Registered number: 05389216
BLUEJAY MINING PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2019
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
5
8
11
12
17
22
23
24
25
26
27
28
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)
Bo Stensgaard (Executive Director) – appointed 13 August 2019
Company Secretary
Heytesbury Corporate LLP
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
15 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
In light of these unprecedented times and the subsequent challenging economic climate, I would like to begin my report by
sending my well wishes to all and thanking the entire Bluejay Mining plc (‘Bluejay’ or the ‘Group’) team for remaining as
focused as ever. Bluejay continues to be steadfast in holding a world class strategic portfolio of value accretive assets and
I am pleased to say that the breadth and potential of our portfolio is considerable; from our emergent grassroots operations
in Greenland and Finland, all the way through to our more established, near term target production assets in Greenland that
include the world’s highest grade ilmenite sand project. We have built a portfolio that spans the full value chain and offers
shareholders significant uplift potential.
To deliver on this potential, Bluejay’s primary focus is commencing production at our flagship asset, the Dundas Ilmenite
Project, which currently possesses a JORC compliant Mineral Resource of 117Mt at 6.1% ilmenite in situ. For Bluejay and
our stakeholders worldwide, Dundas represents significant near-term value potential thanks to the incredibly high grades of
ilmenite in-situ and the sheer size of the deposit. As a result, we have been able to secure a number of highly strategic
commercial agreements with significant industry leaders; our ongoing working agreement with Rio Tinto Iron and Titanium
Canada Inc. (‘RTIT’) has enabled us to complete our first major bulk sample export for processing in Quebec, Canada, and a
confidential MOU with a multinational trading firm in the global titanium feedstock market with offtake potential for up to
200tkpa ilmenite and possible project financing, creates significant opportunity. Alongside this, we continue to engage with
a number of other leading industry players with a view to securing additional commercial offtake agreements.
The bulk sample for RTIT was produced at our pilot plant in Quebec, which commenced operation in February 2020 and had
been running at full capacity for several weeks until COVID-19 outbreak. Whilst the plant is now on care and maintenance in
line with the Quebec’s government guidance that all non-essential businesses should close, we are poised to recommence
activity once it is safe and sensible to do so and we look forward to RTIT smelter testing the sample in 2021, which will be a
key milestone for finalising our future engagement with them.
Whilst we are in a fortunate position that we have a provisional licence that enables us to ship the requisite material for the
RTIT bulk sample, a key point in any project’s commercialisation is its licencing. Over the past year great progress has been
made regarding the Exploitation Licence; we have successfully submitted the Environmental Impact Assessment and Social
Impact Assessment, both of which have been confirmed compliant for the Public Consultation phase, which are currently
being completed. We remain confident that the fantastic support Dundas’ has consistently received from the local
communities and authorities will enable us to conclude the Public Consultation swiftly, as we now work closely with the
government to finalise a way in which to satisfy this licencing requirement whilst adhering to COVID-19 restrictions.
Whilst Bluejay’s operational focus remains concentrated on the continued de-risking and development of Dundas into a
commercially viable operation, our other promising Greenlandic assets remain at the forefront of future development plans.
Earlier in 2019 the team turned its attention to expanding the Disko-Nuussuaq (‘Disko’) Magmatic Massive Sulphide nickel-
copper-platinum-cobalt project in Greenland, a vast, highly prospective and strategically located project with proven potential
to host similar mineralisation to the world’s most sizeable nickel-copper sulphide mine, Norilsk-Talnakh, in Siberia. Large
scale systematic sampling surveys were undertaken during the period which returned encouraging results supporting the
presence of a nickel-copper bearing mineralisation, thus paving the way for further refining of drill site targets over the licence
area. Testament to our confidence in the discovery potential of Disko, we extended the licence in February 2020 by 76 km2
to 2,897 km2, which was also paired with acquiring a new licence holding over the area.
Unfortunately, the planned 2020 advanced exploration and maiden drilling campaign scheduled at Disko and simultaneously
at our Kangerluarsuk Sed-Ex lead-zinc-silver project (‘Kangerluarsuk’) in southwest Greenland has been postponed as a
result of COVID-19. However, extensive desktop analysis to define drill targets and assess future opportunities for these
programmes has been completed during the lockdown period, enabling the team to hit the ground running should restrictions
be lifted early enough to recommence operations this 2020 field season. At Kangerluarsuk, drilling will target known zinc,
lead, silver and copper occurrences that have correlations with the neighbouring former Black Angel zinc-lead-silver mine.
Mapping suggests these occurrences could be up to 40m thick and as a result of our confidence in the licence’s prospectivity,
post-period-end in January 2020 we increased the project area by more than five-fold to 692km2.
These licence expansions together with a purchase in the second quarter of this year of two new exploration licences in south
Greenland focussing on base metals and gold, known as the Thunderstone Project (‘Thunderstone’) totalling 2,025km2
resulted in Bluejay becoming the single largest operational landholder in Greenland. This prestigious position underpins our
confidence in the quality and discovery potential together with the overall commitment Bluejay has to the region.
Crucially, it is not just Bluejay that has such strong confidence in the value potential of Greenland. In November 2019, the
Company was delighted to raise £11.5m at 10p per share. This was a significant achievement, in challenging markets. We
were able to attract institutional support from German, Danish, UK and Irish investors while also securing investment from
Greenlandic and Danish Government investment funds, thus demonstrating a solid endorsement of Bluejay's in-country
activities. More recently an equal portion from both of the Danish and Greenlandic holdings was transferred to SISA, the
Greenlandic Pension Fund, resulting in all three entities holding equal thirds.
To maximise these funds and ensure the longevity of our company given the current COVID-19 backdrop we implemented a
cost saving programme in April 2020 to reduce corporate overheads. For this I would like to give my thanks to the entire
Bluejay team for supporting our company in this endeavour by agreeing to a 30% reduction in all staff pay, including directors.
I would also like to give my thanks and commend the Greenlandic authorities for the support they have shown Greenland’s
3
BLUEJAY MINING PLC
CHAIRMAN’S REPORT
mining industry by waiving Exploration Licence commitments for 2020, thereby removing the associated financial
responsibilities. This responsible approach is testament to the quality of the jurisdiction in which we operate.
The team is also pleased to maintain a portfolio of Finnish assets; the Hammaslahti copper-zinc-gold-silver project, the
Enonkoski nickel-copper-cobalt-PGM project and the Outokumpu copper-nickel-cobalt-cold project. This portfolio continues
to be cost-sustainable whilst we determine the best plan for future development.
Outlook
Bluejay’s investment model is based on five key sources of value – high grade, scalable deposits, low capex, simple
processing routes and a supportive jurisdiction. Using our strategy of ‘discover, develop and deliver’, the team endeavours
to ensure that we recognise and capitalise upon these signature features across all of our projects to maximise value creation.
In the course of this year we have firmly followed this approach, increasing our land holding to encompass assets that meet
our stringent investment criteria, and implementing targeted development campaigns to advance our portfolio and realise
value.
Our most advanced asset and with an internationally renowned status, Dundas, hosts a vast deposit that is proven to be the
highest grade globally and requires a simple mining operation with minimal processing. Furthermore, Bluejay has experienced
strong demand for its end product, where the export markets and routes are well established. The next major hurdle is to
secure the requisite Exploitation Licence, and given the incredibly strong support that Bluejay and the project has consistently
received from both the government and local community, we remain positive that this is a near term deliverable.
To this end I am grateful to all of the communities in which we operate, our strategic partners, stakeholders, advisors and the
entire Bluejay team for their continued support and tireless work. Whilst the immediate global outlook continues to be
dominated by the extensive reach of COVID-19, we are confident of a promising future beyond this, and look forward to a
productive and promising 2020/2021. In the meantime, we hope everyone continues to stay safe and well and we look forward
to providing further updates on our ongoing desktop studies, licencing and commercial discussions as soon as we are in a
position to do so.
Michael Hutchinson
Chairman
20 May 2020
4
BLUEJAY MINING PLC
STRATEGIC REPORT
The Directors of the Company present their Strategic Report on the Group for the year ended 31 December 2019.
