REG - Goldstone Resources - Final Results
30/06/2022 07:16
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RNS Number : 7295Q Goldstone Resources Ltd 30 June 2022
30 June 2022
GOLDSTONE RESOURCES LIMITED
("GoldStone" or the "Company")
Final Results
GoldStone Resources Limited (AIM: GRL), the emerging gold producer and
developer focussed on Ghana, is pleased to announce its final results for the
year ended 31 December 2021.
The Annual Report and Accounts will shortly be available to view and download
in full at the Company's website www.goldstoneresources.com. Hard copies of
the Annual Report and Accounts are available on request.
Highlights
· Successful transition from explorer and developer to commercial gold
producer
· Completion of first gold pour at Homase Mine in the Ashanti Gold Belt
in Ghana in November 2021
· Export of first commercial gold pour of 42.96kg gold doré, producing
40.96kg of gold bullion (1,307 Troy Ounces) and 1.72 kg of silver bullion (55
Troy Ounces) and revenues of US$2.4 million
· Gold loan repayment of US$1.1 million resulting in the interest rate
being taken out of default and improving GoldStone's financial performance
moving forward
· Post period end, GoldStone has exported and received income from
46.44kg of gold bullion resulting in US$2.84 million of revenue and continues
exporting gold monthly
· Optimisation and re-engineering programme undertaken post period end
to improve efficiencies and gold recovery following agglomeration issues
reported in January 2022
· Resource expansion programme progressing with grade control drilling
for the third Homase pit underway to determine the pit planning and expanding
the mineable resource inventory
· Additional geochemical soil sampling programmes underway across
Homase and Akrokeri licence areas to seek parallel zones of mineralisation and
drilling and trenching programme commenced at Akrokeri to move this forward
towards recommissioning.
Chairman's StatemeNt
GoldStone Resources Limited (the "Company" or, together with its subsidiaries,
the "Group") has been steadily pursuing its main unwavering ambition to become
an emerging gold producer in Ghana. During 2021, the year under review, this
goal was achieved. In November 2021 we announced the successful completion of
our first gold pour at our Homase Mine in the Ashanti Gold Belt in Ghana, an
event which saw us commence our transition from an explorer and developer to a
commercial gold producer.
This is a landmark moment for any gold mining company, however given the
unique challenges presented in the 18 months to the first gold pour, I believe
this is a particularly notable achievement. For this I would like to thank our
operational team, our shareholders and other stakeholders for their staunch
support, and patient and resolute determination over recent years.
As our shareholders will be acutely aware, the work doesn't stop at first gold
pour, but rather starts the ongoing process of optimising and re-engineering
aspects of the operation in order to strive for maximum efficiency as
production ramps up. In many ways 2021 was an exceptionally challenging but
successful year for GoldStone. However, as we moved into 2022, we were
presented with new challenges and, post period end, we updated the market with
news regarding start-up agglomeration issues which impacted initial gold
recoveries. With swift and decisive action by the GoldStone Board and
management team, we were able to resolve these issues and increase gold
recovery from the heap leach pads to over 60%. During this time our in-situ
test work continued and all of the results from testing of stacked ore
indicates that we will ultimately achieve an overall leach recovery of in
excess of 82%. During this time, further testwork has indicated that modifying
the circuit to include additional gravity for coarse gold recovery and
re-crushing the oversize and the quartz particles will ensure the higher
recovery is achieved. Additional construction work to modify the existing
circuit has commenced and this is expected to be completed by Q3 2022.
The Group expects to have stacked some 450,000 tonnes of agglomerated ore by
the end of the current financial year, which will be fed from the first two
pits within the Homase Mine. With the improved dry plant and agglomeration
modifications outlined in the announcement dated 25th March 2022, there has
been an improvement in our production profile during H1 2022. However, our
ability to deliver on our production target of 20,000oz of gold in 2022 has
been impacted, inter alia, by diesel availability (which is impacting us and
indeed Ghana as a whole), and an incident of theft (as reported in our
announcement of 29 June 2022). The fuel issue is a changing and fast-moving
situation, and we are working hard to secure a reliable source of fuel,
however our current expectation for production in 2022 has been revised to
14,000 oz, rising to 20,000oz in 2023.
On 17 January 2022, the Group announced the export of the first commercial
gold pour of 42.96 kg gold doré, which included the 14.46kg poured in
November 2021. This produced 40.96 kg of gold bullion (1,307 Troy Ounces)
and 1.72 kg of silver bullion (55 Troy Ounces), and revenues of US$2.4
million, of which US$1.1 million was credited as payment of the Gold Loan.
Since January, the Group has exported and received income from 46.44 kg of
gold bullion (approximately 1,493 ounces), 1.7 kg of silver bullion
(approximately 100 ounces), resulting in US$2.84 million of revenue. The Group
continues to produce and export gold monthly.
From a financial perspective, our position has improved significantly over
recent months, and as noted above we reported, post period end, that Gold Loan
repayments from first gold pour of US$1.1m, via the delivery of 610 troy
ounces to Asia Investment Management Services Limited was completed, resulting
in the interest rate on the Gold Loan being taken out of default. Once again,
this development ensures that GoldStone is on an even footing and is now well
placed to move forward from a position of strength and achieve its operational
and commercial objectives through 2022 and in the coming years.
Looking ahead, our development plans extend further than our initial first two
pits at Homase, and grade control drilling for the third pit is underway to
determine the pit planning and expanding the mineable resource inventory at
Homase. Additionally, the operational team has undertaken further
geochemical soil sampling programmes within the Homase and Akrokeri Licence
areas to seek parallel zones of mineralisation, following the programme
carried out in 2018. This programme, and subsequent work, has continued to
highlight the importance of our Akrokeri Licence, which includes the former
Akrokeri Underground Mine, in the context of our asset portfolio, and the
Group has commenced a drilling and trenching programme in this area to move
this forward towards a mine plan.
With our production profile consistently improving at Homase and plans in
place for expansion and optimisation extending across Homase and Akrokeri, we
believe GoldStone is in a very strong position to look to deliver real returns
to shareholders. I look forward to providing further updates as our growth
strategy advances and our position as an emerging West African gold producer
is firmly established.
Bill Trew
Chairman
Chief Executive Officer's Statement
GoldStone has performed well over the past two years, with a proven gold
mining operation now producing gold and significant further upside from its
expansion and development initiatives. As many investors and industry
veterans will attest, it is no easy feat for a company to get an asset from
exploration, through development and into production - let alone doing this
with the specific financial pressures of a pre-revenue growth company like
GoldStone. Intensifying our particular list of challenges is its geographical
location - GoldStone is the first junior to take an exploration company all
the way to production in Ghana - a country which boasts several mining majors
but that does not have a proven entry point for emerging producers such as
us. With the consistent and tangible support of our investors and the
tenacity and innovation of our operational team, we achieved this milestone in
November 2021 with our first gold pour.
As shareholders will be aware, our route to gold production has taken various
directions. However during the year under review, GoldStone completed
construction for the initial stage of the mine, which includes crushing,
sizing, agglomeration and stacking unit, three heap leach pads, a
carbon-in-column plant, and an elution and gold room, for a total investment
of US$15 million including overheads. This was a low capex route to cash
flow for GoldStone in terms of benchmark industry standards, and importantly,
it remains a capital efficient operation in the context of other emerging
producers with an estimated cash cost of around US$1,200 per oz expected for
the remainder of 2022, with an all-in sustaining cost of US$1,300 per ounce.
This is the Group's current estimate, however as shareholders will understand,
and as is evident across all industries on a global level, costs are liable to
increase due to persistent supply chain bottlenecks and increased prices for
major input materials such as fuel for the mining fleet and power generation
costs which are seeing increases of over 25%. It is noted that Ghana's
inflation rate has increased to its highest level in 18 years, with an
inflation rate of 23.6% recorded in May 2022. The Group will continue to
monitor the levels of cost inflation over the remainder of 2022, as we
continue to target long-term cash flow and value our operation at industry
costs per ounce of gold produced.
Looking back at our operations specifically, our transition into production
has not been plain sailing and agglomeration issues at the end of the period
resulted in much lower gold recovery than anticipated. The team subsequently
carried out a programme of detailed test work and cost analysis to further
understand the leach kinetics within the heap and therefore optimise the
recovery of the remaining contained gold.
As part of this work programme, the agglomeration and crushing circuit was
reconfigured to handle the excess clay encountered and the greater than
expected amount of silt originating from the oxide orebody's phyllitic
content. A modified screening system has been installed to control the feed
sizing, with the fines (<3mm) being removed, which represents approximately
20% of the ore body, and fed initially to a gravity recovery circuit. The
test work indicates that the gravity recovery circuit should recover between
14% and 24% of the contained gold, whilst reducing leaching costs and
improving cashflow.
Concurrent with the preparation of Cell 3 of the heap leach to receive
agglomerated ore, the Group is building an additional 1,000 tonne per day
(tpd) crushing, agglomeration and stacking circuit, which will have double
stacking capacity to 2,000 tpd and is now due to be commissioned during Q3
2022.
