REG - Thor Explorations Ld - SECOND QUARTER 2023 FINANCIAL & OPERATING RESULTS
24/08/2023 07:00
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RNS Number : 2737K Thor Explorations Ltd 24 August 2023
NEWS RELEASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO U.S. WIRE SERVICES
August 24 2023 TSXV/AIM: THX
THOR EXPLORATIONS ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR THE THREE AND
SIX MONTHS ENDING JUNE 30, 2023
Thor Explorations Ltd. (TSXV / AIM: THX) ("Thor Explorations", "Thor" or the
"Company") is pleased to provide an operational and financial review for its
Segilola Gold mine, located in Nigeria ("Segilola"), and for the
Company's mineral exploration properties located in Nigeria, Senegal and
Burkina Faso for three ("Q2 2023" or the "Period") and six months to June 30,
2023 ("H1 2023").
The Company's Consolidated Condensed Interim Financial Statements together
with the notes related thereto, as well as the Management's Discussion and
Analysis for the three and six months ended June 30, 2023, are available on
Thor Explorations' website at https://thorexpl.com/investors/financials/
(https://thorexpl.com/investors/financials/) .
All figures are in US dollars ("US$") unless otherwise stated.
Operational Highlights for Q2 2023 and H1 2023
Production
· Gold production for the Period totaled 23,078 ounces ("oz") (H1
2023: 43,707 oz)
· All main operating units of the process plant continue to perform
better than expected, with the plant operating above nameplate capacity
o Several improvement projects at the process plant are being undertaken
through the remainder of 2023
· Three Loss Time Injuries ("LTIs") occurred in H1 2023, which
triggered an increase in training and workplace inspections to improve working
conditions
Exploration
· The Company has prioritized exploration within a 25-kilometre
("km") radius of Segilola with the key objective being to extend the life of
mine
· Four main advanced exploration targets that have been defined are
the Kola Prospect, Igila, Aye-Ile Western Prospects and Ijarigbe
· The Kola Prospect is located 23km south of Segilola and is a new
high-grade greenfield exploration discovery:
o Reverse Circulation drilling ("RC") was carried out at a low-level stream
sediment zone and showed initial positive results, which included 7 metres
("m") grading at 25.98 g/t gold in the near-surface weathered horizon and 4 m
at 30.17 g/t gold in the primary horizon
o Exploration testing of the general area is continuing and drilling
activities will continue through the remainder of the year
· The Igila Prospect is located 15km west of Segilola
o Exploration activities are ongoing and focused on delineating additional
strike length and identifying additional lodes
· The Aye-Ile Prospect is located 1.2km south-east from Igila
o Drill testing has focused on the anomalous auger geochemistry located a
north-east dipping vein-system that is developed on the same structural
orientation as Igila
· In Senegal, exploration activities at the Douta Project ("Douta")
have progressed throughout Q2 2023
Thor Lithium - Newstar Minerals Limited
· Thor, through its fully owned subsidiary Newstar Minerals Ltd,
acquired a significant tenure in south-west Nigeria that covers both known
lithium bearing, pegmatite deposits and a large, unexplored, prospective,
pegmatite-rich belt
· An initial drilling program is being undertaken on one of the
Company's prospects located in the West Oyo Project Area to confirm and
delineate lithium-bearing mineralisation, such as spodumene and lepidolite at
depth
· Post Period, the Company announced its initial results with the
below key highlights:
o 11m at 2.61% lithium oxide ("Li(2)O") from 15m
o 9m at 2.42% Li(2)O from 35m
o 11m at 1.53% Li(2)O from 14m, including 9m at 1.70% Li(2)O from 15m
o Spodumene is confirmed as the main lithium-bearing mineral, with minor
lepidolite and shallow mineralisation
Financial Highlights of the Period and H1 2023
· Q2 2023 revenue of US$41.3 million (Q2 2022: US$41.3 million) and
H1 2023 of US$81.7 million (H1 2022: US$66.2 million)
· Q2 2023 operating cost of US$942 per oz sold (Q2 2022: US$983 per
oz) and an all-in sustaining cost ("AISC") of US$1,230 per oz sold (Q2 2022:
US$1,236 per oz)
· Q2 2023 EBITDA of US$19 million (Q2 2022: US$17.7 million) and H1
2023 of US$35.1 million (H1 2022: US$31,1 million)
· Q2 2023 net profit of US$7.9 million (Q2 2022: US$6.7 million)
and H1 2023 of US$12.2 million (H1 2022: US$10.2 million)
· As of June 2023, the Company had cash of US$11.1 million (Q1
2023: US$4.5 million)
· Q2 2023 net debt of US$16.8 million (Q1 2023: US$24.9 million)
Environment, Social and Governance
· The Segilola HSE team commissioned a team of standby emergency
responders in Q2 2023, with 28 personnel specifically trained to respond to
emergency related, medical and operational situations at the SROL site
· The Company progressed its livelihood restoration programs for
the local communities
· Vegetable farms were completed in Q1 2023 and produced their
first crops and improved tomato species in Q2 2023, with commercial off-takers
purchasing the produce
· Fish farms in the local community neared completion in Q2 2023
with farming to commence in Q3 2023
· Improved cocoa species seedlings were issued to the local
community in Q2 2023 and training provided to the farmers to improve yields
and commercial returns
· In Senegal, community projects undertaken included upgrading a
local school's facilities block, clearing land at a local cemetery and
providing a generator for the local police station.
Outlook
· Segilola production for the full year expected to be 85,000 oz
with AISC expectations maintained at US$1,150 - US$1,350 per oz
o Q3 2023 production is expected to be below original expectations at the
beginning of the financial year. However, Q4 gold production forecast remains
in-line with original expectations, with potential upside as mining conditions
continue to improve with the west wall push back nearing completion
· Continue to advance exploration programs across the portfolio,
including:
o Continuation of step-out drilling at Douta gold project in Senegal
o Continuation of drilling at Segilola gold regional targets
o Continuation of drilling at L06 lithium prospect in Nigeria
· Completion of the Douta preliminary feasibility study ("PFS") in
Q4 2023
Segun Lawson, President & CEO, stated:
"The second quarter of 2023 has seen good developments across Thor's project
portfolio. Operations are performing well, with the processing plant still
operating above nameplate design. The Company posted strong revenues for H1 of
US$81 million, with an EBITDA of US$35.1 million and a net profit of US$12
million for the same period.
"The Company expects to achieve its total material mined forecast for H2,
however grade control drilling for Q3 indicates a lower than forecast
recovered gold production for the period. While the Q4 gold production
forecast remains in-line with our original target, with potential upside as
mining conditions continue to improve as the west wall push back nears
completion, the Company considers it prudent to update guidance for 2023 to
85,000oz of recovered gold - the lower end of the previously announced range
for the full financial year.
"As we look to extend the life of mine at Segilola, Thor has located several
exploration targets within close proximity to the project. These exploration
targets are encouraging so far have demonstrated positive results from initial
exploration drilling activities. We plan to follow up with further drilling
activities in Q3 and Q4 2023. At Douta, Thor is making great progress towards
completing the PFS, which is scheduled to be completed in Q4 this year.
"With our strategy to identify high-value resource opportunities, Thor
acquired a significant tenure in south-west Nigeria, which is known for
lithium-bearing pegmatite deposits. An initial drilling program is being
undertaken on the West Oyo Project area, with the objective to confirm and
delineate lithium bearing mineralization. I am pleased to confirm that, post
period, the program confirmed spodumene as the main lithium-bearing mineral,
together with minor lepidolite. We will continue to explore the area and
believe this poses a great opportunity to increase shareholder value.
"We take the working conditions at our operations very seriously, and as such,
Thor has increased training and workplace inspections to improve working
conditions. The Segilola HSE team has also commissioned a team of standby
emergency responders during the Quarter, with 28 personnel specifically
trained to respond to emergency related, medical and operational situations at
the SROL site. The program comprised classroom and practical sessions on how
to respond to first aid cases, administering basic life support to unconscious
victims and emergency response planning and activation processes to ensure
there are fewer lost time injuries.
"The Company is in a good position to advance its projects in the next
quarter, with further developments made at its exploration prospects as well
as improvements in processing capabilities which should result in improved
production. I look forward to updating the shareholders on the developments
made in the next quarter."
About Thor Explorations
Thor Explorations Ltd. is a mineral exploration company engaged in the
acquisition, exploration, development and production of mineral properties
located in Nigeria, Senegal and Burkina Faso. Thor Explorations holds a 100%
interest in the Segilola Gold Project located in Osun State, Nigeria and has a
70% economic interest in the Douta Gold Project located in south-eastern
Senegal. Thor Explorations trades on AIM and the TSX Venture Exchange under
the symbol "THX".
THOR EXPLORATIONS LTD.
Segun Lawson
President & CEO
For further information please contact:
Thor Explorations Ltd
Email: info@thorexpl.com
Canaccord Genuity (Nominated Adviser & Broker)
Henry Fitzgerald-O'Connor / James Asensio
Tel: +44 (0) 20 7523 8000
Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield / Franck Nganou
Tel: +44 (0) 20 7907 8500
Fig House Communications (Investor Relations)
Tel: +1 416 822 6483
Email: investor.relations@thorexpl.com
Ibu Lawson (Investor Relations)
Tel: +447909825446
Email: ibu.lawson@thorexpl.com
BlytheRay (Financial
PR)
Tim Blythe / Megan Ray / Said Izagaren
Tel: +44 207 138 3203
Qualified Person
The technical information included in this report has been prepared under the
supervision of Alfred Gillman (Fellow, AusIMM, CP Geology), who is designated
as a "qualified person" under National Instrument 43-101 and AIM and has
reviewed and approves the content of this news release. He has also reviewed
QA/QC, sampling, analytical and test data underlying the information.
