REG - Lexington Gold Ltd - Final Results for the year ended 31 December 2021
09/06/2022 08:30
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RNS Number : 3002O Lexington Gold Limited 09 June 2022
9 June 2022
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Final Results for the year ended 31 December 2021,
Availability of Annual Report and Notice of Annual General Meeting
Lexington Gold (AIM: LEX), the gold exploration and development company with
projects in North and South Carolina, USA, is pleased to announce its audited
results for the year ended 31 December 2021.
Copies of the Company's full Annual Report and Financial Statements for the
financial year to 31 December 2021 will be made available to download from
the Company's website at www.lexingtongold.co.uk and will shortly be posted to
shareholders together with a Notice of Annual General Meeting (incorporating
an Explanatory Memorandum), which will also be made available on the Company's
website, to be held at 10.00 a.m. (Bermudan time) on 11 July 2022 at the
Company's registered office at Clarendon House, 2 Church Street, Hamilton,
HM11, Bermuda.
Financial Summary
· Net loss for the year from continuing operations was US$1.0million
against the prior year loss of US$0.7 million.
· Total assets were US$4.8 million (2020: US$5.5 million) at the year
end.
· Net cash position of US$0.9 million (2020: US$2.9 million) as at the
year end.
· Total liabilities of US$0.1 million (2020: US$0.09 million) as at the
year end.
· Obtained £335,000 unsecured convertible loan in late April 2022,
post the reporting period end, ensuring that the Group is funded to continue
with its exploration plans. Conversion price set at a level 30.6 per. cent.
above the then prevailing share price.
Operational Summary
· Completion of 207.3 line-kilometre Helicopter borne VTEM survey.
· Completion of 937 line-kilometre magnetic, radiometric and
very-low-frequency ("VLF") fixed-wing airborne geophysical survey over the
JKL, Carolina Belle and Argo projects.
· Completed Phase 1 drilling campaign at Loflin comprising six diamond
drill holes for a total of 562m. All six holes of the Phase 1 drilling
campaign encountered intervals of gold mineralisation of over 1g/t Au above
100m depth.
· Establishment of a maiden independent JORC resource estimate of
approximately 2 million tonnes at 1 g/t gold for 65,000 oz of contained gold.
· Conducted a soil, surface and rock chip sampling campaign at Carolina
Belle. Rock chip and grab samples from the newly identified mineralised zone
returned 10 samples with gold grades over 1g/t including 17g/t; 5.1g/t;
3.5g/t, 3.2g/t; 2.7g/t; and 2.2g/t. Soil sampling over the newly identified
mineralised area suggests an initial surface gold anomaly footprint of
approximately 350m by 250m. The newly identified mineralised area was named
Martha Washington South.
· Commenced a 5,000m Reverse Circulation ("RC") drill campaign at the
Carolina Belle and JKL projects, with very positive results to date, including
a significant southern extension to Loflin,.
Corporate Summary
2021 has been an extremely productive and encouraging period for the Company,
following a transformational 2020 in which the Company completed its
acquisition of majority interests in four gold exploration projects in North
and South Carolina in the United States (the "Projects") and was readmitted to
trading on AIM on 25 November 2020. The reporting period has seen the Company
build on such transformation, with exciting exploration success achieved
during 2021 on our gold projects in the Carolinas. Since the reporting period
end, the company has received encouraging exploration results and with
additional financing from the convertible loan remains focused on implementing
its gold exploration programme.
Enquiries:
Lexington Gold Ltd www.lexingtongold.co.uk (http://www.lexingtongold.co.uk)
Bernard Olivier (Chief Executive Officer) via Yellow Jersey
Edward Nealon (Chairman)
Mike Allardice (Group Company Secretary)
Strand Hanson Limited (Nominated Adviser) www.strandhanson.co.uk (http://www.strandhanson.co.uk)
Matthew Chandler / James Bellman / James Harris T: +44 207 409 3494
Peterhouse Capital Limited (Broker) www.peterhousecap.com (https://peterhousecap.com/)
Duncan Vasey / Lucy Williams (Broking) T: +44 207 469 0930
Eran Zucker (Corporate Finance)
Yellow Jersey PR Limited (Financial Public Relations) www.yellowjerseypr.com (http://www.yellowjerseypr.com)
Tom Randell / Annabelle Wills T: +44 7769 325 254
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.