The current available mineable resource from the first pit within the Homase
Mine was estimated by management to be 304,000 tonnes @ 1.7g/t of oxide ore
(correction to the Press Release dated 25 March 2022, where it referred to two
pits, when it should have been one). From the second pit it is estimated by
management that there is 640,000 tonnes @ 1.25g/t of oxide ore, which was
derived from the update regarding the mineable resource announced 12 November
2020. The mineable resource is within the confines of the 602,000oz JORC
(2012) resource previously announced.
The free dig mining of the first pit was halted at 40metres, due to a silica
alteration in the orebody being encountered, which means that a drill and
blast method of mining will have to be instigated to continue the mining at
depth. This has meant that the high grade southern ore shoot that was
being mined, was curtailed, which has resulted in the average grade mined to
date, dropping to 1.5g/t. The grade is expected to improve with depth, as
the higher grade southern plunging oreshoot within the first pit, becomes more
prominent. The first pit deepening, which is subject to the geotechnical
assessment, requires a pushback, which will make the remaining oxide resources
available, which is situated outside the current 40 metre optimised pit shell,
and should see the average pit grade increasing to 1.7g/t.
The tonnes mined to date from the first pit are 202,138 tonnes of ore and
619,218 tonnes of waste, which is less that the 210,000 tonnes of ore reported
tonnes at 25 March 2022, due to the final pit reconciliation, from which the
average pit density measurements revealed that the oxidised material
characterized by sub- average density is wider than originally anticipated.
The Group has undertaken geotechnical drilling within the first two pits,
which is currently being assessed, and subject to the results and subsequent
permitting, this could possibly allow these pits to extend into the fresh ores
down to -80 metres, for a further 585,700 tonnes @ 1.7g/t and 1,261,600 tonnes
@ 1.1g/t of fresh ore as outlined in the announcement 12 November 2021.
The Group has undertaken grade control drilling for the third pit within the
Homase Mine, to determine the pit planning and expanding the mineable resource
inventory, the results are awaited from the ALS Certified Laboratory in
Kumasi.
Turning now to our Akrokeri Licence, centred on the former Akrokeri
Underground Mine, our operational team continued with the reassessment of the
former mine workings and former artisanal mine workings, building the database
with historical exploration work and consolidating historical geological
reports that reference not just the Akrokeri Mine but also the several other
historical exploration targets in the vicinity of the Akrokeri Mine. This
work has merited a diamond drilling campaign for which the Company is waiting
for the arrival of a rig. The results will provide a better guide to the
structural setting of the Akrokeri mineralisation and provide a route through
which to advance further exploration and through to production.
In June 2022, the Group was dealt a financial blow post-period end in June
2022, due to an armed robbery at site which resulted in the loss of gold, with
a value of approximately US$350k. Whilst this loss is not expecting to have
a fundamental impact on the performance of the business, the Group was not in
a position to make an announcement which was compliant with the AIM Rules,
which led to a suspension in the trading of its ordinary shares on the AIM
market on 10 June 2022 whilst an investigation was launched by the authorities
in Ghana. The suspension was lifted following the Company's 29 June 2022
announcement. The investigation into the robbery is ongoing and, concurrently,
Goldstone is reviewing its security protocols. A new security company has been
appointed and additional security measures are being implemented on an urgent
basis to enhance protection for the Company's operations, assets and personnel
moving forward. These issues are causing some short-term disruption to
operations, which are expected to continue into Q3 2022, but the Company
expects to maintain regular production of gold doré throughout Q3 and Q4
2022.
Corporate and Financial Review
Losses from operations for the 12 months to 31 December 2021 were US$1,523k
(2020: loss of US$610k). This included a finance cost of US$729k (2020:
US$nil) in respect of the restatement of the Gold Loan taken out in 2020 of
US$3.0 million to the gold price at the year end.
After an exchange loss on the restatement of the Group's Ghanaian assets as 31
December 2020, to the exchange rate as at 31 December 2021 of US$1,250k (2020:
US$30k), the comprehensive loss for the year was US$2,773k (2020:
US$640k).
The financial statements at year end show the Group's balance sheet, with net
assets standing at US$16.0 million against net assets of US$10.85 million at
the end of the previous year.
Cash and cash equivalents as at 31 December 2021 were US$337k (2020:
US$701k).
With the revenue now being generated from our gold production and the further
funds issued from the revenue of warrants in June 2022, the Board is confident
that it remains well positioned to continue the ramp up of production at
Homase.
The Group prepares regular management accounts and financial forecasts to
monitor and manage working capital and funding requirements going forward.
The accounts and forecasts are regularly reviewed and challenged by the Board.
Warrants
The Company announced on 23 June 2022, the exercise of 14,000,000 warrants to
subscribe for new ordinary shares of 1 penny each in the capital of the
Company ("Ordinary Shares") at a price of 3 pence per Ordinary Share (the
"Warrant Exercise"). The Warrant Exercise provides £420,000 of additional
funding to the Company.
Nguvu Holdings Limited (formerly known as BCM Investments Limited) ("Nguvu")
gave notice to the Company in late May 2022 of its intention to exercise
6,000,000 of the 12,000,000 warrants it held to subscribe for Ordinary Shares
at a price of 3 pence per Ordinary Share (the "Nguvu Warrants"), but Nguvu was
unable to provide a signed notice of exercise before the Company entered into
a close period pending publication of the annual report and accounts of the
Company for the year ended 31 December 2021. As Angela List, a director of
the Company, is a director of and shareholder in Nguvu, the Nguvu Warrants,
which had an expiry date of 22 June 2022, could not be exercised during this
close period. Accordingly, the Board of the Company resolved to extend the
exercise period of the Nguvu Warrants by two weeks, to expire at midnight on 6
July 2022 (the "Warrant Extension"). If the Nguvu Warrants are exercised, in
whole or in part, during such extended period, a further announcement will be
made. The remaining 6 million Warrants held by Nguvu expired at midnight on
22 June 2022.
Former director's claim
As previously announced, following the claim against Goldstone Resources
Limited ("the Company") brought by a former director (initially announced on
13 October 2016), it was further announced in December 2018 that the South
African Labour Court had ruled in favour of the former director and awarded
him damages of US$140k plus interest and legal costs. In January 2021, The
Group agreed to issue 1,800,000 new Ordinary Shares of 1 pence each in the
Company to the former director, which had a value of £163,800 (approximately
US$222,768) at the closing middle market price of the Company's Ordinary
Shares on 15 January 2021, which, in addition to US$22,500 already paid in
cash, represented a full and final settlement of the damages awarded to him by
the South African courts. The Company has been indemnified against any
future claims by the former director of the Company.
Risk management
The Board has identified the following as being principal strategic and
operational risks (in no particular order):
a. going concern
The financial statements have been prepared assuming the Group and Company
will continue as a going concern. In assessing whether the going concern
assumption is appropriate, the directors have taken into account all available
information for the foreseeable future; in particular for the 12 months from
the date of approval of these financial statements. This assessment included
consideration of future revenues as the Group commences commercial gold
production, existing cash resources and available facilities.
The Group had available cash of US$336,524 as at 31 December 2021 (2020:
US$701,384).
The Group commenced commercial production in January 2022. This was later
than previously anticipated due to permitting issues. As can be seen in note
15, warrants over 459,035,996 Ordinary Shares were exercised by shareholders
during the year to generate funds for the Group and pay down borrowings. In
addition, Asian Investment Management Services Limited ("AIMS"), who hold the
secured Gold Loan of US$3.0 million, supported the Group by agreeing to a
number of deferments of interest payments and, in September 2021, agreed to an
extension of the facility to 31 August 2022 and a gold repayment plan (see
note 18). As a result of the Group not commencing commercial production
until early 2022 the first three repayments were not made until January 2022
(see note 18 for further details). This allowed the Group to exit the
default interest rate of 17% on the Gold Loan, reverting back to 14%.
The Group is now generating revenues from commercial production. The
financial models and projections prepared by the Board in order to monitor
cash flow demonstrate that the Group is a viable going concern. However, if
there are further delays or problems encountered with production, the ability
to meet the repayment schedule of the Gold Loan would be at risk. The Board
believes the flexibility and support afforded to the Group by AIMS to date
demonstrates that, if required, this would be forthcoming. AIMS have
confirmed their intention to continue to support the Group by agreeing to
further extensions of the payment plan, however the interest rate would revert
back to the default rate of 17% from September 2022.
At the date of this report the Board is, therefore, confident of the ability
of the Group and Company to continue mining and make the on-going operational
improvements, as announced in March 2022. The Board is confident that with
the continued support of the shareholders, the Group and Company can meet all
its contractual obligations as they fall due for the foreseeable future and
therefore, the Board believes it is appropriate to adopt the going concern
assumption.
b. development and mining
Development and mining for natural resources is speculative and involves
significant risk.
Planned production schedules may not be achieved as a result of unforeseen
operational problems, machinery malfunctions or other disruptions. Operating
costs and profits for commercial production therefore remain subject to
variation, such as gold prices or not achieving the expected recovery rates.
Inflation and supply chain issues, which are affectively the global economy,
may also impact on recovery rates.
