TIDMTHX
RNS Number : 2737K
Thor Explorations Ltd
24 August 2023
NEWS RELEASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO U.S. WIRE SERVICES
August 24 2023 TSXV/AIM: THX
THOR EXPLORATIONS ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR
THE THREE AND SIX MONTHSING JUNE 30, 2023
Thor Explorations Ltd. (TSXV / AIM: THX) ("Thor Explorations",
"Thor" or the "Company") is pleased to provide an operational and
financial review for its Segilola Gold mine, located in Nigeria
("Segilola"), and for the Company's mineral exploration properties
located in Nigeria, Senegal and Burkina Faso for three ("Q2 2023"
or the "Period") and six months to June 30, 2023 ("H1 2023").
The Company's Consolidated Condensed Interim Financial
Statements together with the notes related thereto, as well as the
Management's Discussion and Analysis for the three and six months
ended June 30, 2023, are available on Thor Explorations' website at
https://thorexpl.com/investors/financials/ .
All figures are in US dollars ("US$") unless otherwise
stated.
Operational Highlights for Q2 2023 and H1 2023
Production
-- Gold production for the Period totaled 23,078 ounces ("oz") (H1 2023: 43,707 oz)
-- All main operating units of the process plant continue to
perform better than expected, with the plant operating above
nameplate capacity
o Several improvement projects at the process plant are being
undertaken through the remainder of 2023
-- Three Loss Time Injuries ("LTIs") occurred in H1 2023, which
triggered an increase in training and workplace inspections to
improve working conditions
Exploration
-- The Company has prioritized exploration within a 25-kilometre
("km") radius of Segilola with the key objective being to extend
the life of mine
-- Four main advanced exploration targets that have been defined
are the Kola Prospect, Igila, Aye-Ile Western Prospects and
Ijarigbe
-- The Kola Prospect is located 23km south of Segilola and is a
new high-grade greenfield exploration discovery:
o Reverse Circulation drilling ("RC") was carried out at a
low-level stream sediment zone and showed initial positive results,
which included 7 metres ("m") grading at 25.98 g/t gold in the
near-surface weathered horizon and 4 m at 30.17 g/t gold in the
primary horizon
o Exploration testing of the general area is continuing and
drilling activities will continue through the remainder of the
year
-- The Igila Prospect is located 15km west of Segilola
o Exploration activities are ongoing and focused on delineating
additional strike length and identifying additional lodes
-- The Aye-Ile Prospect is located 1.2km south-east from Igila
o Drill testing has focused on the anomalous auger geochemistry
located a north-east dipping vein-system that is developed on the
same structural orientation as Igila
-- In Senegal, exploration activities at the Douta Project
("Douta") have progressed throughout Q2 2023
Thor Lithium - Newstar Minerals Limited
-- Thor, through its fully owned subsidiary Newstar Minerals
Ltd, acquired a significant tenure in south-west Nigeria that
covers both known lithium bearing, pegmatite deposits and a large,
unexplored, prospective, pegmatite-rich belt
-- An initial drilling program is being undertaken on one of the
Company's prospects located in the West Oyo Project Area to confirm
and delineate lithium-bearing mineralisation, such as spodumene and
lepidolite at depth
-- Post Period, the Company announced its initial results with the below key highlights:
o 11m at 2.61% lithium oxide ("Li(2) O") from 15m
o 9m at 2.42% Li(2) O from 35m
o 11m at 1.53% Li(2) O from 14m, including 9m at 1.70% Li(2) O
from 15m
o Spodumene is confirmed as the main lithium-bearing mineral,
with minor lepidolite and shallow mineralisation
Financial Highlights of the Period and H1 2023
-- Q2 2023 revenue of US$41.3 million (Q2 2022: US$41.3 million)
and H1 2023 of US$81.7 million (H1 2022: US$66.2 million)
-- Q2 2023 operating cost of US$942 per oz sold (Q2 2022: US$983
per oz) and an all-in sustaining cost ("AISC") of US$1,230 per oz
sold (Q2 2022: US$1,236 per oz)
-- Q2 2023 EBITDA of US$19 million (Q2 2022: US$17.7 million)
and H1 2023 of US$35.1 million (H1 2022: US$31,1 million)
-- Q2 2023 net profit of US$7.9 million (Q2 2022: US$6.7
million) and H1 2023 of US$12.2 million (H1 2022: US$10.2
million)
-- As of June 2023, the Company had cash of US$11.1 million (Q1 2023: US$4.5 million)
-- Q2 2023 net debt of US$16.8 million (Q1 2023: US$24.9 million)
Environment, Social and Governance
-- The Segilola HSE team commissioned a team of standby
emergency responders in Q2 2023, with 28 personnel specifically
trained to respond to emergency related, medical and operational
situations at the SROL site
-- The Company progressed its livelihood restoration programs for the local communities
-- Vegetable farms were completed in Q1 2023 and produced their
first crops and improved tomato species in Q2 2023, with commercial
off-takers purchasing the produce
-- Fish farms in the local community neared completion in Q2
2023 with farming to commence in Q3 2023
-- Improved cocoa species seedlings were issued to the local
community in Q2 2023 and training provided to the farmers to
improve yields and commercial returns
-- In Senegal, community projects undertaken included upgrading
a local school's facilities block, clearing land at a local
cemetery and providing a generator for the local police
station.
Outlook
-- Segilola production for the full year expected to be 85,000
oz with AISC expectations maintained at US$1,150 - US$1,350 per
oz
o Q3 2023 production is expected to be below original
expectations at the beginning of the financial year. However, Q4
gold production forecast remains in-line with original
expectations, with potential upside as mining conditions continue
to improve with the west wall push back nearing completion
-- Continue to advance exploration programs across the portfolio, including:
o Continuation of step-out drilling at Douta gold project in
Senegal
o Continuation of drilling at Segilola gold regional targets
o Continuation of drilling at L06 lithium prospect in
Nigeria
-- Completion of the Douta preliminary feasibility study ("PFS") in Q4 2023
Segun Lawson, President & CEO, stated:
"The second quarter of 2023 has seen good developments across
Thor's project portfolio. Operations are performing well, with the
processing plant still operating above nameplate design. The
Company posted strong revenues for H1 of US$81 million, with an
EBITDA of US$35.1 million and a net profit of US$12 million for the
same period.
"The Company expects to achieve its total material mined
forecast for H2, however grade control drilling for Q3 indicates a
lower than forecast recovered gold production for the period. While
the Q4 gold production forecast remains in-line with our original
target, with potential upside as mining conditions continue to
improve as the west wall push back nears completion, the Company
considers it prudent to update guidance for 2023 to 85,000oz of
recovered gold - the lower end of the previously announced range
for the full financial year.
"As we look to extend the life of mine at Segilola, Thor has
located several exploration targets within close proximity to the
project. These exploration targets are encouraging so far have
demonstrated positive results from initial exploration drilling
activities. We plan to follow up with further drilling activities
in Q3 and Q4 2023. At Douta, Thor is making great progress towards
completing the PFS, which is scheduled to be completed in Q4 this
year.
"With our strategy to identify high-value resource
opportunities, Thor acquired a significant tenure in south-west
Nigeria, which is known for lithium-bearing pegmatite deposits. An
initial drilling program is being undertaken on the West Oyo
Project area, with the objective to confirm and delineate lithium
bearing mineralization. I am pleased to confirm that, post period,
the program confirmed spodumene as the main lithium-bearing
mineral, together with minor lepidolite. We will continue to
explore the area and believe this poses a great opportunity to
increase shareholder value.
"We take the working conditions at our operations very
seriously, and as such, Thor has increased training and workplace
inspections to improve working conditions. The Segilola HSE team
has also commissioned a team of standby emergency responders during
the Quarter, with 28 personnel specifically trained to respond to
emergency related, medical and operational situations at the SROL
site. The program comprised classroom and practical sessions on how
to respond to first aid cases, administering basic life support to
unconscious victims and emergency response planning and activation
processes to ensure there are fewer lost time injuries.
"The Company is in a good position to advance its projects in
the next quarter, with further developments made at its exploration
prospects as well as improvements in processing capabilities which
should result in improved production. I look forward to updating
the shareholders on the developments made in the next quarter."
About Thor Explorations
Thor Explorations Ltd. is a mineral exploration company engaged
in the acquisition, exploration, development and production of
mineral properties located in Nigeria, Senegal and Burkina Faso.
Thor Explorations holds a 100% interest in the Segilola Gold
Project located in Osun State, Nigeria and has a 70% economic
interest in the Douta Gold Project located in south-eastern
Senegal. Thor Explorations trades on AIM and the TSX Venture
Exchange under the symbol "THX".
THOR EXPLORATIONS LTD.
Segun Lawson
President & CEO
For further information please contact:
Thor Explorations Ltd
Email: info@thorexpl.com
Canaccord Genuity (Nominated Adviser & Broker)
Henry Fitzgerald-O'Connor / James Asensio
Tel: +44 (0) 20 7523 8000
Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield / Franck Nganou
Tel: +44 (0) 20 7907 8500
Fig House Communications (Investor Relations)
Tel: +1 416 822 6483
Email: investor.relations@thorexpl.com
Ibu Lawson (Investor Relations)
Tel: +447909825446
Email: ibu.lawson@thorexpl.com
BlytheRay (Financial PR)
Tim Blythe / Megan Ray / Said Izagaren
Tel: +44 207 138 3203
Qualified Person
The technical information included in this report has been
prepared under the supervision of Alfred Gillman (Fellow, AusIMM,
CP Geology), who is designated as a "qualified person" under
National Instrument 43-101 and AIM and has reviewed and approves
the content of this news release. He has also reviewed QA/QC,
sampling, analytical and test data underlying the information.
Management Discussion & Analysis for Q2 2023
HIGHLIGHTS AND ACTIVITIES - SECOND QUARTER 2023
Operating results for the quarter were highlighted by the
selling of 20,852 ounces of gold during the period at a cash
operating cost1 of $942 per oz sold, with an all-in sustaining
cost(1) of $1,230 per oz sold. AISC guidance for 2023 is maintained
at US$1,150 per ounce to US$1,350 per ounce.
Gold recovered for the quarter was 23,078 ounces. The Company
has updated its production guidance to 85,000oz for the year.
