REG - Thor Explorations Ld - Third Quarter Financial and Operating Results
30/11/2022 07:00
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RNS Number : 0033I Thor Explorations Ltd 30 November 2022
NEWS RELEASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO U.S. WIRE SERVICES
November 30, 2022 TSXV/AIM: THX
This Announcement contains inside information as defined in Article 7 of the
Market Abuse Regulation No. 596/2014 ("MAR"). Upon the publication of this
Announcement, this inside information is now considered to be in the public
domain.
THOR EXPLORATIONS ANNOUNCES THIRD QUARTER 2022 FINANCIAL AND OPERATING
RESULTS, FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30, 2022
Thor Explorations Ltd. (TSXV / AIM: THX) ("Thor Explorations" or the
"Company") is pleased to provide an operational and financial review for its
mineral properties located in Nigeria, Senegal and Burkina Faso for the three
(the "Quarter" or "Q3") and nine months to September 30, 2022 (the "Period").
The Company's Condensed Consolidated Interim Financial Statements together
with the notes related thereto, as well as the Management's Discussion and
Analysis for the three and nine months ended September 30, 2022, are available
on Thor Explorations' website:
https://thorexpl.com/investors/financials/
(https://thorexpl.com/investors/financials/)
Operational Highlights of the Quarter and the Period
· Gold production of 26,523 ounces ("oz") for the Quarter and of
71,651oz for the Period at the Segilola Gold mine, located in Nigeria
("Segilola")
o Average mill feed grade during the Quarter was 3.58 grammes per tonne
("g/t") and recovery was 95.5%
· 28,787oz of gold and 1,931oz of silver sold in the Quarter, and
67,617oz of gold and 4,204oz of silver sold in the Period
o Gold dore inventory of 2,226oz at the end of the Quarter
· Acquisition of additional exploration licences in Osun State and
Kwara State, Nigeria
· Entered into a Joint Venture ("JV") agreement over a further
exploration licence in Kwara State, Nigeria
· Exploration during the Quarter:
o An initial 1,280 metres of reverse circulation ("RC") and diamond drilling
was carried out at Segilola
o At Douta, a RC drilling programme together with a target-generation
termite geochemistry programme occurred to test the Makosa East soil
geochemistry anomaly
o A total of 824 metres of RC drilling at the Sambara prospect at Douta was
completed. Gold mineralisation was discovered over approximately 500m of
strike
· 13 corporate governance policies were either implemented or
updated during the Quarter
· The Company continues to fund a range of livelihood restoration
programmes, including preparing sites for fish farms and for vegetable nursery
farms
· Community development programmes included Youth Initiative and
Women's Initiative programmes focusing on practical skill-based courses and
annual school scholarship awards
Financial Highlights of the Quarter and the Period
· Gold sales generated revenue for the Quarter of US$55.7 million
and US$121.9 million for the Period
· Net profit of US$4.1 million for the Quarter and US$10.4 million
for the Period
· All in sustaining cost ("AISC") of US$986 per oz for the Quarter
and US$909 per oz for the Period
· As of September 30, 2022 the Company had cash of US$2.4 million
· As of September 30, 2022 the Company had Net Debt of US$40.7
million (Q2 2022: US$47.4 million)
· US$10.3 million of Senior Debt Facility repaid reducing Senior
Debt Facility to US$28.9 million
· EBITDA of US$14.1 million for the Quarter and US$41.2 million for
the Period
Post Period Highlights
· A full transition from diesel to six megawatt ("MW") compressed
natural gas generators was completed, reducing Greenhouse Gas Emissions
("GHG") by 53%
Outlook
· Production guidance for 2022 of 90,000 to 100,000oz of gold
· Drilling programmes to resume in Q1 2023 at the Segilola Open Pit
· Continuing to advance the Douta project towards a preliminary
feasibility study ("PFS")
· Continued exploration programmes across Segilola and Douta
projects
Segun Lawson, President & CEO, stated:
"This has been another outstanding Quarter for the Company. Over the Period
the Segilola mine has continued to produce at a steady rate, with the Company
increasing production guidance twice over the last nine months. I am grateful
for the dedication and hard work shown by the team at site during this Quarter
and across the rainy season to keep production steady.