Management Discussion & Analysis for Q2 2023
HIGHLIGHTS AND ACTIVITIES - SECOND QUARTER 2023
Operating results for the quarter were highlighted by the selling of 20,852
ounces of gold during the period at a cash operating cost1 of $942 per oz
sold, with an all-in sustaining cost(1) of $1,230 per oz sold. AISC guidance
for 2023 is maintained at US$1,150 per ounce to US$1,350 per ounce.
Gold recovered for the quarter was 23,078 ounces. The Company has updated its
production guidance to 85,000oz for the year.
Key Operating and Financial Statistics
Three Months period ended Six Months period ended
June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Operating
Gold sold Au 20,852 21,553 22,173 42,405 35,636
Gold recovered Au 23,078 20,629 26,331 43,707 45,128
Average realised gold price $/oz 1,990 1,902 1,842 1,945 1,852
Cash operating cost $/oz 942 899 983 920 873
AISC $/oz 1,230 1,346 1,236 1,289 1,189
EBITDA $/oz 913 745 802 828 873
Financial
Revenue $ 41,364,169 40,287,830 41,354,747 81,651,999 66,220,229
Net Profit $ 7,912,187 4,331,347 6,778,954 12,243,534 10,210,578
EBITDA $ 19,044,002 16,065,334 17,772,616 35,109,336 31,127,944
June 30, 2023 March 31, 2023 December 31, 2022
Cash and cash equivalents $ 11,149,491 4,505,071 6,688,037
Deferred Income $ 865,173 - 6,581,743
Net Debt $ 16,807,972 24,940,762 31,650,722
Segilola Gold Mine, Nigeria
Mining
During the three months ended June 30, 2023, 5,633,688 tonnes of material were
mined, equivalent to a mining rate of 61,909 tonnes of material per day. In
this period, 278,583 tonnes of ore were mined, equivalent to a mining rate of
3,061 tonnes of ore per day, at an average grade of 2.43g/t. Mining of the
West wall of the pit is progressing well, with most of the more challenging
mining for the year completed. Production areas are increasing in width
allowing for improved utilization and productivity. Grade was lower than
planned due to delays in accessing higher-grade ore zones in the central mine.
The stockpile balance at the end of the period was 297,100 tonnes of ore at an
average of 1.06g/t. This comprised 1,961 tonnes (4.42g/t) at high grade, 2,006
tonnes (2.09g/t) at medium grade, 288,401 tonnes (1.00g/t) at low grade and
4,693 tonnes (2.45g/t) on the coarse ore stockpile.
Processing
During the three months ended June 30, 2023, a total of 255,231 tonnes of ore,
equivalent to a throughput rate of 2,805 tonnes per day, was processed.
Throughput was higher than planned, with no significant downtime periods.
The mill feed grade was 2.99g/t gold with recovery at 94.0% for a total of
23,078 ounces of gold recovered. The mill rejected ore bearing material
crusher was commissioned during the quarter. Smelting performance was improved
with the commissioning of the new smelter.
All of the main operating units of the process plant continue to perform
better than expected, with the plant operating above nameplate capacity.
Several improvement projects are being undertaken through the remainder of
2023.
Production Metrics
Units Q2 - 2023 Q1 - 2023 Q4 - 2022 Q3 - 2022 Q2 - 2022 Q1 - 2022
Mining
Total Mined Tonnes 5,633,688 4,194,689 4,296,494 4,018,431 4,031,584 3,759,524
Waste Mined Tonnes 5,355,105 3,996,264 3,974,073 3,793,249 3,747,504 3,533,610
Ore Mined Tonnes 278,583 198,425 322,421 225,182 284,079 226,314
Grade g/t Au 2.43 2.85 3.51 4.43 3.63 2.68
Daily Total Mining Rate Tonnes/Day 61,909 46,608 46,701 43,679 44,303 41,772
Daily Ore Mining Rate Tonnes/Day 3,061 2,205 3,505 2,448 3,122 2,515
Stockpile
Ore Stockpiled Tonnes 297,060 270,215 300,531 229,909 249,281 179,758
Ore Stockpiled g/t Au 1.06 1.14 1.48 1.19 1.46 1.23
Ore Stockpiled oz 10,124 9,904 14,300 8,796 11,701 7,109
Processing
Ore Processed Tonnes 255,231 231,001 254,824 241,434 211,582 221,900
Grade g/t Au 2.99 2.95 3.38 3.58 3.66 3.18
Recovery % 94.0 94.1 95.0 95.5 95.5 94.1
Gold Recovered oz 23,078 20,629 26,331 26,523 23,785 21,343
Milling Throughput Tonnes/Day 2,805 2,567 2,770 2,624 2,325 2,466
Units Q2 - 2023 Q1 - 2023 Q4 - 2022 Q3 - 2022 Q2 - 2022 Q1 - 2022
Exploration Activity Summary Q2 2023
Nigeria Gold
Exploration remained a priority for the Company in 2023 in both Nigeria and
Senegal. In Nigeria, the Company continued to prioritize exploration within a
25 kilometre radius of the Segilola Gold Mine. The Company also expanded and
diversified its portfolio through the acquisition of over 600 sq km of lithium
exploration licences via the grant of new licences and also entering into
joint venture agreements with existing licence holders.
The key objective of the exploration strategy is to extend the life of mine
("LOM") at Segilola. Approximately 80% of the Company's Nigerian gold
exploration effort is concentrated within a 25km radius of the Segilola
operation such that potential gold-bearing material can be easily trucked to
the existing plant. In areas that are further from the mine generative
exploration is targeting potential new stand-alone operations.
The majority of the exploration activities carried out on all the Company's
licences, consisted of RC drilling, Diamond Drilling, geochemical stream
sediment sampling, auger drilling and soil sampling. Amongst other target
areas that have been located, a new high-grade target, the Kola target, was
discovered and is located about 23km from the Segilola Mine. The Kola target
produced an initial significant geochemical signature with follow up drill
testing intersecting several mineralized drilling intersections including 11m
grading 22g/tAu.
Four main advanced exploration targets have been defined within a 25km radius
of the Segilola Gold Mine. These comprise the following target areas:
· Kola Prospect
· Igila (Western Prospects)
· Aye-Ile (Western Prospects)
· Ijarigbe
New Exploration Prospect - Kola Prospect
The Kola Prospect is a new high-grade greenfield exploration discovery that is
located 23km south of the Segilola Gold Mine within a 100% Thor-owned
exploration permit The prospect developed from a low-level stream sediment
anomaly which was confirmed by follow-up auger-assisted soil geochemistry that
returned values of up to 4 g/t Au. Targeting of this anomalous zone was
carried out with RC drilling. Initial positive results included 7m grading
25.98 g/t Au in the near-surface weathered horizon. Additional drilling
located primary bedrock mineralisation grading 8m at 30.19 g/t Au. Initial
data suggest that the geological controls relate to a steeply dipping
north-easterly trending zone within a biotite gneiss sequence. Exploration
testing of the general area is continuing. Whilst the initial drilling results
from the Kola Prospect are encouraging, the Company has not yet identified
significant strike length extensions that would add material mine life
extensions to Segilola. Drilling activities will continue through Q3 and Q4.
Exploration Results from the Kola Prospect
(0.5g/t Au lower cut off; maximum 1m internal dilution)
x y Depth Dip Azimuth From (m) To (m) Interval (m) Grade (g/tAu) True Width (m)
SGRC168 699897 807875 56 -60 90 1.0 2.0 1.0 0.96 1.0
SGRC188 699925 807871 90 -60 90 14.0 18.0 4.0 30.17 3.0
SGRC189 699954 807866 120 -60 90 56.0 64.0 8.0 3.01 6.0
SGRC190 699896 807877 60 -60 90 2.0 9.0 7.0 25.98 6.0
-60 90 58.0 59.0 1.0 0.78 0.8
SGRC191 699924 807872 55 -60 90 1.0 6.0 5.0 5.64 4.0
SGRC194 699961 807893 105 -60 90 49.0 57.0 8.0 30.19 7.0
SGRC195 699980 807886 110 -60 270 76.0 78.0 2.0 0.77 1.4
SGRC201 699926 807879 29 -90 0 31.0 32.0 1.0 0.63 1.0
38.0 41.0 3.0 0.55 3.0
SGRC202 699920 807870 30 -90 0 0.0 7.0 7.0 0.86 7.0
12.0 13.0 1.0 0.57 1.0
SGRC203 699913 807870 26 -90 0 0.0 13.0 13.0 11.57 13.0
14.0 17.0 3.0 0.71 3.0
21.0 24.0 3.0 0.97 3.0
SGRC204 699938 807889 70 -60 270 5.0 11.0 6.0 0.73 6.0
16.0 17.0 1.0 0.38 1.0
Kola Prospect Cross Section
Western Prospects
Igila
The Western Prospects are located about 15km directly west of the Segilola
Gold Mine and are held under a joint venture agreement between Thor's wholly
owned subsidiary Segilola Gold Limited ("SGL") and a local mineral exploration
company.
Exploration activities at the Western Prospects are now focused on delineating
additional strike length and identifying additional lodes such as the Aye-Ile
prospect.
Aye-Ile
The Aye-Ile prospect is located approximately 1.2km to the south-east from
Igila. Drilling is planned to expand the zone of mineralisation and to
investigate a possible strike between Igila and Aye-Ile. Geochemical sampling
to the south-east of Aye-Ile returned several anomalous values of up to 10g/t
Au which suggest extensions of the structure.