Key Operating and Financial Statistics
Six Months period
Three Months period ended ended
June March June June June 30,
30, 2023 31, 2023 30, 2022 30, 2023 2022
------------------ ------ ----------- ----------- ----------- ----------- -----------
Operating
------------------ ------ ----------- ----------- ----------- ----------- -----------
Gold sold Au 20,852 21,553 22,173 42,405 35,636
Gold recovered Au 23,078 20,629 26,331 43,707 45,128
Average realised
gold price $/oz 1,990 1,902 1,842 1,945 1,852
Cash operating
cost $/oz 942 899 983 920 873
AISC $/oz 1,230 1,346 1,236 1,289 1,189
EBITDA $/oz 913 745 802 828 873
Financial
------------------ ------ ----------- ----------- ----------- ----------- -----------
Revenue $ 41,364,169 40,287,830 41,354,747 81,651,999 66,220,229
Net Profit $ 7,912,187 4,331,347 6,778,954 12,243,534 10,210,578
EBITDA $ 19,044,002 16,065,334 17,772,616 35,109,336 31,127,944
------------------ ------ ----------- ----------- ----------- ----------- -----------
June 30, March 31, December 31,
2023 2023 2022
----------- ----------- ---------------
Cash and cash equivalents $ 11,149,491 4,505,071 6,688,037
Deferred Income $ 865,173 - 6,581,743
Net Debt $ 16,807,972 24,940,762 31,650,722
--------------------------- --- ----------- ----------- -------------
Segilola Gold Mine, Nigeria
Mining
During the three months ended June 30, 2023, 5,633,688 tonnes of
material were mined, equivalent to a mining rate of 61,909 tonnes
of material per day. In this period, 278,583 tonnes of ore were
mined, equivalent to a mining rate of 3,061 tonnes of ore per day,
at an average grade of 2.43g/t. Mining of the West wall of the pit
is progressing well, with most of the more challenging mining for
the year completed. Production areas are increasing in width
allowing for improved utilization and productivity. Grade was lower
than planned due to delays in accessing higher-grade ore zones in
the central mine.
The stockpile balance at the end of the period was 297,100
tonnes of ore at an average of 1.06g/t. This comprised 1,961 tonnes
(4.42g/t) at high grade, 2,006 tonnes (2.09g/t) at medium grade,
288,401 tonnes (1.00g/t) at low grade and 4,693 tonnes (2.45g/t) on
the coarse ore stockpile.
Processing
During the three months ended June 30, 2023, a total of 255,231
tonnes of ore, equivalent to a throughput rate of 2,805 tonnes per
day, was processed. Throughput was higher than planned, with no
significant downtime periods.
The mill feed grade was 2.99g/t gold with recovery at 94.0% for
a total of 23,078 ounces of gold recovered. The mill rejected ore
bearing material crusher was commissioned during the quarter.
Smelting performance was improved with the commissioning of the new
smelter.
All of the main operating units of the process plant continue to
perform better than expected, with the plant operating above
nameplate capacity. Several improvement projects are being
undertaken through the remainder of 2023.
Production Metrics
Q2 - Q1 - Q4 - Q3 - Q2 - Q1 -
Units 2023 2023 2022 2022 2022 2022
Mining
Total Mined Tonnes 5,633,688 4,194,689 4,296,494 4,018,431 4,031,584 3,759,524
Waste Mined Tonnes 5,355,105 3,996,264 3,974,073 3,793,249 3,747,504 3,533,610
Ore Mined Tonnes 278,583 198,425 322,421 225,182 284,079 226,314
Grade g/t Au 2.43 2.85 3.51 4.43 3.63 2.68
Daily Total
Mining
Rate Tonnes/Day 61,909 46,608 46,701 43,679 44,303 41,772
Daily Ore
Mining
Rate Tonnes/Day 3,061 2,205 3,505 2,448 3,122 2,515
Stockpile
Ore
Stockpiled Tonnes 297,060 270,215 300,531 229,909 249,281 179,758
Ore
Stockpiled g/t Au 1.06 1.14 1.48 1.19 1.46 1.23
Ore
Stockpiled oz 10,124 9,904 14,300 8,796 11,701 7,109
Processing
Ore
Processed Tonnes 255,231 231,001 254,824 241,434 211,582 221,900
Grade g/t Au 2.99 2.95 3.38 3.58 3.66 3.18
Recovery % 94.0 94.1 95.0 95.5 95.5 94.1
Gold
Recovered oz 23,078 20,629 26,331 26,523 23,785 21,343
Milling
Throughput Tonnes/Day 2,805 2,567 2,770 2,624 2,325 2,466
Q2 - Q1 - Q4 - Q3 - Q2 - Q1 -
Units 2023 2023 2022 2022 2022 2022
Exploration Activity Summary Q2 2023
Nigeria Gold
Exploration remained a priority for the Company in 2023 in both
Nigeria and Senegal. In Nigeria, the Company continued to
prioritize exploration within a 25 kilometre radius of the Segilola
Gold Mine. The Company also expanded and diversified its portfolio
through the acquisition of over 600 sq km of lithium exploration
licences via the grant of new licences and also entering into joint
venture agreements with existing licence holders.
The key objective of the exploration strategy is to extend the
life of mine ("LOM") at Segilola. Approximately 80% of the
Company's Nigerian gold exploration effort is concentrated within a
25km radius of the Segilola operation such that potential
gold-bearing material can be easily trucked to the existing plant.
In areas that are further from the mine generative exploration is
targeting potential new stand-alone operations.
The majority of the exploration activities carried out on all
the Company's licences, consisted of RC drilling, Diamond Drilling,
geochemical stream sediment sampling, auger drilling and soil
sampling. Amongst other target areas that have been located, a new
high-grade target, the Kola target, was discovered and is located
about 23km from the Segilola Mine. The Kola target produced an
initial significant geochemical signature with follow up drill
testing intersecting several mineralized drilling intersections
including 11m grading 22g/tAu.
Four main advanced exploration targets have been defined within
a 25km radius of the Segilola Gold Mine. These comprise the
following target areas:
-- Kola Prospect
-- Igila (Western Prospects)
-- Aye-Ile (Western Prospects)
-- Ijarigbe
New Exploration Prospect - Kola Prospect
The Kola Prospect is a new high-grade greenfield exploration
discovery that is located 23km south of the Segilola Gold Mine
within a 100% Thor-owned exploration permit The prospect developed
from a low-level stream sediment anomaly which was confirmed by
follow-up auger-assisted soil geochemistry that returned values of
up to 4 g/t Au. Targeting of this anomalous zone was carried out
with RC drilling. Initial positive results included 7m grading
25.98 g/t Au in the near-surface weathered horizon. Additional
drilling located primary bedrock mineralisation grading 8m at 30.19
g/t Au. Initial data suggest that the geological controls relate to
a steeply dipping north-easterly trending zone within a biotite
gneiss sequence. Exploration testing of the general area is
continuing. Whilst the initial drilling results from the Kola
Prospect are encouraging, the Company has not yet identified
significant strike length extensions that would add material mine
life extensions to Segilola. Drilling activities will continue
through Q3 and Q4.
Exploration Results from the Kola Prospect
(0.5g/t Au lower cut off; maximum 1m internal dilution)
x y Depth Azimuth From To Interval Grade True
Dip (m) (m) (m) (g/tAu) Width
(m)
SGRC168 699897 807875 56 -60 90 1.0 2.0 1.0 0.96 1.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC188 699925 807871 90 -60 90 14.0 18.0 4.0 30.17 3.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC189 699954 807866 120 -60 90 56.0 64.0 8.0 3.01 6.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC190 699896 807877 60 -60 90 2.0 9.0 7.0 25.98 6.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
-60 90 58.0 59.0 1.0 0.78 0.8
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC191 699924 807872 55 -60 90 1.0 6.0 5.0 5.64 4.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC194 699961 807893 105 -60 90 49.0 57.0 8.0 30.19 7.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC195 699980 807886 110 -60 270 76.0 78.0 2.0 0.77 1.4
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC201 699926 807879 29 -90 0 31.0 32.0 1.0 0.63 1.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
38.0 41.0 3.0 0.55 3.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC202 699920 807870 30 -90 0 0.0 7.0 7.0 0.86 7.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
12.0 13.0 1.0 0.57 1.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC203 699913 807870 26 -90 0 0.0 13.0 13.0 11.57 13.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
14.0 17.0 3.0 0.71 3.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
21.0 24.0 3.0 0.97 3.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
SGRC204 699938 807889 70 -60 270 5.0 11.0 6.0 0.73 6.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
16.0 17.0 1.0 0.38 1.0
------- ------- ------ ----- -------- ----- ----- --------- --------- -------
Kola Prospect Cross Section
Western Prospects
Igila
The Western Prospects are located about 15km directly west of
the Segilola Gold Mine and are held under a joint venture agreement
between Thor's wholly owned subsidiary Segilola Gold Limited
("SGL") and a local mineral exploration company.
Exploration activities at the Western Prospects are now focused
on delineating additional strike length and identifying additional
lodes such as the Aye-Ile prospect.
Aye-Ile
The Aye-Ile prospect is located approximately 1.2km to the
south-east from Igila. Drilling is planned to expand the zone of
mineralisation and to investigate a possible strike between Igila
and Aye-Ile. Geochemical sampling to the south-east of Aye-Ile
returned several anomalous values of up to 10g/t Au which suggest
extensions of the structure.
Thor Lithium - Newstar Minerals Limited
As part of its strategy of identifying high-value mineral
resource opportunities, Thor, through its fully owned
subsidiary
Newstar Minerals Ltd, announced the acquisition of significant
tenure in south-west Nigeria that covers both known lithium
bearing, pegmatite deposits and a large unexplored, prospective,
pegmatite-rich belt. Thor's initial focus is on the south-west
quadrant of Nigeria where vital infrastructure is located within
close proximity.
An initial drilling program is being undertaken on one of the
Company's prospects located in the West Oyo Project Area to confirm
and delineate lithium-bearing mineralisation, such as spodumene and
lepidolite, at depth. The Company announced its initial results on
August 16 with the below key highlights:
- 11m at 2.61% Li(2) O from 15m
- 9m at 2.42% Li(2) O from 35m
- 11m at 1.53% Li(2) O from 14m, including 9m at 1.70% Li(2) O from 15m
-- Spodumene confirmed as main lithium-bearing mineral together with minor lepidolite
-- Mineralization is shallow
Thor Explorations Nigeria Licence Location Map
Senegal
Introduction
The Douta Gold Project is a gold exploration permit E02038,
located within the Kéniéba inlier, eastern Senegal. The
northeast-trending license has an area of 58 km(2) . Thor, through
its wholly owned subsidiary African Star Resources Incorporated
("African Star"), has a 70% economic interest in partnership with
the permit holder International Mining Company SARL ("IMC"). IMC
has a 30% free carried interest in its development until the
announcement by Thor of a Probable Reserve.
The Douta licence is strategically positioned 4km east of
Massawa North and Massawa Central deposits, which form part of the
world-class Sabadola-Massawa Project owned by Endeavour Mining. The
Makabingui deposit, belonging to Bassari Resources Ltd, is
immediately located east of the northern portion of E02038.
