant to the Company’s Remuneration Policy.
AIM Compliance Committee
The AIM Compliance Committee comprises Michael Hutchinson and Peter Waugh, and Garth Palmer chairs this committee.
The AIM Compliance Committee is responsible for the coordinating and monitoring the Company’s regulatory responsibilities
including liaising with the Nomad and the London Stock Exchange as necessary. The purpose of the AIM compliance
committee is to designate responsibility of ensuring best practice and application of the defined corporate governance
procedures.
Nominations Committee
The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a
Nominations Committee.
Non-Executive Directors
The Board has adopted guidelines for the appointment of Non-Executive Directors which have been in place and which have
been observed throughout the year. These provide for the orderly and constructive succession and rotation of the Chairman
and non-executive Directors insofar as both the Chairman and non-executive Directors will be appointed for an initial term of
three years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for
subsequent terms. The Chairman may serve as a Non-Executive Director before commencing a first term as Chairman.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the
success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence;
a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a
proposed transaction or arrangement.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The
Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company’s Annual General Meeting.
Investors also have access to current information on the Company though its website, www.bluejaymining.com, and via Kevin
Shiel, Head of Investor Relations who is available to answer investor relations enquiries.
14
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
The Company shall include, when relevant, in its annual report, any matters of note arising from the Audit or Remuneration
committees.
Garth Palmer
Non-Executive Director
3 June 2019
15
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 year ended 31 December 2018 which comprise the Statements of Financial Position, the Consolidated Income Statement,
the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Company
Statement of Changes in Equity, the 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 2018 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.
Our application of materiality
2018
2017
Basis for materiality
Group
£550k
£400k
2% of gross assets
Parent
Company
£40k
£60k
2% of expenses
Our calculation of materiality increased from 2017 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 Group Financial Statements as a whole was £550k, each significant component of the Group was
audited to a level of materiality ranging between £40k - £550k. We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of misstatements. 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 £27.5k (2017: £20k). 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
16
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
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 10 components of the group, a full scope audit was performed on the complete financial information of 4 components,
a limited scope review was performed on 3 components assessed as material and the remaining components were subject
to analytical review only because they were not material to the Group.
Of the 10 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 (refer Note 7)
How the scope of our audit responded to the key audit
matter
The Group holds exploration and evaluation assets
of £15,478,246 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:
The carrying value and recoverability of these assets
are tested annually for impairment. The estimated
recoverable amount of this balance is subjective due
the
to
assessment of exploration projects.
inherent uncertainty
involved
the
in
Management have recognised an impairment in
relation to the projects in Finland during the year.
There is a risk that the exploration and evaluation
assets require further impairment.
• 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 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.
investments
Net
intercompany receivables (refer note 9)
in subsidiaries,
including
in
How the scope of our audit responded to the key audit
matter
The Parent Company’s net
subsidiaries is £20,918,061.
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
in
The carrying value of the net
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
17
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
• Discussing with management the basis for
impairment or non-impairment of investment in
subsidiaries and loans receivable from subsidiaries.
In forming our opinion on the Financial Statements, which is not
modified, we draw to the users attention the disclosure within
note 9 and within the Critical Accounting Estimates and
Judgements which states that the loan due from FinnAust
Mining Finland Oy has a carrying value of £6,398,621. This
exceeds the recoverable amount of the Group’s associated
intangible asset by £2,415,513 which indicates the existence of
a material uncertainty. The Financial Statements do not include
the adjustments that would result if the Company was unable to
fully recover the carrying value of the loan due from FinnAust
Mining Finland Oy.
How the scope of our audit responded to the key audit
matter
We have obtained director’s assessment of the outcome of the
tribunal and therefore the likely recovery of the VAT receivable.
Our work included;
• Consideration of the adequacy of the disclosure made
in note 26 to the Financial Statements and within the
Critical Accounting Estimates and Judgements
concerning the ongoing dispute with HMRC regarding
the recovery of input VAT;
• We have obtained and reviewed correspondence and
documentation relating to the case for consistency with
director’s assessment;
• We have considered the opinions of key external
advisers as to the likely outcome of the case; and
• We have reviewed the the calculation of the receivable
as at 31 December 2018 for accuracy.
In forming our opinion on the Financial Statements, which is not
modified, we draw to the users attention that the dispute will be
heard at tribunal, the outcome of which is uncertain and this
along with the other matters explained in note 25 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.
HMRC enquiry (note 26)
There is an ongoing enquiry with HMRC which will be
heard at tribunal. The total value of the amount in
dispute at 31 December 2018 is considered to be £719k,
which can be broken into two parts:
1) £255k of input VAT reclaimed during 2012-
2015 which HMRC has already repaid and is
pursuing the Company; and
2) £464k of input VAT on returns submitted 2015
– 2018 which HMRC has withheld payment,
although the Company has recorded as a
receivable.
There is an inherent uncertainty as to the outcome
of the tribunal and therefore a risk of material
misstatement.
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:
18
BLUEJAY MINING PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BLUEJAY MINING PLC
•
•
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.