Thor Lithium - Newstar Minerals Limited
As part of its strategy of identifying high-value mineral resource
opportunities, Thor, through its fully owned subsidiary
Newstar Minerals Ltd, announced the acquisition of significant tenure in
south-west Nigeria that covers both known lithium bearing, pegmatite deposits
and a large unexplored, prospective, pegmatite-rich belt. Thor's initial focus
is on the south-west quadrant of Nigeria where vital infrastructure is located
within close proximity.
An initial drilling program is being undertaken on one of the Company's
prospects located in the West Oyo Project Area to confirm and delineate
lithium-bearing mineralisation, such as spodumene and lepidolite, at depth.
The Company announced its initial results on August 16 with the below key
highlights:
- 11m at 2.61% Li(2)O from 15m
- 9m at 2.42% Li(2)O from 35m
- 11m at 1.53% Li(2)O from 14m, including 9m at 1.70% Li(2)O from 15m
· Spodumene confirmed as main lithium-bearing mineral together with
minor lepidolite
· Mineralization is shallow
Thor Explorations Nigeria Licence Location Map
Senegal
Introduction
The Douta Gold Project is a gold exploration permit E02038, located within the
Kéniéba inlier, eastern Senegal. The northeast-trending license has an area
of 58 km(2). Thor, through its wholly owned subsidiary African Star Resources
Incorporated ("African Star"), has a 70% economic interest in partnership with
the permit holder International Mining Company SARL ("IMC"). IMC has a 30%
free carried interest in its development until the announcement by Thor of a
Probable Reserve.
The Douta licence is strategically positioned 4km east of Massawa North and
Massawa Central deposits, which form part of the world-class Sabadola-Massawa
Project owned by Endeavour Mining. The Makabingui deposit, belonging to
Bassari Resources Ltd, is immediately located east of the northern portion of
E02038.
Exploration Activity
During the quarter, workstreams designed to advance the project to the
prefeasibility stage ("PFS") commenced. This included a diamond drilling
program that was designed to obtain sufficient core samples for comprehensive
metallurgical test work and mineralogical studies.
Thor intends to progress the Makosa Resource expansion and infill drilling
together with parallel workstreams including environmental and social baseline
monitoring as part of an Environmental and Social Impact Assessment,
geotechnical and hydrological studies.
NON-IFRS MEASURES
This MD&A refers to certain financial measures, such as average realized
gold price, which are not recognized under IFRS and do not have a standardized
meaning prescribed by IFRS. These measures may differ from those made by other
companies and accordingly may not be comparable to such measures as reported
by other companies. These measures have been derived from the Company's
financial statements because the Company believes that, with the achievement
of gold production, they are of assistance in the understanding of the results
of operations and its financial position.
Average realised gold price per ounce sold
The Group believes that, in addition to conventional measures prepared in
accordance with GAAP, the average realised gold price, which takes into
account the impact of gain/losses on forward sale of commodity contracts, is a
metric used to better understand the gold price realised during a period.
Management believes that reflecting the impact of these contracts on the
Group's realised gold price is a relevant measure and increases the
consistency of this calculation with our peer companies.
In addition to the above, in calculating the realised gold price, management
has adjusted the revenues as disclosed in the consolidated financial statement
to exclude by product revenue, relating to silver revenue, and has reflected
the by product revenue as a credit to cash operating costs. The revenues as
disclosed in the interim financial statements have been reconciled to the
gold revenue for all periods presented.
Average annual realised price per ounce sold
( )
Three Months period ended Six Months period ended
Units June 30, 2023 March 31, 2023 June 30, 2022(1) June 30, 2023 June 30, 2022(1)
Revenues $ 41,364,169 40,287,830 41,354,747 81,651,999 66,220,229
By product revenue $ (68,587) (43,773) (30,549) (112,360) (46,069)
Gold revenue $ 41,295,582 40,244,057 41,324,198 81,539,639 66,174,160
Gain/(Loss) on forward sale of commodity contracts $ 200,534 750,482 (471,403) 951,016 (176,480)
Adjusted gold revenue $ 41,496,116 40,994,539 40,852,795 82,490,655 65,997,680
Gold ounces sold Oz Au 20,852 21,553 22,173 42,405 35,636
Average realized price per ounce sold $ 1,990 1,902 1,842 1,945 1,852
( )
( )
(1 The figures for the Three and Six months period ended June 30, 2022 have
been restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.)
Cash operating cost per ounce
Cash operating cost per oz sold, combined with revenues, can be used to
evaluate the Company's performance and ability to generate operating income
and cash flow from operating activities. The Company believes that, in
addition to conventional measures prepared in accordance with GAAP, certain
investors may find this information useful to evaluate the costs of production
per ounce.
By product revenues are included as a credit to cash operating costs.
Average annual cash operating cost per ounce of gold
Three Months period ended Six Months period ended
Units June 30, 2023 March 31, 2023 June 30, 2022(1) June 30, 2023 June 30, 2022(1)
Production costs $ 17,795,685 18,306,502 20,273,742 36,102,187 28,493,272
Transportation and refining $ 810,080 342,291 604,991 1,152,371 1,107,213
Royalties $ 1,102,308 768,282 946,252 1,870,590 1,497,017
By product revenue $ (68,587) (43,773) (30,549) (112,360) (46,069)
Cash Operating costs $ 19,639,486 19,373,302 21,794,437 39,012,788 31,097,502
Gold ounces sold Oz Au 20,852 21,553 22,173 42,405 35,636
Cash operating cost per ounce sold $/oz 942 899 983 920 873
(1 The figures for the Three and Six months period ended June 30, 2022 have
been restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.)
All-in sustaining cost per ounce
AISC provides information on the total cost associated with producing gold.
The Group calculates AISC as the sum of total cash operating costs (as
described above), other administration expenses and sustaining capital, all
divided by the gold ounces sold to arrive at a per oz amount.
Other administration expenses includes administration expenses directly
attributable to the Segilola Gold Mine plus a percentage of corporate
administration costs allocated to supporting the operations of the Segilola
Gold Mine. For the three and six months periods ended June 30, 2023 and 2022,
this was deemed to be 50%.
Other companies may calculate this measure differently as a result of
differences in underlying principles and policies
applied.
Average annual all-in sustaining cost per ounce of gold
Three Months period ended Six Months period ended
Units June 30, 2023 March 31, 2023 June 30, 2022(1) June 30, 2023 June 30, 2022(1)
Cash operating costs(2) $ 19,639,486 19,373,302 21,794,437 39,012,788 31,097,502
Adjusted other administration expenses $ 1,093,344 3,775,777 3,895,264 4,869,121 5,353,995
Sustaining capital(3) $ 4,914,550 5,864,894 1,713,692 10,779,444 5,910,688
Total all-in sustaining cost $ 25,647,380 29,013,973 27,403,393 54,661,353 42,362,185
Gold ounces sold oz Au 20,852 21,553 22,173 42,405 35,636
All-in sustaining cost per ounce sold $/oz 1,230 1,346 1,236 1,289 1,189
(1 The figures for the Three and Six months period ended June 30, 2022 have
been restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.)
(2 Refer to Cash operating costs.)
(3 Refer to Sustaining and Non-Sustaining Capital)
Net Debt
Net debt is calculated as total debt adjusted for unamortized, deferred,
financing charges less cash and cash equivalents and short-term investments at
the end of the reporting period. This metric is used by management to measure
the Company's debt leverage. The Company considers that in addition to
conventional measures prepared in accordance with IFRS, net debt is useful to
evaluate the Company's performance.
Net Debt
June 30, 2023 March 31, 2023 December 31, 2022
Project Loan 24,187,306 24,257,746 24,459,939
EPC Payments - 1,463,353 10,196,105
Deferred EPC Facility 3,770,157 3,724,734 3,682,715
Less: Cash and cash equivalents1 (11,149,491) (4,505,071) (6,688,037)
Net Debt 16,807,972 24,940,762 31,650,722
Earnings Before Interest, Taxes, Depreciation and Amortisation
EBITDA is calculated as the total earnings before interest, taxes,
depreciation and amortisation. This measure helps management assess the
operating performance of each operating unit.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
Three Months period ended Six Months period ended
Unit June 30, 2023 March 31, 2023 June 30, 2022(1) June 30, 2023 June 30, 2022(1)
Net profit for the period $ 7,912,187 4,331,347 6,778,954 12,243,534 10,210,578
Amortisation and depreciation - owned assets $ 6,679,708 7,165,523 5,977,675 13,845,231 10,982,292
Amortisation and depreciation - right of use assets $ 1,195,213 1,194,587 1,075,735 2,389,800 2,233,990
Impairment of Exploration & Evaluation assets $ 3,365 3,096 4,520 6,461 7,221
Interest expense $ 3,253,529 3,370,781 3,935,732 6,624,310 7,693,863
EBITDA $ 19,044,002 16,065,334 17,772,616 35,109,336 31,127,944
Ounces sold Oz Au 20,852 21,553 22,173 42,405 35,636
EBITDA per ounce sold $ 913 745 802 828 873
(1 The figures for the Three and Six months period ended June 30, 2022 have
been restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.)
( )( )
OUTLOOK AND UPCOMING MILESTONES
This Section 5 of the MD&A contains forward looking information as defined
by National Instrument 51-102. Refer to Section 16 of this MD&A for
further information on forward looking statements.