Exploration Activity
During the quarter, workstreams designed to advance the project
to the prefeasibility stage ("PFS") commenced. This included a
diamond drilling program that was designed to obtain sufficient
core samples for comprehensive metallurgical test work and
mineralogical studies.
Thor intends to progress the Makosa Resource expansion and
infill drilling together with parallel workstreams including
environmental and social baseline monitoring as part of an
Environmental and Social Impact Assessment, geotechnical and
hydrological studies.
NON-IFRS MEASURES
This MD&A refers to certain financial measures, such as
average realized gold price, which are not recognized under IFRS
and do not have a standardized meaning prescribed by IFRS. These
measures may differ from those made by other companies and
accordingly may not be comparable to such measures as reported by
other companies. These measures have been derived from the
Company's financial statements because the Company believes that,
with the achievement of gold production, they are of assistance in
the understanding of the results of operations and its financial
position.
Average realised gold price per ounce sold
The Group believes that, in addition to conventional measures
prepared in accordance with GAAP, the average realised gold price,
which takes into account the impact of gain/losses on forward sale
of commodity contracts, is a metric used to better understand the
gold price realised during a period. Management believes that
reflecting the impact of these contracts on the Group's realised
gold price is a relevant measure and increases the consistency of
this calculation with our peer companies.
In addition to the above, in calculating the realised gold
price, management has adjusted the revenues as disclosed in the
consolidated financial statement to exclude by product revenue,
relating to silver revenue, and has reflected the by product
revenue as a credit to cash operating costs. The revenues as
disclosed in the interim financial statements have been reconciled
to the gold revenue for all periods presented.
Average annual realised price per ounce sold
Six Months period
Three Months period ended ended
Units June March June June June 30,
30, 2023 31, 2023 30, 2022(1) 30, 2023 2022(1)
------------------------------ ------- ----------- ----------- ------------- ----------- -----------
Revenues $ 41,364,169 40,287,830 41,354,747 81,651,999 66,220,229
By product revenue $ (68,587) (43,773) (30,549) (112,360) (46,069)
Gold revenue $ 41,295,582 40,244,057 41,324,198 81,539,639 66,174,160
Gain/(Loss) on forward
sale of commodity contracts $ 200,534 750,482 (471,403) 951,016 (176,480)
------------------------------ ------- ----------- ----------- ------------- ----------- -----------
Adjusted gold revenue $ 41,496,116 40,994,539 40,852,795 82,490,655 65,997,680
------------------------------ ------- ----------- ----------- ------------- ----------- -----------
Oz
Gold ounces sold Au 20,852 21,553 22,173 42,405 35,636
----------- ----------- ------------- ----------- -----------
Average realized price
per ounce sold $ 1,990 1,902 1,842 1,945 1,852
------------------------------ ------- ----------- ----------- ------------- ----------- -----------
(1 The figures for the Three and Six months period ended June
30, 2022 have been restated in connection with the restatement of
the interim financial statements. Refer to note 22 of the interim
financial statements for further details.)
Cash operating cost per ounce
Cash operating cost per oz sold, combined with revenues, can be
used to evaluate the Company's performance and ability to generate
operating income and cash flow from operating activities. The
Company believes that, in addition to conventional measures
prepared in accordance with GAAP, certain investors may find this
information useful to evaluate the costs of production per
ounce.
By product revenues are included as a credit to cash operating
costs.
Average annual cash operating cost per ounce of gold
Six Months period
Three Months period ended ended
Units June March June June 30, June
30, 2023 31, 2023 30, 2022(1) 2023 30, 2022(1)
---------------------- ------- ----------- ----------- ------------- ----------- -------------
Production costs $ 17,795,685 18,306,502 20,273,742 36,102,187 28,493,272
Transportation and
refining $ 810,080 342,291 604,991 1,152,371 1,107,213
Royalties $ 1,102,308 768,282 946,252 1,870,590 1,497,017
By product revenue $ (68,587) (43,773) (30,549) (112,360) (46,069)
---------------------- ------- ----------- ----------- ------------- ----------- -------------
Cash Operating costs $ 19,639,486 19,373,302 21,794,437 39,012,788 31,097,502
---------------------- ------- ----------- ----------- ------------- ----------- -------------
Oz
Gold ounces sold Au 20,852 21,553 22,173 42,405 35,636
---------------------- ------- ----------- ----------- ------------- ----------- -------------
Cash operating cost
per ounce sold $/oz 942 899 983 920 873
---------------------- ------- ----------- ----------- ------------- ----------- -------------
(1 The figures for the Three and Six months period ended June
30, 2022 have been restated in connection with the restatement of
the interim financial statements. Refer to note 22 of the interim
financial statements for further details.)
All-in sustaining cost per ounce
AISC provides information on the total cost associated with
producing gold.
The Group calculates AISC as the sum of total cash operating
costs (as described above), other administration expenses and
sustaining capital, all divided by the gold ounces sold to arrive
at a per oz amount.
Other administration expenses includes administration expenses
directly attributable to the Segilola Gold Mine plus a percentage
of corporate administration costs allocated to supporting the
operations of the Segilola Gold Mine. For the three and six months
periods ended June 30, 2023 and 2022, this was deemed to be
50%.
Other companies may calculate this measure differently as a
result of differences in underlying principles and policies
applied.
Average annual all-in sustaining cost per ounce of gold
Six Months period
Three Months period ended ended
Units June March June June June 30,
30, 2023 31, 2023 30, 2022(1) 30, 2023 2022(1)
------------------------------- ------- ----------- ----------- ------------- ----------- -----------
Cash operating costs(2) $ 19,639,486 19,373,302 21,794,437 39,012,788 31,097,502
Adjusted other administration
expenses $ 1,093,344 3,775,777 3,895,264 4,869,121 5,353,995
Sustaining capital(3) $ 4,914,550 5,864,894 1,713,692 10,779,444 5,910,688
Total all-in sustaining
cost $ 25,647,380 29,013,973 27,403,393 54,661,353 42,362,185
------------------------------- ------- ----------- ----------- ------------- ----------- -----------
Gold ounces sold oz Au 20,852 21,553 22,173 42,405 35,636
------------------------------- ------- ----------- ----------- ------------- ----------- -----------
All-in sustaining cost
per ounce sold $/oz 1,230 1,346 1,236 1,289 1,189
------------------------------- ------- ----------- ----------- ------------- ----------- -----------
(1 The figures for the Three and Six months period ended June
30, 2022 have been restated in connection with the restatement of
the interim financial statements. Refer to note 22 of the interim
financial statements for further details.)
(2 Refer to Cash operating costs.)
(3 Refer to Sustaining and Non-Sustaining Capital)
Net Debt
Net debt is calculated as total debt adjusted for unamortized,
deferred, financing charges less cash and cash equivalents and
short-term investments at the end of the reporting period. This
metric is used by management to measure the Company's debt
leverage. The Company considers that in addition to conventional
measures prepared in accordance with IFRS, net debt is useful to
evaluate the Company's performance.
Net Debt
June 30, March 31, December
2023 2023 31, 2022
---------------------------------- ------------- ------------ ------------
Project Loan 24,187,306 24,257,746 24,459,939
EPC Payments - 1,463,353 10,196,105
Deferred EPC Facility 3,770,157 3,724,734 3,682,715
Less: Cash and cash equivalents1 (11,149,491) (4,505,071) (6,688,037)
Net Debt 16,807,972 24,940,762 31,650,722
----------------------------------- ------------- ------------ ------------
Earnings Before Interest, Taxes, Depreciation and
Amortisation
EBITDA is calculated as the total earnings before interest,
taxes, depreciation and amortisation. This measure helps management
assess the operating performance of each operating unit.
Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA)
Three Months period ended Six Months period
ended
--------------------------- ------
Unit June 30, March June 30, June June 30,
2023 31, 2023 2022(1) 30, 2023 2022(1)
--------------------------- ------ ----------- ----------- ----------- ----------- -----------
Net profit for the
period $ 7,912,187 4,331,347 6,778,954 12,243,534 10,210,578
--------------------------- ------ ----------- ----------- ----------- ----------- -----------
Amortisation and
depreciation - owned
assets $ 6,679,708 7,165,523 5,977,675 13,845,231 10,982,292
Amortisation and
depreciation - right
of use assets $ 1,195,213 1,194,587 1,075,735 2,389,800 2,233,990
Impairment of Exploration
& Evaluation assets $ 3,365 3,096 4,520 6,461 7,221
Interest expense $ 3,253,529 3,370,781 3,935,732 6,624,310 7,693,863
--------------------------- ------ ----------- ----------- ----------- ----------- -----------
EBITDA $ 19,044,002 16,065,334 17,772,616 35,109,336 31,127,944
--------------------------- ------ ----------- ----------- ----------- ----------- -----------
Oz
Ounces sold Au 20,852 21,553 22,173 42,405 35,636
--------------------------- ------ ----------- ----------- ----------- ----------- -----------
EBITDA per ounce
sold $ 913 745 802 828 873
--------------------------- ------ ----------- ----------- ----------- ----------- -----------
(1 The figures for the Three and Six months period ended June
30, 2022 have been restated in connection with the restatement of
the interim financial statements. Refer to note 22 of the interim
financial statements for further details.)
OUTLOOK AND UPCOMING MILESTONES
This Section 5 of the MD&A contains forward looking
information as defined by National Instrument 51-102. Refer to
Section 16 of this MD&A for further information on forward
looking statements.
We are focused on advancing the Company's strategic objectives
and near-term milestones which include:
2023 Operational Guidance and Outlook
Gold Production oz 85,000
All-in Sustaining Cost US$/oz Au sold $1,150 - $1,350
Capital Expenditure(1) US$ 10,000,000
Exploration Expenditure:
Nigeria (2) US$ 4,200,000
Senegal US$ 3,000,000
-------------------------- ---------------- ----------------
1 This excludes production stripping costs capitalizations.
2 This relates to all Nigeria exploration, including lithium and
purchase of licenses.
The critical factors that influence whether Segilola can achieve
these targets include:
-- Segilola's ability to maintain an adequate supply of
consumables (in particular ammonium nitrate, flux and cyanide) and
equipment
-- Fluctuations in the price of key consumables, in particular ammonium nitrate, and diesel
-- Segilola's workforce remaining healthy
-- Continuing to receive full and on-time payment for gold sales
-- Continuing to be able to make local and international
payments in the ordinary course of business
Continue to advance the Douta project towards preliminary
feasibility study ("PFS")
Continue to advance exploration programmes across the
portfolio:
-- Segilola near mine exploration
-- Segilola underground project
-- Segilola regional exploration programme
-- Douta extension programme
-- Douta infill programme
-- Assess regional potential targets in Nigeria
-- Acquiring new concessions and joint venture options on potential targets
SUMMARY OF QUARTERLY RESULTS
The table below sets forth selected results of operations for
the Company's eight most recently completed quarters.
