REG - Lexington Gold Ltd - Final Results for the year ended 31 December 2022
29/06/2023 07:00
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RNS Number : 2922E Lexington Gold Limited 29 June 2023
29 June 2023
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Final Results for the year ended 31 December 2022
and Availability of Annual Report and Financial Statements
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 2022.
Copies of the Company's full Annual Report and Financial Statements for the
financial year to 31 December 2022 will be made available to download from
the Company's website at www.lexingtongold.co.uk and will be posted to
shareholders on or before 30 June 2023.
Financial Summary
· Net loss for the year from continuing operations was US$0.9 million
(2021: US$1.0 million).
· Total assets were US$5.1 million (2021: US$4.8 million) at the year
end.
· Net cash position of US$0.42 million (2021: US$0.95 million) as at the
year end.
· Total liabilities of US$0.1 million (2021: US$0.1 million) as at the
year end.
Corporate Summary
2022 was a very successful year for Lexington Gold. The team has delivered on
a series of important exploration milestones across the Company's existing
project portfolio, including the commissioning and release of an updated and
increased independent JORC resource estimate for the Loflin deposit, the
completion of the latest reverse circulation ("RC") drilling campaign across
both the Carolina Belle and JKL Projects and the establishment of a maiden
independent JORC Mineral Resource Estimate for the Jones-Keystone side of the
JKL Project towards the end of the year.
Post-year end, on 15 May 2023, the Company announced a major corporate
development namely the proposed acquisition of 76% of White Rivers Exploration
(Pty) Limited ("WRE") in South Africa, which has a number of significantly
larger projects and prospects than those explored by Lexington Gold to date.
The Company's strategic emphasis will remain on the exploration for, and
development of, gold resources, with a particular focus on areas with known
significant historical gold production. Successful completion of the proposed
WRE acquisition will enable the Company to explore in the Witwatersrand gold
fields, an area which was historically the largest single gold producing
district in the world, alongside progression of the Company's existing
projects in the Carolinas, USA, with the aim of maximising long term
shareholder value. At the Company's Special General Meeting held on 26 June
2023 the Company's shareholders voted to approve such proposed acquisition.
Operational Highlights
During 2022, Lexington Gold conducted a number of key exploration activities
on its existing portfolio projects as follows:
Initial and Maiden Drill Results for Carolina Belle
In February 2022, the Company announced assay results received in respect of
the first 11 holes from its 32 hole RC drill programme at the Carolina Belle
Project. These drill results identified and confirmed the down-dip extension
and main historical ore-zone mined during the historical third-party Iola and
Uwarra gold mining operations. Selected highlights from the results included:
· 4m @ 2.1 g/t Au from 64m to 68m in hole CRBC-24
· 11m @ 1.01 g/t Au from 68m to 79m (combined Hangingwall, Footwall and
mined out historical main ore-zone) in hole CRBC-22 including:
o Footwall intersection of 4m @ 1.62 g/t Au from 72m to 76m
o Hangingwall intersection of 4m @ 0.7 g/t from 68m to 72m
o Main historical ore-zone intersected between 72.2m and 73.2m
· Potential second gold mineralised zone intersected approximately 25m
above the main historical Iola and Uwarra ore-zone with:
o 4m @1.53 g/t Au from 48m to 52m in hole CRBC-22
RC Drilling Programme at Jones-Keystone-Loflin Project ("JKL")
Progress continued in February 2022 as the Company also announced the
completion of its Phase 2 RC drilling programme on the Loflin side of the JKL
Project and mobilisation of the rig for a maiden drilling programme on the
Jones-Keystone side of this project. A total of 18 drill holes for an
aggregate of 1,695m were drilled at Loflin, with two additional RC drill holes
drilled in a newly identified area due to the significant sulphide
mineralisation intersected on the southern side, later named Loflin South, and
outside of the previously known Loflin resource.
