REG - Lexington Gold Ltd - Final Results for the year ended 31 December 2023
26/06/2024 12:45
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RNS Number : 0023U Lexington Gold Limited 26 June 2024
26 June 2024
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Final Results for the year ended 31 December 2023
and availability of Annual Report and Financial Statements
Lexington Gold (AIM: LEX), the gold exploration and development company with
projects in South Africa and the USA, is pleased to announce its audited
results for the year ended 31 December 2023.
Copies of the Company's full Annual Report and Financial Statements for the
financial year to 31 December 2023 will be made available to download from
the Company's website at www.lexingtongold.co.uk and will be posted to
shareholders by 28 June 2024.
Financial Summary
Net loss for the year from continuing operations was US$0.1 million (2022:
US$0.9 million).
Total assets were US$18.2 million (2022: US$5.1 million) at the year end.
Net cash position of US$2.6 million (2022: US$0.42 million) as at the year
end.
Total liabilities of US$1.1 million (2022: US$0.1 million) as at the year end.
Corporate Summary
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 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 £0.3 million, by way of the provision of a
subordinated loan to WRE, and up to £6.4 million to be settled by way of the
issue of new common shares in Lexington Gold based on certain pre-determined
milestones being satisfied, with 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 tenement interests have been estimated by WRE's former 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 comprised 10 prospecting rights (six granted licences and four
renewal applications - of which one has recently been successfully renewed),
grouped into five projects. Most significantly, WRE holds 65 per cent. of
Jelani Resources with the Harmony Group holding the remaining 35 per cent.
Jelani Resources 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, on 12 May 2023, the Company entered into a one year unsecured loan
agreement for a principal amount of £300,000. As announced on 10 July 2023,
the Company subsequently raised, in aggregate, gross proceeds of £2,516,300
(the "Fundraising") at a price of six pence (the "Fundraising Price") per
common share of US$0.003 each in the capital of the Company ("Common Shares")
from the issue of, in aggregate, 41,938,334 new Common Shares (the
"Fundraising Shares"). The Fundraising comprised a placing of 17,188,334 new
Common Shares (the "Placing Shares") to raise £1,031,300 at the Fundraising
Price (the "Placing"), via the Company's joint brokers, Peterhouse Capital
Limited and WH Ireland Limited, and share subscriptions for, in aggregate,
24,750,000 new Common Shares at the Fundraising Price to raise £1,485,000
(the "Share Subscriptions"). The Share Subscriptions included a subscription
of £100,000 by Edward Nealon, Lexington Gold's Chairman, for 1,666,667
Fundraising Shares.
The Company also issued warrants to the Fundraising participants to subscribe
for up to a further 41,938,334 new Common Shares which are exercisable at 10
pence per share until expiry on 20 July 2026 (the "Fundraising Warrants").
In addition, the Company agreed to settle, in aggregate, £423,518 of
outstanding loans including accrued interest on the same terms as the
Fundraising by way of the issue of 7,058,639 new Common Shares and 7,058,639
warrants with the same terms as the Fundraising Warrants. £120,061 of this
amount was due to Edward Nealon, the Company's Chairman, in relation to his
US$150,000 loan to the Company announced on 14 March 2023 which was settled by
the issue of 2,001,024 new Common Shares and 2,001,024 warrants with the same
terms as the Fundraising Warrants. The remaining £303,457 was due to Mark
Creasy in relation to his £300,000 loan to the Company announced on 15 May
2023 which was settled by the issue of 5,057,615 new Common Shares and
5,057,615 warrants with the same terms as the Fundraising Warrants.
On 7 September 2023, the Company announced the completion of its acquisition
of WRE and on 17 October 2023 completion of the associated Broad-Based Black
Economic Empowerment ("BBBEE") arrangements such that the Company is now the
ultimate beneficial owner of 74 per cent. of WRE with 26 per cent. held by
Lexington Gold's BBBEE partners Letsema Holdings Proprietary Limited
("Letsema").
In accordance with the terms of the acquisition, in September 2023 Lexington
Gold issued 36,129,032 new common shares (the "Initial Consideration Shares")
to settle £2.24 million, representing 35 per cent. of the maximum Lexington
Gold Equity of up to £6.4 million to be paid as consideration under the WRE
Acquisition and Loan Agreements.
The Initial Consideration Shares were issued at a price of 6.20 pence per new
common share (the "Issue Price") based on the 30-day VWAP to Tuesday,
5 September 2023 being 2 business days prior to the announcement of
7 September 2023.
In May 2024, further to the renewal of the Jelani Resources Prospecting Right,
a further tranche of 25,806,451 new common shares (the "Initial Deferred
Consideration Shares") were issued at the Issue Price in respect of the
aforementioned Lexington Gold Equity.
The balance of the consideration due under the WRE Acquisition and Loan
Agreements is to be settled by way of the issue of further new common shares
in Lexington Gold at the Issue Price based on certain milestones being
achieved, namely:
Lexington Gold Equity
% No. of common shares Milestone event
20% 20,645,162 Later of 30 November 2023 and the date of renewal of three of the Prospecting
Rights split, 10%, 8% and 2% respectively between the three Prospecting Rights
concerned.
20% 20,645,161 Receipt of Ministerial Consent.