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 two Executive Director and three Non-Executive Directors.
The Corporate Head Office of the Group is located in London, UK, and provides corporate support services to the overseas
operations. Overseas operations are managed out of the Group’s office in Outokumpu, Finland and Nuuk, Greenland.
Review of business
Throughout the year, the Dundas ilmenite project continued to be the primary focus of the Group. In May 2019, Bluejay
entered into an agreement with Rio Tinto Iron and Titanium Canada Inc. ('RTIT') to further analyse the Ilmenite from its Dundas
project. In the 2019 field season at Dundas, the main focus was the preparation of a 42,000 ton high grade ilmenite bulk
sample. The bulk-sample material was used to produce a 5,000 tons heavy metal concentrate (‘HMC’) sample to be delivered
to RTIT Sorel-Tracy plant in Quebec, Canada, for further beneficiation (magnetic separation) and subsequent smelter sample
test. Further work streams included the finalization of the pre-feasibility studies which were positively validated by the advisors
to the Government of Greenland and the completion and construction of a wet-gravity separation pilot processing plant which
is used to produce the HMC. Finally, the application for the Dundas exploitation licence has been submitted.
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, the field season focussed on
leveraging pre-existing data and knowledge. It refined both new and previously defined drill targets by the reprocessing and
validating historical data as well as the acquisition of new geophysical and geochemical data. 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.
Looking forward, due to the COVID-19 pandemic, the UK, Greenland, Finland and Canadian governments have all imposed
restrictions on air travel and non-essential work. Bluejay have postponed all 2020 field work on recommendation of the
governments and in order to ensure the safety of its employees, contractors and supply chain. In Greenland, the
Government have advised that they will be relieving all spending commitments associated with exploration licences in 2020.
Financial performance review
The loss of the Group for the year ended 31 December 2019 before taxation amounts to £1,806,941 (31 December 2018:
£10,776,686).
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
2019
2018
£10,314,701
£8,843,709
6.00%
6.37%
£7,841,020
£6,251,969
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BLUEJAY MINING PLC
STRATEGIC REPORT
Cash has been used to fund the Group’s operations and facilitate its investment activities (refer to the Statements of Cash
Flows on page 27).
Administrative expenses are the expenses related to the Group’s ability to run the corporate functions to ensure they can
perform their operational commitments.
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.
6
BLUEJAY MINING PLC
STRATEGIC REPORT
COVID-19
The outbreak of the recent global COVID-19 virus has resulted in business disruption and stock market volatility. The extent
of the effect of the virus, including its long-term impact, remains uncertain. The Group has implemented extensive business
continuity procedures and contingency arrangements to ensure that they are able to continue to operate.
Details of the Group’s financial risk management policies are set out in Note 3 to the Financial Statements.
Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its
members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term,
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Company’s employees,
•
• Consider the impact of the Company’s operations on the community and the environment.
Foster the Company’s relationships with suppliers, customers and others, and
The Company continues to progress the development of its existing projects in Greenland, which is inherently speculative in
nature and, without regular income, is dependent upon fund-raising for its continued operation. The pre-revenue nature of the
business is important to the understanding of the Company by its members, employees and suppliers, and the Directors are
as transparent about the cash position and funding requirements as is allowed under AIM Rules for Companies.
The application of the s172 requirements can be demonstrated in relation to the some of the key decisions made during
2019:
Finalising the pre-feasibility studies as part of the exploitation licence process;
• Continuing evaluation of existing license areas and assessment of targets;
•
• Expanding the licensed land area;
•
•
• Continued assessment of corporate overheads, expenditure levels and wider market conditions.
Identifying and refining both new and previously defined drill targets;
Further identification of drill targets and preparation for a percussion drill program;
As a mining exploration Group operating in Greenland and Finland, the Board takes seriously its ethical responsibilities
to the communities and environment in which it works. We abide by the local and relevant UK laws on anti-corruption
& bribery. Wherever possible, local communities are engaged in the geological operations & support functions required
for field operations, providing much needed employment and wider economic benefits to the local communities. In
addition, we follow international best practise on environmental aspects of our work. Our goal is to meet or exceed
standards, in order to ensure we maintain our social licence to operate from the communities with which we interact.
The interests of our employees are a primary consideration for the Board. Personal development opportunities are
supported and a health and security support network is in place to assist with any issues that may arise on field
expeditions.
The Group Strategic Report was approved by the Board on 20 May 2020.
Roderick McIllree
CEO
7
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 2019.
Dividends
The Directors do not recommend the payment of a dividend for the year (31 December 2018: £nil).
Directors & Directors’ interests
The Directors who served during the year ended 31 December 2019 are shown below and had, at that time the following
beneficial interests in the shares of the Company:
Roderick McIllree
Peter Waugh
Michael Hutchinson
Garth Palmer (1)
Ian Henderson
Bo Stensgaard (3)
31 December 2019
31 December 2018
Ordinary
Shares
94,677,778
Options
-
94,677,778
-
140,224
1,950,000
74,127
1,950,000
-
n/a
-
-
1,800,000
-
1,800,000
n/a
-
4,100,000
633,831
-
N/A
-
-
N/A
(1) Garth Plamer resigned on 12 December 2019.
(2) Bo Stensgaard was appointed on 13 August 2019.
Further details on options can be found in Note 17 to the Financial Statements.
Substantial shareholders
The substantial shareholders with more than a 3% shareholding at 20 May 2020 are shown below:
Sandgrove Capital Management LLP
M&G Plc
Roderick McIllree
HSBC Bank Plc
Gregory Kuenzel
Jeremy Whybrow
Corporate responsibility
20 May 2020
Holding
Percentage
163,963,751
132,136,364
94,677,778
86,664,804
39,238,715
38,530,019
16.90%
13.62%
9.76%
8.93%
4.05%
3.97%
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
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.
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BLUEJAY MINING PLC
DIRECTORS’ REPORT
Internal controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control
environment and any related shortfalls during the period. Since the Group was established, the Directors are satisfied that,
given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware
that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and
proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are
adequate and effective.
Further details of corporate governance can be found in the Corporate Governance Report on page 12.
Supplier payment policy
The Group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are
available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The Group's current policy concerning the payment of trade creditors is to:
•
•
•
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the Group's contractual and other legal obligations.
Going concern
As described in Note 30, the Group is managing the impact of the COVID-19 pandemic on its business and the uncertainty it
creates. The Group has taken swift pre-emptive action to ensure the safety of its employees, contractors and supply chain.
This includes a full financial and strategic review designed to safeguard and ensure the stability and longevity of Bluejay
activities for the benefit for all its stakeholders and as a result the Group has postponed all fieldwork until the UK, Greeland
and Finland Governments confirm it is safe to do so.
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 meet all committed and contractual expenditure within the next 12 months and to maintain good title to the exploration
licences. This will ensure they will still be in a strong financial position once they are able to re-commence exploration activity.
The Group’s business activities together with the additional 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 Directors have a reasonable expectation that the Group and Company have sufficient resources to continue in the current
economic climate with the COVID-19 pandemic and for the foreseeable future. Thus, they continue to adopt the going concern
basis of accounting in preparing the Group and Company 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 30 to the Financial Statements.
Future developments
Details of future developments for the Group are disclosed in the Chairman’s Report on page 3.
COVID-19
Since March 2020, the Group has made preparations to mitigate the impact of COVID-19 on the business through several
action plans and mitigation strategies. These will continue to be monitored and updated as required.
Brexit
In March 2017, the UK officially triggered Article 50 and notified the EU of its intention of leaving the EU following the UK’s
June 2016 referendum vote to leave the EU (commonly known as Brexit). The UK ratified its withdrawal from the EU effective
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BLUEJAY MINING PLC
DIRECTORS’ REPORT
31 January 2020 with a transitional period scheduled to end 1 January 2021. The effect of the withdrawal remain unknown
until further information is available on the nature of the UK-EU relationship after the completion of the transitional period.
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 20 May 2020 and signed on its behalf.
