REG - Lexington Gold Ltd - Interim Results
30/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240930:nRSd1602Ga&default-theme=true
RNS Number : 1602G Lexington Gold Limited 30 September 2024
30 September 2024
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Interim Consolidated Results for the half-year ended 30 June 2024
Lexington Gold (AIM: LEX), the gold exploration and development company with
projects in South Africa and the USA, is pleased to announce its unaudited
interim consolidated results for the six-month period to 30 June 2024 ("H1
2024" or the "Period").
Highlights:
Operational
Bothaville Project (SA)
· Successfully completed 2,355 m of drilling comprising a total of
four mother holes and five deflections
· Initial observations indicate the potential presence of
mineralisation in three of the mother holes
· Drilling programme has significantly expanded the potential area
of mineralisation and indicated a possible significant gold system
· During the period the core from the final two holes was logged,
cut and sampled in preparation for submission to SGS Laboratory Services for
assay analysis
Jelani Resources JV Project (SA)
· The successful renewal of the Jelani Resources licence until May 2026
triggered the issuance of an initial tranche of 25,806,451 deferred
consideration shares as part of the terms of the White Rivers Exploration
Proprietary Limited ("WRE") acquisition, predominantly to Mark Creasy/his
nominees
Jennings-Pioneer Project ("Jennings-Pioneer") (USA)
· Completed 495 m of diamond drilling at Jennings-Pioneer
comprising three diamond core holes to test for gold mineralisation adjacent
to the historic Barite Hill Main open pit gold-silver mine
· All three target 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
· Assay results from the drill core confirmed the strike and down
plunge continuation of the Barite Hill Trend gold mineralisation onto the
Jennings-Pioneer Project area
· Significant intercepts from drill core gold (Au) and Tellurium
(Te) assays include:
o Hole JP24-2: 23 m at 1.14 g/t Au from 127 m to 150 m including:
§ 10 m at 2.11 g/t Au from 127 m to 137 m
§ 2 m at 5.66 g/t Au from 133 m to 135 m
o Hole JP24-3: 39 m at 0.80 g/t Au and 60.49 ppm (60.49 g/t) Te from 14 m
to 53 m including:
§ 11 m at 1.03 g/t Au and 79.54 ppm (79.54 g/t) Te from 42 m to 53 m
Post Period End
· Announced formal adoption and release of the Independent JORC (2012)
Mineral Resource Estimate for the Jelani Resources Joint Venture (JV) project
· Total combined Inferred, Indicated and Measured JORC (2012) Mineral
Resource Estimate of 6.02 Moz of gold with an average grade of 6.47 g/t gold
comprising of:
o 4.88 Moz at 6.48 g/t gold located in the Buffer Zone; and
o 1.14 Moz at 6.41 g/t gold located in the JV area
Financial Summary
· Net loss for H1 2024 from continuing operations was US$0.3m (H1 2023:
US$0.4m)
· Total assets were US$17.8m as at the half-year end (31 December 2023:
US$18.2m)
· Cash position of US$1.5m as at the half-year end (31 December 2023:
US$2.6m)
· Total liabilities of US$0.9m as at the half-year end (31 December
2023: US$1.1m)
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
Peterhouse Capital Limited (Broker) www.peterhousecap.com (https://peterhousecap.com/)
Duncan Vasey / Lucy Williams (Broking) T: +44 207 469 0930
Eran Zucker (Corporate Finance)
Yellow Jersey PR Limited (Financial Public Relations) www.yellowjerseypr.com (http://www.yellowjerseypr.com)
Charles Goodwin / Annabelle Wills 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 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.
Chairman's Statement
I am pleased to present Lexington Gold's unaudited interim consolidated
results for the six-month period ended 30 June 2024 and to report on the
group's ongoing activities to the date of this statement.
Despite capital markets remaining difficult for junior mining companies, we
have made encouraging progress during the first half of the year in terms of
deploying capital efficiently to advance our exploration projects and build
asset value.
In the USA, we completed a drilling programme at our Jennings-Pioneer project
in South Carolina, targeting gold mineralisation adjacent to Barite Hill.
Assay results were promising and showed extensions of the Barite Hill Trend
gold mineralisation, further highlighting the potential of this exploration
area.
Since our acquisition of WRE, we have been clear about the potential of the
extensive gold deposits in South Africa's Witwatersrand Basin. In the period,
we made good progress at our Bothaville Project after completing a drill
programme with assay results confirming the presence of a potentially
significant gold system. The results enhanced our existing geological data and
expanded potential mineralisation zones.