Note to Editors:
Lexington Gold Ltd (AIM: LEX) is focused on the exploration and development of
its four diverse gold projects, covering a combined area of approximately
1,675 acres in North and South Carolina, USA. The projects are situated in the
highly prospective Carolina Super Terrane ("CST"), which has seen significant
historic gold production and is host to a number of multi-million-ounce mines
operated by majors and was also the site of the first US gold rush in the
early 1800s, before gold was discovered in California.
Further information is available on the Company's website:
www.lexingtongold.co.uk (http://www.lexingtongold.co.uk) . Neither the
contents of the Company's website nor the contents of any website accessible
from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
Chairman's Statement
I am pleased to present Lexington Gold's second set of annual results, for its
financial year ended 31 December 2021, and to report on the Company's ongoing
activities to the date of this statement.
2021 was a year of further progress as we continued to deliver on our
exploration programmes across our four gold projects: Carolina Belle,
Jennings-Pioneer, Argo and Jones-Keystone-Loflin ("JKL"). Through extensive
exploration work, including two drilling campaigns, the second involving the
commencement of a 5,000m reverse circulation drilling programme across the
Carolina Belle and JKL projects, we have made substantial progress with our
projects and significantly increased our understanding of the nature and
opportunities available in the Carolina Super Terrane region. We also
announced our first independent JORC resource estimate of 65,000 oz of
contained gold for the Loflin side of the JKL project. Based on the progress
achieved we were confident in investing in additional leased acreage, with
options to purchase, covering an additional 129 acres of mineral exploration
rights at the JKL project, taking our total project acreage in the Carolinas
to approximately 1,675 acres.
Further to obtaining a £335,000 unsecured convertible loan note in late April
2022, post the reporting period end, the Group is now funded to continue with
its exploration plans, with the intention of establishing a maiden JORC
resource estimate for Jones-Keystone, to increase our current JORC resource
and develop a thorough understanding of the total opportunity across all four
gold projects in our portfolio. The conversion price was set at a level 30.6
per. cent. above the prevailing market share price, thereby serving to
demonstrate the lenders, compromising two significant shareholders and three
directors, belief in the Company's future potential.
Operating in a stable jurisdiction, the US, with transparent permitting, rules
and regulations, reliable infrastructure, wide choice of contractors and in a
region with recent and historic records of substantial million ounce plus
producing gold mines we have been able to focus all our attention on finding
gold. Having made a good start with our exploration work, despite the
challenges posed by COVID-19, we remain focused on implementing our remaining
work programmes, and further scoping out the potential size of our gold
assets. We look forward to an exciting period of discovery ahead.
I would like to take this opportunity to thank our entire team for their
commitment to delivering results in line with our exploration plan. Together
with our highly experienced local joint venture partner in the Carolinas,
Uwharrie Resources Inc., we have been able to undertake a high impact
exploration campaign, spending over US$1.3 million on exploration during 2021
and generating significant value in the process.
Global uncertainty appears likely to continue to support a robust gold price
but our focus is on delivering our exploration programmes and building
long-term shareholder value regardless of wider economic and financial
conditions. Finally, on behalf of the Board, I wish to express thanks for the
support received from our various stakeholders, all of whom share our vision
for the Carolina Super Terrane region of the US.
Edward Nealon
Non-Executive Chairman
8 June 2022
Chief Executive's Operational and Financial Review
1. Overview
2021 has been an extremely productive and encouraging period for the Company,
following a transformational 2020 during which the Company completed its
acquisition of majority interests in four gold exploration projects in North
and South Carolina in the United States (the "Projects") and was readmitted to
trading on AIM on 25 November 2020. The reporting period has seen the Company
build on such transformation, with both exciting and substantial exploration
success achieved during the year on our gold projects in the Carolinas.
During 2021, Lexington Gold conducted the following exploration activities on
its portfolio projects:
Helicopter borne VTEM survey
A 207.3 line-kilometre survey was conducted by Ontario based Geotech Airborne
Geophysical Surveys ("Geotech") utilising their helicopter-borne geophysical
system which collects both VTEM and Horizontal Magnetic Gradiometer Survey
data. The aim of the VTEM survey was to identify any conductors located within
and surrounding the Jennings-Pioneer project area that could be associated
with volcanic massive sulphide ("VMS") style mineralisation.
The interpretation and modelling of the VTEM geophysical survey data obtained
over the Jennings-Pioneer project was also completed. The survey
successfully identified two potential anomalies at Jennings-Pioneer that will
be further investigated through soil sampling, trenching and potential
drilling in 2022.