Roderick McIllree
Director
10
BLUEJAY MINING PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
elected to prepare the Group and Parent Company Financial Statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company, and
of the profit or loss of the Group for that period. In preparing these Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material
departures disclosed and explained in the Financial Statements; and
• prepare the Financial Statements on a going concern basis unless it is inappropriate to presume the Company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company, and enable
them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and Company, and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the Financial
Statements may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company’s website.
The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.
11
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
The Board of 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 2019 was the completion and
submission of the Environmental Impact Assessment and Social Impact Assessment reports at the Dundas project, both of
which have been confirmed compliant for the Public Consultation phase.
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 pre-feasibility study, production of bulk sample which has been shipped to
Canada and set up of the pilot plant in Quebec. 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 or the Company’s PR
advisors, St Brides Partners Limited who are 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 at the Group’s Dundas Titanium project in Greenland, a detailed social impact assessment
study was undertaken. This 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
12
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.
The outbreak of the recent global COVID-19 virus has resulted in increased risks within the global economy. The extent of
the effect of the virus, including its long-term impact, remains uncertain and the Company continues to monitor the situation.
Principle Five
A Well Functioning Board of Directors
As at the date hereof the Board comprised, the CEO Roderick McIllree, the Chairman Michael Hutchinson, the General
Manager Bo Stensgaard and two Non-Executive Directors, Peter Waugh and Ian Henderson. 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.
13
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
Details of the Directors’ attendance at the Board meetings are set out below:
Roderick McIllree
Michael Hutchinson
Peter Waugh
Garth Palmer (1)
Ian Henderson
Bo Stensgaard
(1) Garth Plamer resigned on 12 December 2019.
Principle Six
Appropriate Skills and Experience of the Directors
Meetings Attended
4
4
4
4
4
2
Meetings eligible to
attend
4
4
4
4
4
2
The Board currently consists of five Directors and, in addition, the Company has employed the services of Heytesbury
Corporate LLP 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
Bo Stensgaard
General Manager
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, AIM Compliance Committee and member of the Audit committee.
Ian Henderson
Independent Non-Executive Director
Chairman of the Audit Committee and member of the Remuneration 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. The Board has not yet had any internal
reviews. 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.
14
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
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. 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 importance 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 Michael Hutchinson, 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. Peter Waugh 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;
15
BLUEJAY MINING PLC
CORPORATE GOVERNANCE REPORT
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 or the Company’s PR advisors, St Brides Partners Limited who are available to answer
investor relations enquiries.
The Company shall include, when relevant, in its annual report, any matters of note arising from the Audit or Remuneration
committees.
Peter Waugh
Non-Executive Director
20 May 2020
16
BLUEJAY MINING PLC
INDEPENDENT AUDITORS REPORT
Opinion
We have audited the financial statementsFinancial statements of Bluejay Mining plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 December 2019 which comprise the Statement 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 2019 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.
Emphasis of matter
We draw your attention to note 2.4 of the financial statements, which describes the group’s and company’s assessment of
the COVID-19 impact on its ability to continue as a going concern. The group and company have explained that the events
arising from the COVID-19 outbreak do not impact its use of the going concern basis of preparation nor do they cast significant
doubt about the group’s and company’s ability to continue as a going concern for a period of at least twelve months from the
date when the financial statements are authorised for issue.
Our opinion is not modified in this respect.
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
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. The materiality applied
to the financial statements as a whole was set as follows:
2019
2018
Basis for materiality
Group
£375,000
£550,000
1% of gross assets (2018:
2% of gross assets)
Parent
Company
£40,000
£40,000
2% of expenses
17
BLUEJAY MINING PLC
INDEPENDENT AUDITORS REPORT
Our calculation of group materiality decreased from 2018 as a result of a decision to reduce the basis of calculation from 2%
to 1% of gross assets because of the significant increase of gross assets in 2019. This was discussed and agreed with the
audit committee. In our professional judgement, we consider gross assets to be to be one of the principal benchmarks within
the financial statements relevant to members of the group in assessing financial position and performance.
Whilst materiality for the group financial statements as a whole was £375,000, each significant component of the group was
audited to a level of materiality ranging between £40,000 - £337,500.
We agreed with the audit committee that we would report all individual audit differences identified during the course of our
audit in excess of £18,750 (2018: £20,000), in addition to other audit misstatements below that threshold that we believe
warrant reporting on qualitative grounds.
An overview of the scope of our audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
In particular we looked at areas involving significant accounting estimates and judgements by the Directors and considered
future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of
internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk
of material misstatement due to fraud.
Of the 10 components of the group, a full scope audit was performed on the complete financial information of 3 components,
a limited scope review was performed on a component 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 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 £23,138,507 which relate to the Dundas Titanium
Project in Greenland and a portfolio of copper, zinc
and nickel projects in Finland. Intangible assets
represent c. 61% of the group’s total assets.
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
to
the
assessment of exploration projects.
inherent uncertainty
involved
the
in
• 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.
18
BLUEJAY MINING PLC
INDEPENDENT AUDITORS REPORT
In forming our opinion on the financial statements, which is not
modified, we draw to the users attention the disclosure within
note 7 and within the Critical Accounting Estimates and
Judgements which states that the recoverability of the projects
in Finland, with a carrying value of £3,999,977, is dependent on
the successful completion of a joint venture with a preferred
parter. The financial statements do not include the adjustments
that would result if the group was unable complete such an
arrangement and to fully recover the carrying value of the
intangible assets.
in
How the scope of our audit responded to the key audit
matter
investments
Net
intercompany receivables (refer note 9)
in subsidiaries,
including
The parent company’s net
subsidiaries is £28,179,626.
investment
in
We have obtained and reviewed the Directors impairment
review of the carrying value of the Parent company’s net
investment in the subsidiaries. Our work included:
investment
The carrying value of the net
in
subsidiaries is ultimately dependent on the value of
the underlying assets. Many of the underlying assets
are exploration projects which are at an early stage
of exploration making it difficult to determine their
value. Valuations for these sites are therefore based
on judgments and estimates made by the Directors -
which leads to a risk of misstatement.
• Reviewing the impairment indicators listed in IFRS 6
including specific consideration regarding the renewal
of the exploration licenses;
• Obtaining and reviewing available key external
reports;
• Reviewing the audit working papers of certain
components to assess impairment considerations of
exploration assets made by their auditors; and
• Discussing with management the basis for
impairment or non-impairment of investment in
subsidiaries and loans receivable from subsidiaries.
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 £6,764,324. This
exceeds the recoverable amount of the group’s associated
intangible asset by £2,764,347 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.
HMRC enquiry (note 27)
There is an ongoing enquiry with HMRC which will be
heard at tribunal. The total value of the amount in
dispute at 31 December 2019 is considered to be £843k,
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) £588k of input VAT on returns submitted 2015
– 2019 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.
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 27 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 2019 for accuracy.
19
BLUEJAY MINING PLC
INDEPENDENT AUDITORS REPORT
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 27 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.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the group and parent company
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the Directors’ report for the financial period for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
•
•
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsiblities, the Directors are responsible for the preparation of the
group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the Directors are responsible for assessing the group’s and
the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.
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.
20
BLUEJAY MINING PLC
INDEPENDENT AUDITORS REPORT
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
20 May 2020
15 Westferry Circus
Canary Wharf
London E14 4HD
21
BLUEJAY MINING PLC
STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
Group
Company
31 December
2019
31 December
2018
31 December
2019
31 December
2018
Note
£
£
£
£
6
7
9
2,768,423
23,138,507
-
2,846,091
15,478,246
-
177,838
-
28,088,279
44,277
-
20,918,061
25,906,930
18,324,337
28,266,117
20,962,338
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
8
10
11
-
1,459,755
10,314,701
330,402
768,960
8,843,709
-
1,728,371
10,197,337
330,402
840,620
8,777,619
Total Assets
Non-Current Liabilities
Lease liabilities
Deferred tax liabilities
Current Liabilities
Lease liabilities
Trade and other payables
11,774,456
9,943,071
11,925,708
9,948,641
37,681,386
28,267,408
40,191,825
30,910,979
13
14
62,220
496,045
-
496,045
558,265
496,045
62,220
-
62,220
-
-
-
13
12
80,814
1,242,847
-
783,836
80,814
996,176
-
469,554
1,323,661
783,836
1,076,990
469,554
Total Liabilities
1,881,926
1,279,881
1,139,210
469,554
Net Assets
35,799,460
26,987,527
39,052,615
30,441,425
Equity attributable to owners of the Parent
Share capital
Share premium
Other reserves
Retained losses
Total Equity
16
16
18
7,484,066
55,463,656
(7,604,567)
(19,543,695)
7,800,237
43,739,139
(6,799,892)
(17,751,957)
7,484,066
55,463,656
660,536
(24,555,643)
7,800,237
43,739,139
311,397
(21,409,348)
35,799,460
26,987,527
39,052,615
30,441,425
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 2019 was £3,161,498 (year ended 31 December 2018: £8,894,678).