"Proudly and notably, the Company repaid another large sum of its Senior Debt
Facility in the Period, having now reduced the facility by almost half since
commercial production commenced.
"The exploration programmes upcoming across our portfolio provide great
potential for the Company and I am positive that we have the teams, both
managerial and on the ground, to realise the full potential of each project.
"Our relationship with the communities surrounding Segilola remains strong,
whilst we continue to develop the project and explore the surrounding areas it
is important to also develop the local communities and bring equal benefit to
the region.
"I look forward to provide more updates in the future on Thor's exciting
portfolio."
Further details can be found on the Company's website: www.thorexpl.com
(http://www.thorexpl.com)
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 / Thomas Diehl
Tel: +44 (0) 20 7523 8000
Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Nilesh Patel / Franck Nganou
Tel: +44 (0) 20 7907 8500
Fig House Communications (Investor Relations)
Tel: +1 416 822 6483
Email: investor.relations@thorexpl.com
BlytheRay (Financial
PR)
Tim Blythe / Megan Ray / Rachael Brooks
Tel: +44 207 138 3203
Q3 2022 Operational Review
Segilola Project, Nigeria
During the Period, there continued to be global supply chain issues resulting
in shortages and increased prices for a number of essential consumables and
supplies such as ammonium nitrate, diesel and spare parts. The Company has
mitigated these risks through the bulk purchase of most supply chain items and
anticipates that its production guidance and costs for the year remain in
line.
Gold Production
During the three months ended September 30, 2022 the Segilola Mine produced
26,523 ounces of gold (Q2 2022: 23,785 ounces).
The Company exported the gold regularly throughout the Quarter selling 28,787
ounces of gold and 1,913 ounces of silver and had a further gold dore
inventory of 2,226 ounces on hand. These ounces have all been sold in the
fourth quarter of 2022.
Mining
During the three months ended September 30, 2022, 4,018,431 tonnes of material
was mined, equivalent to mining rates of 44,649 tonnes of material per day. In
this period, 225,182 tonnes of ore were mined, equivalent to mining rates of
2,475 tonnes of ore per day, at an average grade of 4.43g/t.
The stockpile balance at the end of the period was 229,909 tonnes of ore at an
average of 1.19g/t. This comprised 406 tonnes (5.80g/t) at high grade, 2,028
tonnes (2.87g/t) at medium grade, and 227,475 tonnes (1.12g/t) at low grade.
Processing
During the three months ended September 30, 2022, a total of 241,434 tonnes of
ore, equivalent to a throughput rate of 2,682 tonnes per day, was processed.
The mill feed grade was 3.58g/t gold and recovery was 95.5% for a total of
26,523 ounces of gold produced. The Company continues to review the process
plant to optimize throughput and recoveries.
All of the main operating units of the process plant are performing as
expected, and the plant is consistently operating above nameplate capacity.
The Company continues to carry out further optimization activities for the
gold recovery process.
Production Metrics
Units Q3 2022 Q2 2022 Q1 2022
Mining
Total Ore Mined Tonnes 225,182 284,079 226,314
Ore Processed Tonnes 241,434 211,582 221,900
Ore Stockpiled Tonnes 229,909 249,281 179,758
Waste Mined Tonnes 3,793,249 3,747,504 3,533,610
Total Mined Tonnes 4,018,431 4,031,584 3,759,524
Total Ore Mined Gold Grade g/t Au 4.43 3.63 2.68
Ore Processed g/t Au 3.58 3.66 3.18
Ore Stockpiled g/t Au 1.19 1.46 1.23
Processing
Ore Milled Tonnes 241,434 211,583 221,920
Daily Throughput Rate (average) Tpd 2,835 2,784 2,760
Daily Throughput/ Nameplate % 138% 141% 128%
Capacity
Ore Processed Gold Grade
Recovery % 95.5 95.5 94.1
Gold Recovered Oz 26,523 23,785 21,343
Environment and Social Summary Q3 2022
The main focus with respect to the Company's environment and social activities
for Q3 2022 was implementing its new governance policies (13 new and/or
updated policies) which included finalising the contract for an independent
and free whistle blower hotline. Thor's 2021 Sustainability Report was
further progressed, and metrics devised for measuring implementation of key
sustainability parameters across the material topics of Corporate Governance,
People, Health and Safety, Social and Community Development, Cultural
Governance and Environment. The report will be completed in Q4 2022. The
Company has agreed to use the Global Reporting Initiative's (GRI) ESG
reporting standards including the recently released Mining and Metals Sector
disclosure standards for Thor's 2022 Sustainability and ESG Report.