We are focused on advancing the Company's strategic objectives and near-term
milestones which include:
2023 Operational Guidance and Outlook
Gold Production oz 85,000
All-in Sustaining Cost US$/oz Au sold $1,150 - $1,350
Capital Expenditure(1) US$ 10,000,000
Exploration Expenditure:
Nigeria(2) US$ 4,200,000
Senegal US$ 3,000,000
1 This excludes production stripping costs capitalizations.
2 This relates to all Nigeria exploration, including lithium and purchase of
licenses.
The critical factors that influence whether Segilola can achieve these targets
include:
· Segilola's ability to maintain an adequate supply of consumables
(in particular ammonium nitrate, flux and cyanide) and equipment
· Fluctuations in the price of key consumables, in particular
ammonium nitrate, and diesel
· Segilola's workforce remaining healthy
· Continuing to receive full and on-time payment for gold sales
· Continuing to be able to make local and international payments in
the ordinary course of business
Continue to advance the Douta project towards preliminary feasibility study
("PFS")
Continue to advance exploration programmes across the portfolio:
· Segilola near mine exploration
· Segilola underground project
· Segilola regional exploration programme
· Douta extension programme
· Douta infill programme
· Assess regional potential targets in Nigeria
· Acquiring new concessions and joint venture options on potential
targets
SUMMARY OF QUARTERLY RESULTS
The table below sets forth selected results of operations for the Company's
eight most recently completed quarters.
Summary of quarterly results
$ 2023 Q2 2023 Q1 2022 Q4 2022 Q3 2022 Q2 2022 Q1 2021 Q4 2021 Q3
Jun-31 Mar-31 Dec-31 Sep-30 Jun-30 Mar-31 Dec-31 Sep-30
Revenues 41,364,169 40,287,830 43,251,204 55,703,098 41,354,747 24,865,482 6,049,485 -
Net profit for period 7,912,187 4,331,347 14,908,460 4,126,066 6,778,954 3,490,938 3,116,416 463,844
Basic profit/(loss) per share (cents) 1.20 0.67 2.21 0.65 1.1 0.55 0.47 0.07
RESULTS FOR SIX MONTHS ENDED JUNE 30, 2023
The review of the results of operations should be read in conjunction with the
Interim Financial Statements and notes thereto.
The Group reported a net profit of $12,243,543 (1.9 cents per share) for the
six months period ended June 30, 2023, as compared to a net profit of
$10,210,578 (1.6 cents per share) for the six months period ended June 30,
2022. The increase in profit for the period was largely due to:
· revenue during the period of $81,651,999 (2022: $66,220,229)
These were offset partially by:
· Amortization and depreciation of $16,235,031 (2022: $13,216,282);
· Interest of $6,466,499 (2022: $4,171,263); and
· Production costs of $36,102,187 (2022: $28,493,272)
No interest was earned during the six months period ended June 30, 2023, and
2022.
LIQUIDITY AND CAPITAL RESOURCES
As at June 30, 2023, the Group had cash of $11,149,491 (December 31 2022:
$6,688,037) and a working capital deficit of $45,657,241 (December 31, 2022:
deficit of $29,116,915).
The increase in cash from December 31, 2022 is due mainly to cash generated in
operations of $44,546,954 offset by cash used in investing and financing
activities of $29,911,132 and $10,813,624, respectively.
The increase in working capital deficit is mainly due to the transfer of
$19,347,245 of loans and other borrowings from non-current to current as these
are due within 12 months from June 30, 2023.
The total EPC amount has been finalized with our EPC contractor, and the Group
has paid all due outstanding EPC payments as at June 30, 2023.
Working Capital Calculation
The Working Capital Calculation excludes $9,139,784 (Q1 2023: $9,979,413 -
2022: $10,187,630) of Gold Stream liabilities, and $35,478 (Q1 2023: $805,801
- 2022: $2,215,585) in third party royalties included in current accounts
payable, that are contingent upon the achievement of the revised gold sales
forecast of 85,000 ounces for the year ending December 31, 2023.
Working Capital
Unit June 30, 2023 March 31, 2023 December 31, 2022
Current Assets
Cash $ 11,149,491 4,505,071 6,688,037
Inventory $ 20,060,960 25,080,808 19,901,262
Amounts receivable, prepaid expenses, advances and deposits $ 8,612,279 8,461,572 10,697,365
Total Current Assets for Working Capital $ 39,822,730 38,047,451 37,286,664
Current Liabilities
Accounts Payable and accrued liabilities $ 59,595,451 60,555,348 56,337,289
Deferred income $ 865,173 - 6,581,743
Lease Liabilities $ 4,819,439 4,815,512 4,811,991
Gold Stream Liability $ 9,319,784 9,979,413 10,187,630
Loan and other borrowings $ 20,235,386 11,790,796 888,141
$ 94,835,233 87,141,069 78,806,794
less: Current Liabilities contingent upon future gold sales $ (9,355,262) (10,785,214) (12,403,215)
Working capital deficit $ (45,657,241) (38,308,404) (29,116,915)
Inventory
Gold inventory is recognised, at cost, in the ore stockpiles and in production
inventory, comprised principally of ore stockpile and doré at site or in
transit to the refinery, with a component of gold-in-circuit.
Inventory
June 30, 2023 March 31, 2023 December 31, 2022
Plant spares and consumables 7,072,420 9,146,279 4,751,922
Gold ore in stockpile 9,185,796 12,479,805 11,869,168
Gold in CIL 3,802,744 3,454,724 1,160,237
Gold Dore - - 2,119,935
$ 20,060,960 25,080,808 19,901,262
Liquidity and Capital Resources
The Group has generated positive operating cash flow during H1 2023 and
expects to continue to do so based on its production and AISC guidance. This
operating cash flow will support debt repayments, regional exploration and
underground expansion drilling at Segilola, planned capital expenditures and
corporate overhead costs.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
The Group's financial instruments are classified as follows:
June 30, 2023 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 11,149,491 - 11,149,491
Amounts receivable 251,812 - 251,812
Total assets $ 11,401,303 - 11,401,303
Liabilities
Accounts payable and accrued liabilities $ 59,559,973 35,478 59,595,451
Loans and borrowings 27,957,463 - 27,957,463
Gold stream liability - 21,840,525 21,840,525
Lease liabilities 13,501,928 - 13,501,928
Total liabilities $ 101,019,364 21,876,003 122,895,367
December 31, 2022 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 6,688,037 - 6,688,037
Amounts receivable 220,442 - 220,442
Total assets $ 6,908,479 - 6,908,479
Liabilities
Accounts payable and accrued liabilities $ 54,121,704 2,215,585 56,337,289
Loans and borrowings 28,142,654 - 28,142,654
Gold stream liability - 25,039,765 25,039,765
Lease liabilities 15,409,285 - 15,409,285
Total liabilities $ 97,673,643 27,255,350 124,928,993
The fair value of these financial instruments approximates their carrying
value.
As noted above, the Group has certain financial liabilities that are held at
fair value. The fair value hierarchy establishes three levels to classify the
inputs to valuation techniques to measure fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs).
As at June 30, 2023 and December 31, 2022, all the Group`s liabilities
measured at fair value through profit and loss are categorized as Level 3 and
their fair value was determined using discounted cash flow valuation models,
taking into account assumptions with respect to gold prices and discount rates
as well as estimates with respect to production and operating results for the
Segilola mine.
.
DISCLOSURE OF OUTSTANDING SHARE DATA
As at the date of this MD&A, there were 655,314,724 common shares issued
and outstanding stock options to purchase a total of 14,790,000 common shares.
Authorized Common Shares
Common shares issued
June 30, 2023 December 31, 2022
Common shares issued 655,314,724 644,696,185
Warrants
There were no warrants that were outstanding at June 30, 2023, and as at the
date of this report.
During the Three and Six Months ended June 30, 2023 no warrants were issued.
Stock Options
The number of stock options that were outstanding and the remaining
contractual lives of the options at June 30, 2023, were as follows.
Options outstanding
Exercise Price Number Weighted Average Remaining Contractual Life Expiry Date
Outstanding
C$0.140 750,000 0.27 October 5, 2023
C$0.200 14,040,000 1.55 January 16, 2025
Total 14,790,000
The Company has previously granted employees, consultants, directors and
officers share purchase options. These options were granted pursuant to the
Company's stock option plan. No new options have been granted in Q2 2023.
During the Three and Six Months ended June 30, 2023, 12,111,000 options were
exercised at a price of C$0.145.
Condensed Interim Consolidated Financial Statements
For the Three Months Ended March 31, 2023, and 2022
(in United States Dollars)
CORPORATE INFORMATION
Thor Explorations Ltd. (the "Company"), together with its subsidiaries
(collectively, "Thor" or the "Group") is a West African focused gold producer
and explorer, dually listed on the TSX-Venture Exchange (THX.V) and AIM Market
of the London Stock Exchange (THX.L).
The Company was formed in 1968 and is organized under the Business
Corporations Act (https://www.lawinsider.com/clause/business-corporations-act)
(British Columbia (https://www.lawinsider.com/clause/british-columbia) )
(BCBCA) with its registered office at 550 Burrard St, Suite 2900 Vancouver,
BC, CA, V6C 0A3. The Company evolved into its current form in August 2011
following a reverse takeover and completed the transformational acquisition of
its flagship Segilola Gold Project in Nigeria in August 2016.
1. BASIS OF PREPARATION
a) Statement of compliance
These condensed interim consolidated financial statements ("interim financial
statements") have been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting, of International Financial Reporting
Standards as issued by the International Accounting Standards Board ("IFRS").