In September 2023, Mark Creasy also invested an amount of £100,000 by way of
a subscription for 1,666,666 new common shares (the "Creasy Subscription
Shares") and 1,666,666 associated Fundraising Warrants on the same commercial
terms as the Company's approximate £2.5 million equity fundraising announced
on 10 July 2023.
Table 1 below shows the current status of WRE's Prospecting licences and
Prospecting Right applications.
Table 1: WRE's Prospecting Licences and Prospecting Right Applications
Project Tenement Area (hectares "ha") Status Expiry date
Jelani Resources FS 30/5/1/1/2/10350(10627) PR 956.76 Renewal Granted 26-May-26(1)
Kroonstad FS 30/5/1/1/2/889(10637) PR 13,845.77 Renewal under appeal (2)
Kroonstad FS 30/5/1/1/2/10520(10643) PR 12,429.45 Renewal under appeal (2)
Kroonstad FS 30/5/1/1/2/10519(10684) PR 22,193.1 Renewal Granted 29-May-27
New Kroonstad North FS 30/5/1/1/2/10696 PR 18,340.46 New Application Accepted ( 3)
Bothaville FS 30/5/1/1/2/10273(10578) PR 9,510 Withdrawn (See FS10695 PR) 03-Mar-24
Bothaville FS 30/5/1/1/2/10274(10579) PR 9,119.58 Withdrawn (See FS10695 PR) 17-Mar-24
New Bothaville Cons FS 30/5/1/1/2/10695 PR 18,627.20 New Application Accepted (4)
Ventersburg FS 30/5/1/1/2/888(10686) PR 8,418.7 Renewal Granted 16-April-27 (1)
Ventersburg FS 30/5/1/1/2/10489(10687) PR 8,965.9 Renewal Granted 16-April-27 (1)
Ventersburg FS 30/5/1/1/2/10528(10701) PR 2,248.6 Executed (Renewal Lodged and pending) 21-Aug-24
Oribi FS 30/5/1/1/2/10486 PR 6,795 Executed 18-Dec-24
Klerksdorp NW 30/5/1/1/2/11335(13484) PR 1,816.9 Renewal under appeal (2)
Active licences total (ha):(*) 114,637.84
Notes:
* - excluding the two withdrawn Bothaville applications detailed above.
(1) In South Africa renewals are for 3 years from granting of renewal rights.
(2) Renewals under appeal by WRE following an initial refusal due to technical
non-compliance of original renewals previously submitted by WRE. New
applications by Reef Exploration, a subsidiary of Lexington Gold South Africa
have also been submitted over the same areas.
- In respect of Kroonstad (FS 889 PR), Reef Exploration lodged an
application under DMRE reference FS 30/5/1/1/10677 PR to secure the area
pending the appeal process.
- In respect of Kroonstad (FS 10520 PR), Reef Exploration lodged
an application under DMRE reference FS 30/5/1/1/10681 PR to secure the area
pending the appeal process.
- In respect of Klerksdorp (NW 11335 PR), Reef Exploration lodged
an application under DMRE reference NW 30/5/1/1/13963 PR to secure the area
pending the appeal process.
(3) New areas adjacent to the existing Kroonstad Rights have been identified
to be of interest for additional exploration. An application for a prospecting
right was lodged by WRE. The application was accepted and is being processed.
(4) To re-secure the two Bothaville prospecting areas which expired after
their 3-year period, Reef Exploration, a subsidiary of Lexington Gold South
Africa, lodged a consolidated application for a prospecting right in respect
of both areas. The application was accepted and is being processed.
Further to Lexington Gold South Africa's receipt of its interest in WRE, the
procedural application for Ministerial Consent in respect of the transaction
was made and the parties to the WRE Acquisition and Loan Agreements agreed an
extension to the deadline for obtaining such consent to 31 August 2024 or such
later date as may be further agreed between the parties.
The Initial Consideration Shares, the Initial Deferred Consideration Shares
and future issues of Lexington Gold Equity are subject to a 12 month lock-up
from their date of issue and thereafter to a further 12-month orderly market
arrangement via Lexington Gold's brokers.
In October 2023, warrants to subscribe for a total of 3,268,485 new common
shares were exercised by their holder at a price of 2.75 pence per share with
the Company receiving approximately £90k.
Operational Highlights
USA Drilling Operations
Both the Jennings-Pioneer and Argo projects in the Carolinas, USA, made good
progress during 2023, especially Jennings-Pioneer where drilling has yielded
potentially significant results. Drilling at Jennings-Pioneer intersected
several new gold zones, thereby confirming the high-grade potential adjacent
to the historic Barite Hill Main Pit. These latest results will help refine
our geological models and guide future exploration efforts.