The Financial Statements were approved and authorised for issue by the Board of Directors on 20 May 2020 and were signed
on its behalf by:
Roderick McIllree
Chief Executive Officer
The Notes on pages 28 to 54 form part of these Financial Statements.
22
BLUEJAY MINING PLC
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2019
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
2019
Year ended 31
December
2018
£
-
-
-
£
-
-
-
(2,259,624)
567,068
(121,891)
(1,814,447)
-
6,454
1,052
(1,806,941)
-
(1,800,851)
(93,111)
(23,757)
(1,917,719)
(8,873,585)
12,209
2,409
(10,776,686)
-
Note
25
22
7
21
23
Loss for the year attributable to owners of the Parent
(1,806,941)
(10,776,686)
Basic and Diluted Earnings Per Share attributable to owners of the
Parent during the period (expressed in pence per share)
24
(0.21)p
(1.279)p
The Notes on pages 28 to 54 form part of these Financial Statements.
23
BLUEJAY MINING PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2019
Loss for the year
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Currency translation differences
Other comprehensive income for the year, net of tax
Total Comprehensive Income attributable to owners of the Parent
Year ended 31
December 2019
£
Year ended 31
December
2018
£
(1,806,941)
(10,776,686)
(1,153,814)
150,660
(1,153,814)
150,660
(2,960,755)
(10,626,026)
The Notes on pages 28 to 54 form part of these Financial Statements.
24
BLUEJAY MINING PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
Balance as at 1 January 2018
7,792,372
27,220,576
(6,949,904)
(6,975,919)
21,087,125
Share capital
Share premium
Other reserves
Retained losses
Note
£
£
£
£
Total
£
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 period
-
-
-
-
-
-
-
(10,776,686)
(10,776,686)
150,660
-
150,660
150,660
(10,776,686)
(10,626,026)
Proceeds from share issues
Issue costs
Share based payments
Exercised options
16
16
17
17
Total transactions with owners, recognised
directly in equity
7,828
-
37
-
17,092,171
(641,071)
67,463
-
7,865
16,518,563
-
-
-
(648)
(648)
-
-
-
648
648
17,099,999
(641,071)
67,500
-
16,526,428
Balance as at 31 December 2018
7,800,237
43,739,139
(6,799,892)
(17,751,957)
26,987,527
Balance as at 1 January 2019
7,800,237
43,739,139
(6,799,892)
(17,751,957)
26,987,527
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
Expired options
Other equity adjustments
-
-
-
-
-
-
16
16
17
17
17
16
11,500
11,488,500
-
496
-
-
(328,167)
(175,800)
411,817
-
-
-
-
(1,806,941)
(1,806,941)
(1,153,814)
(1,153,814)
-
-
36,175
(13,605)
(1,598)
328,167
-
(1,153,814)
(1,806,941)
(2,960,755)
-
-
-
13,605
1,598
-
11,500,000
(175,800)
448,488
-
-
-
Total transactions with owners, recognised
directly in equity
(316,171)
11,724,517
349,139
15,203
11,772,688
Balance as at 31 December 2019
7,484,066
55,463,656
(7,604,567)
(19,543,695)
35,799,460
The Notes on pages 28 to 54 form part of these Financial Statements.
25
BLUEJAY MINING PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
Share capital
Note
£
Share
premium
£
Other reserves
Retained losses
Total equity
£
£
£
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
16
16
17
17
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
Balance as at 1 January 2019
7,800,237
43,739,139
311,397
(21,409,348)
30,441,425
Loss for the year
Total comprehensive income for the year
Proceeds from share issues
Issue costs
Share based payments
Issued Options
Exercised options
Expired Options
16
16
17
17
17
17
-
-
-
-
11,500
11,488,500
-
496
-
-
(175,800)
411,817
-
-
-
-
-
-
-
-
36,175
(13,605)
(1,598)
328,167
(3,161,498)
(3,161,498)
(3,161,498)
(3,161,498)
-
-
-
-
13,605
1,598
-
11,500,000
(175,800)
412,313
36,175
-
-
-
Other equity adjustments
(328,167)
Total transactions with owners, recognised
directly in equity
(316,171)
11,724,517
349,139
15,203
11,772,688
Balance as at 31 December 2019
7,484,066
55,463,656
660,536
(24,555,643)
39,052,615
The Notes on pages 28 to 54 form part of these Financial Statements.
26
BLUEJAY MINING PLC
STATEMENTS OF CASH FLOWS
For the year ended 31 December 2019
Cash flows from operating activities
Loss before income tax
Adjustments for:
Depreciation
Loss/(gain) on financial assets at FVTPL
Loss on sale of property, plant and equipment
Share options expense
Share based payments
Intercompany management fees
Net finance (income)/costs
Non cash loss/(gain)
Impairments
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
Sale of financial assets at FVTPL
Sale of property, plant and equipment
Purchase of quoted shares measured at fair value
through the profit or loss
Purchase of intangible assets
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Transaction costs of share issue
Loans granted to subsidiary undertakings
Interest paid
Group
Company
Year ended
Year ended
31 December
2019
31 December
2018
Year ended
31 December
2019
Year ended 31
December
2018
Note
£
£
£
£
6
8
6
17
17
21
7
10
12
6
8
6
8
7
16
16
(1,806,941)
(10,776,686)
(3,161,498)
(8,894,678)
500,479
(668,133)
71,644
36,175
412,313
-
(6,454)
96,568
250,590
96,573
-
-
45,000
-
(12,906)
-
61,519
(668,133)
-
36,175
412,313
(665,120)
(458,442)
1,483,889
12,745
96,573
-
-
45,000
(620,482)
(303,912)
-
-
8,873,585
-
8,010,452
(1,156,028)
(174,810)
459,847
241,867
647,777
526,623
404,782
(42,224)
(2,060,530)
(1,456,787)
(1,784,897)
(1,291,744)
(543,556)
(2,452,284)
998,535
165,140
-
-
-
(426,975)
(7,841,020)
(6,251,969)
(12,539)
998,535
-
-
-
(48,689)
-
-
(426,975)
-
10,683
12,906
10,683
12,210
(7,210,218)
(9,118,322)
996,679
(463,454)
10,925,000
17,099,999
10,925,000
17,099,999
(175,800)
(641,071)
(175,800)
(641,071)
-
(4,229)
-
-
(8,538,772)
(8,746,995)
(2,492)
-
Net cash generated from financing activities
10,744,971
16,458,928
2,207,936
7,711,933
Net decrease/(increase) in cash and cash equivalents
1,474,223
5,883,819
1,419,718
5,956,735
Cash and cash equivalents at beginning of year
8,843,709
2,901,922
8,777,619
2,820,884
Exchange gain on cash and cash equivalents
(3,231)
57,968
-
-
Cash and cash equivalents at end of year
11
10,314,701
8,843,709
10,197,337
8,777,619
Major non-cash transactions
During the year, the Company issued share capital for proceeds of £11.5m. An amount of £575,000 is unpaid at 31 December
2019.
The Company has issued shares as settlement for expenses with a value of £412,313.
The Notes on pages 28 to 54 form part of these Financial Statements.
27
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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 2019
As of 1 January 2019, the Company adopted IFRS 16 Leases, Amendments to IFRS 2 – classification and measurement of
share based payments transactions, Annual improvements to IFRS Standards 2015-2017 cycle and IFRIC 23 Uncertainty
over income tax treatments .