In March 2022, the Company completed its maiden drilling programme on the
Jones-Keystone side of the JKL Project, drilling a total of 6 holes for an
aggregate of 675m, and thereby concluded the overall 5,000m RC drilling
campaign. Initial logging identified multiple intersections of alteration
zones and sulphide mineralisation, with the largest combined intersection
identified being over 50m. In the subsequent weeks, the Company announced the
first drill results from Jones-Keystone which exceeded expectations, as they
showed multiple intersections of 24m width and over and grades of between 1.37
g/t and 1.69 g/t gold, with all gold intersections starting above 100m depth
and representing commercial grades and mineable widths. Key results included:
· Hole JKRC-002: 52m @ 0.99 g/t Au from 72m to 124m including:
o 24m @ 1.37 g/t Au from 80m to 104m
o 16m @ 1.7 g/t Au from 84m to 100m
o 4m @ 2.75 g/t Au from 92m to 96m
· Hole JKRC-004: 40m @ 1.27 g/t Au from 20m to 60m including:
o 28m @ 1.69 g/t Au from 28m to 56m
o 16m @ 2.5 g/t Au from 28m to 44m
o 4m @ 4.56 g/t Au from 36m to 40m
· Hole JKRC-003: 28m @ 1.37 g/t Au from 64m to 92m including:
o 8m @ 3.1 g/t Au from 64m to 72m
o 4m @ 4.96 g/t Au from 64m to 68m
Drill Results for Loflin
Following completion of the abovementioned drilling programme, in March 2022
the Company announced initial assay results for Loflin relating to 8 of the 18
RC drill holes from the campaign, with 6 holes from Loflin South and 2 holes
from the north-eastern extension of the main Loflin deposit. The assay
results confirmed a significant new discovery, which was named Loflin South.
Selected highlights from the assay results included:
· Hole LFRC-006: 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
· Hole LFRC-002: 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
· Hole LFRC-003: 8m @ 1.32 g/t Au from 80m to 88m including:
o 4m @ 1.45 g/t Au from 80m to 84m
In May 2022, the Company announced the remaining assay results from Loflin
which involved shallow-level infill drilling and testing of the North-Eastern,
South-Western and Southern boundaries and extensions.
Selected results included:
· Hole LFRC-018: 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
· Hole LFRC-009: 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
· Hole LFRC-010: 4m @ 0.58 g/t Au from 48m to 52m
· Hole LFRC-016: 4m @ 0.73 g/t Au from 4m to 8m
27% upgrade to initial maiden JORC resource at Loflin
In July 2022, following completion of the drill programme, the Company also
announced the results of the 1m sample re-splits at Loflin, which underlined
the success of the RC drill campaign. The deposit exhibited significant
shallow mineralisation, with grades of up to 10g/t gold achieved as well as
multiple Intersections of 20m+ widths at mineable grades, including 34m at an
average grade of 1.75 g/t gold. These results were incorporated into the
existing geological model and database with the aim of achieving an upgrade to
the pre-existing JORC Resource estimate for Loflin. In August 2022, the
Company was pleased to confirm a 27% increase in the contained gold estimated
for the Loflin deposit, with a total Inferred Resource of 2,596,000t @ 0.99
g/t Au for 82,700 oz of contained gold, which included over 9,000 gold ounces
from the newly discovered Loflin South.
In November 2022, the Company was pleased to announce receipt of a maiden
independent JORC Mineral Resource Estimate for the Jones-Keystone side of the
JKL Project prepared by Pivot Mining Consultants Pty Limited. The results
exceeded expectations, with an estimated resource of 128,000oz, taking the
aggregate inferred Mineral Resource Estimate for the JKL Project to over
210,000 oz of gold.
Fundraisings
Lexington Gold carried out two fundraisings in 2022. In April, the Company
signed unsecured convertible loan agreements with two significant shareholders
and three of its directors with respect to borrowing an aggregate amount of
£335,000, in order to provide it with additional working capital and
financial flexibility. In light of market conditions at that time, and the
subdued share price, the Board felt that this was the most appropriate funding
route to avoid excessive dilution, which an equity raise would have caused.
The conversion rights for the lenders concerned were set at a level of 3.2p
per share (subject to adjustment in certain prescribed circumstances), which
was approximately 30.6 per cent. above the prevailing closing middle market
share price of 2.45p per share.