During Q3 2022, significant progress has been made for the Company's wholly
owned operating subsidiary, Segilola Resources Operating Limited ("SROL") to
attain its' ISO 45001 Health and Safety accreditation with a site audit
completed and agreement on actions to close out over the next 12 months.
Accreditation is expected in Q4 2023. SROL's General Manager, Mike Kelly,
received the Safety Ambassador Award from the Institute of Safety
Professionals Nigeria (August 2022). This award from health and safety peers
is a professional acknowledgement of the high safety standards implemented at
the Segilola project.
A full transition from diesel to 6 MW compressed natural gas ("CNG")
generators will reduce GHG by 53% over that generated by diesel generators.
This is a key step in SROL's reduction of its carbon footprint. This
transition was completed post the period.
HSE statistics to end Q3 2022
An Environmental Impact Assessment for a helipad within the existing Segilola
Mine site has been submitted to Federal Ministry of Environment and is
expected to be approved in Q1 2023.
Social and community development parameters for the Segilola Project were also
progressed in Q3 2022. Focus has been on establishing livelihood restoration
projects by preparing sites for the fish farms (construction expected in Q1
2023) and site clearance for the vegetable farms' nursery. Contracts have been
awarded to local companies for the construction of both livelihood projects.
Specialist agricultural assistance from Nigerian experts has been contracted
in by SROL to assist with implementation during the next 12 month period to
enable the projects' community operators to become self-sufficient and
financially viable within the next 12 to 18 months.
Through funding agreed via Community Development Agreements ("CDA") signed
with the three communities surrounding the Segilola Mine, community programmes
were progressed in Q3 2022. These included Youth Initiative and Women's
Initiative programmes focusing on practical skill-based courses - truck driver
training, mobile phone repairs and value-added production equipment. Annual
school scholarship awards to enable children from vulnerable backgrounds to
remain in school, are progressing with testing and interviews completed.
Recipients will be selected in Q4 2022.
Compensation for temporary loss of assets and lands impacted by exploration
activities (at 13 explorations sites across three states in Nigeria) stands at
$354,000 for 585 asset owners and 15 landowners (as of end of Q3 2022).
Social listening continues (monitoring SROL and Thor mentions in Nigerian
media) across electronic, TV and printed media and findings are shared with
key departments in SROL. Most media coverage has been positive.
In Senegal, exploration activities at the Douta Project have progressed
throughout Q3 2022. The project has now appointed a HSE officer with HSE
leading and lagging indicators being recorded. A site waste plan has been
implemented and waste generated from the drill site and camp is stored in
separate bins of biodegradable and non-biodegradable. Biodegradable such as
paper, sample bags and food are burned. Non-biodegradable such as cans, and
empty water bottles are given to the local population for recovery or
recycling. Used oils are stored in a well-defined place pending delivery to
specialised companies for disposal. The HSE officer has formalized the sale of
metal waste and the money from this sale is paid into the company's social
fund for community projects.
Exploration Activity Summary Q3 2022
Nigeria
Introduction
The high grade Segilola gold deposit is located on the major regional shear
zone that extends for several hundred kilometres through the gold-bearing
Ilesha schist belt (structural corridor) of Nigeria.