Fixed-wing geophysics survey
In April 2021 Questor Surveys Ltd completed a 937 line-kilometre magnetic,
radiometric and very-low-frequency ("VLF") fixed-wing airborne geophysical
survey over the JKL, Carolina Belle and Argo projects. The aim of the survey
was to further define and delineate the known areas of mineralisation over the
three projects as well as identifying new targets for geological studies and
potential drilling.
Core Geophysics, based in Perth, Australia, subsequently conducted the
modelling and interpretation of the geophysical data. The results, combined
with the results of a rock and soil sampling programme in conjunction with the
Company's existing database, were used to design a maiden drill programme for
Caroline Belle and a Phase 2 drilling campaign for JKL.
Phase 1 Drilling Campaign on Loflin (part of the JKL project)
The Phase 1 drilling campaign comprised six diamond drill holes for a total of
562m at the JKL project. The campaign sought to confirm and expand on the
historical third-party drilling performed at Loflin as well as assisting in
defining the 3-dimensional shape, continuity and orientation of the
mineralisation. A primary goal was also to enable the estimation of a maiden
JORC resource estimate for the JKL project.
On 26 May 2021 and 15 June 2021, we announced two batches of assay results
from this drilling campaign. The results indicated the continuation of broad
zones of shallow gold mineralisation and also demonstrated good correlation to
the historical drilling. All six holes in the Phase 1 drilling campaign
encountered intervals of gold mineralisation of over 1g/t Au above 100m depth.
Highlighted intersections include:
· 35.7m @ 1.15 g/t Au from surface to 35.7m including:
o 18.9m @ 1.57 g/t Au from surface to 18.9m
· 32m @ 0.97 g/t Au from 53.9m to 85.9m including:
o 6.1m @ 3.36 g/t Au from 79.9m to 86m
o 1.5m @ 9.5 g/t Au from 79.9m to 81.4m
· 12.2m @ 1.39 g/t Au from 23.5m to 35.7m including:
o 4.1m @ 2.57 g/t Au from 23.5m to 27.6m
· 35m @ 0.79 g/t Au from 9.8m to 44.8m including:
o 6m @ 2.26 g/t Au from 9.8m to 15.8m; and
o 4.6m @ 1.43 g/t Au from 29.5m to 34.1m
This Phase 1 drilling campaign added significantly to our understanding of
JKL's mineralisation and confirmed the presence of broad zones of particularly
shallow gold mineralisation as well as enabling the establishment of a maiden
JORC resource estimate for the JKL project as discussed further below.
Maiden JORC Resource Estimate for Loflin (part of the JKL project)
The Phase 1 drilling campaign enabled the estimation of a maiden independent
JORC Resource for Loflin. On 22 September 2021, the Company announced a major
step forward for the JKL project by way of a Maiden JORC (2012) Mineral
Resource Estimate completed by Pivot Mining Consultants Pty Ltd ("Pivot") for
the Loflin side of the JKL project.
Pivot established a maiden JORC resource of approximately 2 million tonnes at
1 g/t gold for 65,000 oz of contained gold. Their report further highlighted
the following:
· Potential for the mineralisation at Loflin to remain open to the
north-east and south-west, along the plunge of the syncline with the resource
expected to grow via additional drilling
· A 3D geological model suggests that the gold mineralisation is
associated with an isoclinal fold structure
· Potential for extensions, significant upgrading of the maiden
resource classification and additional discoveries at JKL through additional
drilling campaigns.
Securing of additional Mineral Rights
During the reporting period the Company expanded its mineral exploration
rights at the JKL project via the execution of three additional Lease with
Option to Purchase agreements with certain landowners for an additional 129
acres of mineral exploration rights and a further 22 acres of surface rights.
Accordingly, the total mineral exploration rights at Loflin increased from
50.66 acres to 179.66 acres, taking the Group's total project acreage to
approximately 1,675 acres. In December 2021 the Company also extended a
pre-existing 4.05 acre mining lease with an option to purchase agreement on
the south-western ("Loflin") side of the JKL project for an additional
six-year period to 17 December 2027.
Soil, surface and rock chip sampling campaign at Carolina Belle
Soil sampling was conducted on a 50m x 100m grid, covering the entire 391.98
acre Carolina Belle project area. A total of 325 soil samples were submitted
to American Assay Laboratories in Nevada, for processing and fire assay,
including sample duplicates, blanks and standards. In addition to the soil
sampling, 37 surface rock chip and grab samples were submitted to SGS
laboratories in Vancouver, Canada for fire assay. The surface exploration
programme is the first known systematic surface sampling programme to be
conducted at the Carolina Belle project and successfully evaluated, delineated
and extended the known prospects within the project area. The results from the
soil and rock chip sampling programmes were incorporated into the project
database and assisted with the planning of a drill programme for Carolina
Belle.