Summary of quarterly results
$ 2023 2023 2022 2022 2022 2022 2021 2021
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
---------------
Jun-31 Mar-31 Dec-31 Sep-30 Jun-30 Mar-31 Dec-31 Sep-30
--------------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- --------
Revenues 41,364,169 40,287,830 43,251,204 55,703,098 41,354,747 24,865,482 6,049,485 -
Net profit
for period 7,912,187 4,331,347 14,908,460 4,126,066 6,778,954 3,490,938 3,116,416 463,844
Basic
profit/(loss)
per share
(cents) 1.20 0.67 2.21 0.65 1.1 0.55 0.47 0.07
--------------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- --------
RESULTS FOR SIX MONTHSED JUNE 30, 2023
The review of the results of operations should be read in
conjunction with the Interim Financial Statements and notes
thereto.
The Group reported a net profit of $12,243,543 (1.9 cents per
share) for the six months period ended June 30, 2023, as compared
to a net profit of $10,210,578 (1.6 cents per share) for the six
months period ended June 30, 2022. The increase in profit for the
period was largely due to:
-- revenue during the period of $81,651,999 (2022: $66,220,229)
These were offset partially by:
-- Amortization and depreciation of $16,235,031 (2022: $13,216,282);
-- Interest of $6,466,499 (2022: $4,171,263); and
-- Production costs of $36,102,187 (2022: $28,493,272)
No interest was earned during the six months period ended June
30, 2023, and 2022.
LIQUIDITY AND CAPITAL RESOURCES
As at June 30, 2023, the Group had cash of $11,149,491 (December
31 2022: $6,688,037) and a working capital deficit of $45,657,241
(December 31, 2022: deficit of $29,116,915).
The increase in cash from December 31, 2022 is due mainly to
cash generated in operations of $44,546,954 offset by cash used in
investing and financing activities of $29,911,132 and $10,813,624,
respectively.
The increase in working capital deficit is mainly due to the
transfer of $19,347,245 of loans and other borrowings from
non-current to current as these are due within 12 months from June
30, 2023.
The total EPC amount has been finalized with our EPC contractor,
and the Group has paid all due outstanding EPC payments as at June
30, 2023.
Working Capital Calculation
The Working Capital Calculation excludes $9,139,784 (Q1 2023:
$9,979,413 - 2022: $10,187,630) of Gold Stream liabilities, and
$35,478 (Q1 2023: $805,801 - 2022: $2,215,585) in third party
royalties included in current accounts payable, that are contingent
upon the achievement of the revised gold sales forecast of 85,000
ounces for the year ending December 31, 2023.
Working Capital
Unit June 30, March 31, December 31,
2023 2023 2022
------------------------------ ------ ------------- ------------- -------------
Current Assets
Cash $ 11,149,491 4,505,071 6,688,037
Inventory $ 20,060,960 25,080,808 19,901,262
Amounts receivable, prepaid
expenses, advances and
deposits $ 8,612,279 8,461,572 10,697,365
Total Current Assets for
Working Capital $ 39,822,730 38,047,451 37,286,664
------------------------------ ------ ------------- ------------- -------------
Current Liabilities
Accounts Payable and accrued
liabilities $ 59,595,451 60,555,348 56,337,289
Deferred income $ 865,173 - 6,581,743
Lease Liabilities $ 4,819,439 4,815,512 4,811,991
Gold Stream Liability $ 9,319,784 9,979,413 10,187,630
Loan and other borrowings $ 20,235,386 11,790,796 888,141
$ 94,835,233 87,141,069 78,806,794
less: Current Liabilities
contingent upon future
gold sales $ (9,355,262) (10,785,214) (12,403,215)
Working capital deficit $ (45,657,241) (38,308,404) (29,116,915)
------------------------------ ------ ------------- ------------- -------------
Inventory
Gold inventory is recognised, at cost, in the ore stockpiles and
in production inventory, comprised principally of ore stockpile and
doré at site or in transit to the refinery, with a component of
gold-in-circuit.
Inventory
June 30, March 31, December 31, 2022
2023 2023
------------------------------ --- -------------------- ---------------------- ------------------
Plant spares and consumables 7,072,420 9,146,279 4,751,922
Gold ore in stockpile 9,185,796 12,479,805 11,869,168
Gold in CIL 3,802,744 3,454,724 1,160,237
Gold Dore - - 2,119,935
-----------------------------------
$ 20,060,960 25,080,808 19,901,262
---------------------------------- -------------------- ---------------------- ------------------
Liquidity and Capital Resources
The Group has generated positive operating cash flow during H1
2023 and expects to continue to do so based on its production and
AISC guidance. This operating cash flow will support debt
repayments, regional exploration and underground expansion drilling
at Segilola, planned capital expenditures and corporate overhead
costs.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
The Group's financial instruments are classified as follows:
June 30, 2023 Measured at amortized Measured at Total
cost fair value through
profit and loss
Assets
Cash and cash equivalents $ 11,149,491 - 11,149,491
Amounts receivable 251,812 - 251,812
-------------------------------- ---------------------- -------------------- ------------
Total assets $ 11,401,303 - 11,401,303
--------------------------- --- ---------------------- -------------------- ------------
Liabilities
Accounts payable
and accrued liabilities $ 59,559,973 35,478 59,595,451
Loans and borrowings 27,957,463 - 27,957,463
Gold stream liability - 21,840,525 21,840,525
Lease liabilities 13,501,928 - 13,501,928
-------------------------------- ---------------------- -------------------- ------------
Total liabilities $ 101,019,364 21,876,003 122,895,367
--------------------------- --- ---------------------- -------------------- ------------
December 31, 2022 Measured at amortized Measured at Total
cost fair value through
profit and loss
Assets
Cash and cash equivalents $ 6,688,037 - 6,688,037
Amounts receivable 220,442 - 220,442
-------------------------------- ---------------------- -------------------- ------------
Total assets $ 6,908,479 - 6,908,479
--------------------------- --- ---------------------- -------------------- ------------
Liabilities
Accounts payable
and accrued liabilities $ 54,121,704 2,215,585 56,337,289
Loans and borrowings 28,142,654 - 28,142,654
Gold stream liability - 25,039,765 25,039,765
Lease liabilities 15,409,285 - 15,409,285
-------------------------------- ---------------------- -------------------- ------------
Total liabilities $ 97,673,643 27,255,350 124,928,993
--------------------------- --- ---------------------- -------------------- ------------
The fair value of these financial instruments approximates their
carrying value.
As noted above, the Group has certain financial liabilities that
are held at fair value. The fair value hierarchy establishes three
levels to classify the inputs to valuation techniques to measure
fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2 - inputs other than quoted prices included within level
1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices);
and
Level 3 - inputs for the asset or liability that are not based
on observable market data (that is, unobservable inputs).
As at June 30, 2023 and December 31, 2022, all the Group`s
liabilities measured at fair value through profit and loss are
categorized as Level 3 and their fair value was determined using
discounted cash flow valuation models, taking into account
assumptions with respect to gold prices and discount rates as well
as estimates with respect to production and operating results for
the Segilola mine.
.
DISCLOSURE OF OUTSTANDING SHARE DATA
As at the date of this MD&A, there were 655,314,724 common
shares issued and outstanding stock options to purchase a total of
14,790,000 common shares.
Authorized Common Shares
Common shares issued
June 30, 2023 December 31, 2022
---------------------- -------------- ------------------
Common shares issued 655,314,724 644,696,185
----------------------- -------------- ------------------
Warrants
There were no warrants that were outstanding at June 30, 2023,
and as at the date of this report.
During the Three and Six Months ended June 30, 2023 no warrants
were issued.
Stock Options
The number of stock options that were outstanding and the
remaining contractual lives of the options at June 30, 2023, were
as follows.
Options outstanding
Exercise Price Number Weighted Average Expiry Date
Outstanding Remaining Contractual
Life
---------------- ------------- ----------------------- ------------
October 5,
C$0.140 750,000 0.27 2023
January 16,
C$0.200 14,040,000 1.55 2025
---------------- ------------- ----------------------- ------------
Total 14,790,000
---------------- ------------- ----------------------- ------------
The Company has previously granted employees, consultants,
directors and officers share purchase options. These options were
granted pursuant to the Company's stock option plan. No new options
have been granted in Q2 2023.
During the Three and Six Months ended June 30, 2023, 12,111,000
options were exercised at a price of C$0.145.
Condensed Interim Consolidated Financial Statements
For the Three Months Ended March 31, 2023, and 2022
(in United States Dollars)
CORPORATE INFORMATION
Thor Explorations Ltd. (the "Company"), together with its
subsidiaries (collectively, "Thor" or the "Group") is a West
African focused gold producer and explorer, dually listed on the
TSX-Venture Exchange (THX.V) and AIM Market of the London Stock
Exchange (THX.L).
The Company was formed in 1968 and is organized under the
Business Corporations Act ( British Columbia ) ( BCBCA) with its
registered office at 550 Burrard St, Suite 2900 Vancouver, BC, CA,
V6C 0A3. The Company evolved into its current form in August 2011
following a reverse takeover and completed the transformational
acquisition of its flagship Segilola Gold Project in Nigeria in
August 2016.
1. BASIS OF PREPARATION
a) Statement of compliance
These condensed interim consolidated financial statements
("interim financial statements") have been prepared in accordance
with International Accounting Standard 34, Interim Financial
Reporting, of International Financial Reporting Standards as issued
by the International Accounting Standards Board ("IFRS").
These interim financial statements should be read in conjunction
with the audited consolidated financial statements for the year
ended December 31, 2022, which have been prepared in accordance
with IFRS.
These interim financial statements were authorized for issue by
the Board of Directors on August 22, 2023.
b) Basis of measurement
These interim financial statements are presented in United
States dollars ("US$").
These interim financial statements have been prepared on a
historical cost basis, except for certain financial instruments
that are measured at fair value at the end of each reporting
period.
The Group's accounting policies have been applied consistently
to all periods in the preparation of these interim financial
statements. In preparing the Group 's interim financial statements
for the three and six months ended June 30, 2023, the Group applied
the critical judgments and estimates as disclosed in note 3 of its
annual financial statements for the year ended December 31,
2022.