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
3 June 2019
1 Westferry Circus
Canary Wharf
London E14 4HD
19
BLUEJAY MINING PLC
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2018
Non-Current Assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Current Assets
Financial assets at fair value through profit or loss
Trade and other receivables
Cash and cash equivalents
Company number: 05389216
Group
Company
31 December
2018
31 December
2017
31 December
2018
31 December
2017
Note
£
£
£
£
6
7
9
8
10
11
2,846,091
15,478,246
-
631,054
17,971,795
-
44,277
-
20,918,061
8,333
-
19,717,873
18,324,337
18,602,849
20,962,338
19,726,206
330,402
768,960
8,843,709
-
642,870
2,901,922
330,402
840,620
8,777,619
-
620,891
2,820,884
9,943,071
3,544,792
9,948,641
3,441,775
Total Assets
28,267,408
22,147,641
30,910,979
23,167,981
Non-Current Liabilities
Deferred Tax Liabilities
Current Liabilities
13
496,045
496,045
496,045
496,045
-
-
-
-
Trade and other payables
12
783,836
564,471
469,554
358,306
Total Liabilities
1,279,881
1,060,516
469,554
358,306
783,836
564,471
469,554
358,306
Net Assets
26,987,527
21,087,125
30,441,425
22,809,675
Equity attributable to owners of the Parent
Share capital
Share premium
Other reserves
Retained losses
Total Equity
15
15
17
7,800,237
43,739,139
(6,799,892)
(17,751,957)
7,792,372
27,220,576
(6,949,904)
(6,975,919)
7,800,237
43,739,139
311,397
(21,409,348)
7,792,372
27,220,576
312,045
(12,515,318)
26,987,527
21,087,125
30,441,425
22,809,675
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 year ended 31
December 2018 was £8,894,678 (period ended 31 December 2017: £1,999,470).
The Financial Statements were approved and authorised for issue by the Board of Directors on 3 June 2019 and were signed
on its behalf by:
Garth Palmer
Director
The Notes on pages 26 to 51 form part of these Financial Statements.
20
BLUEJAY MINING PLC
CONSOLIDATED INCOME STATEMENT
For the year ended 28 February 2013
Continued operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Other gains/(losses)
Foreign exchange
Operating Loss
Impairments
Finance income
Other income
Loss before Income Tax
Income tax expense
Year ended
31 December
2018
18 month period
ended 31
December
2017
Note
24
21
7
20
0
£
-
-
-
(1,800,851)
(93,111)
(23,757)
(1,917,719)
(8,873,585)
12,209
2,409
(10,776,686)
-
£
-
-
-
(2,111,312)
-
70,953
(2,040,359)
(643,168)
1,717
1,102
(2,680,708)
-
Loss for the Period attributable to owners of the Parent
(10,776,686)
(2,680,708)
Basic and Diluted Earnings Per Share attributable to owners of the parent
during the period (expressed in pence per share)
23
(1.279)p
(0.408)p
The Notes on pages 26 to 51 form part of these Financial Statements.
21
BLUEJAY MINING PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
Loss for the year/period
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Currency translation differences
Other comprehensive income for the year/period, net of tax
Total Comprehensive Income attributable to owners of the Parent
Year ended 31
December 2018
£
18 month
period ended
31 December
2017
£
(10,776,686)
(2,680,708)
150,660
694,161
(10,626,026)
(1,986,547)
(10,626,026)
(1,986,547)
The Notes on pages 26 to 51 form part of these Financial Statements.
22
BLUEJAY MINING PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
Share
capital
£
Share
premium
£
Other
reserves
£
Retained
losses
£
Note
Non-
controlling
interest
Total equity
£
£
Total
£
Balance as at 1 July 2016
7,763,676
16,183,675
(7,600,301)
(4,458,414)
11,888,636
590,561
12,479,197
-
(2,680,708)
(2,680,708)
-
(2,680,708)
-
-
-
-
-
-
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
694,161
-
694,161
694,161
(2,680,708)
(1,986,547)
15
15
16
16
16
28,596
11,645,757
-
100
(678,756)
69,900
-
-
-
-
-
-
-
-
-
119,439
(163,203)
-
-
-
-
-
11,674,353
(678,756)
70,000
119,439
163,203
-
-
-
-
-
-
-
-
-
-
694,161
(1,986,547)
11,674,353
(678,756)
70,000
119,439
-
(590,561)
(590,561)
28,696
11,036,901
(43,764)
163,203
11,185,036
(590,561)
10,594,475
-
-
-
-
-
-
-
-
-
-
-
21,087,125
21,087,125
(10,776,686)
150,660
(10,626,026)
17,099,999
(641,071)
67,500
-
16,526,428
26,987,527
Balance as at 31 December 2017
7,792,372
27,220,576
(6,949,904)
(6,975,919)
21,087,125
Balance as at 1 January 2018
7,792,372
27,220,576
(6,949,904)
(6,975,919)
21,087,125
Loss for the year
Other comprehensive income for
the year
Items that may be subsequently
reclassified to profit or loss
Currency translation differences
Total comprehensive income for
the year
Proceeds from share issues
Issue costs
Share based payments
Exercised options
15
15
16
16
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
7,828
17,092,171
(641,071)
67,463
-
37
-
-
(10,776,686)
(10,776,686)
150,660
-
150,660
150,660
(10,776,686)
(10,626,026)
-
-
-
-
-
-
17,099,999
(641,071)
67,500
-
-
(648)
648
7,865
16,518,563
(648)
648
16,526,428
Balance as at 31 December 2018
7,800,237
43,739,139
(6,799,892)
(17,751,957)
26,987,527
The Notes on pages 26 to 51 form part of these Financial Statements.