In May 2024, Lexington Gold successfully renewed the Jelani Resources licence
until May 2026, which triggered the issuance of an initial tranche of deferred
consideration shares in connection with the WRE acquisition. This was an
important milestone in the ongoing development of the Jelani Resources JV and
our relationship with Harmony Gold.
In relation to our circa £2.5 million (gross) fundraising in July 2023, our
unlisted 10 pence warrants, expiring in July 2026, were admitted to JP
Jenkins' matched bargain platform in order to provide an accessible trading
venue for our warrant holders.
Lexington Gold has made great strides with its multi-project portfolio as the
price of gold has continued to surge. The value of this precious metal has
soared to over US$2,600 per troy ounce, spurred on by high demand among Asian
consumers, buying by central banks keen to diversify away from the US dollar
amid geopolitical uncertainty, and expectations of lower US interest rates. We
look forward to making further progress with our projects in both the USA and
South Africa as we continue to unlock value and build our mineral resources.
Mr Edward Nealon
Non-Executive Chairman
30 September 2024
Chief Executive's Operational and Financial Review
1. Overview
Lexington Gold continued to successfully advance its exploration activities
during the first half of 2024, with efforts focused at its Bothaville project
in South Africa and Jennings-Pioneer project on the Carolina Slate Belt, USA.
The South African assets acquired through WRE, in early September 2023, have
added an exciting and potentially highly valuable dynamic to our portfolio.
Having commenced in December last year, our initial drill programme at the
Bothaville project was successfully completed in May 2024. This delivered
highly encouraging assay results as we continue to build our database and
understanding of the project.
In May 2024, the Company also renewed its Jelani Resources Prospecting Right
until May 2026. The Jelani Resources JV project is a major part of our South
African portfolio, and we are committed to its further progress. The licence
renewal led to the issue of an initial tranche of deferred consideration
shares in line with the terms of the acquisition of WRE.
Following signing of a new drilling contract with Logan Drilling Group, we
also completed a drilling programme at our Jennings-Pioneer project. This
generated some excellent results which have reinforced our commitment to
advancing the project and our broader USA exploration portfolio.
Momentum has continued into the second half with the recent authorisation and
announcement of the Independent JORC (2012) Mineral Resource Estimate for the
Jelani Resources JV project prepared in August 2018.
2. Financial Performance
· Net loss for H1 2024 from continuing operations was US$0.3m (H1 2023:
US$0.4m)
· Total assets were US$17.8m as at the half-year end (31 December 2023:
US$18.2m)
· Cash position of US$1.5m as at the half-year end (31 December 2023:
US$2.6m)
· Total liabilities of US$0.9m as at the half-year end (31 December
2023: US$1.1m)
3. Dividend
The directors have not declared a dividend (2023: Nil).
4. Operational and Corporate Activities
During the first half of 2024, Lexington Gold conducted a series of
exploration activities on its existing portfolio projects as follows:
South African Projects
Bothaville project
Lexington Gold began the period with the continuation of its drilling
programme at the Bothaville project located in the Witwatersrand Gold Basin,
South Africa. The percussion drilling phase, which is crucial for
cost-effective penetration of the overlying Karoo sediments, was then
successfully completed by the end of January.
In late February, Lexington Gold announced that it had completed the first two
diamond drill holes and four associated deflections. Both drill holes and
their deflections were successful in intersecting the targeted Kimberley
Formation, including the A-Reef. Initial inspections of the core showed signs
of mineralisation in both holes, indicating the potential presence of gold.
In May, Lexington Gold confirmed that it had completed four drillholes,
totalling 2,355 m of drilling. This comprised 1,433 m of percussion drilling
through the overburden and 922 m of core 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. Due to the presence of an
unexpected geological structure the fourth hole was abandoned before it could
intersect the A-Reef.
The drilling was undertaken to test for a gold-bearing channel at shallow
depth in the target A-Reef horizon at Bothaville, as postulated by the
drilling of two historic holes, which returned 7.1 g/t Au over 71 cm and 5.53
g/t over 77 cm, respectively.
The drilling proved the concept of A-Reef channels occurring at Bothaville. It
also provided significantly more information on the presence and orientation
of one such channel first intersected by historic third-party drilling. Three
new successful drillholes intersected gold mineralisation approximately 250 m
towards the north west, north east and south east of the historical
drillholes. This has considerably expanded the potential area of
mineralisation and indicated the possibility of a significant gold system.