In October 2022, following a recovery in the Company's share price, the
Company successfully completed a placing, raising £500,000 (before expenses)
at 4.7p per share, which represented an approximate 13.6 per cent. premium to
the 30 day volume weighted average price at that time. The abovementioned loan
facility was converted in full, together with the accrued interest thereon,
alongside such placing.
Joint Broker Appointment
On 15 August 2022, the Company appointed WH Ireland Limited as its Joint
Broker.
Post-year end events
The Company's momentum from 2022 has been maintained during the first half of
2023 to date. Following completion of soil sampling early on in the year at
the Jennings-Pioneer Project, in April 2023 the Company announced the
associated assays, with the results reaffirming the high potential of
Jennings-Pioneer, particularly the mineralised extension from the historical
Barite Hill pit onto the Company's property, with surface sampling returning
up to 1.735g/t Au. As well as elevated gold values, the samples also
indicated significant base metal assays, with the presence of barite and
tellurium, which could add further potential value to the project given their
diverse industrial applications.
In March 2023, the Company entered into a US$150,000 unsecured loan facility
with Lexington Gold's Chairman, Edward Nealon, to support the group's ongoing
working capital requirements and the costs associated with evaluating
potential additional new gold projects/opportunities.
In May 2023, the Company announced a substantial development in the form of
the proposed acquisition of 76 per cent. of WRE, an exploration and
development company with significant gold assets in the Witwatersrand gold
fields in South Africa, which historically was the largest single gold
producing district in the world. The aggregate amount payable by the Company
under the associated WRE Acquisition and Loan Agreements is £0.3m, by way of
the provision of a subordinated loan to WRE, and up to £6.4m to be settled by
way of the issue of new common shares in Lexington Gold based on certain
pre-determined milestones being satisfied, with any such shares being subject
to a 12-month lock-up arrangement followed by a 12-month orderly market
arrangement from the date of their issue.
WRE's current tenement interests have been estimated by WRE's management to
contain non-code compliant potential resources of over 37 million ounces of
gold. WRE has focussed its exploration efforts on shallow (200 to 1,200m
depth) deposits close to well-established infrastructure. Its tenement
interests comprise 10 prospecting rights (six granted licences and four
renewal applications), which are grouped into five projects. This includes a
joint venture (the Jelani Resources JV) with Avgold Limited, a subsidiary of
Harmony Gold Mining Company Limited. Such JV project has a non-code compliant
independently estimated resource of 6.02 million ounces of gold at an average
grade of 6.47 g/t.
WRE was established by well-known Australian explorer, Mark Creasy, in 2002,
with whom the Company has on 12 May 2023 entered into a one year unsecured
loan agreement for a principal amount of £0.3m. Further details of the
proposed WRE transaction and its conditions precedent are set out in the
Company's announcement of 15 May 2023 and Note 23 to the full annual report
and financial statements.
For further information, please contact:
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 / Abigail Wennington T: +44 207 409 3494
WH Ireland Limited (Joint Broker) www.whirelandplc.com (http://www.whirelandplc.com)
Katy Mitchell / Enzo Aliaj T: +44 207 220 1666
Peterhouse Capital Limited (Joint 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)
Charles Goodwin / Annabelle Wills / Soraya Jackson T: +44 7948 758 681
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 by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
Note to Editors:
Lexington Gold (AIM: LEX) is a gold exploration and development company
currently holding interests in 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
several multi-million-ounce mines operated by majors. It 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.
Key Extracts from the Company's audited
Annual Report and Financial Statements are set out below:
Chairman's Statement
I am delighted to report on another highly successful year for Lexington Gold
Ltd ("Lexington" or the "Company") for the twelve months ended 31 December
2022. Since providing our half-year update, we have continued to advance our
exploration activities across all of our existing projects, meeting our
objectives in terms of significantly increasing our independently reported
gold resource estimate and building shareholder value. We have also made
significant progress during 2023 to date, having recently announced details of
a proposed acquisition which we believe will potentially serve to transform
our prospects and the scale of the Company.