Jennings-Pioneer Project ("Jennings-Pioneer")
In February 2023, the Company announced the competition of a soil and surface
sampling programme at Jennings-Pioneer targeting gold, silver and base metals
through multi-element assaying to verify and supplement historical sampling
conducted on the deposit. Selected highlights included:
· 505 soil samples on a 30m by 123m grid spacing with a tighter 15m x
123m grid spacing on the Barite Hill Trend
· 17 surface samples collected concurrent with the surface mapping
campaign
· A total of 522 samples were submitted to ALS Geochemistry in Nevada
The results of the 505 soil and 17 rock grab samples were announced in April
2023 and findings included:
· The identification of 13 gossans (targets at surface) within three
separate mineralisation trends: the Barite Hill Trend, the Jennings Trend and
the Self Trend
· The Barite Hill Trend represents the north east extension of the
historic Barite Hill Mine, which continues 600m along strike onto Lexington
Gold's tenured property
· Identification of a 350 metre surface extent of the Red Hill
mineralisation extending from the historic Barite Hill pit
· United States critical mineral by-product potential including barite
and tellurium with diverse industrial applications
Argo Project ("Argo")
In February 2023, the Company also completed its surface trenching and
sampling campaign, involving a total of 13 trench lines, with a total combined
length of approximately 844m, with 409 composite channel samples of 2m each
collected. An additional 30 rock samples were taken at surface and as point
samples in trenches. The, in aggregate, 439 samples were shipped to ALS in
Nevada for assaying. The trenching, sampling and mapping activity sought to
better define the grade distribution and structure of the mineralised zones in
order to facilitate the design of a potential Phase I drilling campaign for
the project in due course.
In late July 2023, the Company received the results of the aforementioned
campaign which were a promising first set of assays for Argo showing
high-grade surface mineralisation at both the Northeast and Southern workings.
Other key findings included:
· The trench assay results confirming that gold is present at surface
at the project:
o Trench AT-04: 24m @ 1.10 g/t Au from 14m to 38m, including:
§ 2m @ 7.50 g/t Au from 14m to 16m
§ 2m @ 2.51 g/t Au from 26m to 28m
o Trench AT-07: 8m @ 0.61 g/t Au from 16m to 24m, including:
§ 2m @ 1.24 g/t Au from 22m to 24m
o Trench AT-13: 8m @ 0.34 g/t Au from 24m to 32m
· Rock samples from trenches and outcrops showed local high grade ore
shoots:
o ARRK-016: 12.65 g/t Au from trench wall of AT-07
o ARRK-017: 2.89 g/t Au from trench wall of AT-07
o ARRK-011: 2.70 g/t Au from trench wall of AT-06
o ARRK-014: 1.21 g/t Au from historic waste dump
o ARRK-024: 43.30 g/t Ag from surface outcrop
South African Operations
The acquisition of WRE, completed in early September 2023, has greatly
enhanced our resource inventory, particularly with respect to the Bothaville
Project where our recent drill campaign has confirmed the presence of
gold-bearing formations. This project alone represents a significant step
towards benefiting from the vast potential of the Witwatersrand Basin.
In December 2023, the Company commenced its planned initial drill campaign,
comprising of four mother holes plus wedging at the Bothaville Project. The
campaign involved:
· Confirming and expanding the area of gold mineralisation intersected
in historic third-party drilling, with half of the drilling penetrating the
Karoo Supergroup (the "Karoo cover"); and
· The main exploration targets were the gold-bearing conglomerates of
the Kimberley Formation (including A-Reef) which subcrops beneath the Karoo
cover starting at a depth of 250m, where diamond drilling was to be utilised.
In May 2024, the Company announced that a total of four drillholes had been
completed at Bothaville, amounting to 2,355m of drilling. Three of the four
holes were completed successfully with a total of eight intersections of the
A-Reef from three motherholes and five deflections. The drilling tested for a
gold-bearing channel at shallow depth in the target A-Reef horizon, as
postulated by the drilling of two third party historic holes which returned
7.1 g/t Au over 71 cm and 5.53 g/t over 77 cm, respectively.
South African Licence Overview
Lexington Gold South Africa Proprietary Limited ("Lexington Gold South
Africa") through its subsidiaries is a major tenement holder in the
Witwatersrand gold fields of South Africa, covering approximately
114,638 hectares. Its portfolio assets are estimated to contain potential
resources of over 37 million ounces of gold. Such resources are primarily
located in shallow deposits close to established infrastructure, thereby
enhancing their potential value and accessibility.
Key Projects and Technical Highlights:
Jelani Resources Proprietary Limited ("Jelani Resources"): The shareholders of
Jelani Resources are Lorraine Gold Mines Limited and Avgold Limited (both
subsidiaries of Harmony Gold Mining Company Limited (JSE: HAR) ("Harmony"))
(together, the "Harmony Group") (35%) and WRE (65%). The recently renewed
Jelani Resources prospecting right covers an area of 956 hectares adjacent to
Harmony's Target Mine in the north-western portion of the Welkom Gold Fields.
An historic independently estimated resource suggested a potential
6.02 million ounces of gold at an average grade of 6.47 g/t. Jelani
Resources represents a significant component of our strategic asset base in
South Africa.
Kroonstad Project: This area is particularly exciting, with an estimated gold
exploration target of between 6.06 and 62.41 million ounces, at grades
ranging from 4.96 g/t to 11.54 g/t. Kroonstad could potentially represent a
new goldfield within the Witwatersrand region.
Bothaville NE and Klerksdorp South Projects: These areas are included in our
detailed exploration and development plans, focused on expanding the known
mineralisation and improving our geological understanding of such zones.
WRE's extensive historical database, consisting of approximately 2,500 mother
holes and their associated assays, forms a critical part of our strategy to
convert resources into JORC-compliant mineral resource estimates. This
database is considered to be one of the largest and most comprehensive
collections of surface exploration data in South Africa.
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 (Non-Executive 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 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 T: +44 7747 788 221
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 and in six
gold projects covering approximately 114,638 hectares in South Africa.