Furthermore, the surface exploration programme identified a new gold anomaly
not associated with the known gold mineralisation in the project area. Rock
chip and grab samples from the newly identified mineralised zone returned 10
samples with gold grades over 1g/t including 17g/t; 5.1g/t; 3.5g/t, 3.2g/t;
2.7g/t; and 2.2g/t. Soil sampling over the newly identified mineralised area
suggests an initial surface gold anomaly footprint of approximately 350m by
250m. The newly identified mineralised area was named Martha Washington South.
5,000m Reverse Circulation ("RC") drill programme at the JKL and Carolina
Belle projects
On 19 October 2021, drilling commenced at Carolina Belle as part of a 5,000m
RC drilling campaign to be conducted on the Carolina Belle and JKL projects
(both the Loflin and Jones-Keystone deposits). The primary objectives of the
5,000m drilling campaign included:
· First reconnaissance drilling of the Carolina Belle project
· Investigation of the potential extensions of mineralisation at
Loflin, with the aim of further expanding the maiden resource estimate as
detailed above.
· Drilling of the Loflin South geophysical anomaly
· Drilling on the Jones-Keystone side of the JKL project with the aim
of enabling the potential establishment of a maiden resource estimate for this
area of the project.
Drilling at Carolina Belle was completed in November 2021 and then commenced
at the JKL project. A total of 32 drill holes for 2,630m were drilled at
Carolina Belle.
In general terms, the exploration activities being conducted by Lexington Gold
are similar in nature to those conducted by TSX listed junior, Romarco
Minerals Inc which conducted modern exploration activities on its Haile
property in South Carolina, USA, which led to the establishment of a formal
NI43-101 compliant resource estimate of 4.5M oz @ 1.8 g/t and subsequent
acquisition of Romarco by OceanaGold (ASX) for approximately C$856m in 2015.
The COVID-19 pandemic continued throughout 2021 and measures taken by various
governments to contain the virus have affected global economic activity
throughout the year and beyond the year-end. The pandemic impacted our
business with regards to delays in delivery times, especially with regards to
assay results as well as the availability of parts and contractors and
resulted in various operational delays in respect of to the drilling campaigns
conducted during 2021.
2. Financial Performance
Net loss for the year was US$1.0 million from continuing operations against
the prior year loss of US$0.7 million.
Total assets were US$4.8 million (2020: US$5.5 million) at the year end.
Net cash position of US$0.95 million (2020: US$2.9 million) as at the year
end.
Total liabilities of US$0.1 million (2020: US$0.09 million) as at the year
end.
3. Dividend
The directors have not declared a dividend (2020: Nil).
4. Corporate Activities
Fundraisings
There were no fundraising activities during the 2021 reporting period.
5. Post Period End
Post the reporting period end, the Company began receiving the assay results
in respect of its Phase 2 5,000m RC Drilling campaign conducted over the
Carolina Belle and JKL projects.
The Carolina Belle project is sub-divided into three targets or gold
anomalies, namely Uwarra and Iola; MacMaster and the recently discovered
Martha Washington South. Highlighted results for all three targets are shown
below.