The first half of 2022 was dominated by our focus on completing the drill
programme on both the Loflin and Jones-Keystone sides of the
Jones-Keystone-Loflin ("JKL") Project. Assay results confirmed a significant
new discovery, named Loflin South, whilst we also received exceptional assay
results for the six reverse circulation ("RC") drill holes at Jones-Keystone.
In August 2022, we announced an updated independent JORC (2012) Mineral
Resource Estimate for the Loflin deposit, including over 9,000 gold ounces
from Loflin South, which increased the Loflin deposit resource estimate by
27%. The JORC resource estimation of 128,000 gold ounces for the
Jones-Keystone side of the project announced towards the end of the year also
surpassed our expectations, taking the total JORC inferred mineral resource
estimate for the JKL Project to over 210,000 gold ounces.
Further to completion of the Company's maiden 2021 drill campaign at Carolina
Belle, the Company reviewed and updated its geological model for this project
over the course of 2022. The maiden 2021 drill campaign achieved multiple
intersections of 1g/t Au or more and improved the delineation of the historic
third-party mining operations and the nature of the ore-zones targeted by such
operations. Following extensive review of the project, a Phase II drilling
campaign is currently being prepared.
Advancements were also made at our Jennings-Pioneer Project with assays from
soil sample grid and rock sampling announced in April 2023. The analysis of
soil assays in conjunction with field mapping, identified 13 gossans within
three separate mineralisation trends: the Barite Hill Trend, the Jennings
Trend and the Self Trend. The Barite Hill Trend is particularly exciting and
represents the northeast extension of the historic Barite Hill Mine, which
produced 59,000 oxide ounces in the early 1990s. The Barite Hill Trend
continues 600m along strike onto the Company's tenured property, and surface
sampling has outlined a siliceous alteration halo extending 600m to the
northeast and sulphide mineralisation extending over 350m to the northeast,
with gossanous surface rock chips returning up to 1.735g/t Au.
Post-period end, on 15 May 2023, the Company announced the exciting news that
it had entered into conditional share subscription and loan agreements to
acquire 76% of White Rivers Exploration Proprietary Limited ("WRE") (the
"Proposed WRE Acquisition"), which has a substantial portfolio of gold assets
estimated by WRE's management to potentially contain over 37 million ounces in
a world-renowned gold-producing area of Witwatersrand in South Africa. This
proposed transaction, which has been approved by the Company's shareholders at
a shareholders meeting on 26 June 2023 is subject, inter alia, to conditions,
has the potential to significantly enhance Lexington's future prospects whilst
we continue to advance our existing projects in the Carolinas to build further
shareholder value and further announcement(s) will be made in due course
regarding the Proposed WRE Transaction.
Completion of the Proposed WRE Acquisition would see Mark Creasy, one of the
mining industry's most successful entrepreneurs and founder of WRE, become a
significant shareholder in Lexington and continue to play an important role in
developing WRE's assets. At the same time, we will be looking to capitalise on
WRE's Joint Venture arrangement with Avgold Limited, a subsidiary of Harmony
Gold Mining Company Limited, the largest gold producer by volume in South
Africa. If completed, the consideration payable in respect of the acquisition
of WRE principally comprises up to £6.4m of new common shares in Lexington
based on certain pre-determined milestones being satisfied and the provision
of a £0.3m subordinated loan to WRE.
2023 is set to be a very significant year for Lexington. As always, we are
most grateful for the team's unwavering commitment to advancing our projects
and helping to build shareholder value. As a Company, we look forward to
updating shareholders on our future progress.
Edward Nealon
Non-Executive Chairman
28 June 2023
Chief Executive's Operational and Financial Review
1. Overview
2022 was a very successful year for Lexington. The team has delivered on a
series of important exploration milestones across our existing project
portfolio, including the commissioning and release of an updated and increased
independent JORC resource estimate for the Loflin deposit, the completion of
the latest RC drilling campaign across both the Carolina Belle and JKL
Projects and the establishment of a maiden independent JORC Mineral Resource
Estimate for the Jones-Keystone side of the JKL Project towards the end of the
year.