Key intercepts included 1.2 g/t Au and 111 cmg/t over 92.7 cm from
275.89 m (Hole CD03D2) and 0.76 g/t and 160 cmg/t over 209 cm from
442.68 m (Hole CD02AD1).
The new drillholes only tested a localised portion of the entire Bothaville
project site which covers an area of over 180 km(2). Historical drilling
identified other areas with significant gold mineralisation such that the
overall project represents a sizeable gold exploration opportunity.
Jelani Resources JV project
In May, Lexington Gold announced the renewal of the Jelani Resources
Prospecting Right until May 2026. This is a testament to our commitment to
long-term value creation and strengthens our position in the region.
The licence covers an area of approximately 956 hectares adjacent to Harmony
Gold's Target Mine in the north-western portion of the Welkom Gold Fields. An
historic independently estimated resource, formally adopted and released post
the reporting period, suggests a potential 6.02 million ounces of gold at an
average grade of 6.47 g/t of which 4.88Moz at 6.48 g/t relates to a Buffer
Zone and 1.14 Moz at 6.41 g/t relates to the current JV area. The JV project
represents a significant component of our strategic asset base in South
Africa.
The renewal led to the issue of, in aggregate, an initial tranche of
25,806,451 deferred consideration shares in respect of the Company's
acquisition of WRE, as follows:
· 19,387,703 new common shares to Mark Creasy or his nominee; and
· 6,418,748 new common 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.
USA Projects
During the period, activity in the USA was focused on our Jennings-Pioneer
project in South Carolina. Having commenced a drilling programme at the end of
2023, this was duly completed with the corresponding assay results showing
promising extensions of the Barite Hill Trend gold mineralisation. These
results validated our geological models and reaffirmed the potential of our
regional exploration strategy. We continue to have excellent relations with
our US partners, URI and Carolina Gold Resources, and have agreed with them an
extension of three months to the period in which we are due to meet certain
Minimum Funding Contributions in respect of the GAR Projects (see note 9).
Jennings-Pioneer project
In March, the Company announced signing of a new drilling contract with Logan
Drilling Group. The agreement related to the commencement of our 2024 drilling
programme at the Jennings-Pioneer project on the Carolina Slate Belt. Drilling
was concluded in April for a total of 495 m comprising three diamond core
holes as part of testing for gold mineralisation adjacent to the historic
Barite Hill Main open pit gold-silver mine. The drilling targeted three
distinct gold ore zones that lie along and marginal to the contact between the
Lower Pyroclastic Unit and the Upper Pyroclastic Unit of the Persimmon Fork
Formation.
In mid June, we received the assay results for the three drill holes which
confirmed the along strike and down plunge continuation of the Barite Hill
Trend gold mineralisation onto the Jennings-Pioneer project area.
All three target 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.
Massive sulphides, semi-massive sulphides and associated quartz barite veins
were found in all three drill holes.
Significant intercepts from drill core gold (Au) and Tellurium (Te) assays
included:
· Hole JP24-2: 23 m at 1.14 g/t Au from 127 m to 150 m including:
o 10 m at 2.11 g/t Au from 127 m to 137 m
o 2 m at 5.66 g/t Au from 133 m to 135 m
· Hole JP24-3: 39 m at 0.80 g/t Au and 60.49 ppm (60.49 g/t) Te from
14 m to 53 m including:
o 11 m at 1.03 g/t Au and 79.54 ppm (79.54 g/t) Te from 42 m to 53 m
Potential by-product intercepts from drill core Ag, Cu and Zn assays included:
· Hole JP24-1: 10 m at 1.33% Zn, 22.17 g/t Ag and 0.11 g/t Au
· Hole JP24-2: 6 m at 0.52% Cu, 13.16 g/t Ag and 0.35 g/t Au
Trading facility for unlisted Warrants
In June 2024, Lexington Gold announced the admission of its existing unlisted
10 pence warrants expiring on 20 July 2026 to trading on JP Jenkins'
securities matching platform. The warrants were issued to the participants in
the Company's circa £2.5 million (gross) fundraise in July 2023, affording
the holders the opportunity to subscribe for up to a further 41,938,334 new
common shares at a price of 10 pence per share.
5. Post Period End
In mid September 2024, we were pleased to announce the formal adoption of the
Independent JORC (2012) Mineral Resource Estimate for our Jelani Resources JV
project. The JV is between Lexington Gold's subsidiary, WRE, and certain of
Harmony Gold's subsidiaries, being the largest gold mining company in South
Africa.