IFRS 16 Adoption
On 1 January 2019, the Group adopted the provisions of IFRS 16 – Leases using the modified retrospective approach, under
which the cumulative effect of initial application is recognised in retained earnings at 1 January 2019 where material.
Accordingly, the comparative information presented for 2018 has not been restated.
FIRS 16 has been applied to one new lease which was adopted during the financial year. In the Statement of Financial
Position the right-of-use asset is recorded in non-current assets as part of property, plant and equipment and the lease liability
is split between current liabilities for the portion due within 12 months and non-current liabilities for the remainder.
To determine the split between principal and interest in the lease the incremental borrowing rate of the Group was applied.
This method was adopted as the Group was not able to ascertain the implied interest rate in the lease.
The Group has applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months
of lease term when applying IFRS 16 to leases previously classified as operating leases under IAS 17.
Of the other IFRSs and IFRICs, none are expected to have a material effect on future Company Financial Information.
28
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
(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 3 (Amendments)
IAS 1 and IAS 8
(Amendments)
IAS 1 (Amendments)
*subject to EU endorsement
Impact on initial application
Definition of a Business
Definition of material
Classification of Liabilities as Current or Non-
Current.
Effective date
*1 January 2020
1 January 2020
*1 January 2022
The Group is evaluating the impact of the new and amended standards above which are not expected to have a material
impact on the Group’s results or shareholders’ funds
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.
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
As described in Note 30, the Group is managing the impact of the COVID-19 pandemic on its business and the uncertainty it
creates. The Company has taken swift pre-emptive action to ensure the safety of its employees, contractors and supply chain.
This includes a full financial and strategic review designed to safeguard and ensure the stability and longevity of Bluejay
activities for the benefit for all its stakeholders and as a result the Group have postponed all fieldwork until the UK and
Greenland Governments confirm it is safe to do so.
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 meet all committed and contractual expenditure within the next 12 months and to maintain good title to the exploration
licences. This will ensure they will still be in a strong financial position once they are able to re-commence exploration activity.
The Group’s business activities together with the additional 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.
29
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
The Directors have a reasonable expectation that the Group and Company have sufficient resources to continue in the current
economic climate with the COVID-19 pandemic and 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
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.
30
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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
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.
31
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
(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
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
32
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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.
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.
Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
Fixed payments, less any lease incentives receivable;
•
• Variable lease payment that are based on an index or a rate, initially measured using the index or the rate as at the
commencement date;
The exercise price of a purchase option; and
•
• Payment of penalties for terminating the lease.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary
to obtain an asset of similar value to the right-ofuse asset in a similar economic environment with similar terms, security and
conditions. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
Assets obtained under finance leases are depreciated over their useful lives. The lease liabilities are shown in note 13.
33
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
Rent payable under operating leases on which the short term exemption has been taken, less any lease incentives received,
is charged to the income statement on a straight-line basis over the term of the relevant lease except where another more
systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
2.14.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.15.
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.
2.16.
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.
2.17.
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.
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.
2.18.
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
34
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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.
(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.
35
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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 2019 the Group had borrowings of £nil (31 December 2018: £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: 2019
impact on Euro
Loss before tax for the year ended
31 December 2019
Group
Company
Equity before tax for the year
ended
31 December 2019
Group
Company
Increase/(decrease)
exchange rate
in
foreign
£
£
£
£
10%
-10%
(1,815,118)
(1,798,764)
(3,070,151)
(3,070,151)
36,212,767
35,386,153
39,143,962
39,143,962
Potential
expenses: 2019
impact on DKK
Loss before tax for the year ended
31 December 2019
Equity before tax for the year
ended
31 December 2019
Group
Company
Group
Company
Increase/(decrease)
exchange rate
in
foreign
10%
-10%
£
£
£
£
(1,854,789)
(1,759,093)
(3,070,151)
(3,070,151)
37,595,930
34,002,990
39,143,962
39,143,962
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.
36
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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 2019 of £23,138,507 (2018: £15,478,246). 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.
Included within intangible assets at 31 December 2019 is an amount of £3,999,977 (2018: £3,983,108) in respect of projects
in Finland. In the previous year the Directors assessed this amount as recoverable through a new strategy of entering into a
joint venture with a preferred partner. As at 31 December 2019 the Directors have not finalised and agreed binding terms with
a preferred partner. The Directors have not recognised any impairment to this amount because they consider that they will
be able to successfully finalise the terms and recover the carrying amount in full. If a preferred partner cannot be located,
then it is likely that an impairment charge will be necessary in respect of Finish projects and this is considered a critical
accounting judgement.
The Directors have reviewed the estimated value of each project prepared by management and have concluded that the no
impairment is to be recognised.
Recoverability of the loan due from FinnAust Mining Finland Oy
The Directors have assessed that there is no impairment required to the Intangible assets in respect of the projects in Finland
with a carrying amount of £3,999,977. The Directors have not impaired a receivable due from FinnAust Mining Finland Oy
with a carrying value of £6,764,324. The recoverability of this receivable is dependent on the success of the underlying project
in Finland. Therefore, the carrying value of the receivable from FinnAust Mining Finland Oy exceeds the carrying amount of
the projects in Finland by £2,764,347. The Directors consider that the receivable due from FinnAust Mining Finland Oy will
be recovered in full by enterting into a joint venture with a preferred partner, however the Group has not finalised such an
arrangement 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 2019, the Group and Company have recognised an amount of £588,302 (2018: £463,704) 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 27. 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.
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.
Recovery of other receivables
Included in other receivables is an amount of £575,000 (2018: £nil) as at 31 December 2019 in respect of unpaid ordinary
share capital issued on 25 November 2019. 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.
37
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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 three geographical segments; the United Kingdom,
Greenland and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Greenland and Finland
relate to exploration and evaluation work.
The Group had no turnover during the period.
2019
Revenue
Administrative expenses
Foreign exchange
Finance income
Other income
Loss before tax per reportable segment
Additions to PP&E
Additions to intangible asset
Reportable segment assets
2018
Revenue
Administrative expenses
Foreign exchange
Finance income
Other income
Impairment of intangible asset
Loss before tax per reportable segment
Additions to PP&E
Additions to intangible asset
Reportable segment assets
Greenland
£
-
(610,008)
(2,186)
-
-
478,481
531,017
7,573,396
21,840,152
Greenland
£
-
(499,927)
(155,111)
-
-
-
478,708
2,395,852
5,148,986
11,960,517
Finland
£
-
(167,185)
(550)
-
1,052
UK
£
-
(1,482,431)
(119,155)
6,454
-
Total
£
-
(2,259,624)
(121,891)
6,454
1,052
81,770
1,246,690
1,806,941
-
267,624
4,092,289
12,539
-
11,748,945
543,556
7,841,020
37,681,386
Finland
£
-
(92,937)
(63,818)
-
2,409
8,873,586
8,707,376
23,548
1,102,983
4,081,746
UK
£
-
(1,207,987)
195,172
12,209
-
Total
£
-
(1,800,851)
(23,757)
12,209
2,409
-
(8,873,586)
1,590,602
48,690
-
12,225,145
10,776,686
2,468,090
6,251,969
28,267,408
38
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
6. Property, plant and equipment
Group
Cost
As at 1 January 2018
Exchange Differences
Additions
As at 31 December 2018
As at 1 January 2019
Exchange Differences
IFRS 16 Adjustment
Additions
Disposals
As at 31 December 2019
Depreciation
As at 1 January 2018
Charge for the period
Exchange differences
As at 31 December 2018
As at 1 January 2019
Charge for the year
Disposals
Exchange differences
Right of
use assets
£
-
-
-
-
-
-
182,542
-
-
182,542
-
-
-
-
-
40,565
-
-
Software
£
Machinery &
equipment
Office
equipment
£
£
Total
£
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
28,470
-
-
8,623
-
3,091,550
(164,770)
-
531,017
(202,413)
49,289
(274)
-
3,916
-
3,169,309
(165,044)
182,542
543,556
(202,413)
37,093
3,255,384
52,931
3,527,950
8,113
6,363
-
14,476
14,476
10,796
-
-
48,292
235,935
8,667
7,556
8,292
-
63,961
250,590
8,667
292,894
15,848
323,218
292,894
436,487
(37,273)
(26,719)
15,848
12,631
-
(178)
323,218
500,479
(37,273)
(26,897)
As at 31 December 2019
40,565
25,272
665,389
28,301
759,527
Net book value as at 31 December 2018
-
13,994
2,798,656
33,441
2,846,091
Net book value as at 31 December 2019
141,977
11,821
2,589,995
24,630
2,768,423
Depreciation expense of £500,479 (31 December 2018: £250,590) for the Group has been charged in administration
expenses.