These interim financial statements include the accounts of the
Company and its subsidiaries. Subsidiaries are entities controlled
by the Company, which is defined as having the power over the
entity, rights to variable returns from its involvement with the
entity, and the ability to use its power to affect the amount of
returns. All intercompany transactions and balances are eliminated
on consolidation. The Company's subsidiaries at June 30, 2023 are
consistent with the subsidiaries as at December 31, 2022 as
disclosed in note 3 to the annual financial statements.
None of the new standards or amendments to standards and
interpretations applicable during the period has had a material
impact on the financial position or performance of the Group. The
Group has not early adopted any standard, interpretation or
amendment that was issued but is not yet effective.
2. BASIS OF PREPARATION (continued)
c) Nature of operations and going concern
The Board of Directors have performed an assessment of whether
the Company and Group would be able to continue as a going concern
until at least August 2024. In their assessment, the Group has
taken into account its financial position, expected future trading
performance, its debt and other available credit facilities, future
debt servicing requirements, its working capital and capital
expenditure commitments and forecasts.
At June 30, 2023, the Group had a cash position of $11.1million
and a net debt position of $16.8 million, calculated as total debt
adjusted for unamortized deferred financing charges less cash and
cash equivalents and short-term investments. Cash flows from
operating activities for the three and six months ended June 30,
2023 were inflows of $25.3 million and $44.5 million
respectively.
The Directors have a reasonable expectation that the Group will
have adequate resources to continue in operational existence for at
least the next twelve months and that, as at the date of this
report, there are no material uncertainties regarding going
concern
The Board of Directors is satisfied that the going concern basis
of accounting is an appropriate assumption to adopt in the
preparation of the interim financial statements as at, and for the
period ended June 30, 2023.
2. PROFIT FROM OPERATIONS
3a. REVENUE
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
-------------------- ----------- ----------- ----------- -----------
Gold revenue 41,295,582 41,324,199 81,539,639 66,174,161
Silver revenue 68,587 30,549 112,360 46,069
--------------------- ----------- ----------- ----------- -----------
$ 41,364,169 $ 41,354,747 $ 81,651,999 $ 66,220,229
-------------------- ----------- ----------- ----------- -----------
The Group`s revenue is generated in Nigeria. All sales are made
to the Group`s only customer.
3b. COST OF SALES
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
------------------------------------- ------------- ------------ ------------- ------------
Mining 21,836,232 17,883,204 41,873,619 24,814,116
Processing 4,312,647 2,584,044 8,421,432 4,054,501
Support services and others 1,873,999 3,446,978 3,279,061 5,448,950
Foreign exchange (gains)/losses
on production costs* (10,227,193) (3,640,484) (17,471,925) (5,824,295)
Production costs $ 17,795,685 $ 20,273,742 $ 36,102,187 $ 28,493,272
Transportation and refining 810,080 604,991 1,152,371 1,107,213
Royalties 1,102,308 946,252 1,870,590 1,497,017
Amortization and depreciation
- operational assets - owned
assets 6,641,484 5,486,909 13,534,856 10,219,689
Amortization and depreciation
- operational assets - right
of use assets 1,159,110 1,060,827 2,318,647 2,219,082
-------------------------------------- ------------- ------------ ------------- ------------
Cost of sales 27,508,667 28,372,721 54,978,651 43,536,273
-------------------------------------- ------------- ------------ ------------- ------------
(* The total foreign exchange gain for the current period was
$17,471,925, which comprises of realized foreign exchange gains of
$11,878,343 and unrealized foreign exchange gains of $5,593,582.
During the period, SROL purchased its local currency on a spot
basis. The foreign exchange gains and losses from these trades are
generated from the differences between the local currency values
achieved on the trades versus the currency translation rate at the
time of the trade.)
3c. AMORTIZATION AND DEPRECIATION
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
----------------- ---- -------------- ---------- --------- ----------- -------- -----------
Amortization and
depreciation
- operational
assets - owned
assets 6,641,484 5,486,909 13,534,856 10,219,689
Amortization and
depreciation
- operational
assets - right
of use assets 1,159,110 1,060,827 2,318,647 2,219,082
Amortization and
depreciation
- owned assets 38,224 490,766 310,375 762,603
Amortization and
depreciation
- right-of-use
assets 36,103 14,908 71,153 14,908
----------------- ---- -------------- ---------- --------- ----------- -------- -----------
$ 7,874,921 $ 7,053,410 $ 16,235,031 $ 13,216,282
----------------- ---- -------------- ---------- --------- ----------- -------- -----------
3d. OTHER ADMINISTRATION EXPENSES
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
------------------------------- ---------- --- ---------- ---------- ----------
Employee compensation 1,414,556 320,802 2,107,855 739,349
Professional services 614,104 777,007 1,268,310 1,148,534
Other corporate expenses 382,900 1,130,740 3,090,334 2,283,380
$ 2,411,560 $ 2,228,549 $ 6,466,499 $ 4,171,263
------------------------------- ---------- --- ---------- ---------- ----------
3. INVENTORIES
June 30, December 31,
2023 2022
------------------------------- ----------- -----------------
Plant spares and consumables $ 7,072,420 $ 4,751,922
Gold ore in stockpile 9,185,796 11,869,168
Gold in CIL 3,802,744 1,614,267
Gold Dore - 2,119,935
$ 20,060,960 $ 19,901,262
------------------------------- ----------- -----------------
There were no write downs to reduce the carrying value of
inventories to net realizable value during the periods ended June
30, 2023 and 2022.
4. AMOUNTS RECEIVABLE
June 30, December 31,
2023 2022
--------------------- --- --------- -------------
Accounts receivable $ 38,715 $ 67,084
GST 3,481 993
Other receivables 209,616 152,365
$ 251,812 $ 220,442
------------------------- --------- -------------
The value of receivables recorded on the balance sheet is
approximate to their recoverable value and there are no expected
material credit losses.
5. PREPAID EXPENSES, ADVANCES AND DEPOSITS
June 30, December 31,
2022
2023
---------------------------------------- ---- ---------- --- -------------
Current:
Gold Stream liability arrangement fees 33,186 33,186
Advance deposits to vendors 5,596,067 9,625,204
Other prepayments 2,731,214 818,533
---------------------------------------------- ---------- --- -------------
$ 8,360,467 10,476,923
--------------------------------------------- ---------- --- -------------
Non-current:
Gold Stream liability arrangement fees 24,889 74,667
Other prepayments 214,638 208,158
---------------------------------------------- ---------- --- -------------
$ 239,527 282,825
--------------------------------------------- ---------- --- -------------
Included in Advance deposits to vendors, are payment deposits
towards key equipment, materials and spare parts, with longer lead
times to delivery, which are of critical importance to maintain
efficient operations of the mine and process plant. These were made
to mitigate against price volatility and inflation currently
affecting the sector.
6. LEASES
The Group accounts for leases in accordance with IFRS 16. The
definition of a lease under IFRS 16 was applied only to contracts
entered into or changed on or after January 1, 2019. The Group has
elected not to recognize right-of-use assets and lease liabilities
for leases which have low value, or short-term leases with a
duration of 12 months or less. The payments associated with such
leases are charged directly to the income statement on a
straight-line basis over the lease term. There were no such leases
for the periods ended June 30, 2023 and 2022.
Leases relate principally to corporate offices and the mining
fleet at the Segilola mine. Corporate offices are depreciated over
5 years and mining fleet over the life of mine of Segilola.
The key impacts on the Statement of Comprehensive Income and the
Statement of Financial Position for the period ended June 30, 2023,
were as follows:
Right of Lease liability Income
use asset statement
----------------------------- --- ------------ ---------------- ------------
Carrying value December 31,
2022 $ 16,849,402 $ (15,409,285) $
New leases entered in to - - -
during the period
Depreciation (2,389,800) - (2,389,800)
Interest - (560,217) (560,217)
Lease payments - 2,512,720 -
Foreign exchange movement 26,572 (45,146) (45,146)
----------------------------------- ------------ ---------------- ------------
Carrying value at June 30,
2023 $ 14,486,174 $ (13,501,928) $ (2,995,163)
------------------------------ ------------ ---------------- ------------
Current liability (4,819,439)
Non-current liability (8,682,489)
----------------------------------- ------------ ---------------- ------------
7. LEASES (continued)
The key impacts on the Statement of Comprehensive Loss and the
Statement of Financial Position for the year ended December 31,
2022, were as follows:
Right of Lease liability Income
use asset statement
----------------------------- --- ------------ ---------------- ------------
Carrying value December 31,
2021 $ 20,843,612 $ (18,274,374) $ -
New leases entered in to
during the period 660,064 (660,064) -
Depreciation (4,724,100) - (4,724,100)
Interest - (1,052,329) (1,052,329)
Lease payments - 4,882,786 -
Foreign exchange movement 69,826 (305,304) (305,304)
----------------------------------- ------------ ---------------- ------------
Carrying value at December
31, 2022 $ 16,849,402 $ (15,409,285) $ (6,081,733)
------------------------------ ------------ ---------------- ------------
Current liability (4,811,991)
Non-current liability (10,597,294)
----------------------------------- ------------ ---------------- ------------
7. GOLD STREAM LIABILITY
Gold stream liability
June 30, December 31,
2023 2022
------------------------------------------- --- ------------ --- -------------
Balance at Beginning of period $ 25,039,765 $ 30,262,279
Repayments (5,898,728) (11,534,441)
Interest at the effective interest rate 2,699,488 6,311,927
Balance at end of period $ 21,840,525 $ 25,039,765
------------------------------------------- --- ------------ --- -------------
Current liability 9,319,784 10,187,630
------------------------------------------------ ------------ --- -------------
Non-current liability 12,520,741 14,852,135
------------------------------------------------ ------------ --- -------------
On April 29, 2020, the Group announced the closing of project
financing for its flagship Segilola Gold Project ("Segilola") in
Osun State, Nigeria. The financing included a $21 million gold
stream upfront deposit ("the Prepayment") over future gold
production at Segilola under the terms of a Gold Purchase and Sale
Agreement ("GSA") entered into between the Group's wholly owned
subsidiary SROL and the AFC. The Prepayment is secured over the
shares in SROL as well as over SROL's assets and is not subject to
interest. The initial term of the GSA is for ten years with an
automatic extension of a further ten years. The AFC will receive
10.27% of gold production from the Segilola ML41 mining license
until the $21 million Prepayment has been repaid in full.
Thereafter, the AFC will continue to receive 10.27% of gold
production from material mined within the ML41 mining license until
a further $26.25 million is received, representing a total money
multiple of 2.25 times the value of the Prepayment, at which point
the GSA will terminate. The AFC are not entitled to receive an
allocation of gold production from material mined from any of the
Group's other gold tenements under the terms of the GSA.