The estimate, prepared as at 27 August 2018, detailed a total combined
Inferred, Indicated and Measured JORC (2012) Mineral Resource Estimate of
6.02 Moz of gold with an average grade of 6.47 g/t comprising of:
· 4.88 Moz at 6.48 g/t gold located in the Buffer Zone; and
· 1.14 Moz at 6.41 g/t gold located in the JV area.
Accordingly, the net attributable ounces to Lexington Gold's effective 76%
interest in the current JV area are 0.56 Moz of gold, potentially increasing
to 2.24 Moz of gold should the JV parties proceed to future production, on a
revised ownership interest of 49% for WRE, with the Buffer Zone then included
as part of such arrangement.
This significant resource underlines the vast potential of both the Jelani
Resources JV project and Lexington Gold's South African assets as a whole.
Dr Bernard Olivier
Chief Executive Officer
30 September 2024
Interim Consolidated Financial Statements
Lexington Gold Ltd
Condensed Consolidated Statement of Profit and Loss and Other Comprehensive
Income
For the Half-Year ended 30 June 2024
(Unaudited)
Unaudited Unaudited
Notes Six months ended 30 June 2024 Six months ended 30 June 2023
$'000 $'000
CONTINUING OPERATIONS
Operating expenses 3 (416) (397)
Fair value gain on derivative liability 135 -
Net finance income/(cost) 5 (5)
Loss before income tax (276) (402)
Income tax credit/(charge) - -
(276) (402)
Loss for the period
Other comprehensive income
Loss for the period (276) (402)
Items that may be reclassified to profit or loss:
Foreign currency reserve movement 22 (6)
(254) (408)
Total comprehensive loss for the period
Loss per share attributable to the owners of the parent
Basic and diluted loss per share from continuing operations (cents per share) 4 (0.02) (0.14)
The accompanying notes form part of these financial statements.
Lexington Gold Ltd
Consolidated Statement of Financial Position
As at 30 June 2024 (Unaudited)
Unaudited Audited
Notes 30 31 December 2023
June
2024
$'000 $'000
Non-current assets
Exploration and evaluation assets 5 16,223 15,490
Total non-current assets 16,223 15,490
Current assets
Other receivables 35 79
Restricted cash and cash equivalents 47 45
Cash and cash equivalents 1,482 2,617
Total current assets 1,564 2,741
17,787 18,231
Total assets
Equity
Share capital 1,198 1,121
Share premium 67,293 65,425
Shares to be issued 6 3,113 5,058
Share option reserve 651 651
Foreign currency translation reserve (88) (98)
Accumulated loss (57,698) (57,624)
Total equity attributable to equity owners of the parent 14,469 14,533
Non-controlling interest 2,443 2,633
Total equity 16,912 17,166
Current liabilities
Trade and other payables 618 673
Derivative liability 7 257 392
Total current liabilities 875 1,065
17,787 18,231
Total equity and liabilities
The accompanying notes form part of these financial statements.
Lexington Gold Ltd
Consolidated Statement of Changes in Equity
For the Half-Year Ended 30 June 2024
(Unaudited)
Issued share capital Share premium Shares to be issued Share option reserve Foreign currency trans-lation reserve Accumu- Total equity attribu-table to share-holders Non-controlling interest Total equity
lated
loss
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Six months ended 30 June 2024 (unaudited)
At start of period 1,121 65,425 5,058 651 (98) (57,624) 14,533 2,633 17,166
Total comprehensive loss for the period - - - - 10 (74) (64) (190) (254)
Loss for the period - - - - - (74) (74) (202) (276)
Foreign exchange gain on translation - - - - 10 - 10 12 22
Contingent shares issued 77 1,868 (1,945) - - - - - -
1,198 67,293 3,113 651 (88) (57,698) 14,469 2,443 16,912
At end of period
Six months ended 30 June 2023 (unaudited)
At start of period 851 60,163 - 651 (2) (57,674) 3,989 970 4,959
Total comprehensive loss for the period - - - - (6) (402) (408) - (408)
Loss for the period - - - - - (402) (402) - (402)
Foreign exchange loss on translation - - - - (6) - (6) - (6)
851 60,163 - 651 (8) (58,076) 3,581 970 4,551
At end of period
The accompanying notes form part of these financial statements.