These interim financial statements should be read in conjunction with the
audited consolidated financial statements for the year ended December 31,
2022, which have been prepared in accordance with IFRS.
These interim financial statements were authorized for issue by the Board of
Directors on August 22, 2023.
b) Basis of measurement
These interim financial statements are presented in United States dollars
("US$").
These interim financial statements have been prepared on a historical cost
basis, except for certain financial instruments that are measured at fair
value at the end of each reporting period.
The Group's accounting policies have been applied consistently to all periods
in the preparation of these interim financial statements. In preparing the
Group 's interim financial statements for the three and six months ended June
30, 2023, the Group applied the critical judgments and estimates as disclosed
in note 3 of its annual financial statements for the year ended December 31,
2022.
These interim financial statements include the accounts of the Company and its
subsidiaries. Subsidiaries are entities controlled by the Company, which is
defined as having the power over the entity, rights to variable returns from
its involvement with the entity, and the ability to use its power to affect
the amount of returns. All intercompany transactions and balances are
eliminated on consolidation. The Company's subsidiaries at June 30, 2023 are
consistent with the subsidiaries as at December 31, 2022 as disclosed in note
3 to the annual financial statements.
None of the new standards or amendments to standards and interpretations
applicable during the period has had a material impact on the financial
position or performance of the Group. The Group has not early adopted any
standard, interpretation or amendment that was issued but is not yet
effective.
2. BASIS OF PREPARATION (continued)
c) Nature of operations and going concern
The Board of Directors have performed an assessment of whether the Company and
Group would be able to continue as a going concern until at least August 2024.
In their assessment, the Group has taken into account its financial position,
expected future trading performance, its debt and other available credit
facilities, future debt servicing requirements, its working capital and
capital expenditure commitments and forecasts.
At June 30, 2023, the Group had a cash position of $11.1million and a net debt
position of $16.8 million, calculated as total debt adjusted for unamortized
deferred financing charges less cash and cash equivalents and short-term
investments. Cash flows from operating activities for the three and six months
ended June 30, 2023 were inflows of $25.3 million and $44.5 million
respectively.
The Directors have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for at least the next twelve
months and that, as at the date of this report, there are no material
uncertainties regarding going concern
The Board of Directors is satisfied that the going concern basis of accounting
is an appropriate assumption to adopt in the preparation of the interim
financial statements as at, and for the period ended June 30, 2023.
2. PROFIT FROM OPERATIONS
3a. REVENUE
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
Gold revenue 41,295,582 41,324,199 81,539,639 66,174,161
Silver revenue 68,587 30,549 112,360 46,069
$ 41,364,169 $ 41,354,747 $ 81,651,999 $ 66,220,229
The Group`s revenue is generated in Nigeria. All sales are made to the Group`s
only customer.
3b. COST OF SALES
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
Mining 21,836,232 17,883,204 41,873,619 24,814,116
Processing 4,312,647 2,584,044 8,421,432 4,054,501
Support services and others 1,873,999 3,446,978 3,279,061 5,448,950
Foreign exchange (gains)/losses on production costs* (10,227,193) (3,640,484) (17,471,925) (5,824,295)
Production costs $ 17,795,685 $ 20,273,742 $ 36,102,187 $ 28,493,272
Transportation and refining 810,080 604,991 1,152,371 1,107,213
Royalties 1,102,308 946,252 1,870,590 1,497,017
Amortization and depreciation - operational assets - owned assets 6,641,484 5,486,909 13,534,856 10,219,689
Amortization and depreciation - operational assets - right of use assets 1,159,110 1,060,827 2,318,647 2,219,082
Cost of sales 27,508,667 28,372,721 54,978,651 43,536,273
(* The total foreign exchange gain for the current period was $17,471,925,
which comprises of realized foreign exchange gains of $11,878,343 and
unrealized foreign exchange gains of $5,593,582. During the period, SROL
purchased its local currency on a spot basis. The foreign exchange gains and
losses from these trades are generated from the differences between the local
currency values achieved on the trades versus the currency translation rate at
the time of the trade.)
3c. AMORTIZATION AND DEPRECIATION
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
Amortization and depreciation - operational assets - owned assets 6,641,484 5,486,909 13,534,856 10,219,689
Amortization and depreciation - operational assets - right of use assets 1,159,110 1,060,827 2,318,647 2,219,082
Amortization and depreciation - owned assets 38,224 490,766 310,375 762,603
Amortization and depreciation - right-of-use assets 36,103 14,908 71,153 14,908
$ 7,874,921 $ 7,053,410 $ 16,235,031 $ 13,216,282
3d. OTHER ADMINISTRATION EXPENSES
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
Employee compensation 1,414,556 320,802 2,107,855 739,349
Professional services 614,104 777,007 1,268,310 1,148,534
Other corporate expenses 382,900 1,130,740 3,090,334 2,283,380
$ 2,411,560 $ 2,228,549 $ 6,466,499 $ 4,171,263
3. INVENTORIES
June 30, 2023 December 31, 2022
Plant spares and consumables $ 7,072,420 $ 4,751,922
Gold ore in stockpile 9,185,796 11,869,168
Gold in CIL 3,802,744 1,614,267
Gold Dore - 2,119,935
$ 20,060,960 $ 19,901,262
There were no write downs to reduce the carrying value of inventories to net
realizable value during the periods ended June 30, 2023 and 2022.
4. AMOUNTS RECEIVABLE
June 30, 2023 December 31, 2022
Accounts receivable $ 38,715 $ 67,084
GST 3,481 993
Other receivables 209,616 152,365
$ 251,812 $ 220,442
The value of receivables recorded on the balance sheet is approximate to their
recoverable value and there are no expected material credit losses.
5. PREPAID EXPENSES, ADVANCES AND DEPOSITS
June 30, December 31, 2022
2023
Current:
Gold Stream liability arrangement fees 33,186 33,186
Advance deposits to vendors 5,596,067 9,625,204
Other prepayments 2,731,214 818,533
$ 8,360,467 10,476,923
Non-current:
Gold Stream liability arrangement fees 24,889 74,667
Other prepayments 214,638 208,158
$ 239,527 282,825
Included in Advance deposits to vendors, are payment deposits towards key
equipment, materials and spare parts, with longer lead times to delivery,
which are of critical importance to maintain efficient operations of the mine
and process plant. These were made to mitigate against price volatility and
inflation currently affecting the sector.
6. LEASES
The Group accounts for leases in accordance with IFRS 16. The definition of a
lease under IFRS 16 was applied only to contracts entered into or changed on
or after January 1, 2019. The Group has elected not to recognize right-of-use
assets and lease liabilities for leases which have low value, or short-term
leases with a duration of 12 months or less. The payments associated with such
leases are charged directly to the income statement on a straight-line basis
over the lease term. There were no such leases for the periods ended June 30,
2023 and 2022.
Leases relate principally to corporate offices and the mining fleet at the
Segilola mine. Corporate offices are depreciated over 5 years and mining fleet
over the life of mine of Segilola.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position for the period ended June 30, 2023, were as follows:
Right of use asset Lease liability Income statement
Carrying value December 31, 2022 $ 16,849,402 $ (15,409,285) $
New leases entered in to during the period - - -
Depreciation (2,389,800) - (2,389,800)
Interest - (560,217) (560,217)
Lease payments - 2,512,720 -
Foreign exchange movement 26,572 (45,146) (45,146)
Carrying value at June 30, 2023 $ 14,486,174 $ (13,501,928) $ (2,995,163)
Current liability (4,819,439)
Non-current liability (8,682,489)
7. LEASES (continued)
The key impacts on the Statement of Comprehensive Loss and the Statement of
Financial Position for the year ended December 31, 2022, were as follows:
Right of use asset Lease liability Income statement
Carrying value December 31, 2021 $ 20,843,612 $ (18,274,374) $ -
New leases entered in to during the period 660,064 (660,064) -
Depreciation (4,724,100) - (4,724,100)
Interest - (1,052,329) (1,052,329)
Lease payments - 4,882,786 -
Foreign exchange movement 69,826 (305,304) (305,304)
Carrying value at December 31, 2022 $ 16,849,402 $ (15,409,285) $ (6,081,733)
Current liability (4,811,991)
Non-current liability (10,597,294)
7. GOLD STREAM LIABILITY
Gold stream liability
June 30, 2023 December 31, 2022
Balance at Beginning of period $ 25,039,765 $ 30,262,279
Repayments (5,898,728) (11,534,441)
Interest at the effective interest rate 2,699,488 6,311,927
Balance at end of period $ 21,840,525 $ 25,039,765
Current liability 9,319,784 10,187,630
Non-current liability 12,520,741 14,852,135
On April 29, 2020, the Group announced the closing of project financing for
its flagship Segilola Gold Project ("Segilola") in Osun State, Nigeria. The
financing included a $21 million gold stream upfront deposit ("the
Prepayment") over future gold production at Segilola under the terms of a Gold
Purchase and Sale Agreement ("GSA") entered into between the Group's wholly
owned subsidiary SROL and the AFC. The Prepayment is secured over the shares
in SROL as well as over SROL's assets and is not subject to interest. The
initial term of the GSA is for ten years with an automatic extension of a
further ten years. The AFC will receive 10.27% of gold production from the
Segilola ML41 mining license until the $21 million Prepayment has been repaid
in full. Thereafter, the AFC will continue to receive 10.27% of gold
production from material mined within the ML41 mining license until a further
$26.25 million is received, representing a total money multiple of 2.25 times
the value of the Prepayment, at which point the GSA will terminate. The AFC
are not entitled to receive an allocation of gold production from material
mined from any of the Group's other gold tenements under the terms of the GSA.