39
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
Company
Cost
As at 1 January 2018
Additions
As at 31 December 2018
As at 1 January 2019
IFRS 16 Adjustment
Additions
As at 31 December 2019
Depreciation
As at 1 January 2018
Charge for the period
As at 31 December 2018
As at 1 January 2019
Charge for the year
As at 31 December 2019
Right of
use assets
Software
Office
equipment
£
£
Total
£
£
-
-
-
12,664
15,806
9,033
32,883
21,697
48,689
28,470
41,916
70,386
-
182,542
-
28,470
-
8,623
41,916
-
3,916
70,386
182,542
12,539
182,542
37,093
45,832
265,467
-
-
-
8,113
6,363
5,251
6,382
14,476
11,633
-
40,565
14,476
10,796
11,633
10,158
13,364
12,745
26,109
26,109
61,519
40,565
25,272
21,792
87,629
Net book value as at 31 December 2018
-
13,994
30,283
44,277
Net book value as at 31 December 2019
141,977
11,821
24,040
177,838
Depreciation expense of £61,519 (31 December 2018: £12,745) 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.
Group
31 December
31 December
Exploration & Evaluation Assets - Cost and Net Book Value
Cost
As at 1 January
Additions
Exchange differences
As at year end
Provision for impairment
As at 1 January
Impairments
As at year end
Net book value
2019
£
24,351,831
7,841,020
(180,759)
32,012,092
8,873,585
-
8,873,585
23,138,507
2018
£
17,971,795
6,251,969
128,067
24,351,831
-
8,873,585
8,873,585
15,478,246
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
40
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
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;
• 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.
In the previous year, the Directors recognised an impairment of £8,873,585 in respect of exploration projects in Finland
following their impairment assessment because certain project areas were no longer considered to be prospective and no
further exploration or evaluation work was planned or budgeted for. The carrying value of the remaining project areas in
Finland was assessed by the Directors as recoverable through a new strategy of identifying a preferred partner to enter into
a joint venture agreement. During 2019 there has been some progress in locating a preferred partner, however no binding
terms have been finalised and agreed. The Directors do not consider that the Finish projects should be impaired further based
on being able to finalise terms with a preferred partner in the future.
Following their assessment, the Directors concluded that no impairment charge was required at 31 December 2019.
8. Financial assets measured at fair value
As at 1 January
Acquisition of quoted shares
Disposal of quoted shares
Fair value gain
As at year end
Group
Company
31 December
2019
31 December
2018
31 December
2019
31 December
2018
£
330,402
£
-
£
330,402
£
-
-
426,975
-
426,975
(998,535)
-
(998,535)
-
668,133
(96,573)
688,133
(96,573)
-
330,402
-
330,402
These investments are held for short-term trading purposes. At the reporting date, all the shares had been sold.
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
Transfer of investment
Impairment charge
At end of period
Loans to Group undertakings
Total
41
Company
31 December
2019
31 December
2018
£
£
2,000,002
9,700,002
58,340
-
(1,500,000)
(7,700,000)
558,342
2,000,002
27,621,284
18,918,059
28,179,626
20,918,061
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment
provision.
During 2019, the Group fully impaired its investment in BJ Mining Limited which had a carrying value of £1,500,000 following
a transfer of legal ownership to a third party 100% owned outside the Group. Immediately prior to the transfer of legal
ownership, the assets held by BJ Mining Limited were transferred to Dundas Titanium A/S.
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
Kummunkatu 23,
FI-83500 Outokumpu, Finland
Finland
Kummunkatu 23,
FI-83500 Outokumpu, Finland
Finland
Disko Exploration
Limited
2nd Floor 7-9 Swallow Street,
London, England, W1B 4DE
United
Kingdom
Nil
Nil
100%
Exploration
100%
Exploration
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
Prepayments
VAT receivable (See note 25)
Other receivables
Total
Group
Company
31 December
2019
31 December
2018
31 December
2019
31 December
2018
£
£
£
£
43,925
30,237
-
83,423
619,957
712,450
-
72,989
517,178
148,556
4,312
395,174
83,423
588,302
657,160
30,236
191,346
62,685
463,704
92,649
1,459,755
768,960
1,728,371
840,620
The fair value of all receivables is the same as their carrying values stated above.
42
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
Included in other receivables is an amount of £575,000 (2018: £nil) as at 31 December 2019 in respect of unpaid ordinary
share capital issued on 25 November 2019.
At 31 December 2019 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.
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
2019
£
1,401,201
38,637
19,917
2018
£
618,352
70,756
79,852
2019
£
1,728,371
-
-
31
December
2018
£
809,699
-
30,921
1,459,755
768,960
1,728,371
840,620
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
2019
£
2018
£
2019
£
2018
£
Cash at bank and in hand
10,314,701
8,843,709
10,197,337
8,777,619
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
Group
Company
31 December
31 December
31 December
31 December
2019
£
2018
£
2019
£
2018
£
10,212,030
38,236
64,435
8,781,031
4,762
57,916
10,197,337
-
-
8,777,619
-
-
10,314,701
8,843,709
10,197,337
8,777,619
43
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
12. Trade and other payables
Trade payables
Other creditors
Accrued expenses
Group
Company
31 December
31 December
31 December
31 December
2019
£
1,015,968
98,705
128,174
2018
£
514,490
125,671
143,675
2019
£
932,125
248
63,803
2018
£
326,225
13,861
129,468
1,242,847
783,836
996,176
469,554
Trade payables include amounts due of £898,395 in relation to exploration and evaluation activities.
The carrying amounts of the Group and Company’s trade and other payables are denominated in the following currencies:
Group
Company
31 December
31 December
31 December
31 December
2019
£
2018
£
1,061,692
29,957
151,198
8,781,031
4,762
57,916
2019
£
996,176
-
-
2018
£
469,554
-
-
1,242,847
8,843,709
996,176
469,554
UK Pounds
Euros
Danish Krone
13. Lease liabilities
Lease liabilities are effectively secured, as the rights to the leased asset revert to the lessor in the event of default.
Lease liabilities
Not later than one year
Later than one year and no later than five years
Later than five years
Future finance charges on finance lease liabilities
Present value of finance lease liabilities
Group and Company
31 December
2019
31 December
2018
£
80,814
62,220
-
143,034
3,966
147,000
£
-
-
-
-
-
-
For the year ended 31 December 2019, the total finance charges were £2,492. The contracted and planned lease
commitments were discounted using the incremental borrowing rate of 3%.
14. Deferred tax
An analysis of deferred tax liabilities is set out below.
Group
2019
£
Company
2018
£
2019
£
2018
£
Deferred tax liabilities
- Deferred tax liability after more than 12 months
496,045
496,045
Deferred tax liabilities
496,045
496,045
-
-
-
-
44
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
The Group has additional capital losses of approximately £8,883,046 (2018: £8,873,586) and other losses of approximately
£6,181,673 (2018: £5,897,843) 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.