Further information is available on the Company's website:
www.lexingtongold.co.uk (http://www.lexingtongold.co.uk) or follow us through
our social media channel: X (formerly known as Twitter): @LexGoldLtd
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
Reflecting on the twelve months ended 31 December 2023, I am immensely proud
of the progress and achievements of our team at Lexington Gold. This year
marked a series of strategic milestones coming to fruition that have
significantly transformed our operational scope and bolstered our market
standing.
Our acquisition of White Rivers Exploration Proprietary Limited ("WRE"),
completed in early September 2023, has been a key focus, bringing access to
extensive gold deposits in South Africa's Witwatersrand Basin, an area
synonymous with rich gold reserves. The integration of WRE has not only
expanded our resource base but also diversified our operational risk and
enhanced our growth potential. The recent renewal of the Jelani Resources
Prospecting Right until May 2026 underscores the long-term value we foresee in
its asset portfolio.
In the Carolinas, USA, we have continued our drilling activities with
significant progress at the Jennings-Pioneer Project. The discovery of
multiple gold-bearing structures adjacent to the historic Barite Hill Main Pit
has provided further confirmation of the high-grade mineralisation potential
within our existing resource areas.
We have successfully executed a comprehensive drilling programme across the
majority of our Carolinas portfolio, culminating in a better understanding of
the geological characteristics of our various projects and refining our
exploration models. Such efforts are ultimately aimed at upgrading our
resource classifications and extending our known mineral zones.
Our financial strategy remains robust, characterised by prudent management of
cash reserves and strategic capital allocation. The successful equity raise of
approximately £2.5 million gross in July 2023 has provided us with the
necessary funds to pursue our ambitious exploration goals and ensure
operational excellence is maintained.
Post-period end, 2024 to date has seen further progress across our operations,
continuing last year's momentum. Our Jennings-Pioneer drilling programme in
the USA, targeting gold mineralisation adjacent to Barite Hill, has shown
promising results with recently announced assays yielding extensions of the
Barite Hill Trend gold mineralisation which serves to further support the high
potential of this exploration area. Over in South Africa, the Bothaville
Project has made significant strides, with drilling activities enhancing our
existing geological data and expanding potential mineralisation zones.
The renewal of the Jelani Resources licence until May 2026 demonstrates our
commitment to long-term value creation. This renewal triggered the issuance of
25,806,451 deferred consideration shares in connection with the WRE
acquisition, predominantly to Mark Creasy/his nominee. Accordingly, Mr Creasy
and his nominees are now interested in approximately 13.35 per cent. of the
Company's enlarged issued share capital. In addition, on 6 June 2024 our
unlisted 10 pence warrants, expiring in July 2026, were admitted to JP
Jenkins' matched bargain platform thereby providing an accessible trading
venue for our warrant holders.
As we look to the future, our strategy is clear and focused. We are committed
to advancing our projects, enhancing shareholder value, and achieving
sustainable growth through strategic exploration and development.
I am grateful for your continued support and confidence in our strategic
vision and look forward to reporting further successes as we move forwards.
Edward Nealon
Non-Executive Chairman
26 June 2024
Chief Executive's Operational and Financial Review
1. Overview
FY2023 was a transformational year for Lexington Gold with the acquisition of
White Rivers Exploration Proprietary Limited ("WRE") which affords access to
extensive gold deposits in South Africa's Witwatersrand Basin. Following
successful completion of the acquisition, the Company conducted a 2,355m drill
campaign, the results of which have provided invaluable data, confirming the
presence of a potentially significant gold system. The Company has also
undertaken drilling across its other assets in the Carolinas, USA. Discoveries
of gold-bearing structures near the historic Barite Hill Main Pit at the
Jennings-Pioneer Project have confirmed its high-grade mineralisation
potential. A successful equity raise of approximately £2.5 million gross has
enabled the pursuit of our ambitious exploration goals.
Momentum has continued into 2024 with the Jennings-Pioneer drill programme
delivering promising results, whilst the Bothaville Project in South Africa
has made substantial progress. The renewal of the Jelani Resources licence
until May 2026 triggered the issuance of an initial tranche of deferred
consideration shares as part of the WRE acquisition, predominantly to Mark
Creasy/his nominee, whilst earlier this month our unlisted 10 pence warrants,
expiring in July 2026, were admitted to JP Jenkins' matched bargain trading
platform.
Operational Highlights:
USA Drilling Operations
Both the Jennings-Pioneer and Argo projects in the Carolinas, USA, made good
progress during 2023, especially Jennings-Pioneer where drilling has yielded
potentially significant results. Drilling at Jennings-Pioneer intersected
several new gold zones, thereby confirming the high-grade potential adjacent
to the historic Barite Hill Main Pit. These latest results will help refine
our geological models and guide future exploration efforts.