8. GOLD STREAM LIABILITY (continued)
The $26.25 million represented interest on the Prepayment. A
calculation of the implied interest rate was made as at drawdown
date with interest being apportioned over the expected life of the
Stream Facility. The principal input variables used in calculating
the implied interest rate and repayment profile were the production
profile and gold price. The future gold price estimates were based
on market forecast reports for the years 2021 to 2025 and, the
production profile was based on the latest life of mine plan model.
The liability was to be re-estimated on a periodic basis to include
changes to the production profile, any extension to the life of
mine plan and movement in the gold price. Upon commencement of
production, any change to the implied interest rate will be
expensed through the Condensed Interim Consolidated Statement of
Income (Loss).
In December 2021, the Group entered into a cash settlement
agreement with the AFC where the gold sold to the AFC is settled in
a net-cash sum payable to the AFC instead of delivery of bullion in
repayment of the gold stream arrangement.
The following table represents the Group's loans and borrowings
measured and recognised at fair value.
Level Level 2 Level 3 Total
1
------------------------ --- ------- --------- ----------- -----------
Financial liability
at fair value through
profit or loss $ - - 21,840,525 21,840,525
------------------------ --- ------- --------- ----------- -----------
The liabilities included in the above table are carried at fair
value through profit and loss.
8. LOANS AND BORROWINGS
June 30, December
31, 2022
2023
------------------------------------------------- ---- ----------- --- -----------
Current liabilities:
Loans payable to the Africa Finance Corporation
less than 1 year $ 17,673,363 $ 356,155
Deferred element of EPC contract 2,562,023 531,986
$ 20,235,386 888,141
------------------------------------------------------ ----------- --- -----------
Non-current liabilities:
Loans payable to the Africa Finance Corporation
more than 1 year $ 6,513,943 $ 24,103,784
Deferred element of EPC contract 1,208,134 3,150,729
------------------------------------------------------- ----------- --- -----------
$ 7,722,077 $ 27,254,513
------------------------------------------------------ ----------- --- -----------
Loans from the Africa Finance Corporation
June 30, December 31,
2022
2023
--------------------------------------- ---- ------------ --- --------------
Balance at Beginning of period $ 24,459,939 $ 46,859,966
Drawdown - -
Principal repayments (1,053,077) (24,220,764)
Interest paid (1,955,325) (4,645,014)
Arrangement fees (126,874) -
Unwinding of interest in the period 2,862,643 6,465,751
Balance at end of period $ 24,187,306 $ 24,459,939
--------------------------------------- ---- ------------ --- --------------
Current liability 17,673,363 356,155
--------------------------------------------- ------------ --- --------------
Non-current liability 6,513,943 24,103,784
--------------------------------------------- ------------ --- --------------
9. LOANS AND BORROWINGS (continued)
On December 1, 2020, the Group announced that its subsidiary
Segilola Resources Operating Limited ("SROL") had completed the
financial closing of a $54 million project finance senior debt
facility ("the Facility") from the Africa Finance Corporation
("AFC") for the construction of the Segilola Gold Project in
Nigeria. The Facility could be drawn down at the Group's request in
minimum disbursements of $5 million. As at December 31, 2022, SROL
has received total disbursements of $52.6 million (2021: $52.6
million), with $nil drawn down in 2022 (2021: $31.2 million) and
the remaining $1.35m undrawn facility cancelled by the Group during
the period under review (2021: $nil). Total disbursements received
represent 97% of the Facility. The Facility is secured over the
share capital of SROL and its assets, with repayments commencing in
March 2022 and to conclude in March 2025.
Repayment of the aggregate Facility will be made in instalments
over a 36-month period by repaying an amount on a series of
repayment dates, as set out in the Facility Agreement, which
reduces the amount of the outstanding aggregate Facility by the
amount equal to the relevant percentage of Loans borrowed as at the
close of business in London on the date of Financial Close.
Interest accrues at SOFR plus 9% and is payable on a quarterly
basis in arrears.
In conjunction with the granting of the Facility, Thor issued
33,329,480 bonus shares to the AFC. Thor also incurred transaction
costs of $4,663,652 in relation to the loan facility. The fair
value of the liability at inception was determined at $45,822,943
taking into account the transaction costs and equity component and
recognized at amortized cost using an effective rate of interest,
with the fair value of the shares issued in April 2020 of
$5,666,011 recognized within equity.
On 31 January 2023, the Group entered into an agreement with the
AFC amending the terms of its senior debt facility.
The amended facility removes the project finance cash sweep
requirement and allows for free distributions from SROL (subject to
a 20% distribution sweep to the senior debt facility), as well as
releasing the Group from restrictions regarding acquisitions,
distribution of dividends and certain indebtedness covenants. The
payment timetable was also re-scheduled to reallocate a higher
percentage of the repayments to a later period in the Facility's
term.
Deferred payment facility on EPC contract for the construction
of the Segilola Gold Mine
The Group has constructed its Segilola Gold Mine through an
engineering, procurement, and construction contract ("EPC
Contract"). The EPC Contract has been agreed on a lump sum turnkey
basis which provides Thor with a fixed price of $67.5 million for
the full delivery of design, engineering, procurement,
construction, and commissioning of the proposed 715,000 ton per
annum gold ore processing plant.
The EPC Contract includes a deferred element ("the Deferred
Payment Facility") of 10% of the fixed price. As at June 30, 2023,
a total of $2,762,303 (December 31, 2022: $3,682,715) was deferred
under the facility. The 10% deferred element is repayable in
instalments over a 36-month period by repaying an amount on a
series of repayment dates, as set out in the Deferred Payment
Facility. Repayments commenced in March 2022 and will conclude in
2025. Interest on this element of the EPC deferred facility accrues
at 8% per annum from the time the Facility taking-over Certificate
was issued.
June 30, December
31, 2022
2023
---------------------------------------- --- ---------- --- ------------
Balance at beginning of period $ 3,682,715 $ 6,210,090
Offset against EPC payment - 440,263
Principal repayments (133,007) (3,440,449)
Interest paid (144,978) -
Unwinding of interest in the period 365,427 472,811
Balance at end of period $ 3,770,157 $ 3,682,715
---------------------------------------- --- ---------- --- ------------
Current liability 2,562,023 531,986
--------------------------------------------- ---------- --- ------------
Non-current liability 1,208,134 3,150,729
--------------------------------------------- ---------- --- ------------
9. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
June 30, 2023 Gold Stream AFC loan EPC deferred Total
liability facility
------------------------------ --- ------------ ------------ ------------- ------------
January 1, 2023 $ 25,039,765 24,459,939 3,682,715 53,182,419
Cash flows:
(Repayment of) / Proceeds
from loans and borrowings (5,898,728) (1,053,077) (133,007) (7,084,812)
Arrangement fees - (126,874) - (126,874)
Interest paid - (1,955,325) (144,978) (2,100,303)
Non-cash changes:
Unwinding of interest
in the year 2,699,488 2,862,643 365,427 5,927,558
June 30, 2023 $ 21,840,525 24,187,306 3,770,157 49,797,988
------------------------------ --- ------------ ------------ ------------- ------------
December 31, 2022 Gold stream Short AFC loan EPC deferred Total
liability term advance facility
------------------------------ --- ------------- -------------- ------------- ------------- -------------
January 1, 2022 $ 30,262,279 668,570 46,859,966 6,210,090 84,000,905
Cash flows:
(Repayment of) / Proceeds
from loans and borrowings (11,534,441) (668,570) (24,220,764) (3,440,449) (39,864,224)
Interest paid - - (4,645,014) - (4,645,014)
Non-cash changes:
Unwinding of interest
in the year 6,311,927 - 6,465,751 472,811 13,250,489
Offset against EPC
payment - - - 440,263 440,263
December 31, 2022 $ 25,039,765 - 24,459,939 3,682,715 53,182,419
------------------------------ --- ------------- -------------- ------------- ------------- -------------
10. PROVISIONS
June 30, 2023 Fleet demobilization
costs Restoration
Other costs Total
---------------------------- ---- -------- --------------------- -------------- ----------
Balance at Beginning
of period $ 18,157 $ 173,442 $ 4,768,039 $ 4,959,638
Initial recognition - - - -
of provision
Changes in estimates - -
Unwinding of discount - - 23,432 23,432
Foreign exchange movements 839 - - 839
---------------------------------- -------- --------------------- -------------- ----------
Balance at end of the
period $ 18,996 $ 173,442 $ 4,791,471 $ 4,983,909
---------------------------- ---- -------- --------------------- -------------- ----------
Current liability - - - -
---------------------------- ---- -------- --------------------- -------------- ----------
Non-current liability 18,996 173,442 4,791,471 4,983,909
---------------------------------- -------- --------------------- -------------- ----------
11. PROVISIONS (continued)
December 31, 2022 Fleet demobilization
costs Restoration
Other costs Total
---------------------------- ---- -------- --------------------- -------------- ----------
Balance at Beginning
of period $ - $ 173,241 $ 5,064,935 $ 5,238,176
Initial recognition
of provision 18,415 - - 18,415
Changes in estimates - - (404,859) (404,859)
Unwinding of discount - 201 107,963 108,164
Foreign exchange movements (258) - - (258)
---------------------------------- -------- --------------------- -------------- ----------
Balance at end of the
period $ 18,157 $ 173,442 $ 4,768,039 $ 4,959,638
---------------------------- ---- -------- --------------------- -------------- ----------
Current liability - - - -
---------------------------- ---- -------- --------------------- -------------- ----------
Non-current liability 18,157 173,442 4,768,039 4,959,638
---------------------------------- -------- --------------------- -------------- ----------
The restoration costs provision is for the site restoration at
Segilola Gold Project in Osun State Nigeria. The value of the above
provision is measured by unwinding the discount on expected future
cash flows using a discount factor that reflects the
credit-adjusted risk-free rate of interest. It is expected that the
restoration costs will be paid in US dollars, and as such US
forecast inflation rates of 2.9% and the interest rate of 4% on
5-year US bonds were used to calculate the expected future cash
flows, which are in line with the life of mine. The provision
represents the net present value of the best estimate of the
expenditure required to settle the obligation to rehabilitate
environmental disturbances caused by mining operations at mine
closure.
The fleet demobilization costs provision is the value of the
cost to demobilize the mining fleet upon closure of the mine.