23
BLUEJAY MINING PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
Balance as at 1 July 2016
Loss for the period
Total comprehensive income for the period
Proceeds from share issues
Issue costs
Share based payments
Issued options
Exercised options
15
15
16
16
16
Share capital
Note
£
Share
premium
£
Other reserves
Retained losses
Total equity
£
£
£
7,763,676
16,183,675
355,809
(10,679,051)
13,624,109
-
-
-
-
28,596
11,645,757
(678,756)
69,900
-
100
-
-
-
-
-
-
-
(1,999,470)
(1,999,470)
(1,999,470)
(1,999,470)
-
-
-
-
163,203
11,674,353
(678,756)
70,000
119,439
-
-
-
119,439
(163,203)
Total transactions with owners, recognised
directly in equity
28,696
11,036,901
(43,764)
163,203
11,185,036
Balance as at 31 December 2017
7,792,372
27,220,576
312,045
(12,515,318)
22,809,675
Balance as at 1 January 2018
7,792,372
27,220,576
312,045
(12,515,318)
22,809,675
Loss for the year
Total comprehensive income for the year
Proceeds from share issues
Issue costs
Share based payments
Exercised options
15
15
16
16
Total transactions with owners, recognised
directly in equity
-
-
-
-
7,828
17,092,171
-
37
-
(641,071)
67,463
-
7,865
16,518,563
-
-
-
-
-
(648)
(648)
(8,894,678)
(8,894,678)
(8,894,678)
(8,894,678)
-
-
-
648
17,099,999
(641,071)
67,500
-
648
16,526,428
Balance as at 31 December 2018
7,800,237
43,739,139
311,397
(21,409,348)
30,441,425
The Notes on pages 26 to 51 form part of these Financial Statements.
24
BLUEJAY MINING PLC
STATEMENTS OF CASH FLOWS
For the year ended 31 December 2018
Cash flows from operating activities
Loss before income tax
Adjustments for:
Loss on financial assets at FVTPL
Depreciation
Share options expense
Share based payments
Intercompany management fees
Impairment on Assets
Foreign exchange
Changes in working capital:
(Increase)/Decrease in trade and other receivables
Increase/(Decrease) in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Purchase of property plant and equipment
Purchase of software
Loans granted to subsidiary undertakings
Loans granted to third parties
Purchase of quoted shares measured at fair value
through the profit or loss
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
Group
Company
Year ended
18 month
period ended
31 December
2018
31 December
2017
Year ended
31 December
2018
18 month
period ended
31 December
2017
Note
£
£
£
£
(10,776,686)
(2,680,708)
(8,894,678)
(1,999,470)
8
6
15
15
7
10
12
6
6
8
7
15
15
96,573
250,590
-
45,000
-
8,873,585
(32,914)
-
46,868
119,439
70,000
96,573
12,745
-
45,000
-
9,504
119,439
70,000
-
(620,482)
(280,628)
643,168
(70,953)
(126,090)
(145,345)
241,867
127,963
8,010,452
(208,838)
321,918
(42,224)
646,319
(15,915)
(82,277)
4,142
(1,428,075)
(1,889,568)
(1,279,534)
(1,528,886)
(2,452,284)
(653,568)
(15,806)
(7,352)
(32,883)
(15,806)
(5,909)
(7,352)
-
-
-
(8,746,995)
(5,631,501)
(54,000)
-
(54,000)
(426,975)
-
(426,975)
(6,251,969)
(4,600,044)
-
-
-
(9,147,034)
(5,314,964)
(9,222,659)
(5,698,762)
17,099,999
10,355,803
17,099,999
10,355,803
(641,071)
(678,756)
(641,071)
(678,756)
Net cash generated from financing activities
16,458,928
9,677,047
16,458,928
9,677,047
Net decrease/(increase) in cash and cash equivalents
5,883,819
2,472,515
5,956,735
2,449,399
Cash and cash equivalents at beginning of
year/period
2,901,922
425,046
2,820,884
371,485
Exchange gain on cash and cash equivalents
57,968
4,361
-
-
Cash and cash equivalents at end of year/period
11
8,843,709
2,901,922
8,777,619
2,820,884
The Notes on pages 26 to 51 form part of these Financial Statements.
25
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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 open market of 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.
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 January 2018
As of 1 January 2018, the Company adopted IFRS 9, Financial Instruments (‘IFRS 9’), which replaced IAS 39, Financial
Instruments: Recognition and Measurement. IFRS 9 addresses the classification, measurement and recognition of financial
assets and liabilities.
The Company reviewed the financial assets and liabilities reported on its Statement of Financial Position and completed an
assessment between IAS 39 and IFRS 9 to identify any accounting changes. The financial assets subject to this review were
trade and other receivables and financial assets held at fair value through profit or loss. The financial liabilities subject to this
review were the trade and other payables. Based on this assessment of the classification and measurement model, there
were no changes to classification and measurement other than changes in terminology.
Of the other IFRSs and IFRICs, none have had a material effect on future Company Financial Information
(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 16
IFRS 9 (Amendments)
IAS 28 (Amendments)
2015-2017 Cycle
IFRS 3 (Amendments)
Impact on initial application
Leases
Prepayment features with negative
compensation
Long term interests in associates and joint ventures 1 January 2019
1 January 2019
Annual improvements to IFRS Standards
*1 January 2020
Business combinations
Effective date
1 January 2019
1 January 2019
*subject to EU endorsement
Of the other IFRSs and IFRICs, none are expected to have a material effect on future Company financial statements.
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.
26
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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
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
27
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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, as such at the year-end all intangibles held have an
indefinite life, 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:
Office Equipment – 5 years
Machinery and Equipment – 5 to 15 years
Software – 2 years
28
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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. If an impairment review is conducted following an indicator of impairment, assets
which are not able to be assessed for impairment individually are assessed in combination with other assets within a cash
generating unit.
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 at amortised cost and at fair value through the profit or loss. The classification depends
on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets
at initial recognition.
(b) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised on the trade date at cost – 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.
Fair value through the profit or loss
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.The
Group holds equity instruments that are classified as FVTPL as these were acquired principally for the purpose of selling in
the near term.
Financial assets at FTVPL, are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs
used in determining fair value measurements are categorised into different levels based on how observable the inputs used
in the valuation technique utilised are (the ‘fair value hierarchy’):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect
on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures its investments in quoted shares using the quoted market price.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and
all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash
29
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual
terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies
the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit
risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases,
the Group may also consider a financial asset to be in default when internal or external information indicates that the Group
is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by
the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows
and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Derecognition
(d)
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial
asset measured at FVTPL.