Selected results from the Uwarra and Iola target:
· 4m @ 2.1 g/t Au from 64m to 68m
· 11m @ 1.01 g/t Au from 68m to 79m including:
o 4m @ 1.62 g/t Au from 72m to 76m
· 4m @ 1.53 g/t Au from 48m to 52m
· 4m @ 0.71 g/t from 44m to 48m
Selected results from the McMaster target:
· 3m @ 3.68 g/t Au from 64m to 67m
· 4m @ 1 g/t Au from 28m to 32m
· 4m @1.8 g/t Au from 28m to 32m
· 4m @ 1.06 g/t Au from 20m to 24m
Selected results from the Martha Washington South target:
· 8m @ 1.07 g/t Au from surface to 8m
· 4m @ 1.1 g/t Au from 8m to 12m
· 4m @ 1.15 g/t Au from 52m to 56m
· 4m @ 1.19 g/t Au from 36m to 40m
The JKL project is subdivided into two main targets or gold anomalies namely,
Loflin (which includes Loflin South) and Jones-Keystone. At the time of
writing this review, the assay results for Loflin have been returned, but the
Jones-Keystone results remain pending. Highlighted assay results for Loflin
from the recent drilling campaign include:
· 36m @ 1.67 g/t Au and 1.89 g/t Ag from 20m to 56m including:
o 12m @ 3.27 g/t Au and 2.9 g/t Ag from 28m to 40m
o 4m @ 5.63 g/t Au and 3.5 g/t Ag from 32m to 36m
· 20m @ 1.52 g/t Au and 1.67 g/t Ag from 16m to 36m including:
o 4m @ 3.01 g/t Au and 2.45 g/t Ag from 32m to 36m
· 8m @ 1.32 g/t Au from 80m to 88m including:
o 4m @ 1.45 g/t Au from 80m to 84m
· 12m @ 1.26 g/t Au from 16m to 28m including:
o 4m @ 1.78 g/t Au from 20m to 24m
· 24m @ 1.07 g/t Au and 2.76 g/t Ag from 4m to 28m including:
o 4m @ 2.34 g/t Au and 6.41 g/t Ag from 24m to 28m
· 16m @ 1.27 g/t Au and 3.79 g/t Ag from 16m to 32m including:
o 8m @ 1.76 g/t Au and 6.48 g/t Ag from 20m to 28m and
o 4m @ 1.93 g/t Au and 6.11 g/t Ag from 24m to 28m
6. Outlook
In line with the Company's stated strategy, the Directors believe that its
gold projects in North and South Carolina in the United States represent an
excellent opportunity to create long-term shareholder value through the
identification and exploration of gold deposits within a well-mineralised but
under explored Carolina Super Terrane.
Bernard Olivier
Chief Executive Officer
8 June 2022
Financial Statements
Lexington Gold Ltd
Consolidated statement of profit or loss and other comprehensive income
for the Year Ended 31 December 2021
(Audited)
2021 2020
US$'000 US$'000
CONTINUING OPERATIONS
Other income - -
Operating expenses (1,022) (712)
Operating loss (1,022) (712)
Loss before taxation (1,022) (712)
Income tax charge - -
(1,022) (712)
Loss for the year
Attributable to:
Equity owners of the parent (1,021) (712)
Non-controlling interest (1) -
Other comprehensive income
Loss for the year (1,022) (712)
Items that may be reclassified to profit or loss:
Foreign exchange loss on translation of discontinued operations 1 (3)
(1,021) (715)
Total comprehensive loss for the year
Attributable to:
Equity owners of the parent (1,020) (715)
Non-controlling interest (1) -
(1,021) (715)
Total comprehensive loss for the year
Loss per share attributable to the owners of the parent during the year
Basic and diluted loss per share from continuing operations (US cents/share) (0.39) (0.58)
Lexington Gold Ltd
Consolidated statement of financial position
as at 31 December 2021
(Audited)
2021 2020
US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 3,764 2,499
Total non-current assets 3,764 2,499
Current assets
Trade and other receivables 45 56
Cash and cash equivalents 953 2,895
Total current assets 998 2,951
Total assets 4,762 5,450
Equity
Share capital 787 787
Share premium 59,096 59,096
Share option reserve 555 234
Foreign currency translation reserve (2) (3)
Accumulated loss (56,750) (55,729)
Total equity attributable to equity owners of the parent 3,686 4,385
Non-controlling interest 970 971
Total equity 4,656 5,356
Current liabilities
Trade and other payables 106 94
Total current liabilities 106 94
4,762 5,450
Total equity and liabilities
Lexington Gold Ltd
Consolidated statement of cash flows
for the Year Ended 31 December 2021
(Audited)
2021 2020
US$'000 US$'000
Cash flows from operating activities
Cash utilised by operations (678) (266)
(678) (266)
Net cash flows utilised in operating activities
Cash flows from investing activities
Payments for exploration (1,265) (518)
Acquisition of subsidiary, net of cash - (165)
(1,265) (683)
Net cash flows utilised by investing activities
Cash flows from financing activities
Proceeds from issue of shares - 3,741
Loan from director - 100
- 3,841
Net cash flows generated from financing activities
Net (decrease)/increase in cash and cash equivalents (1,943) 2,892
Movement in cash and cash equivalents
Net foreign currency exchange losses 1 (9)
At the beginning of the year 2,895 12
Net (decrease)/increase in cash and cash equivalents (1,943) 2,892
953 2,895
Cash and cash equivalents at the end of the year
**ENDS**
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