12. PROPERTY, PLANT AND EQUIPMENT
12. PROPERTY, PLANT AND EQUIPMENT (continued)
A summary of depreciation capitalized is as follows:
Three months Six months ended Total depreciation
ended June 30, June 30, capitalized
-------------------------- --- -------------------- ------------------------ ------------------------------
June December
2022 2021 2022 2021 30, 2023 31, 2022
------------------------------ ------- ------- ------- ------- ---------- ----------
Exploration expenditures 20,880 37,306 76,598 60,724 696,950 620,352
------------------------------- ------- ------- ------- ------- ---------- ----------
Total $ 20,880 $ 37,306 $ 76,598 $ 60,724 $ 696,950 $ 620,352
-------------------------- --- ------- ------- ------- ------- ---------- ----------
a) Segilola Project, Osun Nigeria:
Classification of Expenditure on the Segilola Gold Project
On January 1, 2022, the Group achieved Commercial Production at
the Segilola Gold Project in Nigeria ("the Project") Upon achieving
Commercial Production, the Assets under Construction was
reclassified within Property, Plant and Equipment, and transferred
to Mining Asset, Processing Plant and Decommissioning Asset.
Decommissioning Asset
The decommissioning asset relates to estimated restoration costs
at the Group's Segilola Gold Mine as at June 30, 2023. Refer to
Note 11 for further detail.
EPC payments
During the six month period ended June 30, 2023, the Group paid
$10,196,105 (December 31, 2022: $4,321,856) to the EPC contractor
in relation to the construction of the Segilola Mine and processing
plant.
13. INTANGIBLE ASSETS
The Group's exploration and evaluation assets costs are as
follows:
13. INTANGIBLE ASSETS (continued)
a) Douta Gold Project, Senegal:
The Douta Gold Project consists of an early-stage gold
exploration license located in southeastern Senegal, approximately
700km east of the capital city Dakar.
The Group is party to an option agreement (the "Option
Agreement") with International Mining Company ("IMC"), by which the
Group has acquired a 70% interest in the Douta Gold Project located
in southeast Senegal held through African Star SARL.
Pursuant to the terms of the Option Agreement, IMC's 30%
interest will be a "free carry" interest until such time as the
Group announces probable reserves on the Douta Gold Project (the
"Free Carry Period"). Following the Free Carry Period, IMC must
either elect to sell its 30% interest to African Star at a purchase
price determined by an independent valuer commissioned by African
Star or fund its 30% share of the exploration and operating
expenses.
b) Central Houndé Project, Burkina Faso:
(i) Bongui and Legue gold permits, Burkina Faso:
AFC Constelor SARL holds a 100% interest in the Bongui and Legue
gold permits covering an area of approximately 233 km(2) located
within the Houndé belt, 260 km southwest of the capital
Ouagadougou, in western Burkina Faso.
(ii) Ouere Permit, Central Houndé Project, Burkina Faso:
Argento BF SARL holds a 100% interest in the Ouere gold permit,
covering an area of approximately 241 km(2) located within the
Houndé belt.
The three permits together cover a total area of 474km(2) over
the Houndé Belt which form the Central Houndé Project.
The Group carried out an impairment assessment of the Central
Houndé Project at December 31, 2020, and a decision was taken to
fully impair the value of the Central Houndé Project. It is the
Group's intention to focus on Segilola development and Douta
exploration in the short term, and it does not plan to undertake
significant work on the license areas in the near future.
c) Lithium exploration Licenses, Nigeria
During 2023, the Group has acquired over 600km2 of granted
tenure in south-west Nigeria that covers both known lithium bearing
pegmatite deposits and a large unexplored prospective
pegmatite-rich belt.
d) Gold exploration Licenses, Nigeria
As at June 30, 2023, the Group's gold exploration tenure
currently comprises 16 wholly owned exploration licenses and nine
joint venture partnership exploration licenses. Together with the
mining lease over the Segilola Gold Deposit, Thor's total gold
exploration tenure amounts to 1,542 km(2).
14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
June 30, December 31,
2023 2022
----------------------- --- ------------- --------------------
Trade payables $ 45,534,482 $ 46,914,333
Accrued liabilities 12,827,805 6,213,977
Other payables 1,682,962 3,208,979
---------------------------- ------------- --------------------
$ 60,045,249 $ 56,337,289
--------------------------- ------------- --------------------
Current liability 59,595,451 56,337,289
---------------------------- ------------- --------------------
Non-current liability 449,798 -
---------------------------- ------------- --------------------
Accounts payable and accrued liabilities are classified as
financial liabilities and approximate their fair values.
Also included in trade payables is a total of $35,478 (December
31, 2022: $2,215,585) that relates to third party royalties that
will become payable upon future gold sales. All these royalties'
creditors are included in current liabilities.
The following table represents the Group's trade payables
measured and recognized at fair value.
Level Level 2 Level Total
1 3
------------------------ --- ------- --------- ------- -------
Trade payables
Third party royalties $ - - 35,478 35,478
------------------------ --- ------- --------- ------- -------
15. CAPITAL AND RESERVES
a) Authorized
Unlimited common shares without par value.
b) Issued
June 30, June 30, December December
31, 31,
2023 2023 2022 2022
Number Number
----------------------------- ------------------ -------------------- ------------ -----------
As at start of the
year 644,696,185 $ 80,439,693 632,358,009 $ 79,027,183
Issue of new shares:
- Share options exercised
i 10,618,539 1,011,085 9,939,000 960,546
- RSU awards vested - - 2,399,176 451,964
655,314,724 $ 81,450,778 644,696,185 $ 80,439,693
----------------------------- ------------------ -------------------- ------------ -----------
(i) Value of 1,500,000 options exercised at a price of CAD$0.145
per share on June 5, 2023, and 9,118,539 options exercised at a
price of CAD$0.145 per share on June 14, 2023.
15. CAPITAL AND RESERVES (continued)
c) Share-based compensation
Stock option plan
The Group has granted directors, officers and consultants share
purchase options. These options were granted pursuant to the
Group's stock option plan.
Under the current Share Option Plan, 44,900,000 common shares of
the Group are reserved for issuance upon exercise of options.
-- On January 16, 2020, 14,250,000 stock options were granted at
an exercise price of C$0.20 per share for a period of five years.
The options vested immediately.
-- On October 5, 2018, 750,000 stock options were granted at an
exercise price of C$0.14 per share for a period of five years.
-- On March 12, 2018, 12,800,000 stock options were granted at
an exercise price of C$0.145 per share for a period of five years.
All these stock options have been exercised.
All of the stock options were vested as at the balance sheet
date. These options did not contain any market conditions and the
fair value of the options were charged to the statement of
comprehensive loss or capitalized as to assets under construction
in the period where granted to personnel's whose cost is
capitalized on the same basis. The assumptions inherent in the use
of these models are as follows:
Vesting First vesting Expected Risk Exercise Volatility Fair Options Options Expiry
period date remaining free price of share value vested granted
(years) life rate price
(years)
--------- -------------- ----------- ------ --------- ----------- ------- ----------- ----------- ----------
March 12, June 15,
5 2018 - 2.00% $ 0.145 105.09% $0.14 12,111,000 12,111,000 2023
October October
5 5, 2018 0.27 2.43% $ 0.14 100.69% $0.14 750,000 750,000 5, 2023
January January
5 16, 2020 1.55 1.49% $ 0.20 66.84% $0.07 14,250,000 14,250,000 16, 2025
In Canadian Dollars
The Group has elected to measure volatility by calculating the
average volatility of a collection of three peer companies'
historical share prices for the exercising period of each parcel of
options. Management believes that given the transformational change
that the Group has undergone since the acquisition of the Segilola
Gold Project in August 2016, the Group's historical share price is
not reflective of the current stage of development of the Group,
and that adopting the volatility of peer companies who have
advanced from exploration to development is a more accurate measure
of share price volatility for the purpose of options valuation.
The following is a summary of changes in options from January 1,
2023, to June 30, 2023, and the outstanding and exercisable options
at June 30, 2023:
15. CAPITAL AND RESERVES (continued)
c) Share-based compensation (continued)
In Canadian Dollars
The following is a summary of changes in options from January 1,
2022, to December 31, 2022, and the outstanding and exercisable
options at December 31, 2022:
In Canadian Dollars
d) Nature and purpose of equity and reserves
The reserves recorded in equity on the Group's statement of
financial position include 'Reserves,' 'Currency translation
reserve,' 'Retained earnings' and 'Deficit.'
'Option reserve' is used to recognize the value of stock option
grants prior to exercise or forfeiture.
'Currency translation reserve' is used to recognize the exchange
differences arising on translation of the assets and liabilities of
foreign branches and subsidiaries with functional currencies other
than US dollars.
'Deficit' is used to record the Group's accumulated deficit.
'Retained earnings' is used to record the Group's accumulated
earnings.
16. EARNINGS PER SHARE
Diluted earnings per share was calculated based on the
following:
Three months ended Six months ended June
June 30, 30,
------------------------------- --------------------------- --------------------------
2023 2022 2023 2022
------------------------------- ------------ ------------ ------------ ------------
Basic weighted average
number of shares outstanding 646,583,925 637,605,227 645,161,655 636,603,895
-------------------------------- ------------ ------------ ------------ ------------
Stock options 5,242,375 - 5,242,375 -
Diluted weighted average
number of shares outstanding 651,826,300 637,605,227 650,404,030 636,603,895
655,314,724 641,897,009 655,314,724 641,897,009
Total common shares
outstanding 670,104,724 669,198,009 670,104,724 669,198,009
-------------------------------- ------------ ------------ ------------ ------------
Total potential diluted
common shares 646,583,925 637,605,227 645,161,655 636,603,895
-------------------------------- ------------ ------------ ------------ ------------
17. RELATED PARTY DISCLOSURES
A number of key management personnel, or their related parties,
hold or held positions in other entities that result in them having
control or significant influence over the financial or operating
policies of the entities outlined below.
a) Trading transactions
The Africa Finance Corporation ("AFC") is deemed to be a related
party given the size of its shareholding in the Company. There have
been no other transactions with the AFC other than the Gold Stream
liability as disclosed in Note 8, and the secured loan as disclosed
in Note 9.
b) Compensation of key management personnel
The remuneration of directors and other members of key
management during the three and six months ended June 30, 2023, and
2022 were as follows:
Three months ended Six months ended
June 30, June 30,
---------------------- -------- -------------------------- ---------------------------
2023 2022 2023 2022
------------------------------- -------- -------- --------- --------
Salaries and bonuses
(i)
Current directors (ii)
and officers (iii) $ 736,436 $ 163,566 $ 973,098 $ 331,995
Former directors
and officers $ - $ 34,739 $ - $ 71,557
Directors' fees
Current directors (i)
and officers (ii) $ 113,022 $ 90,452 $ 222,178 $ 199,114
$ 849,458 $ 288,757 $ 1,195,276 $ 602,666
-------------------------------
(i) Key management personnel were not paid post-employment
benefits, termination benefits, or other long-term benefits during
the three and six months ended June 30, 2023, and 2022.