15. Financial Instruments by Category
Group
31 December 2019
31 December 2018
Assets per Statement of Financial Performance
other
receivables
Trade
and
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)
Finance lease liability
Company
Amortised
cost
£
1,376,332
-
10,314,701
11,691,033
FVTPL
£
Total
£
Amortised
cost
£
FVTPL
£
Total
£
-
1,376,332
695,971
-
-
-
- 10,314,701 8,843,709
- 11,691,033 9,539,680
-
330,402
695,971
330,402
- 8,843,709
330,402 9,870,082
31 December 2019
31 December 2018
Amortised
cost
Total
Amortised
cost
Total
£
£
£
£
1,242,847 1,242,847
143,034
1,385,881 1,385,881
143,034
783,836
-
783,836
783,836
-
783,836
31 December 2019
31 December 2018
Amortised cost
FVTPL
Total Amortised cost
FVTPL
Total
Assets per Statement of Financial Performance
£
£
£
£
£
£
Trade and other receivables (excluding
prepayments)
Financial assets at fair value through profit or
loss
Cash and cash equivalents
1,644,498
- 1,644,498
777,935
-
777,935
-
10,197,337
11,841,835
-
-
- 10,197,337
- 330,402
330,402
8,777,619
- 8,777,619
- 11,841,835
9,555,554 330,402 9,885,956
Liabilities per Statement of Financial
Performance
Trade and other payables (excluding non-
financial liabilities)
Finance lease liability
31 December 2019
31 December 2018
At amortised
cost
Total
At amortised
cost
Total
£
£
£
£
996,176
996,176
469,554
469,554
143,034
143,034
1,139,210 1,139,210
-
469,554
-
469,554
45
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
16. Share capital and premium
Group and Company
Number of shares
Share capital
Ordinary shares
Deferred shares
Deferred A shares
Total
31 December
2019
31 December
2018
31 December
2019
31 December
2018
969,969,397
850,007,782
96,996
85,001
558,104,193
558,104,193
558,104
588,104
68,289,656,190
71,271,328,120
6,828,966
7,127,132
69,817,729,780
72,709,440,095
7,484,066
7,800,237
Issued at 0.01 pence per share
Number of
Ordinary shares
Share capital
Share premium
£
£
Total
£
At 1 January 2018
771,357,866
77,136
27,220,576 27,297,712
Issue of new shares – 11 January 2018
Issue of new shares – 1 February 2018 (1)
Issue of new shares – 23 May 2018
Exercise of options – 1 October 2018
Issue of new shares – 19 October 2018
As at 31 December 2018
As at 1 January 2019
Issue of new shares – 24 January 2019
Issue of new shares – 24 January 2019
Exercise of options – 2 May 2019
Exercise of options – 10 May 2019
Issue of new shares – 25 November 2019 (2)
Issue of new shares – 12 December 2019
143,495
77,272,728
97,835
1,000,000
135,858
850,007,782
850,007,782
1,461,615
1,000,000
300,000
2,200,000
75,000,000
40,000,000
14
7,728
10
100
13
85,001
85,001
145
100
30
220
7,500
4,000
22,486
22,500
16,351,200 16,358,928
22,500
100,000
22,500
22,490
99,900
22,487
43,739,139 43,824,140
43,739,139 43,824,140
102,167
102,312
59,900
29,970
219,780
7,316,700
60,000
30,000
220,000
7,324,200
3,996,000
4,000,000
As at 31 December 2019
969,969,397
96,996
55,463,656 55,560,652
(1)
(2)
Includes issue costs of £641,071
Includes issue costs of £175,800
Deferred Shares (nominal value of 0.1 pence per share)
As at 1 January 2018
As at 31 December 2018
As at 1 January 2019
Other equity adjustment
As at 31 December 2019
Number of Deferred
shares
588,104,193
588,104,193
588,104,193
(30,000,000)
558,104,193
Share capital
£
588,104
588,104
588,104
(30,000)
558,104
Deferred A Shares (nominal value of 0.1 pence per share)
Number of Deferred A
shares
Share capital
£
As at 1 January 2018
As at 31 December 2018
As at 1 January 2019
Other equity adjustment
As at 31 December 2019
71,271,328,120
71,271,328,120
71,271,328,120
(2,981,671,930)
68,289,656,190
7,127,132
7,127,132
7,127,132
(298,167)
6,828,966
46
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
On 24 January 2019 the Company issued and allotted 1,461,615 new Ordinary Shares at a price of 7 pence per share per
share as an exercise of warrants. On this same day the Company issued and allotted 1,000,000 new Ordinary Shares at a
price of 6 pence per share as an exercise of warrants.
On 2 May 2019 the Company issued and allotted 300,000 new Ordinary Shares at a price of 10 pence per share as an
exercise of options.
On 10 May 2019 the Company issued and allotted 2,200,000 new Ordinary Shares at a price of 10 pence per share as an
exercise of options.
On 25 November 2019 the Company raised £7,500,000 via the issue and allotment of 75,000,000 new Ordinary Shares at a
price of 10 pence per share.
On 12 December 2019 the Company raised £4,000,000 via the issue and allotment of 40,000,000 new Ordinary Shares at a
price of 10 pence per share.
The Directors have corrected an error in the number of Deferred and Deferred A shares in the year ended 31 December 2019
relating to a share repurchase in 2011 which was not recorded correctly in the financial statements. This is not material and
has therefore not amounted to a prior period adjustment. The correcting entry is a recategorisation of £328,167 recorded
within share capital which should have been recorded in the capital redemption reserve. The adjustment has no impact on
the Company or Group’s net assets or profit or loss.
There is an amount of £575,000 which has not been paid as at 31 December 2019 in respect of the ordinary share capital
issued on 25 November 2019 which is recorded in other receivables.
17. 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
29 November 2013
4 March 2016
Expiry Date
29 May 2019
3 March 2019
17 December 2016
17 December 2021
9 June 2017
17 October 2017
17 October 2017
17 October 2017
23 July 2019
23 July 2019
23 July 2019
9 June 2022
17 October 2020
17 October 2020
17 October 2020
23 July 2023
23 July 2023
23 July 2023
Exercise price in £ per share
Options & Warrants
31 December
2019
31 December
2018
0.10
0.06
0.07
0.165
0.20
0.25
0.30
0.10
0.15
0.20
-
-
1,228,153
1,025,000
5,350,000
5,350,000
5,350,000
5,200,000
5,200,000
5,600,000
5,000,000
1,000,000
2,689,768
1,025,000
5,350,000
5,350,000
5,350,000
-
-
-
34,303,153
25,764,768
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters
used are detailed below:
2016 Options
2017 Options
2017 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)
17/12/2016
5 years
7p
0.81%
17.64%
-
20%
17
47
9/6/2017
5 years
15.5p
0.56%
31.83%
-
20%
34
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
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
Granted on:
Life (years)
Share price (pence per share)
Risk free rate
Expected volatility
Expected dividend yield
Marketability discount
Total fair value (£000)
2017 Options
2019 Options
2019 Options
2019 Options
17/10/2017
4 years
17.75p
0.5%
13.85%
-
20%
1
23/7/2019
4 years
7.45p
0.5%
21.64%
-
20%
31
23/7/2019
4 years
7.45p
0.5%
21.64%
-
20%
5
23/7/2019
4 years
7.45p
0.5%
21.64%
-
20%
1
The expected volatility of the 2016, 2017 and 2019 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 2019 is shown below:
Outstanding at beginning of period
Expired
Exercised
Granted
Outstanding as at period end
Exercisable at period end
2019
2018
Weighted
average
exercise price
(£)
0.1913
-
0.085
-
0.1898
0.1898
Number
25,764,768
(2,500,000)
(4,961,615)
16,000,000
34,303,153
34,303,153
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
2019
2018
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
0.1898
34,303,153
-
3.68
-
3.68
-
-
0.1913
25,764,768
-
1.65
-
1.65
During the period there was a charge of £36,175 (2018: £nil) in respect of share options.