The Board are evaluating each stage of the development and mining of the
Group's project, site by site, in order to mitigate as far as possible these
risks inherent in production. Use of modern technology and electronic tools
assist in reducing risk in this area. Good employee relations are also key
in reducing the exposure to labour disputes. The Group is committed to
following sound environmental guidelines and practice and is keenly aware of
the issues surrounding each individual project.
c. country and political
GoldStone's projects are in Ghana. Emerging market economies could be
subject to greater risks including legal, regulatory, economic and political
risks and are potentially subject to rapid change.
The Board routinely monitors political and regulatory developments in Ghana.
The Ghanaian Government continues to be supportive towards the mining sector,
including the improved policing of small-scale mining operations, thus
ensuring controlled management of neighbouring areas.
In addition, the Group actively engages in dialogue with relevant Government
representatives in order to keep abreast of all key legal and regulatory
developments applicable to areas of interest. GoldStone maintains internal
processes to ensure that it is wholly compliant with all relevant regulations
in order to maintain its licences.
It is noted that security risk is inherent with a business operating in an
emerging economy such as Ghana, particularly for a producing gold mine. The
Company is increasing its engagement with the government and its governing
bodies to monitor the emerging country risk in order to ascertain any
particular risks or trends that can be identified and mitigated to seek to
ensure the security of our people and our business.
The Company has increased its focus on security and management plans and is
continuously monitoring any security issues, threats and emerging potential
issues through global and national advisory services, government security
intelligence and local engagement, to establish an appropriate and effective
security approach that is also aligned with the Voluntary Principles of
Security and Human Rights.
d. social, safety and environmental
The Group's success depends upon its social, safety and environmental
performance as failures may lead to delays or suspensions of its activities.
The Group takes its responsibilities in these areas seriously and monitors its
performance across these areas on a regular basis.
The Group experienced no fatalities for the 2021 financial year and no
lost-time injuries, which contributes to the Group's commendable safety
performance.
The Group has set out to create an environment of zero harm by creating a safe
and healthy workplace and managing our activities in a way that eliminates
accidents, minimises health and safety risks and promotes excellence in the
performance of our operations.
As the Homase Mine ramps up production, the Group is strengthening its
relationships with the communities living within the concession areas and
close to the projects. The immediate focus for each of the villages within
the licences, has been sanitation and drinking water, and improving the school
facilities, maintaining the buildings and providing school uniforms. The
Group continues to build on the community relationships to assist the
smallholder farmers and ensuring a "community first" approach when
recruiting. These schemes benefit both the communities and the investors in
which the Group will be operating.
e. coronavirus impact
The Coronavirus pandemic continued to have a significant impact on the
operations of many businesses both in Ghana and globally during 2021. The
Group strictly adhered to government requirements and health guidelines at the
height of the pandemic and continues to follow enhanced health and wellbeing
protocols to safeguard our employees, local communities and partners within
our supply chain.
Emma Priestley
Chief Executive Officer
For further information, please contact:
GoldStone Resources Limited
Bill Trew / Emma Priestley Tel: +44 (0) 1534 487 757
Strand Hanson Limited
James Dance / James Bellman Tel: +44 (0) 20 7409 3494
S. P. Angel Corporate Finance LLP
Ewan Leggat / Charlie Bouverat Tel: +44 (0) 20 3470 0501
St Brides Partners Limited Tel: +44 (0) 20 7236 1177
Susie Geliher / Catherine Leftley
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018 (as amended).
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated statement of financial position
as at 31 December 2021
in united states dollars note 31 December 2021 31 December 2020
Assets
non-current assets
property, plant and equipment 8 21,280,257 491,208
intangible assets - exploration and evaluation 9
- 14,339,772
total non-current assets 21,280,257 14,830,980
current assets
inventory 12 1,959,083 -
trade and other receivables 11 257,013 2,145,576
cash and cash equivalents 13 336,524 701,384
total current assets 2,552,620 2,846,960
total assets 23,832,877 17,677,940
Equity
share capital - ordinary shares 15 6,383,213 3,913,963
share capital - deferred shares 15 6,077,013 6,077,013
share premium 15 33,535,384 28,080,853
foreign exchange reserve 15 (1,332,396) (82,149)
capital contribution reserve 15 555,110 555,110
share options reserve 15, 17 3,535,197 3,535,197
accumulated deficit 15 (32,758,006) (31,234,911)
total equity 15,995,514 10,845,076
Liabilities
non-current liabilities
borrowings 18 - 1,300,000
provision for rehabilitation 14 901,284 -
total non-current liabilities 901,284 1,300,000
current liabilities
trade and other payables 19 1,395,222 1,001,998
borrowings 18 5,540,857 4,530,866
total current liabilities 6,936,079 5,532,864
total liabilities 7,837,363 6,832,864
total equity and liabilities 23,832,877 17,677,940
Consolidated statement of comprehensive income
for the year ended 31 December 2021
in united states dollars year ended year ended
31 December 2021 31 December 2020
note
administrative expenses (794,208) (577,153)
operating loss 6 (794,208) (577,153)
finance costs 7 (728,887) (32,942)
loss before and after tax from continuing operations (1,523,095) (610,095)
items that may be reclassified subsequently to profit and loss:
foreign exchange translation movement (1,250,247) (30,088)
total comprehensive loss for the year (2,773,342) (640,183)
loss per share from operations
basic and diluted losses per share attributable to the equity holders of the 16 (0.004) (0.002)
company during the year (expressed in cents per share)
Consolidated statement of changes in equity
for the year ended 31 December 2021
in united states dollars share capital share capital share premium capital contribution reserve share options reserve accumulated deficit total equity
ordinary shares deferred shares foreign
note exchange
reserve
balance as at 31 December 2019 3,484,580 6,077,013 27,222,084 (52,061) 555,110 229,688 (30,624,816) 6,891,598
Total loss for the year - - - - - - (610,095) (610,095)
translation movement - - - (30,088) - - - (30,088)
total comprehensive loss for the year - - - (30,088) - - (610,095) (640,183)
warrants granted in period 17 - - - - - 3,305,509 - 3,305,509
warrants exercised in period 17 405,084 - 810,168 - - - - 1,215,252
share issue 15 24,299 - 48,601 - - - - 72,900
balance as at 31 December 2020 3,913,963 6,077,013 28,080,853 (82,149) 555,110 3,535,197 (31,234,911) 10,845,076
Total loss for the year - - - - - - (794,208) (794,208)
translation movement - - - (1,250,247) - - - (1,250,247)
loan derivative movement - - - - - - (728,887) (728,887)
total comprehensive loss for the year - - - (1,250,247) - - (1,523,095) (2,773,342)
warrants granted in period 17 - - - - - - - -
warrants exercised in period 17 2,191,715 - 3,367,140 - - - - 5,558,855
share issue 15 277,535 - 2,087,391 - - - - 2,364,926
Balance as at 31 December 2021 6,383,213 6,077,013 33,535,384 (1,332,396) 555,110 3,535,197 (32,758,006) 15,995,514
Consolidated statement of cash flows
for the year ended 31 December 2021
in united states dollars year ended year ended
31 December 2021 31 December 2020
note
cash flow from operating activities
operating loss for the year (794,208) (577,153)
adjusted for:
- depreciation 8 71,300 14,617
- foreign exchange differences 164,170 (30,088)
- provisions - 25,737
- changes in working capital (462,382) 329,937
net cash used in operating activities (1,021,237) (236,950)
cash flow from investing activities
capitalisation of exploration costs 9 (746,640) (4,185,534)
acquisition of property, plant and equipment 8 (4,872,653) (481,511)
net cash used in investing activities (5,619,293) (4,667,045)
cash flow from financing activities
proceeds from loan 18 - 3,000,000
(repayment)/proceeds from bond issue 18 (300,000) 1,300,000
proceeds from share issue 15 6,575,670 1,215,251
net cash generated from financing activities 6,275,670 5,515,251
net decrease in cash and cash equivalents (364,860) 611,256
cash and cash equivalents at beginning of the year 13 701,384 90,128
cash and cash equivalents at end of the year 13 336,524 701,384
Notes to the consolidated financial statements
1. Reporting entity
The consolidated financial statements for the year ended 31 December 2021 (the
"financial statements") comprise GoldStone Resources Limited (the "Company")
and its subsidiaries, set out in note 22, (together referred to as the
"Group").
The Company is quoted on the AIM market of the London Stock Exchange and is
incorporated and domiciled in Jersey (Channel Islands). The address of its
registered office is 2(nd) Floor, International House, 41 The Parade, St.
Helier, Jersey, JE2 3QQ. The Company's principal activity is that of a
holding company. The Group's principal activity is exploration and mining of
gold and associated elements.
2. Basis of preparation
(a) statement of compliance and basis of preparation
The Group's annual report is for the year ended 31 December 2021 and includes
the consolidated financial statements of the Group prepared in accordance with
international accounting standards in accordance with UK-adopted-IFRSs.
The Group financial statements have been prepared using accounting policies
set out in note 3 which are consistent with all applicable IFRSs. For these
purposes, IFRSs comprise the standards issued by the International Accounting
Standards Board and interpretations issued by the International Financial
Reporting Interpretations Committee that have been endorsed by the UK
Endorsement Board.
The Group financial statements have been prepared under the historical cost
convention except for the treatment of share based payments, certain debtors
at fair value and derivatives. The Group financial statements are presented
in United States Dollars ("$") and all values are rounded to the nearest
thousand except where otherwise stated.