2.12.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs. The Group’s financial liabilities include trade and other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial
instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by
IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective
hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other
comprehensive income.
Trade and other payables
After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are
derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other
comprehensive income.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
30
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit
or loss and other comprehensive income.
Liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit and loss or other liabilities,
as appropriate.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised
cost.
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
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;
“Reverse acquisition reserve” represents a non-distributable reserve arising on the acquisition of
Finland Investments Limited;
“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
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.
31
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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
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.
32
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
(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 exposure to equity securities price risk, as it holds listed equity investments.
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 2018 the Group had borrowings of £nil (31 December 2017: £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
expenses: 2018
impact on euro
Loss before tax for the year ended
31 December 2018
Group
Company
Equity before tax for the period
ended
31 December 2017
Group
Company
Increase/(decrease)
exchange rate
in
foreign
£
£
£
£
10%
-10%
(11,659,970)
(9,893,402)
(8,894,679)
(8,894,679)
28,323,990
25,651,064
30,441,425
30,441,425
Potential
expenses: 2018
impact on DKK
Loss before tax for the year ended
31 December 2018
Equity before tax for the period ended
31 December 2017
Group
Company
Group
Company
Increase/(decrease)
exchange rate
in
foreign
£
£
£
£
10%
-10%
(10,840,250)
(10,713,122)
(8,894,679)
(8,894,679)
27,018,281
26,956,773
30,441,425
30,441,425
33
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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 2018 of £15,478,246 (2017: £17,971,795). 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
project in Finland be impaired to it’s recoverable amount of £3,983,108. The recoverable amount is the Director’s assessment
of the value of the work performed on the active projects since 2014. Therefore the recoverable amount and the corresponding
impairment charge is considered to be a critical accounting estimate.
There was no impairment recognised in respect of the Dundas project in Greenland.
Recoverability of the loan due from FinnAust Mining Finland Oy
The Directors have assessed that there is an impairment to the carrying value of the Intangible assets in respect of the projects
in Finland and accordingly have also impaired the carrying value of the investment and receivable from Finland Investments
Limited in the Company financial statements. The Directors have not impaired a receivable due from FinnAust Mining Finland
Oy with a carrying value of £6,398,621. The recoverability of this receivable is dependent on the success of the underlying
project in Finland, which the Directors have assessed to have a recoverable amount of £3,983,108. Therefore, the carrying
value of the receivable from FinnAust Mining Finland Oy exceeds the recoverable amount of the projects in Finland by
£2,415,513. The Directors consider that the receivable due from FinnAust Mining Finland Oy will be recovered in full by
enterting into a joint arrangement with a preferred partner, however the Group has not finalised such an arrangements and
therefore the recoverability of the receivable in the Company financial statements is considered to be a critical accounting
estimate.
VAT receivable
At 31 December 2018, the Group and Company have recognised an amount of £463,704 (2017: £287,731) within trade and
other receivables which relates to VAT receivable. The amount is subject to an on-going enquiry with HMRC, further details
of which can be found in Note 26. 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.
Useful economic lives of property, plant and equipment
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic
lives and residual values of the assets, taking into account that the assets are not used throughout the whole year due to the
seasonality of the licence locations. The useful economic lives and residual values are re-assessed annually. They are
amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets.
See note 6 for the carrying amount of the property plant and equipment and note 2.9 for the useful economic lives for each
class of assets.
34
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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. No share options or warrants were issued in the current year.
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 16.
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.
Finland
£
-
(92,937)
(63,818)
-
2,409
8,873,586
8,707,376
23,548
1,102,983
4,081,746
Finland
£
-
(97,633)
(8)
15
-
UK
£
-
(1,207,987)
195,172
12,209
-
-
Total
£
-
(1,800,851)
(23,757)
12,209
2,409
(8,873,586)
1,590,602
10,776,686
48,690
-
12,225,145
2,468,090
6,251,969
28,267,408
UK
£
-
(2,041,525)
69,170
1,702
-
Total
£
-
(2,111,312)
70,953
1,717
1,102
-
(643,168)
(643,168)
(97,626)
-
2,000,553
11,867,293
(2,613,821)
13,260
-
3,298,253
(2,680,708)
660,920
5,987,283
22,147,641
2018
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
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
Greenland
£
-
(499,927)
(155,111)
-
-
-
478,708
2,395,852
5,148,986
11,960,517
Greenland
£
-
27,846
1,791
-
1,102
-
30,739
647,660
3,986,730
6,982,095
35
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
6. Property, plant and equipment
Group
Cost
As at 1 July 2016
Exchange Differences
Additions
As at 31 December 2017
As at 1 January 2018
Exchange Differences
Additions
As at 31 December 2018
Depreciation
As at 1 July 2016
Charge for the period
Exchange differences
As at 31 December 2017
As at 1 January 2018
Charge for the year
Exchange differences
As at 31 December 2018
Machinery
&
equipment
Office
equipment
£
£
Software
£
Total
£
5,312
-
7,352
21,750
1,602
647,659
5,431
-
5,909
32,493
1,602
660,920
12,664
671,011
11,340
695,015
12,664
-
15,806
671,011
6,204
2,414,335
11,340
-
37,949
695,015
6,204
2,468,090
28,470
3,091,550
49,289
3,169,309
734
7,379
-
8,113
8,113
6,363
-
10,438
36,371
1,483
48,292
48,292
235,935
8,667
4,438
3,118
-
7,556
7,556
8,292
-
15,610
46,868
1,483
63,961
63,961
250,590
8,667
14,476
292,894
15,848
323,218
Net book value as at 31 December 2017
4,551
622,719
3,784
631,054
Net book value as at 31 December 2018
13,994
2,798,656
33,441
2,846,091
Depreciation expense of £250,590 (31 December 2017: £46,868) for the Group has been charged in administration expenses.