8. GOLD STREAM LIABILITY (continued)
The $26.25 million represented interest on the Prepayment. A calculation of
the implied interest rate was made as at drawdown date with interest being
apportioned over the expected life of the Stream Facility. The principal input
variables used in calculating the implied interest rate and repayment profile
were the production profile and gold price. The future gold price estimates
were based on market forecast reports for the years 2021 to 2025 and, the
production profile was based on the latest life of mine plan model. The
liability was to be re-estimated on a periodic basis to include changes to the
production profile, any extension to the life of mine plan and movement in the
gold price. Upon commencement of production, any change to the implied
interest rate will be expensed through the Condensed Interim Consolidated
Statement of Income (Loss).
In December 2021, the Group entered into a cash settlement agreement with the
AFC where the gold sold to the AFC is settled in a net-cash sum payable to the
AFC instead of delivery of bullion in repayment of the gold stream
arrangement.
The following table represents the Group's loans and borrowings measured and
recognised at fair value.
Level 1 Level 2 Level 3 Total
Financial liability at fair value through profit or loss $ - - 21,840,525 21,840,525
The liabilities included in the above table are carried at fair value through
profit and loss.
8. LOANS AND BORROWINGS
June 30, December 31, 2022
2023
Current liabilities:
Loans payable to the Africa Finance Corporation less than 1 year $ 17,673,363 $ 356,155
Deferred element of EPC contract 2,562,023 531,986
$ 20,235,386 888,141
Non-current liabilities:
Loans payable to the Africa Finance Corporation more than 1 year $ 6,513,943 $ 24,103,784
Deferred element of EPC contract 1,208,134 3,150,729
$ 7,722,077 $ 27,254,513
Loans from the Africa Finance Corporation
June 30, December 31, 2022
2023
Balance at Beginning of period $ 24,459,939 $ 46,859,966
Drawdown - -
Principal repayments (1,053,077) (24,220,764)
Interest paid (1,955,325) (4,645,014)
Arrangement fees (126,874) -
Unwinding of interest in the period 2,862,643 6,465,751
Balance at end of period $ 24,187,306 $ 24,459,939
Current liability 17,673,363 356,155
Non-current liability 6,513,943 24,103,784
9. LOANS AND BORROWINGS (continued)
On December 1, 2020, the Group announced that its subsidiary Segilola
Resources Operating Limited ("SROL") had completed the financial closing of a
$54 million project finance senior debt facility ("the Facility") from the
Africa Finance Corporation ("AFC") for the construction of the Segilola Gold
Project in Nigeria. The Facility could be drawn down at the Group's request in
minimum disbursements of $5 million. As at December 31, 2022, SROL has
received total disbursements of $52.6 million (2021: $52.6 million), with $nil
drawn down in 2022 (2021: $31.2 million) and the remaining $1.35m undrawn
facility cancelled by the Group during the period under review (2021: $nil).
Total disbursements received represent 97% of the Facility. The Facility is
secured over the share capital of SROL and its assets, with repayments
commencing in March 2022 and to conclude in March 2025.
Repayment of the aggregate Facility will be made in instalments over a
36-month period by repaying an amount on a series of repayment dates, as set
out in the Facility Agreement, which reduces the amount of the outstanding
aggregate Facility by the amount equal to the relevant percentage of Loans
borrowed as at the close of business in London on the date of Financial Close.
Interest accrues at SOFR plus 9% and is payable on a quarterly basis in
arrears.
In conjunction with the granting of the Facility, Thor issued 33,329,480 bonus
shares to the AFC. Thor also incurred transaction costs of $4,663,652 in
relation to the loan facility. The fair value of the liability at inception
was determined at $45,822,943 taking into account the transaction costs and
equity component and recognized at amortized cost using an effective rate of
interest, with the fair value of the shares issued in April 2020 of $5,666,011
recognized within equity.
On 31 January 2023, the Group entered into an agreement with the AFC amending
the terms of its senior debt facility.
The amended facility removes the project finance cash sweep requirement and
allows for free distributions from SROL (subject to a 20% distribution sweep
to the senior debt facility), as well as releasing the Group from restrictions
regarding acquisitions, distribution of dividends and certain indebtedness
covenants. The payment timetable was also re-scheduled to reallocate a higher
percentage of the repayments to a later period in the Facility's term.
Deferred payment facility on EPC contract for the construction of the Segilola
Gold Mine
The Group has constructed its Segilola Gold Mine through an engineering,
procurement, and construction contract ("EPC Contract"). The EPC Contract has
been agreed on a lump sum turnkey basis which provides Thor with a fixed price
of $67.5 million for the full delivery of design, engineering, procurement,
construction, and commissioning of the proposed 715,000 ton per annum gold ore
processing plant.
The EPC Contract includes a deferred element ("the Deferred Payment Facility")
of 10% of the fixed price. As at June 30, 2023, a total of $2,762,303
(December 31, 2022: $3,682,715) was deferred under the facility. The 10%
deferred element is repayable in instalments over a 36-month period by
repaying an amount on a series of repayment dates, as set out in the Deferred
Payment Facility. Repayments commenced in March 2022 and will conclude in
2025. Interest on this element of the EPC deferred facility accrues at 8% per
annum from the time the Facility taking-over Certificate was issued.
June 30, December 31, 2022
2023
Balance at beginning of period $ 3,682,715 $ 6,210,090
Offset against EPC payment - 440,263
Principal repayments (133,007) (3,440,449)
Interest paid (144,978) -
Unwinding of interest in the period 365,427 472,811
Balance at end of period $ 3,770,157 $ 3,682,715
Current liability 2,562,023 531,986
Non-current liability 1,208,134 3,150,729
9. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
June 30, 2023 Gold Stream liability AFC loan EPC deferred facility Total
January 1, 2023 $ 25,039,765 24,459,939 3,682,715 53,182,419
Cash flows:
(Repayment of) / Proceeds from loans and borrowings (5,898,728) (1,053,077) (133,007) (7,084,812)
Arrangement fees - (126,874) - (126,874)
Interest paid - (1,955,325) (144,978) (2,100,303)
Non-cash changes:
Unwinding of interest in the year 2,699,488 2,862,643 365,427 5,927,558
June 30, 2023 $ 21,840,525 24,187,306 3,770,157 49,797,988
December 31, 2022 Gold stream liability Short term advance AFC loan EPC deferred facility Total
January 1, 2022 $ 30,262,279 668,570 46,859,966 6,210,090 84,000,905
Cash flows:
(Repayment of) / Proceeds from loans and borrowings (11,534,441) (668,570) (24,220,764) (3,440,449) (39,864,224)
Interest paid - - (4,645,014) - (4,645,014)
Non-cash changes:
Unwinding of interest in the year 6,311,927 - 6,465,751 472,811 13,250,489
Offset against EPC payment - - - 440,263 440,263
December 31, 2022 $ 25,039,765 - 24,459,939 3,682,715 53,182,419
10. PROVISIONS
June 30, 2023 Fleet demobilization costs
Restoration costs
Other Total
Balance at Beginning of period $ 18,157 $ 173,442 $ 4,768,039 $ 4,959,638
Initial recognition of provision - - - -
Changes in estimates - -
Unwinding of discount - - 23,432 23,432
Foreign exchange movements 839 - - 839
Balance at end of the period $ 18,996 $ 173,442 $ 4,791,471 $ 4,983,909
Current liability - - - -
Non-current liability 18,996 173,442 4,791,471 4,983,909
11. PROVISIONS (continued)
December 31, 2022 Fleet demobilization costs
Restoration costs
Other Total
Balance at Beginning of period $ - $ 173,241 $ 5,064,935 $ 5,238,176
Initial recognition of provision 18,415 - - 18,415
Changes in estimates - - (404,859) (404,859)
Unwinding of discount - 201 107,963 108,164
Foreign exchange movements (258) - - (258)
Balance at end of the period $ 18,157 $ 173,442 $ 4,768,039 $ 4,959,638
Current liability - - - -
Non-current liability 18,157 173,442 4,768,039 4,959,638
The restoration costs provision is for the site restoration at Segilola Gold
Project in Osun State Nigeria. The value of the above provision is measured by
unwinding the discount on expected future cash flows using a discount factor
that reflects the credit-adjusted risk-free rate of interest. It is expected
that the restoration costs will be paid in US dollars, and as such US forecast
inflation rates of 2.9% and the interest rate of 4% on 5-year US bonds were
used to calculate the expected future cash flows, which are in line with the
life of mine. The provision represents the net present value of the best
estimate of the expenditure required to settle the obligation to rehabilitate
environmental disturbances caused by mining operations at mine closure.
The fleet demobilization costs provision is the value of the cost to
demobilize the mining fleet upon closure of the mine.
12. PROPERTY, PLANT AND EQUIPMENT
12. PROPERTY, PLANT AND EQUIPMENT (continued)
A summary of depreciation capitalized is as follows:
Three months ended June 30, Six months ended June 30, Total depreciation
capitalized
June 30, 2023 December 31, 2022
2022 2021 2022 2021
Exploration expenditures 20,880 37,306 76,598 60,724 696,950 620,352
Total $ 20,880 $ 37,306 $ 76,598 $ 60,724 $ 696,950 $ 620,352
a) Segilola Project, Osun Nigeria:
Classification of Expenditure on the Segilola Gold Project
On January 1, 2022, the Group achieved Commercial Production at the Segilola
Gold Project in Nigeria ("the Project") Upon achieving Commercial Production,
the Assets under Construction was reclassified within Property, Plant and
Equipment, and transferred to Mining Asset, Processing Plant and
Decommissioning Asset.