48
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
18. Other reserves
Group
Foreign
currency
translation
reserve
Reverse
acquisition
reserve
Redemption
reserve
£
£
£
Merger
reserve
£
Share
option
reserve
£
Total
£
At 31 December 2018
166,000
959,712
(8,071,001)
36,463
108,934
(6,799,892)
Currency translation differences
Exercised options
Expired Options
Issued Options
Other equity adjustments
-
-
-
-
-
(1,153,814)
-
-
-
-
-
-
-
-
-
-
-
-
-
328,167
-
(13,605)
(1,598)
36,175
-
(1,153,814)
(13,605)
(1,598)
36,175
328,167
At 31 December 2019
166,000
(194,102)
(8,071,001)
364,630
129,906
(7,604,567)
At 31 December 2018
Exercised options
Expired Options
Issued Options
Other equity adjustments
At 31 December 2019
19. Employee benefit expense
Company
Merger
reserve
Redemption
reserve
Share option
reserve
£
£
£
Total
£
166,000
36,463
108,934
311,397
-
-
-
-
-
-
-
328,167
(13,605)
(1,598)
36,175
-
(13,605)
(1,598)
36,175
328,167
166,000
364,630
129,906
660,536
Group
Company
Year ended
31 December
2019
Year ended
31 December
2018
Year ended
31 December
2019
Year ended
31 December
2018
Staff costs (excluding Directors)
£
£
£
£
Salaries and wages
Social security costs
Retirement benefit costs
948,450
77,095
5,084
1,030,629
790,179
108,061
1,616
899,856
438,012
25,322
5,084
468,418
279,567
9,836
1,374
290,777
The average monthly number of employees for the Group during the year was 16 (year ended 31 December 2018:16) and
the average monthly number of employees for the Company was 10 (year ended 31 December 2018: 9).
Of the above Group staff costs, £763,055 (year ended 31 December 2018: £485,063) has been capitalised in accordance
with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
49
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
20. Directors' remuneration
Executive Directors
Roderick McIllree
Bo Stensgaard (1)
Non-executive Directors
Ian Henderson
Garth Palmer (2)
Peter Waugh
Michael Hutchinson
Year ended 31 December 2019
Short-term
benefits
Post-
employment
benefits
£
£
57,612
113,438
50,000
22,636
24,000
25,000
1,143
-
-
619
492
-
292,686
2,254
Share based
payments
£
-
-
-
-
-
-
-
Total
£
58,755
113,438
50,000
23,255
24,492
25,000
294,940
Of the above Group directors’ remuneration, £44,412 (31 December 2018: £42,905) has been capitalised in accordance with
IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
Year ended 31 December 2018
Post-
employment
benefits
Share based
payments
£
640
5
-
330
-
315
1,290
£
-
-
-
-
-
-
-
Short-term
benefits
£
182,783
10,286
19,022
16,114
24,000
25,000
277,205
Total
£
183,423
10,291
19,022
16,444
24,000
25,315
278,495
Executive Directors
Roderick McIllree
Non-executive Directors
Greg Kuenzel (3)
Ian Henderson
Garth Palmer
Peter Waugh
Michael Hutchinson
(1) Bo Stensgaard was appointed on 13 August 2019
(2) Garth Palmer resigned on 12 December 2019
(3) Gregory Kuenzel resigned on 2 June 2018
Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have
been disclosed in Note 28.
The remuneration of Directors and key executives is determined by the remuneration committee having regard to the
performance of individuals and market trends.
21. Finance income
Interest received from cash and cash equivalents
Finance Income
50
Group
Year ended
Year ended
31 December
31 December
2019
£
6,454
6,454
2018
£
12,209
12,209
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
22. Other gain/(losses)
Gain/(Loss) on financial assets measured at fair value through profit or loss
Loss on sale of property, plant and equipment
Other gains
Other gain/(losses)
23. Income tax expense
No charge to taxation arises due to the losses incurred.
Group
Year ended
Year ended
31 December
31 December
2019
£
668,133
(71,644)
(29,421)
567,068
2018
£
(96,573)
-
3,462
(93,111)
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax
rate applicable to the losses of the consolidated entities as follows:
Loss before tax
Tax at the applicable rate of 21.96% (2018: 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
2019
Year ended
31 December
2018
£
£
(1,806,941)
(10,776,686)
(396,804)
(2,187,667)
122,433
(9,460)
283,831
-
1,807,738
(450,153)
830,082
-
The weighted average applicable tax rate of 21.96% (2018: 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 £1,189,029 (2018: £1,179,569) due to tax losses
available to carry forward against future taxable profits. The Company has tax losses of approximately £6,181,673 (2018:
£5,897,843) 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.
24. Earnings per share
Group
The calculation of the total basic earnings per share of (0.21) pence (31 December 2018: (1.279) pence) is based on the loss
attributable to equity holders of the parent company of £1,806,941 (31 December 2018: £10,776,686) and on the weighted
average number of ordinary shares of 969,969,397 (31 December 2018: 842,546,640) 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 17.
51
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
25. Expenses by nature
Employee expenses
Establishment expenses
Travel & subsistence
Professional & consultancy fees
IT & Software
Insurance
Depreciation
Share Option expense
Other expenses
Total administrative expenses
Group
Year ended
31 December
2019
£
Year ended
31 December
2018
£
437,329
105,971
130,708
897,713
17,605
76,157
500,479
36,175
57,487
281,158
91,211
141,906
930,372
9,795
54,832
250,590
-
40,987
2,259,624
1,800,851
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
Year ended 31
December
2019
£
65,655
20,868
2018
£
47,000
70,778
26. 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.
52
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
(b) License commitments
Bluejay now owns 7 mineral exploration licenses in Greenland. Licence 2015/08 and 2019/114 is a part of the Dundas project
and licences 2011/31, 2012/29, 2017/01, 2018/16 and 2019/116 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 2019 these are as follows:
Group
Not later than one year
Later than one year and no later than five years
Total
Group
Minimum
spend
requirement
£
Total
£
-
3,009
5,768,829 5,783,063
License
fees
£
3,009
14,234
17,243
5,768,829 5,768,072
As a result of the COVID-19 pandemic, the Greenland Government has approved that there will be no mineral exploration
licence spend obligations for the period 1 January 2020 until 31 December 2020.
27. 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 £588,302 at 31 December 2019 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 2019 to
£843,794.
The Directors strongly refute the view of HMRC that the Company does not constitute a business for VAT purposes. As at
the date of of release, the case is yet to be heard in front of a Tribunal. Tribunal was scheduled for March 2020, however due
to COVID-19, it has been pushed back indefinitely. 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 £843,794 will be recovered in full and therefore have not recognised any
impairment to the carrying value of this amount.
28. 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)
53
Company
31 December
2019
£
31 December
2018
£
-
6,764,324
345
-
19,785,147
980,121
-
6,398,621
345
1,010,623
11,112,258
396,212
27,529,937
18,918,059
BLUEJAY MINING PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
Loans granted to subsidiaries have increased during the year due to additional loans being granted to the subsidiaries, and
foreign exchange loss of £1,344,308, 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 2019 (31 December 2018: £84,000) for the provision of corporate management, accounting and
consulting services to the Company. There was a balance of £9,622 owing at year end (31 December 2018: £8,537) .
RM Corporate Limited, a limited company of which Roderick McIllree is a director, was paid a fee of £221,996 for the year
ended 31 December 2019 (31 December 2018: £126,996) 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 2018: £12,700).
PMW Consultancy Services, operated by Peter Waugh as a sole trader, was paid a fee of £35,664 for the year ended 31
December 2019 (31 December 2018: £52,600) for consulting services to the Company. There was a balance of £10,000
owing at year end (31 December 2018: £10,000).
Greenland Gas & Oil Limited, a limited company of which Roderick McIllree is a director, was paid a fee of £nil for the year
ended 31 December 2019 (31 December 2018: £9,300) for geological information systems consulting services to the
Company. There was no balance outstanding at the year-end (31 December 2018: £nil).
29. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
30. Events after the reporting date
On 11 March 2020, the World Health Organisation declared the Coronavirus outbreak to be a pandemic in recognition of its
rapid spread across the globe, with over 200 countries now affected. Many governments are taking increasingly stringent
steps to help contain or delay the spread of the virus and as a result there is a significant increase in economic uncertainty.
For the Group’s 31 December 2019 financial statements, the Coronavirus outbreak and the related impacts are considered
non-adjusting events. Consequently, there is no impact on the recognition and measurement of assets and liabilities. Due to
the uncertainty of the outcome of current events, the Group cannot reasonably estimate the impact these events will have on
the Group’s financial position, results of operations or cash flows in the future.
54