36
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
Company
Cost
As at 1 July 2016
Additions
As at 31 December 2017
As at 1 January 2018
Additions
As at 31 December 2018
Depreciation
As at 1 July 2016
Charge for the period
As at 31 December 2017
As at 1 January 2018
Charge for the year
As at 31 December 2018
Net book value as at 31 December 2017
Net book value as at 31 December 2018
Software
Office
equipment
£
£
5,312
7,352
12,664
12,664
15,806
3,124
5,909
9,033
9,033
32,883
Total
£
8,436
13,261
21,697
21,697
48,689
28,470
41,916
70,386
734
7,379
8,113
8,113
6,363
3,124
2,127
5,251
5,251
6,382
3,858
9,506
13,364
13,364
12,745
14,476
11,633
26,109
4,551
3,782
8,333
13,994
30,283
44,277
Depreciation expense of £12,745 (31 December 2017: £9,505) for the Company has been charged in administration
expenses.
7.
Intangible assets
Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated.
These are measured at cost and have an indefinite asset life. Once the pre-production phase has been entered into, the
exploration and evaluation assets will cease to be capitalised and commence amortisation.
Exploration & Evaluation Assets - Cost and Net Book Value
As at 1 January
Additions
Acquired through acquisition (at fair value)
Exchange differences
Impairments
As at year end
Group
31 December
31 December
2018
£
17,971,795
6,251,969
-
128,067
(8,873,585)
15,478,246
2017
£
12,627,680
4,600,044
622,702
764,537
(643,168)
17,971,795
The Dundas project in Greenland has a current JORC compliant mineral resource of 117 million tonnes at 6.1% ilmenite (in-
situ) and has been confirmed as the highest-grade mineral sand ilmenite project globally. Exploration projects in Finland and
the Disko project in Greenland are at an early stage of development and there are no JORC (Joint Ore Reserves Committee)
or non-JORC compliant resource estimates 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;
37
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
• 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 an impairment charge of £8,873,585 was prudent in relation to the
Finnish exploration assets for the year ended 31 December 2018. The impairment charge was recognised as the amount
being the difference between the fair value of the intangibles and the carrying amount. Management based the recoverable
amount using a mix of level 2 and level 3 inputs as per the fair value hierarchy table. Similar observable direct or indirect
inputs where viewed and factored into the fair value assessment, as well as non-derived market data that were based on
management’s expertise and knowledge of the industry.
8. Financial assets measured at fair value
As at 1 January
Acquisition of quoted shares
Fair value loss
As at year end
Group
Company
31 December
2018
31 December
2017
31 December
2018
31 December
2017
£
-
426,975
(96,573)
330,402
£
-
-
-
-
£
-
426,975
(96,573)
330,402
£
-
-
-
-
These investments are held for short-term trading purposes. At the reporting date, the shares were revalued and a loss of
£96,573 was recognised in the profit or loss.
The assets are measured in accordance with Level 1 of the fair value hierarchy by using the quoted market price. There have
been no transfers between fair value levels during the year.
9.
Investments in subsidiary undertakings
Shares in Group Undertakings
At beginning of period
Additions
Impairment charge
At end of period
Loans to Group undertakings
Total
Company
31 December
2018
31 December
2017
£
£
9,700,002
-
(7,700,000)
8,605,609
1,094,393
-
2,000,002
9,700,002
18,918,059
10,017,871
20,918,061
19,717,873
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment
provision.
Following the Directors intangible asset impairment assessment the Directors concluded that the impairment of the investment
in and loan to Finland Investments Limited with a carrying value of £8,010,452 be impaired in full. The Directors continue to
recognise the loan due from FinnAust Mining Finland Oy with a carrying value of £6,398,621 as they believe that the amount
will be fully recovered through the Group’s involvement in the future activities of the exploration projects in Finland.
38
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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.
10. Trade and other receivables
Current
Trade receivables
Amounts owed by Group undertakings
Amounts owed by Directors
Prepayments
VAT receivable (See note 25)
Other receivables
Total
Group
Company
31 December
2018
31 December
2017
31 December
2018
31 December
2017
£
£
£
£
30,237
30,614
30,236
30,614
-
-
72,989
517,178
148,556
-
191,346
163,519
41,623
55,587
346,274
168,772
-
62,685
463,704
92,649
41,623
43,404
287,731
54,000
768,960
642,870
840,620
620,891
The fair value of all receivables is the same as their carrying values stated above.
At 31 December 2018 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.
39
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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
Company
31 December
31 December
31 December
2018
£
618,352
70,756
79,852
2017
£
463,315
82,615
96,940
2018
£
809,699
-
30,921
31
December
2017
£
620,891
-
-
768,960
642,870
840,620
620,891
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.
11. Cash and cash equivalents
Group
Company
31 December
31 December
31 December
31 December
2018
£
2017
£
2018
£
2017
£
Cash at bank and in hand
8,843,709
2,901,922
8,777,619
2,820,884
All of the UK entities cash at bank is held with institutions with an AA- credit rating. The Finland and 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
12. Trade and other payables
Trade payables
Other creditors
Accrued expenses
Group
Company
31 December
31 December
31 December
31 December
2018
£
2017
£
2018
£
2017
£
8,781,031
4,762
57,916
2,820,998
68,491
12,433
8,777,619
-
-
2,820,884
-
-
8,843,709
2,901,922
8,777,619
2,820,884
Group
Company
31 December
31 December
31 December
31 December
2018
£
514,490
125,671
143,675
2017
£
424,372
76,422
63,677
2018
£
326,225
13,861
129,468
2017
£
297,504
8,657
52,145
783,836
564,471
469,554
358,306
Trade payables include amounts due of £395,950 in relation to exploration and evaluation activities.