Thor's exploration tenure comprises 11 wholly owned explorations licences and
four joint ventures. Together with the mining lease over the Segilola Gold
Deposit, Thor's total exploration tenure amounts to over 1,400 km(2).
Exploration Activity
In the Quarter, the Company increased its exploration footprint in Nigeria via
the acquisition of additional exploration licences in Osun State and Kwara
State and also entered into a joint venture agreement over a further
exploration licence in Kwara state.
The Company's licence portfolio now consists of 17 exploration licences and
the Segilola mining licence.
Figure 1:Thor Explorations/ Segilola Licence Portfolio Map
Exploration during the Quarter consisted of an initial 1,280 metres of reverse
circulation ("RC") and diamond drilling. In addition to the drilling
programme, the Company prioritised the generation of drilling targets, with a
focus on targets within trucking distance of the Segilola plant. Exploration
activities comprised of soil and stream geochemical surveys, auger drilling,
trenching and ground magnetic programmes.
The areas drilled were north of the Segilola Open Pit and at the "Ijana" and
"Esteedan" targets which are located 14km to the west of Segilola. The main
objectives of this programme are:
1. To test the geochemical and structural targets generated by auger soil
sampling and trenching in EL 20776 and EL23573 also the drilling was targeting
the occurrence of gold mined in shallow pits mined by artisanal.
2. To test the gold-in soil anomalies generated by auger soil and trench
sampling at Odo within EL19066, 3km north of Segilola deposit.
The drilling programmes are scheduled to resume in January following the
receipt of all assay results and completion of drill target generation work.
Figure 2: Map Showing Drilling Programme Locations
Figure 3: Drill Targets Generated on the Company's portfolio
Senegal
Introduction
The Douta Gold Project is a gold exploration permit, E02038, which covers an
area of 58km(2) and is located within the Kéniéba inlier, eastern Senegal.
The northeast-trending licence (Figure 4) 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 (Figure 4). The Makabingui deposit,
belonging to Bassari Resources Ltd, is immediately located east of the
northern portion of E02038.
There is an initial resource estimate of 15 million tonnes ("Mt") grading
1.53g/t Au for 730,000oz gold in the Inferred category. The resource
encompasses the Makosa, Makosa North and Makosa Tail zones, which are
collectively named the Makosa Resource.
Figure 4: Douta Project Location Map
Exploration Activity
During the Quarter, the main exploration work comprised the RC drilling
programme together with a target-generation termite geochemistry programme
occurred to test the Makosa East soil geochemistry anomaly.
Tables 5 and 6 summarise the exploration statistics for the Quarter.
Statistic RC Drilling Q3 July August September 2022
Prospect Month Start Date End Date Holes drilled Samples Total Depth Drilled Sample Despatched Assay Received Assay Pending/EndofMonth
Sambara July 21/07/2022 31/07/2022 11 970 824 824 0 970
August 01/08/2022 31/08/2022 0 0 0 0 970 0
September 01/09/2022 30/09/2022 0 0 0 0 0
Makosa Tail July 01/07/2022 30/07/2022 4 314 267 0 0 6107
August 01/08/2022 31/08/2022 48 4676 3986 3024 624 5483
September 01/09/2022 30/09/2022 11 1045 940 3084 2399 3084
Makosa Main July 01/07/2022 30/07/2022 0 0 0 0 0
August 01/08/2022 31/08/2022 0 0 0 0 0
September 01/09/2022 30/09/2022 34 3070 2670
Q3 Total 108 9990 8687 6932 3993
Table 5: Douta Drilling Statistics
Geochem Statistic Q3 July August September 2022
Drill Type MonthNo Start Date End Date Point Status Sample Despatched Assay received Assay Pending / End of month
GEOCHEM July 2022-07-01 2022-07-31 COMPLETE ABANDONED
August 2022-08-01 2022-08-31 299 299
September 2022-09-01 2022-09-30
ROCKS July 2022-07-01 2022-07-31
August 2022-08-01 2022-08-31 26 26
September 2922-09-01 2022-09-30 299
Table 6: Douta Geochemistry statistics
Exploration Results
Sambara
The Sambara Prospect is located 15km north-east along strike from the Makosa
resource (Figure 5). Drilling targeted an anomalous zone defined by auger
geochemical sampling. The area is located 2km directly north of the Makabingui
group gold deposits and which collectively contain approximately 340,000oz
gold in the indicated category and 670,000oz gold in the inferred category.