Jennings-Pioneer Project ("Jennings-Pioneer")
In February 2023, the Company announced the competition of a soil and surface
sampling programme at Jennings-Pioneer targeting gold, silver and base metals
through multi-element assaying to verify and supplement historical sampling
conducted on the deposit. Selected highlights included:
· 505 soil samples on a 30m by 123m grid spacing with a tighter 15m x
123m grid spacing on the Barite Hill Trend
· 17 surface samples collected concurrent with the surface mapping
campaign
· A total of 522 samples were submitted to ALS Geochemistry in Nevada
The results of the 505 soil and 17 rock grab samples were announced in April
2023 and findings included:
· The identification of 13 gossans (targets at surface) within three
separate mineralisation trends: the Barite Hill Trend, the Jennings Trend and
the Self Trend
· The Barite Hill Trend represents the north east extension of the
historic Barite Hill Mine, which continues 600m along strike onto Lexington
Gold's tenured property
· Identification of a 350 metre surface extent of the Red Hill
mineralisation extending from the historic Barite Hill pit
· United States critical mineral by-product potential including barite
and tellurium with diverse industrial applications
Argo Project ("Argo")
In February 2023, the Company also completed its surface trenching and
sampling campaign, involving a total of 13 trench lines, with a total combined
length of approximately 844m, with 409 composite channel samples of 2m each
collected. An additional 30 rock samples were taken at surface and as point
samples in trenches. The, in aggregate, 439 samples were shipped to ALS in
Nevada for assaying. The trenching, sampling and mapping activity sought to
better define the grade distribution and structure of the mineralised zones in
order to facilitate the design of a potential Phase I drilling campaign for
the project in due course.
In late July 2023, the Company received the results of the aforementioned
campaign which were a promising first set of assays for Argo showing
high-grade surface mineralisation at both the Northeast and Southern workings.
Other key findings included:
· The trench assay results confirming that gold is present at surface
at the project:
o Trench AT-04: 24m @ 1.10 g/t Au from 14m to 38m, including:
§ 2m @ 7.50 g/t Au from 14m to 16m
§ 2m @ 2.51 g/t Au from 26m to 28m
o Trench AT-07: 8m @ 0.61 g/t Au from 16m to 24m, including:
§ 2m @ 1.24 g/t Au from 22m to 24m
o Trench AT-13: 8m @ 0.34 g/t Au from 24m to 32m
· Rock samples from trenches and outcrops showed local high grade ore
shoots:
o ARRK-016: 12.65 g/t Au from trench wall of AT-07
o ARRK-017: 2.89 g/t Au from trench wall of AT-07
o ARRK-011: 2.70 g/t Au from trench wall of AT-06
o ARRK-014: 1.21 g/t Au from historic waste dump
o ARRK-024: 43.30 g/t Ag from surface outcrop
South African Operations
The acquisition of WRE, completed in early September 2023, has greatly
enhanced our resource inventory, particularly with respect to the Bothaville
Project where our recent drill campaign has confirmed the presence of
gold-bearing formations. This project alone represents a significant step
towards benefiting from the vast potential of the Witwatersrand Basin.
In December 2023, the Company commenced its planned initial drill campaign,
comprising of four mother holes plus wedging at the Bothaville Project. The
campaign involved:
· Confirming and expanding the area of gold mineralisation intersected
in historic third-party drilling, with half of the drilling penetrating the
Karoo Supergroup (the "Karoo cover"); and
· The main exploration targets were the gold-bearing conglomerates of
the Kimberley Formation (including A-Reef) which subcrops beneath the Karoo
cover starting at a depth of 250m, where diamond drilling was to be utilised.
In May 2024, the Company announced that a total of four drillholes had been
completed at Bothaville, amounting to 2,355m of drilling. Three of the four
holes were completed successfully with a total of eight intersections of the
A-Reef from three motherholes and five deflections. The drilling tested for a
gold-bearing channel at shallow depth in the target A-Reef horizon, as
postulated by the drilling of two third party historic holes which returned
7.1 g/t Au over 71 cm and 5.53 g/t over 77 cm, respectively.
South African Licence Overview
Lexington Gold South Africa Proprietary Limited ("Lexington Gold South
Africa") through its subsidiaries is a major tenement holder in the
Witwatersrand gold fields of South Africa, covering approximately
114,638 hectares. Its portfolio assets are estimated to contain potential
resources of over 37 million ounces of gold. Such resources are primarily
located in shallow deposits close to established infrastructure, thereby
enhancing their potential value and accessibility.
Key Projects and Technical Highlights:
Jelani Resources Proprietary Limited ("Jelani Resources"): The shareholders of
Jelani Resources are Lorraine Gold Mines Limited and Avgold Limited (both
subsidiaries of Harmony Gold Mining Company Limited (JSE: HAR) ("Harmony"))
(together, the "Harmony Group") (35%) and WRE (65%). The recently renewed
Jelani Resources prospecting right covers an area of 956 hectares adjacent to
Harmony's Target Mine in the north-western portion of the Welkom Gold Fields.
An historic independently estimated resource suggested a potential
6.02 million ounces of gold at an average grade of 6.47 g/t. Jelani
Resources represents a significant component of our strategic asset base in
South Africa.
Kroonstad Project: This area is particularly exciting, with an estimated gold
exploration target of between 6.06 and 62.41 million ounces, at grades
ranging from 4.96 g/t to 11.54 g/t. Kroonstad could potentially represent a
new goldfield within the Witwatersrand region.
Bothaville NE and Klerksdorp South Projects: These areas are included in our
detailed exploration and development plans, focused on expanding the known
mineralisation and improving our geological understanding of such zones.
WRE's extensive historical database, consisting of approximately 2,500 mother
holes and their associated assays, forms a critical part of our strategy to
convert resources into JORC-compliant mineral resource estimates. This
database is considered to be one of the largest and most comprehensive
collections of surface exploration data in South Africa.