(ii) The Group paid consulting and director fees to both
individuals and private companies controlled by directors and
officers of the Group for services. Accounts payable and accrued
liabilities at June 30, 2023, include $56,938 (December 31, 2022 -
$102,092) due to directors or private companies controlled by an
officer and director of the Group. Amounts due to or from related
parties are unsecured, non-interest bearing and due on demand.
(iii) Executive bonuses were paid in the three months period
ended in June 30, 2023.
18. FINANCIAL INSTRUMENTS
The Group's financial instruments are classified as follows:
June 30, 2023 Measured at amortized Measured Total
cost at fair value
through profit
and loss
--------------------------- ---
Assets
Cash and cash equivalents $ 11,149,491 - 11,149,491
Amounts receivable 251,812 - 251,812
-------------------------------- ---------------
Total assets $ 11,401,303 - 11,401,303
--------------------------- --- ---------------
Liabilities
Accounts payable
and accrued liabilities $ 59,559,973 35,478 59,595,451
Loans and borrowings 27,957,463 - 27,957,463
Gold stream liability - 21,840,525 21,840,525
Lease liabilities 13,501,928 - 13,501,928
-------------------------------- ---------------
Total liabilities $ 101,019,364 21,876,003 122,895,367
--------------------------- --- ---------------
December 31, 2022 Measured at amortized Measured at Total
cost fair value
through profit
and loss
--------------------------- ---
Assets
Cash and cash equivalents $ 6,688,037 - 6,688,037
Amounts receivable 220,442 - 220,442
-------------------------------- ---------------
Total assets $ 6,908,479 - 6,908,479
--------------------------- --- ---------------
Liabilities
Accounts payable
and accrued liabilities $ 54,121,704 2,215,585 56,337,289
Loans and borrowings 28,142,654 - 28,142,654
Gold stream liability - 25,039,765 25,039,765
Lease liabilities 15,409,285 - 15,409,285
-------------------------------- ---------------
Total liabilities $ 97,673,643 27,255,350 124,928,993
--------------------------- --- ---------------
The fair value of these financial instruments approximates their
carrying value.
As noted above, the Group has certain financial liabilities that
are held at fair value. The fair value hierarchy establishes three
levels to classify the inputs to valuation techniques to measure
fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2 - inputs other than quoted prices included within level
1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices);
and
Level 3 - inputs for the asset or liability that are not based
on observable market data (that is, unobservable inputs).
As at June 30, 2023 and December 31, 2022, all the Group`s
liabilities measured at fair value through profit and loss are
categorized as Level 3 and their fair value was determined using
discounted cash flow valuation models, taking into account
assumptions with respect to gold prices and discount rates as well
as estimates with respect to production and operating results for
the Segilola mine.
19. CAPITAL MANAGEMENT
The Group manages, as capital, the components of shareholders'
equity. The Group's objectives, when managing capital, are to
safeguard its ability to continue as a going concern in order to
develop and its mineral interests through the use of capital
received via the issue of common shares and via debt instruments
where the Board determines that the risk is acceptable and, in the
shareholders' best interest to do so.
The Group manages its capital structure, and makes adjustments
to it, in light of changes in economic conditions and the risk
characteristics of the underlying assets. To maintain or adjust its
capital structure, the Group may attempt to issue common shares,
borrow, acquire or dispose of assets or adjust the amount of
cash.
20. CONTRACTUAL COMMITMENTS AND CONTINGENT LIABILITIES
Contractual Commitments
The Group has no contractual obligations that are not disclosed
on the Condensed Interim Consolidated Statement of Financial
Position.
Contingent liabilities
The Group is involved in various legal proceedings arising in
the ordinary course of business. Management has assessed these
contingencies and determined that, in accordance with International
Financial Reporting Standards, all cases are considered remote. As
a result, no provision has been made in the interim financial
statements for any potential liabilities that may arise from these
legal proceedings.
Although the Group believes that it has valid defenses in these
matters, the outcome of these proceedings is uncertain, and there
can be no assurance that the Group will prevail in these matters.
The Group will continue to assess the likelihood of any loss, the
range of potential outcomes, and whether or not a provision is
necessary in the future, as new information becomes available.
Based on the information available, the Group does not believe
that the outcome of these legal proceedings will have a material
adverse effect on the financial position or results of operations
of the Group. However, there can be no assurance that future
developments will not materially affect the Group's financial
position or results of operations.
21. SEGMENTED DISCLOSURES
Segment Information
The Group's operations comprise three reportable segments, the
Segilola Mine Project, Exploration Projects, and Corporate.
Six months ended Segilola Exploration Corporate Total
June 30, 2023 Mine Project Projects
Profit (loss) for the
period $ 14,043,081 $ (302,124) $(1,497,423) $ 12,243,534
- revenue 81,651,999 - - 81,651,999
- production costs (36,102,187) - - (36,102,187)
- royalties (1,870,590) - - (1,870,590)
- amortization and depreciation (16,039,323) (2,246) (193,462) (16,235,031)
- other administration
expenses (4,869,121) (293,417) (1,303,962) (6,466,499)
- impairments - (6,461) - (6,461)
- interest expense (6,624,310) - - (6,624,310)
June 30, 2023 Segilola Exploration Corporate Total
Mine Project Projects
Current assets $ 38,292,438 $ 106,500 $ 1,423,792 $ 39,822,730
Non-current assets
Deferred income tax
assets - 89,120 - 89,120
Prepaid expenses, advances
and deposits 24,889 - 214,638 239,527
Right-of-use assets 13,913,706 - 572,468 14,486,174
Property, plant and
equipment 150,918,862 518,646 139,029 151,576,537
Intangible assets 179,105 22,944,010 - 23,123,115
Total assets $ 203,329,000 $ 23,658,276 $ 2,349,927 $ 229,337,203
Non-current asset additions $ 15,980,050 $ 4,043,733 $ 15,625 $ 20,039,408
Liabilities $(127,390,018) $ (20,261) $(1,783,968) $(129,194,247)
Non-current assets by geographical location:
British
Virgin United
Senegal Islands Nigeria Kingdom Canada Total
June 30, 2023
Prepaid expenses,
advances and deposits - 4,214 24,889 210,424 - 239,527
Right-of-use assets - - 13,913,707 572,467 - 14,486,174
Property, plant
and equipment 443,449 - 150,994,059 134,831 4,198 151,576,537
Intangible assets 12,957,163 - 10,165,952 - - 23,123,115
Total non-current
assets $13,400,612 $4,214 $175,098,607 $917,722 $4,198 $189,425,353
21. SEGMENTED DISCLOSURES (continued)
Six months ended Segilola Exploration Corporate Total
June 30, 2022 Mine Project Projects
Profit (loss) for the
year $ 12,521,263 $ (111,126) $(2,199,559) $ 10,210,578
- revenue 66,220,229 - - 66,220,229
- production costs (28,493,272) - - (28,493,272)
- royalties (1,497,017) - - (1,497,017)
- amortization and depreciation (13,196,331) (4,468) (15,483) (13,216,282)
- other administration
expenses (1,887,750) (99,437) (2,184,076) (4,171,263)
- impairments - (7,221) - (7,221)
- interest expense (7,693,863) - - (7,693,863)
December 31, 2022 Segilola Exploration Corporate Total
Mine Project Projects
Current assets $ 36,334,005 $ 120,752 $ 831,907 $ 37,286,664
Non-current assets
Deferred income tax
assets - 87,797 - 87,797
Prepaid expenses, advances
and deposits 74,667 - 208,158 282,825
Right-of-use assets 16,232,353 - 617,049 16,849,402
Property, plant and
equipment 149,050,728 339,785 123,404 149,513,917
Intangible assets 150,747 19,080,461 - 19,231,208
Total assets $ 201,842,500 $ 19,628,795 $ 1,780,518 $ 223,251,813
Non-current asset additions $ 10,527,299 $ 2,612,033 $ 1,337,066 $ 14,476,398
Liabilities $(133,370,335) $(1,381,629) $(1,718,410) $(136,470,374)
Non-current assets by geographical location:
British
Virgin United
December 31, 2022 Senegal Islands Nigeria Kingdom Canada Total
Prepaid expenses,
advances and deposits - 7,024 74,667 201,134 - 282,825
Right-of-use assets - - 16,232,354 617,048 - 16,849,402
Property, plant
and equipment 176,645 - 149,230,320 101,491 5,461 149,513,917
Intangible assets 10,704,623 - 8,526,585 - - 19,231,208
Total non-current
assets 10,881,268 7,024 174,468,785 919,673 5,461 185,877,352
22. PRIOR PERIOD RESTATEMENT
Following the conclusion of the audited consolidated financial
statements for the year ended December 31, 2022, the Group
identified the restatements below for the three and six month
period ended June 30, 2022:
1 - Capitalization of $348,211 and $3,331,529 for the three and
six months periods ended June 30, 2022, respectively, of stripping
costs within "Property, Plant and equipment" as these related to
improved access to ore as determined by "IFRIC 20 - Stripping Costs
in the Production Phase of a Surface Mine". Recognition of
depreciation expenses of $188,666 in relation to the stripping
costs for the three months period ended June 30, 2022;
2 - Capitalization of $455,467 and $762,614 for the three and
six months periods ended June 30, 2022, respectively, of near mine
exploration costs within "Intangible assets" as these meet the
definition of an asset in accordance with "IFRS 6 - Exploration for
and Evaluation of Mineral Resources";
3 - Reclassification of $6,547,736 and $12,250,105 for the three
and six months periods ended June 30, 2022, respectively, of
amortization and depreciation of operational assets to "Cost of
sales";
4 - Reclassification of $3,640,484 and $5,824,295 for the three
and six months periods ended June 30, 2022, respectively, of
foreign exchange gains to "Production costs" as the foreign
exchange resulted from the purchase of raw materials, spare parts
and other operational inputs required to support and maintain the
Segilola mine operations; and
5 - Reclassification of $464 and $3,467,617 for the three and
six months periods ended June 30, 2022, respectively, of restricted
cash cashflows from "Net cash flows from operating activities" to
"Net cash flows used in investing activities".
6 - Reclassification of $2,997,495 and $4,804,185 for the three
and six months periods ended June 30, 2022, respectively, of
repayment of gold stream liabilities cashflows from "Net cash flows
from operating activities" to "Net cash flows used in investing
activities".
Therefore, in accordance with "IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors", the Condensed interim
consolidated statements of financial position, Condensed interim
consolidated statements of comprehensive income and Condensed
interim consolidated statements of cash flows for the three-month
period ended June 30, 2022 have been restated. The impact of the
restatements on these statements is demonstrated below:
Condensed interim consolidated statements of financial
position
-
Condensed interim consolidated statements of comprehensive
income
Condensed interim consolidated statements of cash flows
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IR EAAPDAAKDEAA
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