Drill testing of the geochemical anomaly was carried out over nine sections
that were spaced at either 100m or 200m apart (Figure 5). This wide spacing
was considered to be appropriate for the first phase of drill testing. Based
on the positive results received, additional, closer-spaced (infill) drilling
will be undertaken.
A total of 824m of RC drilling at the Sambara prospect was completed. Gold
mineralisation was discovered over approximately 500m of strike. The host rock
is deformed greywacke associated with smoky quartz, disseminated pyrite,
sericite, and silica stockworks.
Table 7 summarises the significant results from the Sambara drilling
programme.
HOLE-ID X Y Z Depth (m) Azi-muth Dip From (m) To (m) Interval (m) Grade (g/tAu) True Width (m)
DTRC426 187999 1451958 146 72 130 -50 65 71 6 4.80 2.5
Incl 70 71 1 0.80 0.9
DTRC431 188165 1452076 150 84 130 -50 12 18 6 4.80 3.6
DTRC491 188174 1452068 160 42 130 -60 8 10 2 6.39 1.3
DTRC492 188155 1452081 160 60 130 -60 23 26 3 1.64 1.9
DTRC493 188146 1452093 160 96 130 -60 10 11 1 3.33 0.6
And 41 42 1 2.53 0.6
And 57 63 6 2.58 3.7
Includes 59 63 4 3.32 2.3
DTRC496 188230 1452156 145 70 130 -60 8 13 5 1.12 3.2
DTRC497 188094 1452008 158 45 130 -60 15 20 5 1.74 3.1
DTRC497 130 -60 26 28 2 5.85 1.2
DTRC498 188080 1452020 163 90 130 -60 17 22 5 0.55 3.2
And 29 34 5 1.07 3.2
And 60 61 1 4.72 0.6
Table 7: Sambara Significant Results
Figure 5: Sambara Drillhole Location Map
Makosa
The Makosa resource is currently classified as inferred. In August 2022, Thor
commenced a programme of follow up RC and diamond drilling with the objective
of upgrading the higher-grade portions of the resource, that fall within the
optimised pit shell, to indicated classification.
Initial results from drillholes completed at the southern extremity of the
deposit include 8m at 4.77g/t gold from 62m in drillhole DTRC504 (Figure 6).
The significant intersections from Makosa are listed in Table 8. In addition
to upgrading this part of the resource, the intersection suggests that gold
mineralisation may extend to depth. Two additional drillholes (DTRC561 and
DTRC562) have subsequently been drilled to test for depth extensions to this
higher grade zone. Assays for these two holes are pending.
HOLE-ID X Y Z Length (m) Azi-muth Dip From (m) To (m) Interval (m) Grade (g/tAu) True Width (m)
DTRC502 173909 1433683 198 70 130 -60 45 52 7 1.11 4.6
DTRC504 173926 1433729 155 80 130 -60 47 50 3 1.48 1.9
and 62 70 8 4.77 5.1
DTRC505 173877 1433642 155 72 130 -60 34 39 5 1.92 3.1
and 53 60 7 0.60 4.4
DTRC506 173898 1433630 200 30 130 -60 1 5 4 2.95 2.5
includes 1 4 3 3.29 1.8
DTRC508 174264 1434389 190 60 130 -60 19 21 2 3.12 1.2
and 47 53 6 0.51 3.7
DTRC509 174304 1434427 190 42 130 -60 38 40 2 2.84 1.2
Table 8: Makosa Significant Results
(0.5g/tAu lower cut off; maximum 2m internal dilution, minimum 2m interval)
Figure 6: Makosa Drillhole Location Map
At Makosa, zones of gold mineralisation are developed either within a sheared
gabbro intrusive or within a steep north-westerly dipping sequence of
meta-sedimentary rocks that are close proximity to the gabbro (Figure 7).