The preparation of consolidated financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and reported amounts in the financial
statements. The areas involving a higher degree of judgement or complexity,
or areas where assumptions or estimates are significant to the financial
statements, are disclosed in note 2(d).
(b) going concern
The financial statements have been prepared assuming the Group and Company
will continue as a going concern. In assessing whether the going concern
assumption is appropriate, the directors have taken into account all available
information for the foreseeable future; in particular for the 12 months from
the date of approval of these financial statements. This assessment included
consideration of future revenues as the Group commences commercial gold
production, existing cash resources and available facilities.
The Group had available cash of US$336,524 as at 31 December 2021 (2020:
US$701,384).
The Group commenced commercial production in January 2022. This was later
than previously anticipated due to permitting issues. As can be seen in note
15, warrants over 459,035,996 Ordinary Shares were exercised by shareholders
during the year to generate funds for the Group and pay down borrowings. In
addition, Asian Investment Management Services Limited ("AIMS"), who hold the
secured Gold Loan of US$3.0 million, supported the Group by agreeing to a
number of deferments of interest payments and, in September 2021, agreed to an
extension of the facility to 31 August 2022 and a gold repayment plan (see
note 18). As a result of the Group not commencing commercial production
until early 2022 the first three repayments were not made until January 2022
(see note 18 for further details). This allowed the Group to exit the
default interest rate of 17% on the Gold Loan, reverting back to 14%.
(b) going concern
The Group is now generating revenues from commercial production. The
financial models and projections prepared by the Board in order to monitor
cash flow demonstrate that the Group is a viable going concern. However, if
there are further delays or problems encountered with production, the ability
to meet the repayment schedule of the Gold Loan would be at risk. The Board
believes the flexibility and support afforded to the Group by the shareholders
and AIMS to date demonstrates that, if required, this would be
forthcoming. AIMS have confirmed their intention to continue to support
the Group by agreeing to further extensions of the payment plan, however the
interest rate would revert back to the default rate of 17% from September
2022.
At the date of this report the Board is, therefore, confident of the ability
of the Group and Company to continue mining and make the on-going operational
improvements, as announced in March 2022. The Board is confident that with
the continued support of the shareholders, the Group and Company can meet all
its contractual obligations as they fall due for the foreseeable future and
therefore, the Board believes it is appropriate to adopt the going concern
assumption.
(c) functional and presentational currency
Items included in the financial statements of each of the Group's subsidiaries
are measured using the currency of the primary economic environment in which
the entity operates (its functional currency). These consolidated financial
statements are presented in United States Dollars, which is the functional and
presentational currency of the Group.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at the balance
sheet date.
Exchange differences arising on the settlement of monetary items and on the
retranslation of monetary items are included in the statement of comprehensive
income for the period.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are expressed in United
States Dollars using exchange rates prevailing at the balance sheet date.
Income and expense items are translated at the average exchange rates for the
period. Exchange differences arising if any, are classified as other
comprehensive income and are transferred to the Group's translation reserve.
When the settlement of monetary items receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign
currency gains and losses arising from such items are considered to form part
of a net investment in foreign operations and are recognised in other
comprehensive income, and presented in the exchange reserve in equity.
(d) use of estimates and judgements
In the application of the Group's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised if
the revision affects only that period, or in a period of the revision and
future periods if the revision affects both current and future periods.
The following are the key estimates and judgements that have a significant
risk of resulting in a material adjustment within the next year:
(i) valuation of exploration and evaluation expenditure
The application of the Group's accounting policy for exploration and
evaluation expenditure requires judgement in determining whether it is likely
that future economic benefits are likely from future exploration. If
information becomes available suggesting that recovery of expenditure is
unlikely, the amount capitalised is written off in the consolidated statement
of comprehensive income in the period when the new information becomes
available.
(ii) impairment of intangible and tangible assets
The assessment of tangible and intangible assets for any internal and external
indications of impairment involves judgement. Each reporting period, the
Group assesses whether there are any indicators of impairment, if indicated
then a formal estimate of the recoverable amount is performed and an
impairment loss recognised to the extent that the carrying amount exceeds
recoverable amount. Recoverable amount is determined as the value in use.
Determining whether the projects re impaired requires an estimation of the
recoverable value of the individual areas to which value has been ascribed.
The value in use calculation requires the entity to estimate the future cash
flows expected to arise from the projects in order to calculate present
value.
(iii) production start date
The Group assesses the stage of the mine under construction to determine when
the mine moves into production stage. The criteria used to assess the start
date are determined based on the complexities and operational status of the
mine. The Group considers various criteria to assess when the mine is
commercially operational and should be reclassified from Assets under
construction to 'Producing Mines' or 'Property plant and equipment.' Some of
the criteria will include, but not limited to the following:
· completion of a reasonable period of testing the mine plant and
equipment;
· completion of the commissioning period;
· ability to produce metal in a saleable form;
· ability to sustain ongoing production of metal; and
· ability to be able to export product for commercial sale.
When a mine construction project moves into the production stage, the
capitalisation of certain mine construction costs cease and costs are either
regarded as inventory or expenses except for costs that qualify for
capitalisation relating to mining assets. This is also the point at which
the depreciation/amortisation recognition criteria commences.
(iv) inventory
Net realisable tests are performed at least annually and represent the future
sale price of the product based on prevailing spot metal prices at the
reporting date, less estimated costs to complete production and bring the
product to sale.
Stockpiles are measure by estimating the number of tonnes added and removed
from the stockpile, the number of contained gold ounces based on assay data
and estimated recovery percentage based on expected processing method.
(v) ore reserves and resources
Ore reserves are estimates of the amount of ore that can economically and
legally be extracted from the mine. The Group estimates its ore reserves and
mineral resources, based on information compiled by appropriately qualified
person relating to the geological data on the size, depth and share of the ore
body and requires complex geological judgments to interpret the data. The
estimation of recoverable reserves is based upon factors such as estimates of
foreign exchanges rates, commodity prices, future capital requirements and
production costs along with geological assumptions and judgements made in
estimating the size and grade of the ore body. Changes in the reserve or
resource estimates may impact upon the carrying value of exploration and
evaluation asses, mine properties, property plant and equipment provision for
rehabilitation and deprecation/amortisation charges.
(v) mine rehabilitation provision
The Group assesses its mine rehabilitation provision annually. Significant
estimates and assumptions are made in determining the provision for the mine
rehabilitation as there are numerous factors that will affect the ultimate
liability payable. These factors include estimates of the extent and cost of
rehabilitation activities, technological changes, regulatory changes and
changes in discount rates. Those uncertainties may result in future actual
expenditure differing from the amounts currently provided. The provision at
the reporting date represents managements base estimate of the present value
of the rehabilitation provision.
(vi) valuation of share warrants
The fair value of share warrants is calculated using the Black-Scholes
model. The model requires a number of inputs to calculate the fair value of
the warrants. Volatility is based on the Group's trading performance and the
risk-free rate is determined using a 3-year UK government bond. The
directors have reviewed the underlying inputs and are happy that these appear
reasonable.
3. Significant accounting policies
The accounting policies set out below have been applied consistently to all
periods presented in these consolidated financial statements.
(a) basis of consolidation
The consolidated financial statements comprise the financial statements of the
Group and its subsidiaries as at 31 December 2021. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and
only if, the Group has:
· power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee);
· exposure, or rights, to variable returns from its involvement with
the investee; and
· the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· the contractual arrangement with the other vote holders of the
investee;
· rights arising from other contractual arrangements; and
· the Group's voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation. When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into line with
the Group's accounting policies.
(b) financial instruments
(i) non-derivative financial assets
The Group recognises loans and receivables at fair value on the date that they
are originated. All other financial assets are recognised initially on the
trade date, which is the date that the Group becomes party to the contractual
provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all the risks
and rewards of ownership of the financial asset are transferred. Any
interest in such transferred financial assets that is created or retained by
the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in
the statement of financial position when, and only when, the Group has a legal
right to offset the amounts and intends either to settle them on a net basis
or to realise the asset and settle the liability simultaneously. The Group
classifies non-derivative financial assets into the following categories:
loans and receivables and cash and cash equivalents.
Loans and receivables are financial assets with fixed or determinable payments
that are not quoted in an active market. Such assets are recognised initially
at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, loans and receivables are measured at amortised cost
using the effective interest method, less any impairment losses. Loans and
receivables comprise trade and other receivables.
Cash and cash equivalents comprise bank balances only.
(ii) non-derivative financial liabilities
The Group recognises financial liabilities initially on the trade date, which
is the date that the Group becomes a party to the contractual provisions of
the instrument. The Group derecognises a financial liability when its
contractual obligations are discharged, cancelled or expire.
The Group classifies non-derivative financial liabilities into trade and other
payables.
(iii) share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of the ordinary shares are recognised as a deduction
from equity, net of tax effects.
(iv) deferred shares
Deferred shares are classified as equity and held in the capital contributions
reserve account.
(c) share based payments
The Group has applied the requirements of IFRS 2 - 'Share based payment.' IFRS
2 has been applied to all grants of equity instruments.