Post-year end, on 15 May 2023, the Company announced a major corporate
development namely the proposed acquisition of 76% of White Rivers Exploration
(Pty) Limited ("WRE") in South Africa, which has a number of significantly
larger projects and prospects than those we have been exploring to date. The
Company's strategic emphasis will remain on the exploration for, and
development of, gold resources, with a particular focus on areas with known
significant historical gold production. Successful completion of the Proposed
WRE Acquisition will enable us to explore in the Witwatersrand gold fields, an
area which was historically the largest single gold producing district in the
world, alongside progression of our existing projects in the Carolinas, USA,
with the aim of maximising long term shareholder value.
During 2022, Lexington conducted the following exploration activities on its
portfolio projects:
Initial and Maiden Drill Results for Carolina Belle
In February 2022, we announced assay results received in respect of the first
11 holes from the Company's 32 hole RC drill programme at the Carolina Belle
Project. These drill results identified and confirmed the down-dip extension
and main historical ore-zone mined during the historical third-party Iola and
Uwarra gold mining operations. Selected highlights from the results included:
· 4m @ 2.1 g/t Au from 64m to 68m in hole CRBC-24
· 11m @ 1.01 g/t Au from 68m to 79m (combined Hangingwall, Footwall and
mined out historical main ore-zone) in hole CRBC-22 including:
o Footwall intersection of 4m @ 1.62 g/t Au from 72m to 76m
o Hangingwall intersection of 4m @ 0.7 g/t from 68m to 72m
o Main historical ore-zone intersected between 72.2m and 73.2m
· Potential second gold mineralised zone intersected approximately 25m
above the main historical Iola and Uwarra ore-zone with:
o 4m @1.53 g/t Au from 48m to 52m in hole CRBC-22
RC Drilling Programme at Jones-Keystone-Loflin Project ("JKL")
Progress continued in February 2022 as we also announced the completion of our
Phase 2 RC drilling programme on the Loflin side of the JKL Project and
mobilisation of the rig for a maiden drilling programme on the Jones-Keystone
side of this project. A total of 18 drill holes for an aggregate of 1,695m
were drilled at Loflin, with two additional RC drill holes drilled in a newly
identified area due to the significant sulphide mineralisation intersected on
the southern side, later named Loflin South, and outside of the previously
known Loflin resource.
In March 2022, we completed the maiden drilling programme on the
Jones-Keystone side of the JKL Project, drilling a total of 6 holes for an
aggregate of 675m and thereby concluded the overall 5,000m RC drilling
campaign. Initial logging identified multiple intersections of alteration
zones and sulphide mineralisation, with the largest combined intersection
identified being over 50m. In the subsequent weeks, we announced the first
drill results from Jones-Keystone which exceeded our expectations, as they
showed multiple intersections of 24m width and over and grades of between 1.37
g/t and 1.69 g/t gold, with all gold intersections starting above 100m depth
and representing commercial grades and mineable widths. Key results included:
· Hole JKRC-002: 52m @ 0.99 g/t Au from 72m to 124m including:
o 24m @ 1.37 g/t Au from 80m to 104m
o 16m @ 1.7 g/t Au from 84m to 100m
o 4m @ 2.75 g/t Au from 92m to 96m
· Hole JKRC-004: 40m @ 1.27 g/t Au from 20m to 60m including:
o 28m @ 1.69 g/t Au from 28m to 56m
o 16m @ 2.5 g/t Au from 28m to 44m
o 4m @ 4.56 g/t Au from 36m to 40m
· Hole JKRC-003: 28m @ 1.37 g/t Au from 64m to 92m including:
o 8m @ 3.1 g/t Au from 64m to 72m
o 4m @ 4.96 g/t Au from 64m to 68m
Drill Results for Loflin
Following completion of the abovementioned drilling programme, in March 2022
we announced initial assay results for Loflin relating to 8 of the 18 RC drill
holes from the campaign, with 6 holes from Loflin South and 2 holes from the
north-eastern extension of the main Loflin deposit. The assay results
confirmed a significant new discovery, which we named Loflin South. Selected
highlights from the assay results included:
· Hole LFRC-006: 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
· Hole LFRC-002: 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
· Hole LFRC-003: 8m @ 1.32 g/t Au from 80m to 88m including:
o 4m @ 1.45 g/t Au from 80m to 84m
In May 2022, we announced the remaining assay results from Loflin which
involved shallow-level infill drilling and testing of the North-Eastern,
South-Western and Southern boundaries and extensions.