Lexington Gold Ltd
Consolidated Statement of Cash Flows
For the Half-Year Ended 30 June 2024
(Unaudited)
Unaudited Unaudited
Notes Six months ended 30 June 2024 Six months ended 30 June 2023
$'000 $'000
Cash flows used in operating activities
Cash absorbed by operations 8 (409) (403)
Interest received 5 1
Net cash used in operating activities (404) (402)
Cash flows used in investing activities
Payments for exploration (676) (267)
Net cash used in/by investing activities (676) (267)
Cash flows from financing activities
Proceeds from borrowings - 525
Net cash generated from financing activities - 525
Net decrease in cash and cash equivalents (1,080) (144)
Movement in cash and cash equivalents
Exchange (losses)/gains (55) 4
At the beginning of the period 2,617 424
Decrease (1,080) (144)
1,482 284
At the end of the period
The accompanying notes form part of these financial statements.
Lexington Gold Ltd
Notes to the interim consolidated financial information
For the Half-Year Ended 30 June 2024
(Unaudited)
1. Basis of preparation
The unaudited interim consolidated financial information set out above, which
incorporates the financial information of the Company and its subsidiary
undertakings (the "Group"), has been prepared using the historical cost
convention and in accordance with International Financial Reporting Standards
("IFRS") and with those parts of the Bermuda Companies Act, 1981 applicable to
companies reporting under IFRS.
These interim consolidated results for the six months ended 30 June 2024 are
unaudited and do not constitute statutory accounts as defined in section 87A
of the Bermuda Companies Act, 1981. The unaudited interim consolidated
financial information does not include all of the information required in
annual financial statements in accordance with IFRS and should be read in
conjunction with the financial statements for the year ended 31 December 2023.
The financial statements for the year ended 31 December 2023 have been
delivered to the Registrar of Companies and the auditors' report on those
financial statements was unqualified but contained an emphasis of matter
paragraph on going concern.
2. Going concern
For the period ended 30 June 2024, the Group recorded a loss of US$0.3 million
(H1 2023: US$0.4 million) and had net cash outflows from operating activities
of US$0.4 million (H1 2023: US$0.4 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 group'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 an approximate £2.5
million gross equity fundraise and the 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. This financial 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.
3. Operating expenses
Unaudited Unaudited
Six months ended 30 June 2024 Six months ended 30 June 2023
$'000 $'000
Directors' emoluments and fees (110) (98)
Net foreign exchange (loss)/gain (20) 3
Office expenses (29) (23)
Professional and other services (241) (230)
Other expenses (16) (49)
(416) (397)
Total operating expenses
4. Basic and diluted loss per share
The calculation of basic and diluted loss per share for the six months ended
30 June 2024 was based on the loss attributable to common shareholders from
continuing operations of US$74,000 (H1 2023: US$402,000) and a weighted
average number of common shares outstanding of 389,556,163 (H1 2023:
283,102,002).
The diluted loss per share and the basic loss per share are recorded as the
same amount as conversion of share options, warrants and contingent shares
decreases the basic loss per share, thus being anti-dilutive.
5. Exploration and evaluation assets
Unaudited Audited
30 31 December 2023
June
2024
$'000 $'000
United States
Balance at beginning of period 4,960 4,556
Additions 360 404
5,320 4,960
South Africa
Balance at beginning of period 10,530 -
Acquired - 10,256
Additions 316 89
Foreign currency 57 185
10,903 10,530
16,223 15,490
Total at the end of the period
United States
The amount relates to exploration and development activities in respect of the
Group's 51% investment in four diverse gold projects, covering a combined area
of over 1,675 acres in North and South Carolina, USA.
The projects are situated in the highly prospective Carolina Super Terrane
("CST"), which has seen significant historic gold production and is host to a
number of multi-million-ounce mines operated by majors and was also the site
of the first US gold rush in the early 1800s, before gold was discovered in
California.
In order for the Company to retain its 51% membership interests in the four
projects, it has to make certain Minimum Funding Contributions in respect of
each of the projects in each of the four years and throughout the four-year
period following its re-admission to AIM in November 2020, in an aggregate
amount of AU$5 million (the "Minimum Funding Contributions"). The Minimum
Funding Contributions are further detailed in Note 9 which have been met to
date.
In the event that the Minimum Funding Contributions are not satisfied by the
Company, Uwharrie Resources Inc. ("URI"), has the option to acquire the
Company's 51% interest in the relevant project for a nominal sum of AU$1.