The fair value of warrants and the employee share option scheme is calculated
at the grant date using the Black-Scholes model. The resulting cost is
charged to the statement of comprehensive Income over the vesting period or in
line with the services provided in consideration for the issue.
(d) property, plant and equipment
Upon completion of mine construction, the assets initially charged to 'Assets
under construction' are transferred to 'Plant and equipment and motor
vehicles' or 'Producing mines.' Items of 'Plant and equipment and motor
vehicles' and 'Producing Mines' are stated at cost, less accumulated
depreciation and accumulated impairment losses.
During the production period expenditure directly attributable to the
construction of each individual asset are capitalised as 'Assets under
construction' up to the period when the asset is ready to be put into
operation. When an asset is put into operation it is transferred to 'Plant
and equipment and motor vehicles' or 'Producing mines.' Additional capital
cost incurred subsequent to the date of commencement of operation of the asset
are charged directly to 'Plant and equipment motor vehicles' or 'Producing
mines', i.e. where the asset itself was transferred.
The initial cost of an asset comprises its purchase price or construction
cost, any costs directly attributable to bringing the asset into operation,
the initial estimate of the rehabilitation obligation and, for qualifying
assets, borrowing costs. The purchase price or construction cost is the
aggregate amount paid and the fair value of any other consideration given to
acquire the asset.
When a mine construction project moves into production stage, the
capitalisation of certain mine construction costs ceases and costs are either
regarded as inventory or expensed, except for costs which qualify for
capitalisation relating to mining asset additions or improvements, underground
mine development or mineable reserve development.
Property, plant and equipment is stated at cost less accumulated depreciation
and any recognised impairment loss. Depreciation is charged so as to write
off the cost or valuation of assets over their estimated lives, using the
straight-line method, unless otherwise indicated, on the following bases:
Gold samples no depreciation charged
Computer equipment over three years
Office equipment over four years
Field/geological equipment over four years
Motor vehicles over four years
The carrying value of tangible fixed assets is reviewed for impairment when
events or changes in circumstances indicate that the carrying value may not be
recoverable. The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sale proceeds and the
carrying amount of the asset is recognised in income.
(e) intangible assets - exploration and evaluation
The costs of exploration properties and leases, which include the cost of
acquiring prospective properties and exploration rights and costs incurred in
exploration and evaluation activities, are capitalised as intangible assets as
part of exploration and evaluation assets.
Exploration and evaluation assets are carried forward during the exploration
and evaluation stage and are assessed for impairment in accordance with
indicators of impairment set out in IFRS 6 - 'Exploration for and Evaluation
of Mineral Resources.'
In circumstances where a property is abandoned, the cumulative capitalised
costs relating to the property are written off in the period. No
amortisation is charged prior to commencement of production.
Once commercially viable reserves are established and development is
sanctioned, exploration and evaluation assets are transferred to assets under
construction.
When commercial production commences, exploration, evaluation and development
costs previously capitalised are amortised.
Exploration and evaluation costs incurred after commercial production start
date in relation to evaluation of potential mineral reserves and resources
that are expected to result in increase of reserves are capitalised as
evaluation and exploration assets within intangible assets. Oncer there is
evidence that reserves are increased, such costs are tested for impairment and
transferred to producing mines.
(f) impairment of financial assets
A financial asset is impaired if there is objective evidence of impairment as
a result of one or more events that occurred after the initial recognition of
the asset, and that loss event(s) had an impact on the estimated future cash
flows of that asset that can be estimated reliably.
The Group considers evidence of impairment for financial assets measured at
amortised cost at both a specific asset and collective level.
An impairment loss in respect of a financial asset measured at amortised cost
is calculated as the difference between its carrying amount and the present
value of the estimated future cash flows discounted at the asset's original
effective interest rate. Losses are recognised in the statement of
comprehensive income.
The carrying amount of the Group's non-financial assets are reviewed at each
reporting date to determine whether there is any indication of impairment. If
any such indication exists, then the asset's recoverable amount is
estimated. An impairment loss is recognised if the carrying amount of an
asset exceeds its recoverable amount.
(g) provisions
(i) general
Provisions are recognised when (a) the Group has a present obligation (legal
or constructive) as a result of a past event and (b) it is probable that an
outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the
obligation. If the effect of the time value of money is material, provisions
are discounted using a risk free rate that reflects, where appropriate, the
risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
ii) rehabilitation provision
The Group records the present value of estimated costs of legal and
constructive obligations require to restore the operating locations in the
period in which the obligation is incurred. The nature of these restoration
activities include dismantling and removing structures, rehabilitating mines,
dismantling operating facilities, closure of plant and waste sites and
restoration, reclamation and revegetation of affected areas.
The obligation generally arises when the asset is installed or the group or
environment is disturbed at the production location. When the liability is
initially recognised, the present value of the estimated cost is capitalised
by increasing the carrying amount of the related mining asset to the extent
that it was incurred prior to the production of related ore. Over time, the
discounted liability is increased for the change in present value based on the
discount rates that reflect current market assessments and the risks specific
to the liability.
The periodic unwinding of the discount is recognised in the Group income
statement as a finance cost. Additional disturbances or changes in
rehabilitation costs will be recognised as additions or charges to the
corresponding assets and rehabilitation liability when they occur. Any
reduction in the rehabilitation liability and therefore any deduction from the
rehabilitation asset may not exceed the carrying amount of that asset. If it
does, any excess over the carrying value is taken immediately to the Group
income statement.
If the change in estimate results in an increase in the rehabilitation
liability and therefore an addition to the carrying value of the asset, the
Group is required to consider whether this is an indication of impairment of
the asset as whole and test for impairment in accordance with IAS 36.
(h) related parties
For the purposes of the Group financial statements, the following parties are
considered to be related:
· Where one party has the ability to control the other party or
exercise significant influence over the other party in making financial or
operational decisions
· Entities under common control; and
· Key management personnel
In considering each possible related party relationship, attention is directed
to the substance of the relationship, not merely the legal form.
Related parties may enter into transactions which unrelated parties might not
and transactions between related parties may not be affected on the same
terms, condition and amounts as transaction between unrelated parties. It is
the nature of transactions with related parties that they cannot be presume to
be carried out on an arms length basis.
(i) taxation
Current and deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items charged or credited
directly to equity, in which case the related tax is also dealt with in
equity. Current tax is calculated on the basis of the tax laws enacted or
substantively enacted at the reporting date in the countries where the Company
and its subsidiaries operate.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary
differences can be utilised, except for differences arising on investments in
subsidiaries where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not reverse in the
foreseeable future.
Recognition of the deferred tax assets is restricted to those instances where
it is probable that a taxable profit will be available against which the
difference can be utilised.
Deferred tax is calculated based on rates enacted or substantively enacted at
the reporting date and expected to apply when the related deferred tax asset
is realised or liability settled.
(j) inventories
Metal in circuit consists of in-circuit material at properties with milling or
processing operations and dore awaiting refinement, all valued at the lower of
average cost and net realisable value. In-process inventory costs consist of
direct production costs (including mining, crushing and processing and site
administration costs) and allocated indirect costs (including depreciation,
depletion and amortisation of producing mines and mining interests).
Ore stockpiles consist of stockpiled ore, ore on surface and crushed ore, all
valued at the lower of average cost and net realisable value. Ore stockpile
costs consist of direct production costs (including mining, crushing and
processing and site administration costs) and allocated indirect costs
(including depreciation, depletion and amortisation of producing mines and
mining interests).
Finished goods consist of dore bars that have been refined and assayed and are
in the form that allows them to be sold. Finished goods valued at the lower
of average cost and net realisable value. Finished goods cost consist of
direct production costs (including mining, crushing and processing and site
administration costs) and allocated indirect costs (including depreciation,
depletion and amortisation of producing mines and mining interests).
(k) finance cost
Borrowing costs directly relating to the acquisition, construction or
production of a qualifying capital project under construction are capitalised
and added to the project cost during construction until such time the asset
are considered substantially ready for intended use i.e commercial
production. When funds are borrowed specifically to finance a project, the
amount capitalised represents the actual borrowing costs incurred.
Any general borrowing costs are recognised in the profit and loss period in
which they are incurred.
4. Adoption of new and revised standards
(a) new and amended standards
The following standards and amendments were applicable for annual financial
statements beginning on or after 1 January 2021:
· Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest
Rate Benchmark Reform - Phase 2
The above amendments had no impact on the consolidated financial statements of
the Group.
(b) new standards in issue but not yet effective
The new and amended standards and interpretations that are issued, but not yet
effective up to the date of issuance of the Group's financial statements are
disclosed below.
The Group intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective;
· IFRS 17: Insurance Contracts
· Amendments to IAS 1: Classification of Liabilities as Current or
Non-Current
· Amendments to IFRS 3: Reference to Conceptual Framework
· Amendments to IAS 16: Property, Plant and Equipment: proceeds before
intended use
· Amendments to IAS 37: Onerous contracts - costs of Fulfilling a
Contract
· IFRS 1: First time adoption of International Financial Reporting
Standards: subsidiary as a first time adopter
· IFRS 9: Financial Instruments: Fees in the ''10 per cent'' test for
derecognition of financial liabilities
· IAS 41: Agriculture - Taxation in fair value measurement
· Amendments to IAS 8: Definition of accounting estimates
· Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of
Accounting Policies
· Amendments to IAS 12: Deferred Tax related to assets and liabilities
arising from a single transaction.