40
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
13. Deferred tax
An analysis of deferred tax liabilities is set out below.
Group
2018
£
Company
2017
£
2018
£
2017
£
Deferred tax liabilities
- Deferred tax liability after more than 12 months
496,045
496,045
Deferred tax liabilities
496,045
496,045
-
-
-
-
The Group has additional capital losses of approximately £8,873,586 (2017: £643,168) and other losses of approximately
£5,971,780 (2017: £5,067,761) 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.
14. Financial Instruments by Category
Group
31 December 2018
31 December 2017
Assets per Statement of Financial Performance
other
receivables
and
Trade
prepayments)
Financial assets at fair value through profit or loss
Cash and cash equivalents
(excluding
Liabilities per Statement of Financial
Performance
Trade and other payables (excluding non-financial
liabilities)
Company
Amortised
cost
£
695,971
-
8,843,709
9,539,680
FVTPL
£
-
330,402
-
330,402
Total
£
Amortised
cost
£
FVTPL
£
Total
£
695,971
330,402
587,283
-
8,843,709 2,901,922
9,870,082 3,489,205
587,283
-
-
-
- 2,901,922
- 3,489,205
31 December 2018
31 December 2017
Amortised
cost
Total
Amortised
cost
Total
£
£
£
£
783,836
783,836
783,836
783,836
564,471
564,471
564,471
564,471
31 December 2018
31 December 2017
Amortised cost
FVTPL
Total Amortised cost
FVTPL
Total
Assets per Statement of Financial Performance
£
(excluding
receivables
Trade and other
prepayments)
Financial assets at fair value through profit or
loss
Cash and cash equivalents
777,935
£
-
£
£
777,935
577,487
-
330,402
330,402
-
8,777,619
9,555,554
- 8,777,619
330,402 9,885,956
2,820,884
3,398,371
41
£
-
-
£
577,487
-
- 2,820,884
- 3,398,371
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
31 December 2018
31 December 2017
At amortised
cost
Total
At amortised
cost
Total
£
£
£
£
469,554 469,554
469,554 469,554
358,306
358,306
358,306
358,306
Liabilities per Statement of Financial
Performance
Trade and other payables (excluding non-
financial liabilities)
15. Share capital and premium
Group and Company
Number of shares
Share capital
Ordinary shares
Deferred shares
Deferred A shares
Total
31 December
2018
31 December
2017
31 December
2018
31 December
2017
850,007,782
771,357,866
85,001
77,136
588,104,193
588,104,193
588,104
588,104
71,271,328,120
71,271,328,120
7,127,132
7,127,132
72,709,440,095
72,630,790,179
7,800,237
7,792,372
Issued and fully paid at 0.01 pence per share
Number of
Ordinary shares
At 1 July 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
Issue of new shares – 13 March 2017 (5)
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
Issue of new shares – 9 June 2017 (6)
Exercise of Options – 28 July 2017
Exercise of Options – 31 October 2017
Exercise of Warrants – 1 November 2017
Exercise of Warrants – 18 December 2017
As at 31 December 2017
As at 1 January 2018
Issue of new shares – 11 January 2018
Issue of new shares – 1 February 2018 (7)
Issue of new shares – 23 May 2018
Exercise of Options – 1 October 2018
Issue of new shares – 19 October 2018
484,400,804
10,000,000
117,184,457
7,584,238
1,000,000
2,000,000
108,071,388
1,333,333
1,625,000
2,766,667
250,000
1,500,000
29,166,667
1,550,000
1,284,366
1,000,000
640,946
771,357,866
771,357,866
143,495
77,272,728
97,835
1,000,000
135,858
Share capital
Share premium
£
Total
£
£
48,440
1,000
11,719
758
100
200
10,807
133
163
277
25
150
2,917
155
128
100
64
77,136
77,136
14
7,728
10
100
13
16,183,675 16,232,115
479,100
5,228,092
499,242
19,900
144,800
583,586
99,867
52,338
228,472
18,725
112,350
3,172,574
154,845
128,308
69,900
44,802
480,100
5,239,811
500,000
20,000
145,000
594,393
100,000
52,501
228,749
18,750
112,500
3,175,490
155,000
128,436
70,000
44,866
27,220,576 27,297,712
27,220,576 27,297,712
22,486
22,500
16,351,200 16,358,928
22,500
100,000
22,500
22,490
99,900
22,487
As at 31 December 2018
850,007,782
85,001
43,739,139 43,824,140
(1)
(2)
(3)
(4)
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
42
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
Issue of shares for remaining ownership in BJ Mining Limited
Includes issue costs of £324,509
Includes issue costs of £641,071
(5)
(6)
(7)
(8) The share capital disclosure has been restated from the prior year to include a more detailed split between class of share. In
addition, the deferred shares which were disclosed separately on the Statement of Financial Position have been included within
share capital for clearer presentation. This does not constitute a prior year adjustment.
Deferred Shares (nominal value of 0.01 pence per share)
As at 1 July 2016
As at 31 December 2017
As at 1 January 2018
As at 31 December 2018
Deferred A Shares (nominal value of 0.01 pence per share)
As at 1 July 2016
As at 31 December 2017
As at 1 January 2018
As at 31 December 2018
Number of Deferred
shares
588,104,193
588,104,193
588,104,193
588,104,193
Number of Deferred A
shares
71,271,328,120
71,271,328,120
71,271,328,120
71,271,328,120
Share capital
£
588,104
588,104
588,104
588,104
Share capital
£
7,127,132
7,127,132
7,127,132
7,127,132
On 11 January 2018 the Company issued and allotted 143,495 new Ordinary Shares at a price of 15.68 pence per share per
share to extinguish liabilities for services provided in the period ended 31 December 2017.