Selected results included:
· Hole LFRC-018: 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
· Hole LFRC-009: 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
· Hole LFRC-010: 4m @ 0.58 g/t Au from 48m to 52m
· Hole LFRC-016: 4m @ 0.73 g/t Au from 4m to 8m
27% upgrade to initial maiden JORC resource at Loflin
In July 2022, following completion of the drill programme, we also announced
the results of the 1m sample re-splits at Loflin, which underlined the success
of the RC drill campaign. The deposit exhibited significant shallow
mineralisation, with grades of up to 10g/t gold achieved as well as multiple
Intersections of 20m+ widths at mineable grades, including 34m at an average
grade of 1.75 g/t gold. These results were incorporated into the existing
geological model and database with the aim of achieving an upgrade to the
pre-existing JORC Resource estimate for Loflin. In August 2022, we were
pleased to confirm a 27% increase in the contained gold estimated for the
Loflin deposit, with a total Inferred Resource of 2,596,000t @ 0.99 g/t Au
for 82,700 oz of contained gold, which included over 9,000 gold ounces from
the newly discovered Loflin South.
In November 2022, we were pleased to announce receipt of a maiden independent
JORC Mineral Resource Estimate for the Jones-Keystone side of the JKL Project
prepared by Pivot Mining Consultants Pty Limited. The results exceeded our
expectations, with an estimated resource of 128,000oz, taking the aggregate
inferred Mineral Resource Estimate for the JKL Project to over 210,000 oz of
gold.
2. Financial Performance
Net loss for the year from continuing operations was US$0.9 million (2021:
US$1.0 million).
Total assets were US$5.1 million (2021: US$4.8 million) at the year end.
Net cash position of US$0.42 million (2021: US$0.95 million) as at the year
end.
Total liabilities of US$0.1 million (2021: US$0.1 million) as at the year end.
3. Dividend
The directors have not declared a dividend (2021: Nil).
4. Corporate Activities
Fundraisings
Lexington carried out two fundraisings in 2022. In April, the Company signed
unsecured convertible loan agreements with two significant shareholders and
three of its directors with respect to borrowing an aggregate amount of
£335,000, in order to provide it with additional working capital and
financial flexibility. In light of market conditions at that time, and the
subdued share price, the Board felt that this was the most appropriate funding
route to avoid excessive dilution, which an equity raise would have caused.
The conversion rights for the lenders concerned were set at a level of 3.2p
per share (subject to adjustment in certain prescribed circumstances), which
was approximately 30.6 per cent. above the closing middle market share price
at the time of 2.45p per share.
In October 2022, following a recovery in the Company's share price, we
successfully completed a placing, raising £500,000 (before expenses) at 4.7p
per share, which represented an approximate 13.6 per cent. premium to the 30
day volume weighted average price at that time. The abovementioned loan
facility was converted in full, together with the accrued interest thereon,
alongside the placing.
Joint Broker Appointment
On 15 August 2022, the Company appointed WH Ireland Limited as its Joint
Broker.
5. Post-Period Events
Our momentum from 2022 has been maintained during the first half of 2023 to
date. Following completion of soil sampling early on in the year at the
Jennings-Pioneer Project, in April 2023 we announced the associated assays,
with the results reaffirming the high potential of Jennings-Pioneer,
particularly the mineralised extension from the historical Barite Hill pit
onto our property, with surface sampling returning up to 1.735g/t Au. As well
as elevated gold values, the samples also indicated significant base metal
assays, with the presence of barite and tellurium, which could add further
potential value to the project given their diverse industrial applications.
In March 2023, the Company entered into a US$150,000 unsecured loan facility
with Lexington's Chairman, Edward Nealon, to support the group's ongoing
working capital requirements and the costs associated with evaluating
potential additional new gold projects/opportunities.