Where relevant, the Group evaluates the effect of new Standards, amendments to
published Standards and Interpretations issued but not effective, on the
presentation of the financial statements. The directors have assessed there
to be no material impact on the financial statements.
5. Operating segments
The Group has two reportable segments, exploration and corporate, which are
the Group's strategic divisions. For each of the strategic divisions, the
Group's CEO, deemed to be the Chief Operating Decision Maker ("CODM"), reviews
internal management reports on at least a monthly basis. The results are
then subsequently shared with the Board. The Group's reportable segments
are:
Exploration and Evaluation: the exploration operating segment is presented as
an aggregation of the Homase and Akrokeri licences (Ghana). Expenditure on
exploration activities for each licence is used to measure agreed upon
expenditure targets for each licence to ensure the licence clauses are met.
Corporate: the corporate segment includes the holding company costs in respect
of managing the Group. There are varying levels of integration between the
corporate segment and the combined exploration activities, which include
resources spent and accounted for as corporate expenses that relate to
furthering the exploration activities of individual licences.
information about reportable segments for the year ended 31 December 2021
in united states dollars exploration corporate total per consolidated income statement/financial position
reportable segment expenditure (1,236,963) (286,132) (1,523,095)
reportable segment (loss) (1,236,963) (286,132) (1,523,095)
reportable segment assets 23,558,117 274,760 23,832,877
reportable segment liabilities 2,066,460 5,770,903 7,837,363
information about reportable segments for the year ended 31 December 2020
in united states dollars Exploration corporate total per consolidated income statement/financial position
reportable segment expenditure - (610,095) (610,095)
reportable segment (loss) - (610,095) (610,095)
reportable segment assets 14,359,654 3,318,286 17,677,940
reportable segment liabilities (504,905) (6,327,959) (6,832,864)
6. Expenses by nature
The operating loss is stated after charging:
in united states dollars year ended year ended
31 December 2021 31 December 2020
auditor's remuneration in respect of audit of the
financial statements
- current auditor 30,000 26,200
depreciation 71,300 14,617
foreign exchange difference 164,170 172,832
7. Finance cost
in united states dollars year ended year ended
31 December 2021 31 December 2020
interest charged on borrowings - 13,209
finance charges on borrowings - 19,733
loan derivative 728,887 -
total 728,887 32,942
The Gold Loan (see note 18) is repayable in gold, at the choice of the
lender. As the Group is now in production the Loan has been restated in the
year to reflect the gold price as at 31 December 2021. The resulting loss of
US$728,887 is reported as a finance cost.
8. Property, plant and equipment
31 December 2021 31 December 2020
in united states dollars cost accumulated depreciation carrying value cost accumulated depreciation carrying value
assets under the course of construction*
20,408,816 - 20,408,816 - - -
gold samples 4,570 - 4,570 4,570 - 4,570
computer equipment 74,468 (68,263) 6,205 73,368 (67,303) 6,065
office equipment 117,182 (110,115) 7,067 111,672 (108,567) 3,105
field/geological equipment 953,231 (125,529) 827,702 101,168 (62,953) 38,215
motor vehicles 70,304 (44,407) 25,897 477,444 (38,191) 439,253
total 21,628,571 (348,314) 21,280,257 768,222 (277,014) 491,208
* During the period, the Group's exploration and evaluation assets, which
represent the mining assets in Ghana, were transferred from intangible assets
to property, plant and equipment as the Group moved towards commencement of
commercial production in 2022.
reconciliation of property, plant and equipment - 31 December 2021
in united states dollars carrying value opening balance additions transfer carrying value ending balance
depreciation
assets under the course of construction*
- 5,322,404 - 15,086,412 20,408,816
gold samples 4,570 - - - 4,570
computer equipment 6,065 1,100 (960) - 6,205
office equipment 3,105 5,510 (1,548) - 7,067
field/geological equipment 38,215 444,923 (12,558) 357,122 827,702
motor vehicles 439,253 - (56,234) (357,122) 25,897
total 491,208 5,773,937 (71,300) 15,086,412 21,280,257
* Includes a provision for rehabilitation costs of £901,284.
reconciliation of property, plant and equipment -31 December 2020
in united states dollars carrying value opening balance additions depreciation carrying value ending balance
gold samples 4,570 - - 4,570
computer equipment 3,187 5,672 (2,794) 6,065
office equipment 1,155 2,470 (520) 3,105
field/geological equipment 5,872 34,501 (2,158) 38,215
motor vehicles 9,530 438,868 (9,145) 439,253
total 24,314 481,511 (14,617) 491,208
9. Intangible assets - exploration and evaluation
The Group's intangible assets comprise wholly of exploration and evaluation
assets in respect of AKHM in Ghana.
in united states dollars 31 December
balance as at 31 December 2019 8,256,380
additions 6,083,392
balance as at 31 December 2020 14,339,772
additions 746,640
transfer to assets under construction (see note 8) (15,086,412)
balance as at 31 December 2021 -
Once commercially viable reserves are established and development is
sanctioned, exploration and evaluation assets are transferred to assets under
construction.
10. Taxation
current and deferred tax
The Company is subject to Jersey income tax at the rate of 0%. The Group is
also registered for income tax purposes with the South African Revenue
Service. Due to the loss making position of the Group in all jurisdictions
there is no tax charge and no deferred tax asset has been recognised in the
current or prior periods due to the uncertainty and timing of future profits.
As a result, no reconciliation has been prepared.
11. Trade and other receivables
in united states dollars 31 December 2021 31 December 2020
other receivables 257,013 2,145,576
Total 257,013 2,145,576
Other receivables include US$27,955 (2020: US$1,852,791) in respect of the
fair value of share warrants issued in the current and prior period.
12. Inventory
in united states dollars 31 December 2021 31 December 2020
gold in circuit 602,097 -
gold on hand 1,142,276 -
ore stockpile 214,710 -
Total 1,959,083 -
Inventory is recognised at the lower of cost or net realisable value.
13. Cash and cash equivalents
The cash and cash equivalents balance at the year-end was made up of balances
in the following currencies:
in united states dollars 31 December 2021 31 December 2020
sterling 78,372 620,961
US dollars 218,818 72,939
ghana cedis 39,334 7,484
Total 336,524 701,384
14. Provision for rehabilitation
in united states dollars 31 December 2021 31 December 2020
1 January - -
additions 901,284 -
Total 901,284 -
The Group has a liability for restoration, rehabilitation and environmental
costs arising from its mining operations. Estimates of the cost of this work
including reclamation costs, close down and pollution control are made on an
ongoing basis, based on the estimated life of the mine. The provision
represents the net present value of the best estimate of the expenditure
required to settle the obligation to rehabilitate any environmental
disturbances caused by mining operations.
15. Capital and reserves
(a) share capital
31 December 2021 31 December 2020
ordinary shares
called up, allotted and fully paid
459,033,996 ordinary shares of 1 pence each £4,590,340 £2,817,859
(2020: 281,785,967)
converted to united states dollars at date of issue $6,383,213 $3,913,963
deferred shares
called up, allotted and fully paid
in issue at 1 January £3,730,772 £3,730,772
in issue at 31 December - fully paid 414,530,304 (December 2020: 414,530,304) £3,730,772 £3,730,772
deferred 0.9 pence shares
converted to united states dollars at date of issue $6,077,013 $6,077,013
Authorised
1,000,000,000 (December 2020: 1,000,000,000) authorised ordinary 1 pence £10,000,000 £10,000,000
shares
During the year the Company issued the following 1 pence fully paid shares:
Number of Shares Nominal Value Share premium
1 January 2021 Opening balance 281,785,967 $3,913,963 $28,080,853
21 January 2021 Shares at 9.1p share 1,800,000 £18,000 £145,800
Converted to United States Dollars at date of issue - $24,480 $198,288
5 March 2021 Shares at 3p share 42,000,000 £420,000 £840,000
Converted to United States Dollars at date of issue - $583,532 $1,196,198
8 June 2021 Shares at 1.2p share* 20,352,377 £203,524 £40,705
Converted to United States Dollars at date of issue - $286,969 $57,395
Shares at 3p share 66,000,000 £660,000 £1,320,000
Converted to United States Dollars at date of issue - $934,030 $1,868,060
12 July 2021 Shares at 7p share 8,400,000 £84,000 £420,000
Converted to United States Dollars at date of issue - $116,717 $583,585
29 July 2021 Shares at 1.2p share* 20,000,000 £200,000 £40,000
Converted to United States Dollars at date of issue - $277,638 $55,528
17 September 2021 Shares at 3p share 4,000,000 £40,000 £80,000
Converted to United States Dollars at date of issue - $55,239 $110,478
27 September 2021 Shares at 3p share 6,000,000 £60,000 £120,000
Converted to United States Dollars at date of issue - $82,000 $164,000
11 November 2021 Shares at 11.5p share 8,695,652 £86,956 £913,044
Converted to United States Dollars at date of issue - $108,645 $1,220,999
31 December 2021 Closing balance 459,033,996 $6,383,213 $33,535,384
*Proceeds of exercise used to pay down shareholder loan (note 18).