2. Financial Performance
Net loss for the year from continuing operations was US$0.1 million (2022:
US$0.9 million).
Total assets were US$18.2 million (2022: US$5.1 million) at the year end.
Net cash position of US$2.6 million (2022: US$0.42 million) as at the year
end.
Total liabilities of US$1.1 million (2022: US$0.1 million) as at the year end.
3. Dividend
The directors have not declared a dividend (2022: Nil).
4. Corporate Activities
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 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 £0.3 million, by way of the provision of a
subordinated loan to WRE, and up to £6.4 million to be settled by way of the
issue of new common shares in Lexington Gold based on certain pre-determined
milestones being satisfied, with 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 tenement interests have been estimated by WRE's former 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 comprised 10 prospecting rights (six granted licences and four
renewal applications - of which one has recently been successfully renewed),
grouped into five projects. Most significantly, WRE holds 65 per cent. of
Jelani Resources with the Harmony Group holding the remaining 35 per cent.
Jelani Resources 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, on 12 May 2023, the Company entered into a one year unsecured loan
agreement for a principal amount of £300,000. As announced on 10 July 2023,
the Company subsequently raised, in aggregate, gross proceeds of £2,516,300
(the "Fundraising") at a price of six pence (the "Fundraising Price") per
common share of US$0.003 each in the capital of the Company ("Common Shares")
from the issue of, in aggregate, 41,938,334 new Common Shares (the
"Fundraising Shares"). The Fundraising comprised a placing of 17,188,334 new
Common Shares (the "Placing Shares") to raise £1,031,300 at the Fundraising
Price (the "Placing"), via the Company's joint brokers, Peterhouse Capital
Limited and WH Ireland Limited, and share subscriptions for, in aggregate,
24,750,000 new Common Shares at the Fundraising Price to raise £1,485,000
(the "Share Subscriptions"). The Share Subscriptions included a subscription
of £100,000 by Edward Nealon, Lexington Gold's Chairman, for 1,666,667
Fundraising Shares.
The Company also issued warrants to the Fundraising participants to subscribe
for up to a further 41,938,334 new Common Shares which are exercisable at 10
pence per share until expiry on 20 July 2026 (the "Fundraising Warrants").
In addition, the Company agreed to settle, in aggregate, £423,518 of
outstanding loans including accrued interest on the same terms as the
Fundraising by way of the issue of 7,058,639 new Common Shares and 7,058,639
warrants with the same terms as the Fundraising Warrants. £120,061 of this
amount was due to Edward Nealon, the Company's Chairman, in relation to his
US$150,000 loan to the Company announced on 14 March 2023 which was settled by
the issue of 2,001,024 new Common Shares and 2,001,024 warrants with the same
terms as the Fundraising Warrants. The remaining £303,457 was due to Mark
Creasy in relation to his £300,000 loan to the Company announced on 15 May
2023 which was settled by the issue of 5,057,615 new Common Shares and
5,057,615 warrants with the same terms as the Fundraising Warrants.
On 7 September 2023, the Company announced the completion of its acquisition
of WRE and on 17 October 2023 completion of the associated Broad-Based Black
Economic Empowerment ("BBBEE") arrangements such that the Company is now the
ultimate beneficial owner of 74 per cent. of WRE with 26 per cent. held by
Lexington Gold's BBBEE partners Letsema Holdings Proprietary Limited
("Letsema").
In accordance with the terms of the acquisition, in September 2023 Lexington
Gold issued 36,129,032 new common shares (the "Initial Consideration Shares")
to settle £2.24 million, representing 35 per cent. of the maximum Lexington
Gold Equity of up to £6.4 million to be paid as consideration under the WRE
Acquisition and Loan Agreements.
The Initial Consideration Shares were issued at a price of 6.20 pence per new
common share (the "Issue Price") based on the 30-day VWAP to Tuesday,
5 September 2023 being 2 business days prior to the announcement of
7 September 2023.
In May 2024, further to the renewal of the Jelani Resources Prospecting Right,
a further tranche of 25,806,451 new common shares (the "Initial Deferred
Consideration Shares") were issued at the Issue Price in respect of the
aforementioned Lexington Gold Equity.
The balance of the consideration due under the WRE Acquisition and Loan
Agreements is to be settled by way of the issue of further new common shares
in Lexington Gold at the Issue Price based on certain milestones being
achieved, namely:
Lexington Gold Equity
% No. of common shares Milestone event
20% 20,645,162 Later of 30 November 2023 and the date of renewal of three of the Prospecting
Rights split, 10%, 8% and 2% respectively between the three Prospecting Rights
concerned.
20% 20,645,161 Receipt of Ministerial Consent.
In September 2023, Mark Creasy also invested an amount of £100,000 by way of
a subscription for 1,666,666 new common shares (the "Creasy Subscription
Shares") and 1,666,666 associated Fundraising Warrants on the same commercial
terms as the Company's approximate £2.5 million equity fundraising announced
on 10 July 2023.
Table 1 below shows the current status of WRE's Prospecting licences and
Prospecting Right applications.