In May 2023, we announced a substantial development in the form of the
Proposed WRE Acquisition to acquire 76 per cent. of WRE, an exploration and
development company with significant gold assets in the Witwatersrand gold
fields in South Africa, which historically was the largest single gold
producing district in the world. The aggregate amount payable by the Company
under the associated WRE Acquisition and Loan Agreements is £0.3m, by way of
the provision of a subordinated loan to WRE, and up to £6.4m to be settled by
way of the issue of new common shares in Lexington based on certain
pre-determined milestones being satisfied, with any such shares being subject
to a 12-month lock-up arrangement followed by a 12-month orderly market
arrangement from the date of their issue.
WRE's current tenement interests have been estimated by WRE's management to
contain non-code compliant potential resources of over 37 million ounces of
gold. WRE has focussed its exploration efforts on shallow (200 to 1,200m
depth) deposits close to well-established infrastructure. Its tenement
interests comprise 10 prospecting rights (six granted licences and four
renewal applications), which are grouped into five projects. This includes a
joint venture (the Jelani Resources JV) with Avgold Limited, a subsidiary of
Harmony Gold Mining Company Limited. Such JV project has a non-code compliant
independently estimated resource of 6.02 million ounces of gold at an average
grade of 6.47 g/t.
WRE was established by well-known Australian explorer, Mark Creasy, in 2002,
with whom the Company has on 12 May 2023 entered into a one year unsecured
loan agreement for a principal amount of £0.3m. Further details of the
proposed WRE transaction and its conditions precedent are set out in the
Company's announcement of 15 May 2023 and Note 23 to the full annual report
and financial statements.
Bernard Olivier
Chief Executive Officer
28 June 2023
Financial Statements
Lexington Gold Ltd
Consolidated statement of profit or loss and other comprehensive income
for the Year Ended 31 December 2022
(Audited)
2022 2021
US$'000 US$'000
CONTINUING OPERATIONS
Other income -
Operating expenses (708) (1,022)
Operating loss (708) (1,022)
Fair value loss on derivative liability (149) -
Finance cost (67) -
Loss before taxation (924) (1,022)
Income tax charge - -
(924) (1,022)
Loss for the year
Attributable to:
Equity owners of the parent (924) (1,021)
Non-controlling interest - (1)
Other comprehensive income
Loss for the year (924) (1,022)
Items that may be reclassified to profit or loss:
Foreign exchange loss on translation of discontinued operations - 1
(924) (1,021)
Total comprehensive loss for the year
Attributable to:
Equity owners of the parent (924) (1,020)
Non-controlling interest - (1)
(924) (1,021)
Total comprehensive loss for the year
Loss per share attributable to the owners of the parent during the year
Basic and diluted loss per share from continuing operations (US cents/share) (0.35) (0.39)
The above Consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes in the
Company's full Annual Report and Financial Statements.
Lexington Gold Ltd
Consolidated statement of financial position
as at 31 December 2022
(Audited)
2022 2021
US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 4,556 3,764
Total non-current assets 4,556 3,764
Current assets
Trade and other receivables 74 45
Cash and cash equivalents 424 953
Total current assets 498 998
Total assets 5,054 4,762
Equity
Share capital 851 787
Share premium 60,163 59,096
Share option reserve 651 555
Foreign currency translation reserve (2) (2)
Accumulated loss (57,674) (56,750)
Total equity attributable to equity owners of the parent 3,989 3,686
Non-controlling interest 970 970
Total equity 4,959 4,656
Current liabilities
Trade and other payables 95 106
Total current liabilities 95 106
5,054 4,762
Total equity and liabilities
The above Consolidated statement of financial position should be read in
conjunction with the accompanying notes in the Company's full Annual Report
and Financial Statements.