(b) ordinary shares
Each holder of ordinary shares is entitled to receive dividends as declared
from time to time and is entitled to one vote per share at meetings of the
Company.
(c) deferred shares
Each holder of deferred shares shall not be entitled to receive notice of,
attend or vote at any meeting of the Company (other than a meeting of the
holder of the deferred shares), shall not be entitled to any dividends or
other distributions (whether on a winding up of the Company or otherwise).
On a winding up of the Company, each deferred share shall confer upon its
holder the right to receive an amount equal to the nominal amount paid up on
such deferred share.
The Company has not concluded any share repurchases since its incorporation.
(d) dividends
No dividends were proposed or declared during the period under review (2020:
Nil).
(e) description and purpose of reserves
(i) share capital
Share capital consists of amounts subscribed for share capital at nominal
value.
(ii) share premium
Share premium consists of amounts subscribed for share capital in excess of
nominal value.
(iii) foreign exchange reserve
Cumulative gains and losses on translating the net assets of overseas
operations to the presentation currency.
(iv) capital contribution reserve
Capital contribution reserve consists of deferred shares classified as equity.
(v) share options reserve
Share options and warrants reserve consists of the fair value of options and
warrants outstanding at the year end.
(vi) accumulated deficit
Accumulated deficit reserve represents the cumulative net gains and losses
recognised in the consolidated statement of comprehensive income.
16. Earnings per share
The calculation of basic and diluted earnings per share at 31 December 2021
was based on the losses attributable to ordinary shareholders of US$1,523,095
(2020: US$610,095), and an average number of ordinary shares in issue of
353,369,120 (2020: 252,004,667).
in united states dollars 31 December 2021 31 December 2020
loss attributable to shareholders (1,523,095) (610,095)
weighted average number of ordinary shares 353,369,120 252,004,667
basic and diluted earnings per share 0.004 (0.002)
The Group has the following instruments which could potentially dilute basic
earnings per share in the future:
in number of shares 31 December 2021 31 December 2020
Warrants 26,000,000 182,352,377
17. Share based payment arrangements
At 31 December 2021, the Group has the following share-based payment
arrangements.
(a) share option programmes (equity-settled)
The Group has adopted an Option Scheme in order to incentivise key management
and staff. Pursuant to the option scheme, a duly authorised committee of the
Board of the Company may, at its discretion, grant options to eligible
employees, including directors, of the Company or any of its subsidiaries, to
subscribe for shares in the Company at a price not less than the higher of (i)
the closing price of the shares of the Company on the Stock Exchange on the
date of grant of the particular option or (ii) the nominal value of the
shares.
There were no market conditions within the terms of the grant of the options
therefore the main vesting condition for all the options awarded was that the
director or employee remained contracted to the Group at the date of exercise.
The conditions relating to the grants of the share option programmes are as
follows:
The terms relating to the grants of the share option programmes are that on
exercise date, the receiver of the options must still be employed by the
Company, or in the case of the receiver being retrenched or retired, before
three months thereafter, or in the case of the death of the receiver, before
six months thereafter.
There were no such options granted during the year ended 31 December 2021
(2020: same).
(b) reconciliation of outstanding share options
There are no options outstanding at 31 December 2021 (2020: same).
(c) warrants
All Ordinary Shares issued (excluding deferred shares) pursuant to the
exercise of warrants rank pari passu in all respects with the ordinary shares.
The fair value of the warrants issued was measured based on the Black-Scholes
formula. Expected volatility was estimated by considering historical
volatility of the Company's share price over the period commensurate with the
expected return.
reconciliation of outstanding warrants
the number and weighted average exercise prices
number of warrants weighted average exercise price number of warrants weighted average exercise price
31 December 2021 31 December 2021 31 December 2020 31 December 2020
outstanding as at 1 January 182,352,377 2.6p 40,352,377 1.2p
granted during the year - - 172,000,000 3.0p
exercised during the year (156,352,377) 2.5p (30,000,000) 3.0p
outstanding at 31 December 26,000,000 3.0p 182,352,377 2.6p
exercisable at 31 December 26,000,000 3.0p 182,352,377 2.6p
The warrants outstanding at 31 December 2021 have a weighted exercise price of
3.0p (2020: 2.6p) and a weighted average life of 0.5 years (2020: 1.5 years).
(d) measurement of fair value
The inputs used in measuring the fair values of the warrants at grant date
were as follows:
warrants warrants warrants
19 March 22 June 27 December 2018
2020 2020
share price at grant 2.10p 4.20p 1.20p
warrant exercise price 3.00p 3.00p 1.20p
expected life of warrants from exercise date 2.3 years 2.0 years 3.4 years
expected volatility 63.74% 65.71% 51.6%
expected dividend yield 0.00% 0.00% 0.00%
risk free rate 0.27% (0.05)% 0.74%
fair value per warrant 0.56p 1.96p 0.67p
US$:GBP exchange rate used 1.27258 1.24785 1.2469
The risk free rate has been determined based on 3 year UK government bonds.
Total fair value recognised in the share options and warrants reserve in
respect of warrants issued in the year was US$ nil (2020: $3,305,509).
(e) expense recognised in statement of comprehensive income
The fair value of the warrants issued on 27 December 2018 has been reflected
within trade and other receivables and is being released and initially
capitalised as part of the exploration asset, over the period of the loan
facility; see note 11 and 18 for further details. The amount capitalised
during the year was US$67,100 (2020: US$67,400).
The fair value of the warrants issued on 19 March 2020 has been reflected
within trade and other receivables and is being released and initially
capitalised as part of the exploration asset over the period of the bond
facility, see note 11 and 18 for further details. The amount capitalised
during the year was US$75,130 (2020: US$295,000).
The fair value of the warrants issued on 22 June 2020 has been reflected
within trade and other receivables and is being released and initially
capitalised as part of the exploration asset over the period of the gold loan
facility, see note 11 and 18 for further details. The amount capitalised
during the year was US$1,682,615 (2020: US$1,252,328).
18. Borrowings
in united states dollars 31 December 2021 31 December 2020
shareholder loan 742,587 1,346,642
gold loan 3,769,500 3,184,224
loan derivative 728,770 -
bonds 300,000 -
current borrowing 5,540,857 4,530,866
bonds - 1,300,000
non-current borrowing - 1,300,000
Total 5,540,857 5,830,866
Shareholder loan
The Company entered into a loan agreement with Paracale Gold Limited
(''Paracale''), the Company's major shareholder, in December 2018, for a loan
of up to US$1,224k.
In consideration of entering into the loan agreement, Paracale, were issued
with 40,352,377 warrants to subscribe for such number of 1p ordinary shares at
an exercise price of 1.2p per share, at any time during the period through to
2 June 2022.
In June 2021 Paracale exercised warrants totalling 32,352,377 new ordinary
shares of which 20,352,377 at a price of 1.2 pence were set against the loan
(US$344,364). The balance of the warrants were exercised for cash. A further
exercise in July 2021 for 20,000,000 ordinary shares of 1.2p (US$333,166) was
also used to reduce the loan.
At 31 December 2021, Paracale had exercised all its warrants.
Gold Loan
The Company entered into a loan agreement with Asian Investment Management
Services Limited ("AIMS") in June 2020, for a gold loan of up to 2,000 troy
ounces of gold at a price of US$1,500 per troy ounce, equating to a value of
US$3.0 million before expenses.
On 20 September 2021, AIMS agreed to extend the maturity date on the US$3
million secured gold loan to 31 August 2022. The extension restructures the
repayment obligations as shown below. The Company retains the right to repay
the Gold Loan early without penalty.
Interest will continue to accrue at the default rate of 17% until January
2022, then will revert to the original interest rate of 14% until maturity. In
conjunction with the extension, the Company has agreed a repayment schedule
for the Gold Loan and accrued and ongoing interest, as set out below:
Month Gold Loan payments
(in kilos of gold)
October 2021 5
November 2021 6
December 2021 8
January 2022 8
February 2022 8
March 2022 8
April 2022 8
May 2022 8
June 2022 8
July 2022 8
August 2022 7.4
In the event that any payment is not made when due in accordance with the
agreed repayment schedule, this will be deemed an event of default. Any
interest that is not paid when due will accrue interest at the default rate of
17% until payment.
In January 2022, a payment of 19Kg of gold was made in order to repay the
interest due for October, November and December 2021. It was further agreed
with AIMS that in order to enable the Company to efficiently manage shipments,
it shall not be deemed an event of default if the monthly payments set out in
the Company's announcement on 20 September 2021 are not made at the end of
each month.
In consideration of entering into the loan agreement AIMS were issued with
120,000,000 warrants to subscribe for such number of Ordinary Shares at an
exercise of 3.0 pence per share (the "Exercise Price"), at any time during the
period through to 22 June 2022. This resulted in an increase in the share
option reserve and other receivables of US$2.9 million in the prior period.
At 31 December 2021, AIMS had exercised all of their warrants.