Table 1: WRE's Prospecting Licences and Prospecting Right Applications
Project Tenement Area (hectares "ha") Status Expiry date
Jelani Resources FS 30/5/1/1/2/10350(10627) PR 956.76 Renewal Granted 26-May-26(1)
Kroonstad FS 30/5/1/1/2/889(10637) PR 13,845.77 Renewal under appeal (2)
Kroonstad FS 30/5/1/1/2/10520(10643) PR 12,429.45 Renewal under appeal (2)
Kroonstad FS 30/5/1/1/2/10519(10684) PR 22,193.1 Renewal Granted 29-May-27
New Kroonstad North FS 30/5/1/1/2/10696 PR 18,340.46 New Application Accepted ( 3)
Bothaville FS 30/5/1/1/2/10273(10578) PR 9,510 Withdrawn (See FS10695 PR) 03-Mar-24
Bothaville FS 30/5/1/1/2/10274(10579) PR 9,119.58 Withdrawn (See FS10695 PR) 17-Mar-24
New Bothaville Cons FS 30/5/1/1/2/10695 PR 18,627.20 New Application Accepted (4)
Ventersburg FS 30/5/1/1/2/888(10686) PR 8,418.7 Renewal Granted 16-April-27 (1)
Ventersburg FS 30/5/1/1/2/10489(10687) PR 8,965.9 Renewal Granted 16-April-27 (1)
Ventersburg FS 30/5/1/1/2/10528(10701) PR 2,248.6 Executed (Renewal Lodged and pending) 21-Aug-24
Oribi FS 30/5/1/1/2/10486 PR 6,795 Executed 18-Dec-24
Klerksdorp NW 30/5/1/1/2/11335(13484) PR 1,816.9 Renewal under appeal (2)
Active licences total (ha):(*) 114,637.84
Notes:
* - excluding the two withdrawn Bothaville applications as detailed above.
(1) In South Africa renewals are for 3 years from granting of renewal rights.
(2) Renewals under appeal by WRE following an initial refusal due to technical
non-compliance of original renewals previously submitted by WRE. New
applications by Reef Exploration, a subsidiary of Lexington Gold South Africa
have also been submitted over the same areas.
- In respect of Kroonstad (FS 889 PR), Reef Exploration lodged an
application under DMRE reference FS 30/5/1/1/10677 PR to secure the area
pending the appeal process.
- In respect of Kroonstad (FS 10520 PR), Reef Exploration lodged
an application under DMRE reference FS 30/5/1/1/10681 PR to secure the area
pending the appeal process.
- In respect of Klerksdorp (NW 11335 PR), Reef Exploration lodged
an application under DMRE reference NW 30/5/1/1/13963 PR to secure the area
pending the appeal process.
(3) New areas adjacent to the existing Kroonstad Rights have been identified
to be of interest for additional exploration. An application for a prospecting
right was lodged by WRE. The application was accepted and is being processed.
(4) To re-secure the two Bothaville prospecting areas which expired after
their 3-year period, Reef Exploration, a subsidiary of Lexington Gold South
Africa, lodged a consolidated application for a prospecting right in respect
of both areas. The application was accepted and is being processed.
Further to Lexington Gold South Africa's receipt of its interest in WRE, the
procedural application for Ministerial Consent in respect of the transaction
was made and the parties to the WRE Acquisition and Loan Agreements agreed an
extension to the deadline for obtaining such consent to 31 August 2024 or such
later date as may be further agreed between the parties.
The Initial Consideration Shares, the Initial Deferred Consideration Shares
and future issues of Lexington Gold Equity are subject to a 12 month lock-up
from their date of issue and thereafter to a further 12-month orderly market
arrangement via Lexington Gold's brokers.
In October 2023, warrants to subscribe for a total of 3,268,485 new common
shares were exercised by their holder at a price of 2.75 pence per share with
the Company receiving approximately £90k.
5. Post-year end Events
2024 to date has seen continued momentum with several significant developments
as follows:
USA Operations:
Jennings-Pioneer Drilling: 495m drill programme comprising three diamond core
holes completed targeted at exploring the extension of gold mineralisation
adjacent to Barite Hill. Assay results received and announced in June 2024,
yielded promising extensions of the Barite Hill Trend gold mineralisation. The
findings indicated the presence of substantial gold mineralisation and
tellurium mineralisation as well as the potential for further discoveries. In
summary:
· Assays results from 495m of drill core from three drill holes
confirmed the along strike and down plunge continuation of the Barite Hill
Trend gold mineralisation
· All three mineralised zones of the Barite Hill trend were
successfully intersected, namely the Middle Ore Zone, the Foot Wall Ore Zone
and the Red Hill Ore Zone
· Multi-element assays, geologic logs, and core photos from this latest
drill programme have been used to update and expand the Company's explicit
geologic model for the Barite Hill Trend.
South African Operations:
Bothaville Project Progress: Drilling activities at Bothaville, completed in
early 2024, have not only expanded our geological data but also indicated the
presence of mineralisation in new zones. These findings will play a crucial
role in our ongoing exploration strategy and we are confident that continued
exploration will serve to further define and expand this promising gold system
and the larger Bothaville Project. In summary:
· Three of the four holes were completed successfully with a total of
eight intersections of the A-Reef from three motherholes and five deflections
· The latest drilling has proven the concept of A-Reef channels
occurring at Bothaville and has provided significantly more information on the
presence and orientation of one such channel first intersected by historic
third party drilling
· The three new successful drillholes intersected gold mineralisation
approximately 250m towards the NW, NE and SE of the historical drillholes,
thereby significantly expanding the potential area of mineralisation and
indicating a possible significant gold system.