On 1 February 2018 the Company raised £16,358,928 via the issue and allotment of 77,272,728 new Ordinary Shares at a
price of 22 pence per share.
On 23 May 2018 the Company issued and allotted 97,835 new Ordinary Shares at a price of 23 pence per share per share
as consideration for services provided during the year.
On 1 October 2018 the Company issued and allotted 1,000,000 new Ordinary Shares at a price of 10 pence per share as an
exercise of options.
On 19 October 2018 the Company issued and allotted 135,858 new Ordinary Shares at a price of 16.56 pence per share per
share as consideration for services provided during the year.
16. Share based payments
The Company has established a share option scheme for Directors, employees and consultants to the Group. 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
4 March 2016
17 December 2016
9 June 2017
17 October 2017
17 October 2017
17 October 2017
29 May 2019
3 March 2019
17 December 2021
9 June 2022
17 October 2020
17 October 2020
17 October 2020
0.10
0.06
0.07
0.165
0.20
0.25
0.30
Options & Warrants
31 December
2018
31 December
2017
5,000,000
1,000,000
2,689,768
1,025,000
5,350,000
5,350,000
5,350,000
6,000,000
1,000,000
2,689,768
1,025,000
5,350,000
5,350,000
5,350,000
25,764,768
26,764,768
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
43
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
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.
A reconciliation of options and warrants granted over the year to 31 December 2018 is shown below:
Outstanding at beginning of period
Expired
Exercised
Granted
Outstanding as at period end
Exercisable at period end
2018
2017
Weighted
average
exercise price
(£)
0.1879
-
0.1000
-
0.1913
0.1913
Number
26,764,768
-
(1,000,000)
-
25,764,768
25,764,768
Weighted
average
exercise price
(£)
0.1347
-
0.1347
0.2210
0.1879
0.1879
Number
19,309,366
-
(13,950,312)
21,405,714
26,764,768
26,764,768
2018
2017
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
0.1913
25,764,768
-
1.65
-
1.65
-
-
0.1879
26,764,768
-
2.61
-
2.61
During the period there was a charge of £nil (2017: £119,439) in respect of share options.
44
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
17. Other reserves
Group
Foreign
currency
translation
reserve
Reverse
acquisition
reserve
Redemption
reserve
£
£
£
Merger
reserve
£
Share
option
reserve
£
Total
£
At 31 December 2017
166,000
809,052
(8,071,001)
36,463
109,582
(6,949,904)
Currency translation differences
Exercised options
-
-
150,660
-
-
-
-
-
-
150,660
(648)
(648)
At 31 December 2018
166,000
959,712
(8,071,001)
36,463
108,934
(6,799,892)
At 31 December 2017
Exercised options
At 31 December 2018
18. Employee benefit expense
Company
Merger
reserve
Redemption
reserve
Share option
reserve
£
£
£
Total
£
166,000
36,463
109,582
312,045
-
-
(648)
(648)
166,000
36,463
108,934
311,397
Group
Company
Year ended
31 December
2018
18 month period
ended
31 December
2017
Year ended
31 December
2018
18 month period
ended
31 December
2017
Staff costs (excluding Directors)
£
£
£
£
Salaries and wages
Social security costs
Retirement benefit costs
790,179
108,061
1,616
899,856
242,059
18,656
700
261,415
279,567
9,836
1,374
290,777
216,984
16,476
700
234,160
The average monthly number of employees for the Group during the year was 16 (period ended 31 December 2017:11) and
the average monthly number of employees for the Company was 9 (period ended 31 December 2017: 6).
Of the above Group staff costs, £485,063 (period ended 31 December 2017: £135,513) has been capitalised in accordance
with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
45
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
19. Directors' remuneration
Executive Directors
Roderick McIllree
Non-executive Directors
Greg Kuenzel (1)
Ian Henderson
Garth Palmer
Peter Waugh
Michael Hutchinson
Short-term
benefits
£
182,783
10,286
19,022
16,114
24,000
25,000
Year ended 31 December 2018
Post-
employment
benefits
Share based
payments
277,205
1,290
Period ended 31 December 2017
Post-
employment
benefits
Share based
payments
Short-term
benefits
£
£
640
5
-
330
-
315
£
106
109
-
94
-
309
Total
£
183,423
10,291
19,022
16,444
24,000
25,315
278,495
£
-
-
-
-
-
-
-
£
-
-
-
6,278
5,795
Total
£
34,630
49,437
-
18,700
14,129
12,073
116,896
Of the above Group Directors Remuneration, £42,905 (31 December 2017: £18,075) has been capitalised in accordance with
IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
Executive Directors
Roderick McIllree
Non-executive Directors
Greg Kuenzel
Graham Marshall (2)
Peter Waugh
Michael Hutchinson
(1) Gregory Kuenzel resigned on 2 June 2018
(2) Graham Marshall resigned on 16 October 2017
34,524
49,328
-
12,328
8,334
104,514
Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have
been disclosed in Note 27.
The remuneration of Directors and key executives is determined by the remuneration committee having regard to the
performance of individuals and market trends.
20. Finance income
Group
Year ended
Period ended
31 December
31 December
2018
£
12,209
12,209
2017
£
1,717
1,717
Interest received from cash and cash equivalents
Finance Income
46
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
21. Other gain/(losses)
Loss on financial assets measured at fair value through profit or loss
Other gains/(losses)
Other gain/(losses)
22. Income tax expense
No charge to taxation arises due to the losses incurred.