Bonds
In March 2020 the Company issued twenty-six unsecured bond notes of US$50,000
each to certain existing and new investors, raising, in aggregate, US$1.3
million before expenses. Paracale Gold and Nguvu Holdings
Limited (formerly BCM Investments Limited) the Company's major shareholders,
each subscribed for six bonds with a value of, in aggregate, US$0.3 million
respectively. During the year, twenty of the bond notes were redeemed in
cash or shares. In conclusion of entering into the Bonds, a total of
52,000,000 warrants were issued to subscribe for such number of Ordinary
Shares at the Exercise Price, at any time during the period through to 22 June
2022. At 31 December 2021, 26,000,000 warrants remain outstanding.
19. Trade and other payables
in united states dollars 31 December 2021 31 December 2020
trade payables 570,391
882,045
other payables
242,289
302,739
accruals
189,318
210,439
Total 1,395,223 1,001,998
20. Financial instruments
(a) financial risk management
The Group's principal financial instruments comprise of cash, receivables and
payables including the various loans and bonds. Financial risk management of
the Group is governed by policies and guidelines described in the Group's
Financial Reporting Memorandum approved by the Board. Group policies and
guidelines cover interest rate risk, foreign currency risk, credit risk and
liquidity risk. The objective of financial risk management is to contain,
where appropriate, exposures in these financial risks to limit any negative
impact on the Group's financial performance and financial position.
(b) credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty fails to meet its contractual obligations. The maximum credit
risk exposure relating to financial assets is represented by their carrying
value as at the consolidated statement of financial position date. The Group's
exposure to significant concentration on credit risk on trade and other
receivables is considered low.
(c) liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset when they fall due. Ultimate
responsibility for liquidity risk management rests with the Board, which has
established an appropriate liquidity risk management framework for the
management of the Group's liquidity management requirements. The Group
manages liquidity risk by continuously monitoring forecast and actual cash
flows, and by preserving cash resources through minimising the cash burn out
rate achieved through cost reduction. The financial liabilities of the Group
are mainly creditors which are payable on demand, hence it is the opinion of
the Board that an analysis of liabilities by maturity dates is not
appropriate.
(d) market risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates and interest rates will affect the Group's income or the value
of its holding in financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
(i) foreign currency risk
Currency risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in foreign exchange
rates. The Group has cash assets denominated in Sterling, United States
Dollars and Ghana Cedis and incurs liabilities for its working capital
expenditure in one of these denominations. Payments are made in Sterling
(GBP), United States Dollars (US$) and Ghana Cedis (GHS), or Euro at the
pre-agreed price and converted (if necessary) as soon as payment needs to
occur. Currency conversions and provisions for expenditure are only made as
soon as debts are due and payable. The Group is therefore exposed to
currency risk in so far as its liabilities are incurred in South African Rand
and Ghanaian Cedi and fluctuations occur due to changes in the GHS/US$
exchange rates. The Group's policy is not to enter into any currency hedging
transactions.
The directors consider currency risk to be manifested in the expenditure made
on a day to day basis in Sterling, Ghanaian Cedi and US Dollars. The
directors have undertaken a policy of holding cash raised in Sterling and US
Dollars and to convert funds to Ghanaian Cedi as and when required.
The exchange rates converted to United States Dollars affecting the Group were
as follows:
average rate 2021 reporting date spot rate 2021 average rate 2020 reporting date spot rate 2020
Sterling to US dollars 1.376 1.353 1.284 1.380
Ghana Cedis to US dollars 0.157 0.162 0.176 0.170
A strengthening (weakening) of GBP or GHS against all other currencies at 31
December 2021 would have affected the measurement of financial instruments
denominated in a foreign currency and increased (decreased) equity and profit
or loss by the amounts shown below. This analysis is based on foreign
currency exchange rate variances that the Group considered to be reasonably
possible at the end of the reporting period. The analysis assumes that all
other variables, in particular interest rates, remain constant. The
sensitivity analysis includes only outstanding foreign currency denominated
financial assets and liabilities and adjusts this translation at year end for
a percentage change in foreign currency rate thus indicating the potential
movement in equity.
in united states dollars equity strengthening equity weakening equity strengthening equity weakening
2021 2021 2020 2020
ghana cedis 10% (2020: 10%) 2,298,000 (2,298,000) 1,432,000 (1,432,000)
Total 2,298,000 (2,298,000) 1,432,000 (1,432,000)
The percentage change in foreign currency rate used to adjust the translation
of outstanding foreign currency denominated financial assets and liabilities
is in the opinion of the directors appropriate.
(ii) interest rate risk
The risks caused by changes in interest rates are minimal since the Group's
only interest bearing financial asset pertains to cash. The Group has a loan
arrangement with Paracale as detailed in note 18. The interest rate is fixed
at 6% for the duration of the term of the loan. The Group also has a loan
agreement with AIMS. The interest rate is fixed at 14% or 17%. The Group
is therefore not subject to a significant amount of risk due to fluctuations
in the prevailing levels of market interest rates and as such has not prepared
a sensitivity analysis.
21. Related parties
The key management personnel is considered to be only the directors. Details
of their remuneration are disclosed below.
salaries and other short-term benefits - detail:
in united states dollars 31 December 2021 31 December 2020
Director's remuneration: executive - E Priestley 65,500 68,750
Director's remuneration (accrued): executive - E Priestley (*) 54,500 51,250
Director's remuneration: non-executive - R Wilkins - 12,000
Director's remuneration (accrued): non-executive - R Wilkins (*) 12,000 -
Director's remuneration: non-executive - W Trew - 5,000
Director's remuneration: (accrued): non-executive - W Trew (*) 24,000 7,000
Director's remuneration: non-executive - A List - 12,000
Director's remuneration (accrued): non-executive - A List (*) 12,000 -
Director's remuneration: non-executive - O Fenn - 1,500
Director's remuneration (accrued): non-executive - O Fenn (*) 12,000 10,500
total 180,000 168,000
(*) Represents the value of accrued fees for the period 31 December 2020 to 31
December 2021 for each director.
The total amount payable to the highest paid director in respect of emoluments
was US$120,000 (2020: US$120,000). No directors exercised any share options
during the year (2020: nil).
Bill Trew's remuneration is paid to Oxus Mining Limited, a company in which he
is a director. Nothing was paid in the year and has all been accrued.
E Priestley's remuneration was paid to Santon Consultancy Services Limited, a
company in which she is a director. R Wilkins's remuneration was paid to KSJ
Investments Limited, a company in which he is a director.
During 2018, the Company entered into a loan agreement for an amount up to
US$1,224k with Paracale, the Company's major shareholder and a company in
which Bill Trew, the Company's chairman, is interested. At year end the
balance was US$743k (2020: US$1,346k), as at 31 December 2021 and included
interest accrued to date of US$19 (2020: US$177k)- see note 18 for further
details.
On 16 March 2020 the Company entered into a bond agreement with Paracale and
Nguvu Holdings Limited (formerly BCM Investments Limited), for 6, 14% bonds of
US$50K each. In addition 12,000,000 warrants over 1.0p Ordinary Shares of
the Company were awarded to both parties at 3.0p each. Bill Trew is a
director and shareholder of Paracale and A List is a director of Nguvu
Holdings Limited (formerly BCM Investments Limited) see note 18 for further
details.
During the year, MAED (UK) Limited ("MAED") began undertaking the update of
the Definitive Economic Plan ("DEP") report which was originally prepared in
2019 by them. This was an agreed review under the original engagement
between MAED and the Company. MAED is a related party, as it is wholly owned
by the Company's non-executive chairman Bill Trew. At the year end there is
an amount owing to MAED of US$266,109 (2020: US$nil), for services provided
during the financial year.
22. Group entities
Details of the Group's subsidiaries at the end of the reporting period are as
follows:
country of incorporation and operation principal activity ownership interest ownership interest
2021 2020
GoldStone Akrokeri Limited Ghana Development and exploration of gold and associated elements 100% 100%
GoldStone Homase Limited Ghana Dormant 100%(*) 100%(*)
GoldStone Resources Limited Gabon S.A.R.L. Gabon Dormant 100% 100%
(*) Held indirectly via GoldStone Akrokeri Limited
Under Article 105(11) of the Companies (Jersey) Law 1991, the directors of the
holding company need not prepare separate accounts (i.e. company only
accounts) if consolidated accounts for the Company are prepared, unless
required to do so by the members of the Company by ordinary resolution. The
members of the Company have not passed a resolution requiring separate
accounts and, in the directors' opinion, the Company meets the definition of a
holding company. As permitted by the law, the directors have elected not to
prepare separate accounts.
23. Ultimate controlling party
The directors believe that there is no ultimate controlling party of the
Group.
24. Subsequent events
On 4 January 2022, the Company announced that it had commenced commercial gold
production and that repayments of Gold Loan instalments were to be made out of
stock held and a further gold pour (see note 18). Shipment of this gold was
announced on 17 January 2022.
The Board issued an operational and exploration update in March 2022.
On 10 June 2022 shares in the Company were temporarily suspended from trading
on AIM pending an announcement in respect of the armed robbery at the mine
which was made on 29 June 2022. The shares were readmitted for trading on 29
June 2022.
On 23 June 2022, the Company announced the exercise of 14,000,000 warrants to
subscribe for new Ordinary Shares of 1 penny at a price of 3.0 pence per
share. The exercise provided £420,000 of additional funding to the Company.
**ENDS**
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