South Africa
The amount relates to the Group's exploration and development activities in
respect of its six gold projects covering approximately 114,638 hectares in
South Africa assessing the Witwatersrand basin's significant gold potential.
The directors have assessed the value of the total exploration and evaluation
assets having considered any indicators of impairment, and in their opinion,
based on a review of future expected availability of funds to develop the
projects concerned and the intention to continue exploration and evaluation,
no impairment is necessary.
6. Shares to be issued
Unaudited Audited
30 31 December 2023
June
2024
$'000 $'000
Balance at beginning of period 5,058 -
Contingent issuable new Common Shares - 5,058
25,806,451 new Common Shares issued during the period - Allocated to share (1,945) -
capital and premium
3,113 5,058
On 7 September 2023, the Company announced the completion of its acquisition
of White Rivers Exploration Proprietary Limited ("WRE"), an exploration and
development company with significant gold assets in South Africa, for an
initial consideration comprising 36,129,032 fully paid new common shares (the
"Initial Consideration Shares") in Lexington Gold.
The Initial Consideration Shares were issued at a price of 6.20 pence per new
common shares (the "Issue Price") based on the 30-day VWAP to 5 September
2023.
Pursuant to the acquisition, contingent issuable new common shares, will fall
due to be issued at the Issue Price upon the achievement of the following
milestones:
Lexington Gold Equity
% No. of common shares Milestone event
45% 46,451,613* Later of 30 November 2023 and the date of renewal of four of the Prospecting
Rights split, 25%, 10%, 8% and 2% respectively between the four Prospecting
Rights concerned.
20% 20,645,161 Receipt of Ministerial Consent.
Note:
* - 25,806,451 of these shares (25%) were issued on 13 May 2024 pursuant to
the renewal of the Jelani Resources Prospecting Right as described below.
The fair value of the contingent consideration has been based on the
acquisition date share price (6.20 pence per share) and is deemed highly
likely to be issued. The potential obligation to issue shares is classified as
an equity instrument and recognised in the "shares to be issued" reserve.
As announced on 13 May 2024, the prospecting right owned by Jelani Resources
Proprietary Limited ("Jelani Resources") (the "Jelani Resources Prospecting
Right") was formally renewed until 29 May 2026.
The renewal of the Jelani Resources Prospecting Right was a milestone for the
issue of, in aggregate, 25,806,451 deferred consideration shares (the "Initial
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.
Further to the issue of the Initial Deferred Consideration Shares:
· Mr Creasy and his nominees, in aggregate, are currently interested 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 currently owns
15,250,947 common shares representing approximately 3.82 per cent. of the
Company's enlarged issued share capital.
7. Derivative liability
Unaudited Audited
30 31 December 2023
June
2024
$'000 $'000
Derivative liability from warrants
Balance at the beginning of the period 392 -
Warrant liability recognised at inception - 1,095
Change in fair value of warrants (135) (703)
257 392
In 2023, warrants were issued to fundraising participants, Edward Nealon and
Mark Creasy, allowing them to subscribe for new common shares at an exercise
price of 10 pence per share on a one-to-one basis. The warrants are
accounted for as liabilities as the Company concluded that the warrants failed
to meet the fixed for fixed criteria as the exercise price is priced in pence
per share and the Company's functional currency is United States dollars.
The estimated fair value of the warrants was estimated using the
Black-Scholes-pricing model. The application of the Black-Scholes
option-pricing model requires the use of a number of inputs and assumptions.
The following reflects the inputs and assumptions:
30 31 December 2023 7 September 2023 8
June July
2023
2024
Share price 4.2 pence 4.2 pence 6 pence 5.9 pence
Exercise price 10 pence 10 pence 10 pence 10 pence
Risk-free interest rate 3.9 % 3.9 % 3.9 % 3.9 %
Expected terms (in years) 2.05 years 2.55 years 2.87 years 3 years
Expected dividend yield 0 % 0 % 0 % 0 %
Expected volatility 57.5 % 59.9 % 60.7 % 62.1 %
8. Cash absorbed by operations
Unaudited Unaudited
Six months ended 30 June 2024 Six months ended 30 June 2023
$'000 $'000
Loss before income tax (276) (402)
Adjusted for:
§ Fair value gain on derivative liability (135) -
§ Finance (income)/cost (5) 5
§ Net foreign exchange difference 20 (3)
Cash from operations before working capital changes (396) (400)
Working capital changes:
Trade and other receivables 44 (49)
Trade and other payables (57) 46
(409) (403)
Cash absorbed by operations before interest and tax
9. Commitments and contingencies
United States projects
Lexington Gold is required to pay conditional deferred consideration, of, in
aggregate, AU$1.5m (being the Tranche 1 Deferred Consideration if the Tranche
1 Performance Milestone detailed below is met) and the sum of, in aggregate,
AU$3.0m (being the Tranche 2 Deferred Consideration if the Tranche 2
Performance Milestone detailed below is met) to the Sellers and Uwharrie
Resources Inc. ("URI"), in cash or common shares at the Company's sole
discretion, subject to the achievement by the Group of the Tranche 1
Performance Milestone and Tranche 2 Performance Milestone or the occurrence of
certain Vesting Events within five years of completion of the Company's
acquisition of Global Asset Resources Ltd ("GAR").