Renewal of Jelani Resources Licence: The renewal of the Jelani Resources
Prospecting Right until May 2026 is a testament to our commitment to long-term
value creation and strengthens our position in the region.
As announced on 13 May 2024, the renewal of the Jelani Resources Prospecting
Right was a milestone for the issue of, in aggregate, 25,806,451 deferred
consideration shares in respect of the Company's acquisition of WRE such that
the following new common shares were issued:
· 19,387,703 shares to Mark Creasy or his nominee; and
· 6,418,748 shares to Sunswell Holdings Pty Limited ("Sunswell") or its
nominees.
Accordingly, further to the issue of such shares:
· Mr Creasy and his nominees are interested, in aggregate, in
53,254,768 common shares representing approximately 13.35 per cent. of the
Company's enlarged issued share capital; and
· Freefire Technology Ltd, one of Sunswell's nominees owns 15,250,947
common shares representing approximately 3.82 per cent. of the Company's
enlarged issued share capital.
Warrant Trading Facility: On 6 June 2024, the Company announced that its
existing unlisted 10 pence warrants expiring on 20 July 2026, were being
admitted to trading on JP Jenkins' matched bargain securities platform. This
facility provides warrant holders with an efficient and accessible venue to
potentially trade their securities.
These further developments underscore Lexington Gold's operational
capabilities and strategic approach to maximising the value of its project
portfolio. We look forward to announcing further growth and success in the
coming years.
Bernard Olivier
Chief Executive Officer
26 June 2024
Financial Statements
Lexington Gold Ltd
Consolidated statement of profit or loss and other comprehensive income
for the Year Ended 31 December 2023
(Audited)
2023 2022
US$'000 US$'000
CONTINUING OPERATIONS
Other income - -
Operating expenses (770) (708)
Operating loss (770) (708)
Fair value gain/(loss) on derivative liability 703 (149)
Net finance income/(cost) 6 (67)
Loss before taxation (61) (924)
Income tax charge - -
(61) (924)
Loss for the year
Attributable to:
Equity owners of the parent 50 (924)
Non-controlling interest (111) -
Other comprehensive income
Loss for the year (61) (924)
Items that may be reclassified to profit or loss:
Exchange losses arising on translation of foreign operations (87) -
(148) (924)
Total comprehensive loss for the year
Attributable to:
Equity owners of the parent (46) (924)
Non-controlling interest (102) -
(148) (924)
Total comprehensive loss for the year
Profit/(loss) per share attributable to the owners of the parent during the
year
Basic profit/(loss) per share from continuing operations (US cents/share) 0.02 (0.35)
Diluted profit/(loss) per share from continuing operations (US cents/share) 0.01 (0.35)
The above Consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes in the
Company's full Annual Report and Financial Statements.
Lexington Gold Ltd
Consolidated statement of financial position
as at 31 December 2023
(Audited)
2023 2022
US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 15,490 4,556
Total non-current assets 15,490 4,556
Current assets
Other receivables 79 74
Restricted cash and cash equivalents 45 -
Cash and cash equivalents 2,617 424
Total current assets 2,741 498
Total assets 18,231 5,054
Equity
Share capital 1,121 851
Share premium 65,425 60,163
Shares to be issued 5,058 -
Share option reserve 651 651
Foreign currency translation reserve (98) (2)
Accumulated loss (57,624) (57,674)
Total equity attributable to equity owners of the parent 14,533 3,989
Non-controlling interest 2,633 970
Total equity 17,166 4,959
Current liabilities
Trade and other payables 673 95
Borrowings - -
Derivative liability 392 -
Total current liabilities 1,065 95
18,231 5,054
Total equity and liabilities
The above Consolidated statement of financial position should be read in
conjunction with the accompanying notes in the Company's full Annual Report
and Financial Statements.
Lexington Gold Ltd
Consolidated statement of cash flows
for the Year Ended 31 December 2023
(Audited)
2023 2022
US$'000 US$'000
Cash flows from operating activities
Cash utilised by operations (742) (684)
Interest received 13 -
(729) (684)
Net cash flows utilised in operating activities
Cash flows from investing activities
Payments for exploration (493) (792)
Acquisition of subsidiary, net of cash (287) -
(780) (792)
Net cash flows utilised by investing activities
Cash flows from financing activities
Proceeds from issue of shares 3,432 579
Share issue cost (163) (26)
Proceeds from borrowings 525 -
Proceeds from convertible loans - 416
3,794 969
Net cash flows generated from financing activities
Net increase/(decrease) in cash and cash equivalents 2,285 (507)
Movement in cash and cash equivalents
Net foreign currency exchange losses (92) (22)
At the beginning of the year 424 953
Net increase/decrease in cash and cash equivalents 2,285 (507)
2,617 424
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 and six gold
projects covering approximately 114,638 hectares in South Africa.
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 2023, the Group recorded a loss of US$0.1
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 these
accounts. 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 such 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 £2.5 million
gross equity fundraise and conversion of certain loans on 10 July 2023;
· The Directors are confident that they will be able to raise
additional funds to satisfy the Group's cash requirements as and when
necessary; 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 annual report 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 2023 or 31
December 2022 but is derived from those financial statements. The auditors
have reported on the 2023 and 2022 financial statements which carried
unqualified audit reports. The 2023 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 2022 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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