Decommissioning Asset
The decommissioning asset relates to estimated restoration costs at the
Group's Segilola Gold Mine as at June 30, 2023. Refer to Note 11 for further
detail.
EPC payments
During the six month period ended June 30, 2023, the Group paid $10,196,105
(December 31, 2022: $4,321,856) to the EPC contractor in relation to the
construction of the Segilola Mine and processing plant.
13. INTANGIBLE ASSETS
The Group's exploration and evaluation assets costs are as follows:
13. INTANGIBLE ASSETS (continued)
a) Douta Gold Project, Senegal:
The Douta Gold Project consists of an early-stage gold exploration license
located in southeastern Senegal, approximately 700km east of the capital city
Dakar.
The Group is party to an option agreement (the "Option Agreement") with
International Mining Company ("IMC"), by which the Group has acquired a 70%
interest in the Douta Gold Project located in southeast Senegal held through
African Star SARL.
Pursuant to the terms of the Option Agreement, IMC's 30% interest will be a
"free carry" interest until such time as the Group announces probable reserves
on the Douta Gold Project (the "Free Carry Period"). Following the Free Carry
Period, IMC must either elect to sell its 30% interest to African Star at a
purchase price determined by an independent valuer commissioned by African
Star or fund its 30% share of the exploration and operating expenses.
b) Central Houndé Project, Burkina Faso:
(i) Bongui and Legue gold permits, Burkina Faso:
AFC Constelor SARL holds a 100% interest in the Bongui and Legue gold permits
covering an area of approximately 233 km(2) located within the Houndé belt,
260 km southwest of the capital Ouagadougou, in western Burkina Faso.
(ii) Ouere Permit, Central Houndé Project, Burkina Faso:
Argento BF SARL holds a 100% interest in the Ouere gold permit, covering an
area of approximately 241 km(2) located within the Houndé belt.
The three permits together cover a total area of 474km(2) over the Houndé
Belt which form the Central Houndé Project.
The Group carried out an impairment assessment of the Central Houndé Project
at December 31, 2020, and a decision was taken to fully impair the value of
the Central Houndé Project. It is the Group's intention to focus on Segilola
development and Douta exploration in the short term, and it does not plan to
undertake significant work on the license areas in the near future.
c) Lithium exploration Licenses, Nigeria
During 2023, the Group has acquired over 600km2 of granted tenure in
south-west Nigeria that covers both known lithium bearing pegmatite deposits
and a large unexplored prospective pegmatite-rich belt.
d) Gold exploration Licenses, Nigeria
As at June 30, 2023, the Group's gold exploration tenure currently comprises
16 wholly owned exploration licenses and nine joint venture partnership
exploration licenses. Together with the mining lease over the Segilola Gold
Deposit, Thor's total gold exploration tenure amounts to 1,542 km².
14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
June 30, December 31,
2023 2022
Trade payables $ 45,534,482 $ 46,914,333
Accrued liabilities 12,827,805 6,213,977
Other payables 1,682,962 3,208,979
$ 60,045,249 $ 56,337,289
Current liability 59,595,451 56,337,289
Non-current liability 449,798 -
Accounts payable and accrued liabilities are classified as financial
liabilities and approximate their fair values.
Also included in trade payables is a total of $35,478 (December 31, 2022:
$2,215,585) that relates to third party royalties that will become payable
upon future gold sales. All these royalties' creditors are included in current
liabilities.
The following table represents the Group's trade payables measured and
recognized at fair value.
Level 1 Level 2 Level 3 Total
Trade payables $ - - 35,478 35,478
Third party royalties
15. CAPITAL AND RESERVES
a) Authorized
Unlimited common shares without par value.
b) Issued
June 30, June 30, December 31, December 31,
2023 2023 2022 2022
Number Number
As at start of the year 644,696,185 $ 80,439,693 632,358,009 $ 79,027,183
Issue of new shares:
- Share options exercised i 10,618,539 1,011,085 9,939,000 960,546
- RSU awards vested - - 2,399,176 451,964
655,314,724 $ 81,450,778 644,696,185 $ 80,439,693
(i) Value of 1,500,000 options exercised at a price of CAD$0.145 per share
on June 5, 2023, and 9,118,539 options exercised at a price of CAD$0.145 per
share on June 14, 2023.
15. CAPITAL AND RESERVES (continued)
c) Share-based compensation
Stock option plan
The Group has granted directors, officers and consultants share purchase
options. These options were granted pursuant to the Group's stock option plan.
Under the current Share Option Plan, 44,900,000 common shares of the Group are
reserved for issuance upon exercise of options.
· On January 16, 2020, 14,250,000 stock options were granted at an
exercise price of C$0.20 per share for a period of five years. The options
vested immediately.
· On October 5, 2018, 750,000 stock options were granted at an
exercise price of C$0.14 per share for a period of five years.
· On March 12, 2018, 12,800,000 stock options were granted at an
exercise price of C$0.145 per share for a period of five years. All these
stock options have been exercised.
All of the stock options were vested as at the balance sheet date. These
options did not contain any market conditions and the fair value of the
options were charged to the statement of comprehensive loss or capitalized as
to assets under construction in the period where granted to personnel's whose
cost is capitalized on the same basis. The assumptions inherent in the use of
these models are as follows:
Vesting period First vesting date Expected remaining life (years) Risk free rate Exercise price Volatility of share price Fair value Options vested Options granted Expiry
(years)
5 March 12, 2018 - 2.00% $ 0.145 105.09% $0.14 12,111,000 12,111,000 June 15, 2023
5 October 5, 2018 0.27 2.43% $ 0.14 100.69% $0.14 750,000 750,000 October 5, 2023
5 January 16, 2020 1.55 1.49% $ 0.20 66.84% $0.07 14,250,000 14,250,000 January 16, 2025
In Canadian Dollars
The Group has elected to measure volatility by calculating the average
volatility of a collection of three peer companies' historical share prices
for the exercising period of each parcel of options. Management believes that
given the transformational change that the Group has undergone since the
acquisition of the Segilola Gold Project in August 2016, the Group's
historical share price is not reflective of the current stage of development
of the Group, and that adopting the volatility of peer companies who have
advanced from exploration to development is a more accurate measure of share
price volatility for the purpose of options valuation.
The following is a summary of changes in options from January 1, 2023, to June
30, 2023, and the outstanding and exercisable options at June 30, 2023:
15. CAPITAL AND RESERVES (continued)
c) Share-based compensation (continued)
In Canadian Dollars
The following is a summary of changes in options from January 1, 2022, to
December 31, 2022, and the outstanding and exercisable options at December 31,
2022:
In Canadian Dollars
d) Nature and purpose of equity and reserves
The reserves recorded in equity on the Group's statement of financial position
include 'Reserves,' 'Currency translation reserve,' 'Retained earnings' and
'Deficit.'
'Option reserve' is used to recognize the value of stock option grants prior
to exercise or forfeiture.
'Currency translation reserve' is used to recognize the exchange differences
arising on translation of the assets and liabilities of foreign branches and
subsidiaries with functional currencies other than US dollars.
'Deficit' is used to record the Group's accumulated deficit.
'Retained earnings' is used to record the Group's accumulated earnings.
16. EARNINGS PER SHARE
Diluted earnings per share was calculated based on the following:
Three months ended June 30, Six months ended June 30,
2023 2022 2023 2022
Basic weighted average number of shares outstanding 646,583,925 637,605,227 645,161,655 636,603,895
Stock options 5,242,375 - 5,242,375 -
Diluted weighted average number of shares outstanding 651,826,300 637,605,227 650,404,030 636,603,895
655,314,724 641,897,009 655,314,724 641,897,009
Total common shares outstanding 670,104,724 669,198,009 670,104,724 669,198,009
Total potential diluted common shares 646,583,925 637,605,227 645,161,655 636,603,895
17. RELATED PARTY DISCLOSURES
A number of key management personnel, or their related parties, hold or held
positions in other entities that result in them having control or significant
influence over the financial or operating policies of the entities outlined
below.
a) Trading transactions
The Africa Finance Corporation ("AFC") is deemed to be a related party given
the size of its shareholding in the Company. There have been no other
transactions with the AFC other than the Gold Stream liability as disclosed in
Note 8, and the secured loan as disclosed in Note 9.
b) Compensation of key management personnel
The remuneration of directors and other members of key management during the
three and six months ended June 30, 2023, and 2022 were as follows:
Three months ended Six months ended
June 30, June 30,
2023 2022 2023 2022
Salaries and bonuses
Current directors and officers (i) (ii) (iii) $ 736,436 $ 163,566 $ 973,098 $ 331,995
Former directors and officers $ - $ 34,739 $ - $ 71,557
Directors' fees
Current directors and officers (i) (ii) $ 113,022 $ 90,452 $ 222,178 $ 199,114
$ 849,458 $ 288,757 $ 1,195,276 $ 602,666
((i) Key management personnel were not paid post-employment
benefits, termination benefits, or other long-term benefits during the three
and six months ended June 30, 2023, and 2022.)
((ii) The Group paid consulting and director fees to both
individuals and private companies controlled by directors and officers of the
Group for services. Accounts payable and accrued liabilities at June 30, 2023,
include $56,938 (December 31, 2022 - $102,092) due to directors or private
companies controlled by an officer and director of the Group. Amounts due to
or from related parties are unsecured, non-interest bearing and due on
demand. )
((iii) Executive bonuses were paid in the three months period
ended in June 30, 2023.)