Lexington Gold Ltd
Consolidated statement of cash flows
for the Year Ended 31 December 2022
(Audited)
2022 2021
US$'000 US$'000
Cash flows from operating activities
Cash utilised by operations (684) (678)
(684) (678)
Net cash flows utilised in operating activities
Cash flows from investing activities
Payments for exploration (792) (1,265)
(792) (1,265)
Net cash flows utilised by investing activities
Cash flows from financing activities
Proceeds from issue of shares 579 -
Share issue cost (26) -
Proceeds from convertible loans 416 -
969 -
Net cash flows generated from financing activities
Net (decrease)/increase in cash and cash equivalents (507) (1,943)
Movement in cash and cash equivalents
Net foreign currency exchange losses (22) 1
At the beginning of the year 953 2,895
Net decrease in cash and cash equivalents (507) (1,943)
424 953
Cash and cash equivalents at the end of the year
The above Consolidated statement of cash flows should be read in conjunction
with the accompanying notes in the Company's full Annual Report and Financial
Statements.
Notes to the consolidated financial information
1. General Information
Lexington Gold Ltd (the "Company", "Lexington Gold" or "Lexington") and its
subsidiaries (together, "the Group") 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 Company is a limited liability company incorporated and domiciled in
Bermuda. The address of its registered office is Clarendon House, 2 Church
Street, Hamilton, HM 11, Bermuda.
The Company is quoted on the Alternative Investment Market ("AIM") of the
London Stock Exchange.
2. Basis of preparation and significant accounting policies
The principal accounting policies applied in the preparation of the
consolidated financial information are consistent with those set out in the
full Annual Report and Financial Statements. These policies have been
consistently applied to all the years presented unless otherwise stated.
(a) Going concern basis of accounting
For the year ended 31 December 2022, the Group recorded a loss of US$0.9
million and had net cash outflows from operating activities of US$0.7 million.
An operating loss is expected in the year subsequent to the date of the
financial statements. The ability of the entity to continue as a going concern
is dependent on the Group generating positive operating cash flows and/or
securing additional funding through the raising of debt or equity to fund its
projects.
These conditions indicate a material uncertainty that may cast a significant
doubt about the entity's ability to continue as a going concern and,
therefore, that it may be unable to realise its assets and discharge its
liabilities in the normal course of business.
The financial statements have been prepared on the basis that the entity is a
going concern, which contemplates the continuity of normal business activity,
realisation of assets and settlement of liabilities in the normal course of
business for the following reasons:
· The Company secured additional funding by way of a US$150,000
unsecured loan facility on 14 March 2023;
· The Directors are confident that they will be able to raise
additional funds to satisfy its immediate cash requirements; and
· The Directors have the ability to reduce expenditure in order to
preserve cash if required.
Should the entity not be able to continue as a going concern, it may be
required to realise its assets and discharge its liabilities other than in the
ordinary course of business, and at amounts that differ from those stated in
the financial statements. The full Annual Report and Financial Statements does
not include any adjustments relating to the recoverability and classification
of recorded asset amounts or liabilities that might be necessary should the
entity not continue as a going concern.
(b) Basis of preparation
The consolidated financial information set out above does not constitute the
Group's financial statements for the years ended 31 December 2022 or 31
December 2021 but is derived from those financial statements. The auditors
have reported on the 2022 and 2021 financial statements which carried
unqualified audit reports. The 2022 financial statements included reference to
a matter to which the auditors drew attention by way of emphasis, namely the
existence of material uncertainty related to going concern as outlined in Note
2(a) above. The auditor's opinion was not modified in respect of such matter.
The 2021 financial statements included a similar emphasis of matter regarding
the existence of material uncertainty related to going concern and the
auditor's opinion was similarly not modified in respect of such matter.
While the financial information included in this announcement has been
compiled in accordance with, inter alia, International Financial Reporting
Standards ("IFRS"), this announcement does not in itself contain sufficient
information to comply with IFRS.
The full consolidated financial statements have been prepared in accordance
with IFRS, interpretations of the International Financial Reporting
Interpretations Committee ("IFRIC") and Bermuda Companies Act, 1981. The
consolidated financial statements have also been prepared under the historical
cost convention, as modified by:
· Share options measured at fair value; and
· Financial assets and liabilities at fair value through
profit or loss.
**ENDS**
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