The Tranche 1 Performance Milestone comprises confirmation by an independent
geologist and announcement by the Company of JORC 2012 compliant resources in
respect of any one of the GAR Projects (including any Additional Projects)
that are not Excluded Projects of at least:
a) 0.8 million ounces of gold at a grade of more than 1 g/t;
or
b) 0.6 million ounces of gold at a grade of more than 2.5 g/t;
or
c) 0.4 million ounces of gold at a grade of 5 g/t or more.
The Tranche 1 Deferred Consideration, payable within 21 business days of the
achievement of the Tranche 1 Performance Milestone or occurrence of certain
Vesting Events, comprises AU$1,299,000, payable in cash or common shares at
the Relevant Price (in whole or in part) at the Company's sole discretion, to
the Sellers; and AU$201,000, payable in cash or common shares at the Relevant
Price (in whole or in part) at the Company's sole discretion, to URI.
The Tranche 2 Performance Milestone comprises the commissioning from an
independent geologist, completion and announcement by the Company, in
accordance with the AIM Rules, of a pre-feasibility study in respect of any
one of the GAR Projects (including any Additional Projects) that are not
Excluded Projects confirming a pre-tax NPV of more than US$50m at a discount
rate of at least 8 per cent.
The Tranche 2 Deferred Consideration, payable within 21 business days of the
achievement of the Tranche 2 Performance Milestone or occurrence of certain
Vesting Events, comprises AU$2,598,000, payable in cash or common shares at
the Relevant Price (in whole or in part) at the Company's sole discretion, to
the Sellers; and AU$402,000, payable in cash or common shares at the Relevant
Price (in whole or in part) at the Company's sole discretion, to URI. If the
Tranche 1 Deferred Consideration has not previously been paid at the time of
achievement of the Tranche 2 Performance Milestone, the Tranche 1 Deferred
Consideration will also become payable in cash or common shares (at the
Company's sole discretion) at such time.
No provision has been made for the payment of the deferred consideration as
the Tranche 1 Performance Milestone and Tranche 2 Performance Milestone events
have not occurred. The Group's projects are in the exploration phase and
therefore it is not certain that an economic assessment of mineral potential
or a pre-feasibility study will be completed in the next few years, if at all.
The Joint Venture Implementation Deed between GAR, URI and Carolina Gold
Resources also sets out certain Minimum Funding Contributions in respect of
each of the GAR Projects to be provided by the Company in each of the four
years and throughout the four year period following Admission in order to
retain its 51 per cent. interest in the Projects which are summarised below.
In the event that the Minimum Funding Contributions are not satisfied by
Lexington Gold (on both an annual and overall basis), URI has the option to
acquire the Company's 51 per cent. membership interest (via GAR Holdings) in
the relevant Project SPV for a nominal sum of AU$1. Annual commitments have
been met to date. The Company similarly has the option to sell its 51 per
cent. membership interest in any of the GAR Projects to URI at any time during
the four-year period following Admission for AU$1 should the Board determine
that the Company no longer wishes to proceed with one or more of the GAR
Projects.
Minimum Funding Contributions for the Company to retain its 51 per cent.
membership interests
AU$
Minimum Minimum Minimum Minimum Minimum
Project Total Year 1 Year 2 Year 3 Year 4
JKL 1,500,000 250,000 150,000 150,000 150,000
Carolina Belle 1,500,000 250,000 100,000 100,000 100,000
Jennings-Pioneer 1,000,000 100,000 100,000 100,000 100,000
Argo 1,000,000 100,000 100,000 100,000 100,000
5,000,000 700,000 450,000 450,000 450,000
At the end of the initial four year period following Admission and
satisfaction of the Minimum Funding Contributions for a Project, if URI elects
not to fund its proportionate share of future costs or fails to make an
election then, in accordance with the terms of the Joint Venture
Implementation Deed, the Company will potentially be able to increase its
interest in each of the Project SPVs to 80 per cent. by meeting certain
further funding commitments in years 5 and 6 (on both an annual and overall
basis) following Admission (the "Extended Period").