Group
Year ended
Period ended
31 December
31 December
2018
£
(96,573)
3,462
(93,111)
2017
£
-
-
-
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 20.30% (2017: 21.82%)
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
Year ended
31 December
2018
Period ended
31 December
2017
£
£
(10,776,686)
(2,680,708)
(2,187,667)
(584,930)
1,807,738
(450,153)
830,082
-
5,120
(593)
580,403
-
The weighted average applicable tax rate of 20.3% (2017: 21.82%) used is a combination of the 19% standard rate of
corporation tax in the UK, 20% Finnish corporation tax and 30% Greenlandic corporation tax.
The Group has a potential deferred income tax asset of approximately £1,179,569 (2017: £1,028,755) due to tax losses
available to carry forward against future taxable profits. The Company has tax losses of approximately £5,897,843 (2017:
£5,067,761) 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.
23. Earnings per share
Group
The calculation of the total basic earnings per share of (1.279) pence (31 December 2017: (0.408) pence) is based on the
loss attributable to equity holders of the parent company of £10,776,686 (31 December 2017: £2,680,708) and on the
weighted average number of ordinary shares of 842,546,640 (31 December 2017: 656,936,094) in issue during the year.
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 16.
47
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
24. 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
Year ended
31 December
2018
£
Period ended
31 December
2017
£
107,299
173,859
345,917
91,211
69,727
126,579
141,906
397,944
54,832
250,590
-
40,987
81,914
211,175
461,770
111,308
57,981
127,096
160,549
496,622
57,102
46,868
119,439
179,488
1,800,851
2,111,312
Services provided by the Company’s auditor and its associates
During the year, 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
Year ended
31 December
Period ended
31 December
2018
£
47,000
70,778
2017
£
44,500
92,235
25. 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.
48
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
(b) License commitments
Bluejay now owns 5 mineral exploration licenses in Greenland. Licence 2015/08 is a part of the Dundas project and licences
2011/31, 2012/29, 2017/01 & 2018/16 are part of the Disko projects in Greenland. These licences include commitments to
pay annual licence fees and minimum spend requirements.
As at 31 December 2018 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
£
634,756
762,806
5,124,649 5,271,624
License
fees
£
128,050
146,975
275,025
5,759,405 6,034,430
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 year is disclosed in Note 24
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
Group
31 December
31 December
2018
£
35,000
-
35,000
2017
£
60,000
35,000
95,000
26. Contingent liabilities
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 £463,704 at 31 December 2018 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 2018 to
£719,196.
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 2019. 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 £719,196 will be recovered in full and therefore have not recognised any
impairment to the carrying value of this amount.
49
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
27. Related party transactions
Loans to Group undertakings
Amounts receivable as a result of loans granted to subsidiary undertakings are as follows:
Finland Investments Ltd
FinnAust Mining Finland Oy
Centurion Mining Limited
BJ Mining Limited
Dundas Titanium A/S
Disko Exploration Limited
At 31 December (Note 9)
Company
31 December
2018
£
31 December
2017
£
-
6,398,621
345
1,010,623
11,112,258
396,212
310,451
5,087,869
195
1,155,963
3,256,326
207,067
18,918,059
10,017,871
Loans granted to subsidiaries have increased during the year due to additional loans being granted to the subsidiaries, and
foreign exchange gain of £208,836, given that no loans were repaid during the year.
These amounts are unsecured and repayable in Euros and Danish Krone 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 Garth Palmer is a partner, was paid a fee of £84,000 for the
year ended 31 December 2018 (18 month period ended 31 December 2017: £126,000) for the provision of corporate
management, accounting and consulting services to the Company. There was a balance of £8,537 owing at year end (31
December 2017: £nil) .
RM Corporate Limited, a limited company of which Roderick McIllree is a director, was paid a fee of £126,996 for the year
ended 31 December 2018 (18 month period ended 31 December 2017: £97,500) for the provision of corporate management
and consulting services to the Company. There was a balance of £12,700 owing at year end (31 December 2017: £nil).
PMW Consulting Limited, a limited company of which Peter Waugh is a director, was paid a fee of £52,600 for the year ended
31 December 2018 (18 month period ended 31 December 2017: £40,838) for consulting services to the Company. There was
a balance of £10,000 owing at year end (31 December 2017: £nil).
Greenland Gas & Oil Limited, a limited company of which Roderick McIllree is a director, was paid a fee of £9,300 for the
year ended 31 December 2018 (18 month period ended 31 December 2017: £45,400) for geological information systems
consulting services to the Company. There was no balance outstanding at the year-end (31 December 2017: £nil).
JW Geological Limited, a limited company of which Jeremy Whybrow is a director, was paid a fee of £16,667 for the year
ended 31 December 2018 (31 December 2017: £63,988) for consulting services to the Company. Jeremy Whybrow is a
substantial shareholder of the Company. There was no balance outstanding at the period-end.
28. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
29. Events after the reporting date
On 24 January 2019, warrant holders exercised warrants over 1,000,000 new ordinary shares at 6p per share and 1,461,615
new ordinary shares at 7p per share.
On 3 May 2019, option holders exercised options over 300,000 new ordinary shares at a price of 10p per share.
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BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
On 10 May 2019, option holders exercised options over 2,200,000 new ordinary shares at a price of 10p per share.
On 24 May 2019, Bluejay Mining plc and Dundas Titanium A/S entered into an agreement with Rio Tinto Iron and Titanium
Canada Inc. (‘RTIT’) to further analyse the Ilmenite from the Dundas project. The Group and RTIT will work together to review
and improve the technical work that has been completed at Dundas to date.
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