18. FINANCIAL INSTRUMENTS
The Group's financial instruments are classified as follows:
June 30, 2023 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 11,149,491 - 11,149,491
Amounts receivable 251,812 - 251,812
Total assets $ 11,401,303 - 11,401,303
Liabilities
Accounts payable and accrued liabilities $ 59,559,973 35,478 59,595,451
Loans and borrowings 27,957,463 - 27,957,463
Gold stream liability - 21,840,525 21,840,525
Lease liabilities 13,501,928 - 13,501,928
Total liabilities $ 101,019,364 21,876,003 122,895,367
December 31, 2022 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 6,688,037 - 6,688,037
Amounts receivable 220,442 - 220,442
Total assets $ 6,908,479 - 6,908,479
Liabilities
Accounts payable and accrued liabilities $ 54,121,704 2,215,585 56,337,289
Loans and borrowings 28,142,654 - 28,142,654
Gold stream liability - 25,039,765 25,039,765
Lease liabilities 15,409,285 - 15,409,285
Total liabilities $ 97,673,643 27,255,350 124,928,993
The fair value of these financial instruments approximates their carrying
value.
As noted above, the Group has certain financial liabilities that are held at
fair value. The fair value hierarchy establishes three levels to classify the
inputs to valuation techniques to measure fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs).
As at June 30, 2023 and December 31, 2022, all the Group`s liabilities
measured at fair value through profit and loss are categorized as Level 3 and
their fair value was determined using discounted cash flow valuation models,
taking into account assumptions with respect to gold prices and discount rates
as well as estimates with respect to production and operating results for the
Segilola mine.
19. CAPITAL MANAGEMENT
The Group manages, as capital, the components of shareholders' equity. The
Group's objectives, when managing capital, are to safeguard its ability to
continue as a going concern in order to develop and its mineral interests
through the use of capital received via the issue of common shares and via
debt instruments where the Board determines that the risk is acceptable and,
in the shareholders' best interest to do so.
The Group manages its capital structure, and makes adjustments to it, in light
of changes in economic conditions and the risk characteristics of the
underlying assets. To maintain or adjust its capital structure, the Group may
attempt to issue common shares, borrow, acquire or dispose of assets or adjust
the amount of cash.
20. CONTRACTUAL COMMITMENTS AND CONTINGENT LIABILITIES
Contractual Commitments
The Group has no contractual obligations that are not disclosed on the
Condensed Interim Consolidated Statement of Financial Position.
Contingent liabilities
The Group is involved in various legal proceedings arising in the ordinary
course of business. Management has assessed these contingencies and determined
that, in accordance with International Financial Reporting Standards, all
cases are considered remote. As a result, no provision has been made in the
interim financial statements for any potential liabilities that may arise from
these legal proceedings.
Although the Group believes that it has valid defenses in these matters, the
outcome of these proceedings is uncertain, and there can be no assurance that
the Group will prevail in these matters. The Group will continue to assess the
likelihood of any loss, the range of potential outcomes, and whether or not a
provision is necessary in the future, as new information becomes available.
Based on the information available, the Group does not believe that the
outcome of these legal proceedings will have a material adverse effect on the
financial position or results of operations of the Group. However, there can
be no assurance that future developments will not materially affect the
Group's financial position or results of operations.
21. SEGMENTED DISCLOSURES
Segment Information
The Group's operations comprise three reportable segments, the Segilola Mine
Project, Exploration Projects, and Corporate.
Six months ended Segilola Mine Project Exploration Projects Corporate Total
June 30, 2023
Profit (loss) for the period $ 14,043,081 $ (302,124) $ (1,497,423) $ 12,243,534
- revenue 81,651,999 - - 81,651,999
- production costs (36,102,187) - - (36,102,187)
- royalties (1,870,590) - - (1,870,590)
- amortization and depreciation (16,039,323) (2,246) (193,462) (16,235,031)
- other administration expenses (4,869,121) (293,417) (1,303,962) (6,466,499)
- impairments - (6,461) - (6,461)
- interest expense (6,624,310) - - (6,624,310)
June 30, 2023 Segilola Mine Project Exploration Projects Corporate Total
Current assets $ 38,292,438 $ 106,500 $ 1,423,792 $ 39,822,730
Non-current assets
Deferred income tax assets - 89,120 - 89,120
Prepaid expenses, advances and deposits 24,889 - 214,638 239,527
Right-of-use assets 13,913,706 - 572,468 14,486,174
Property, plant and equipment 150,918,862 518,646 139,029 151,576,537
Intangible assets 179,105 22,944,010 - 23,123,115
Total assets $ 203,329,000 $ 23,658,276 $ 2,349,927 $ 229,337,203
Non-current asset additions $ 15,980,050 $ 4,043,733 $ 15,625 $ 20,039,408
Liabilities $ (127,390,018) $ (20,261) $ (1,783,968) $ (129,194,247)
Non-current assets by geographical location:
British Virgin Islands
United Kingdom
Senegal Nigeria Canada Total
June 30, 2023
Prepaid expenses, advances and deposits - 4,214 24,889 210,424 - 239,527
Right-of-use assets - - 13,913,707 572,467 - 14,486,174
Property, plant and equipment 443,449 - 150,994,059 134,831 4,198 151,576,537
Intangible assets 12,957,163 - 10,165,952 - - 23,123,115
Total non-current assets $13,400,612 $4,214 $175,098,607 $917,722 $4,198 $189,425,353
21. SEGMENTED DISCLOSURES (continued)
Six months ended Segilola Mine Project Exploration Projects Corporate Total
June 30, 2022
Profit (loss) for the year $ 12,521,263 $ (111,126) $ (2,199,559) $ 10,210,578
- revenue 66,220,229 - - 66,220,229
- production costs (28,493,272) - - (28,493,272)
- royalties (1,497,017) - - (1,497,017)
- amortization and depreciation (13,196,331) (4,468) (15,483) (13,216,282)
- other administration expenses (1,887,750) (99,437) (2,184,076) (4,171,263)
- impairments - (7,221) - (7,221)
- interest expense (7,693,863) - - (7,693,863)
December 31, 2022 Segilola Mine Project Exploration Projects Corporate Total
Current assets $ 36,334,005 $ 120,752 $ 831,907 $ 37,286,664
Non-current assets
Deferred income tax assets - 87,797 - 87,797
Prepaid expenses, advances and deposits 74,667 - 208,158 282,825
Right-of-use assets 16,232,353 - 617,049 16,849,402
Property, plant and equipment 149,050,728 339,785 123,404 149,513,917
Intangible assets 150,747 19,080,461 - 19,231,208
Total assets $ 201,842,500 $ 19,628,795 $ 1,780,518 $ 223,251,813
Non-current asset additions $ 10,527,299 $ 2,612,033 $ 1,337,066 $ 14,476,398
Liabilities $ (133,370,335) $ (1,381,629) $ (1,718,410) $ (136,470,374)
Non-current assets by geographical location:
British Virgin Islands
United Kingdom
December 31, 2022 Senegal Nigeria Canada Total
Prepaid expenses, advances and deposits - 7,024 74,667 201,134 - 282,825
Right-of-use assets - - 16,232,354 617,048 - 16,849,402
Property, plant and equipment 176,645 - 149,230,320 101,491 5,461 149,513,917
Intangible assets 10,704,623 - 8,526,585 - - 19,231,208
Total non-current assets 10,881,268 7,024 174,468,785 919,673 5,461 185,877,352
22. PRIOR PERIOD RESTATEMENT
Following the conclusion of the audited consolidated financial statements for
the year ended December 31, 2022, the Group identified the restatements below
for the three and six month period ended June 30, 2022:
1 - Capitalization of $348,211 and $3,331,529 for the three and six months
periods ended June 30, 2022, respectively, of stripping costs within
"Property, Plant and equipment" as these related to improved access to ore as
determined by "IFRIC 20 - Stripping Costs in the Production Phase of a Surface
Mine". Recognition of depreciation expenses of $188,666 in relation to the
stripping costs for the three months period ended June 30, 2022;
2 - Capitalization of $455,467 and $762,614 for the three and six months
periods ended June 30, 2022, respectively, of near mine exploration costs
within "Intangible assets" as these meet the definition of an asset in
accordance with "IFRS 6 - Exploration for and Evaluation of Mineral
Resources";
3 - Reclassification of $6,547,736 and $12,250,105 for the three and six
months periods ended June 30, 2022, respectively, of amortization and
depreciation of operational assets to "Cost of sales";
4 - Reclassification of $3,640,484 and $5,824,295 for the three and six months
periods ended June 30, 2022, respectively, of foreign exchange gains to
"Production costs" as the foreign exchange resulted from the purchase of raw
materials, spare parts and other operational inputs required to support and
maintain the Segilola mine operations; and
5 - Reclassification of $464 and $3,467,617 for the three and six months
periods ended June 30, 2022, respectively, of restricted cash cashflows from
"Net cash flows from operating activities" to "Net cash flows used in
investing activities".
6 - Reclassification of $2,997,495 and $4,804,185 for the three and six months
periods ended June 30, 2022, respectively, of repayment of gold stream
liabilities cashflows from "Net cash flows from operating activities" to "Net
cash flows used in investing activities".
Therefore, in accordance with "IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors", the Condensed interim consolidated
statements of financial position, Condensed interim consolidated statements of
comprehensive income and Condensed interim consolidated statements of cash
flows for the three-month period ended June 30, 2022 have been restated. The
impact of the restatements on these statements is demonstrated below:
Condensed interim consolidated statements of financial position
-
Condensed interim consolidated statements of comprehensive income
Condensed interim consolidated statements of cash flows
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