Extended Period funding contributions in AU$ from the Company to acquire an
additional 29 per cent. membership interest and increase its total interest to
80 per cent. in its US Projects
Minimum Minimum Minimum
Project Total Year 5 Year 6
JKL 2,500,000 150,000 150,000
Carolina Belle 2,500,000 100,000 100,000
Jennings-Pioneer 1,500,000 100,000 100,000
Argo 1,500,000 100,000 100,000
8,000,000 450,000 450,000
If the Company does not meet the Extended Period funding contributions in
relation to a particular Project, it will retain its 51 per cent. initial
interest in such Project SPV.
In the event that the Company increases its interest in any of the Project
SPVs to 80 per cent. and URI elects not to fund its proportionate share of
future costs in respect of its then 20 per cent. residual interest in the GAR
Project concerned or fails to make an election, the Company is able to
increase its interest in the relevant Project to 100 per cent. by agreeing to
pay for the relevant Project a Net Smelter Royalty to URI of 0.5 per cent. for
future production up to 50,000 oz gold equivalent, 2.0 per cent. for future
production from 50,000 to 400,000 oz gold equivalent and 1.0 per cent. for
future production in excess of 400,000 oz gold equivalent.
10. Related parties
Identity of related parties
The Group has a related party relationship with its subsidiaries and key
management personnel.
Remuneration of key management personnel
Key management personnel are those persons having authority and responsibility
for planning, directing and controlling the activities of the entity, directly
or indirectly, including any director (whether executive or otherwise) of the
Group. Details of the nature and amount of each element of the remuneration
of each director of the Group during the period are shown in the table below:
Six months ended 30 June 2024
Directors' fees Executive fees ((1)) Total
US$ US$ US$
Edward Nealon 11,250 6,750 18,000
Bernard Olivier 11,250 51,750 63,000
Melissa Sturgess 11,250 - 11,250
Rhoderick Grivas 11,250 6,750 18,000
45,000 65,250 110,250
Six months ended 30 June 2023
Directors' fees Executive fees ((1)) Total
US$ US$ US$
Edward Nealon 11,250 6,750 18,000
Bernard Olivier 11,250 39,000 50,250
Melissa Sturgess 11,250 - 11,250
Rhoderick Grivas 11,250 6,750 18,000
45,000 52,500 97,500
((1) For duties as executive director and consulting.)
Current directors of the holding company and their close family members, as at
the date of these financial statements, control 4.41% (31 December 2023:
4.72%) of the voting shares of Lexington Gold.
Share options and warrants
On 4 December 2020, the Company granted, in aggregate, 19,610,910 options over
new common shares to its directors and senior managers exercisable at a price
of 2.75 pence per share (the "Options").
The Options vest in three equal tranches being: (i) one third on their date of
issue; (ii) one third on 25 November 2021; and (iii) one third on 25 November
2022, and are exercisable for a period of 10 years from their date of grant.
Details of the Options granted to directors are set out in the table below:
Directors Number of Options granted and resultant holding of Options
Edward Nealon 2,614,788
Bernard Olivier 4,140,081
Melissa Sturgess 2,614,788
Rhoderick Grivas 2,614,788
Total: 11,984,445
During the 2023 year, the Company issued warrants for the potential issue of
50,663,639 shares at an exercise price of 10 pence per share which expire on
20 July 2026. Details of warrants outstanding to directors are set out in the
table below:
Directors Number of warrants outstanding
Edward Nealon 3,667,691
Total: 3,667,691
11. Subsequent events
No significant events have occurred subsequent to the reporting date that
would have a material impact on the interim consolidated financial statements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SEUFUUELSELURecent news on Lexington Gold
See all newsREG - Lexington Gold Ltd - Drilling contract signed at Jennings-Pioneer
AnnouncementREG - AIM - AIM Notice - 24/04/2025
AnnouncementREG - Lexington Gold Ltd - Equity Fundraise and Broker Appointment
AnnouncementREG - Lexington Gold Ltd - Result of Annual General Meeting
AnnouncementRCS - Lexington Gold Ltd - U.S. Recognises Gold as a Strategic Mineral
Announcement