Higher grade zones or shoots are suspected to occur along east-west oriented
structures that cut across the main north-east trend of the mineralisation.
The potential to upgrade the resource will be assessed by ongoing infill
drilling along the Makosa mineralised trend.
Figure 7: Makosa Cross Section
Hounde Gold Project, Burkina Faso
No exploration activities took place during the Quarter.
SUBSEQUENT EVENTS
There are no material subsequent events to report.
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 focussed on advancing the Company's strategic objectives and near-term
milestones which include:
· Maintain our rigorous health and safety protocols
· 2022 Operational Guidance and Outlook
Gold Production oz 90,000-100,000
All-in Sustaining Cost ("AISC") US$/oz Au sold $850 - $950
Capital Expenditure1 US$ 23,500,000
Exploration Expenditure:
Nigeria2 US$ 4,200,000
Senegal US$ 3,000,000
1 The increase in guidance from Q2 is due to the additional provision for the
EPC contract ($9m), and purchase of additional mining equipment ($4.5m) not
included in previous guidance.
2 This includes purchase of licenses and near mine exploration
· The critical factors that influence whether Segilola can achieve
these targets include:
o Segilola's ability to maintain an adequate supply of consumables (in
particular ammonium nitrate, flux and cyanide) and equipment, particularly if
there is any resurgence in the COVID-19 pandemic
o Fluctuations in the price of key consumables, in particular ammonium
nitrate, and diesel
o Segilola's workforce remaining healthy
o Continuing to receive full and on-time payment for gold sales
o 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:
o Segilola near mine exploration
o Segilola underground project
o Segilola regional exploration programme
o Douta extension programme
o Douta infill programme
o Assess regional potential targets in Nigeria
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
$ 2022 Q3 2022 Q2 2022 Q1 2021 Q4
Sep 30 Jun 30 Mar 31 Dec 31
Revenues 55,703,098 41,354,747 24,865,482 6,205,345
Net profit/(loss) for period 4,126,066 6,163,942 200,473 2,665,653
Basic and fully diluted profit/(loss) per share (cents) 0.016 0.01 0.00 0.40
$ 2021 Q3 2021 Q2 2021 Q1 2020 Q4
Sep 30 Jun 30 Mar 31 Dec 31
Revenues - - - -
Net profit/(loss) for period 463,844 (5,582,090) (67,365) (1,560,694)
Basic and fully diluted profit/(loss) per share (cents) (0.001) (0.90) (0.05) (0.25)
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
Average realized gold price is a metric used to better understand the gold
price realized during a period. This is calculated as sales less treatment and
refining charges, and sales agreement costs divided by gold oz sold.
Average annual realised price per ounce sold
Units Nine months to September 30 2022 Three months to September 30, 2022 Three months to June 30, 2022 Three months to March 31, 2022
Revenues 1 $ 121,923,327 55,703,098 41,354,747 24,865,482
Deferred Income 2 $ - - - 6,233,347
Gold Sales $ 121,923,327 55,703,098 41,354,747 31,098,829
Gold ounces sold oz Au 67,617 28,787 22,172 16,658
Average realised price per ounce sold3 $ 1,803.15 1,935.01 1,865.18 1,866.90
(1) Included in Revenues is sales of silver, which is a produced and sold as a
by-product, and is not material to the calculation.
2 Deferred income relates to 3,196 ounces of gold sales that were in transit
as at March 31 2022.
3 Impact of deferred income ounces rolled forward into three months to
September 30,2022, regularized at nine months to September 30, 2022
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.
Average annual cash operating cost per ounce of gold
Nine months to September 30, 2022 Three months to September 30, 2022 Three months to June 30, 2022 Three months to March 31, 2022
Operating expenses $ 47,012,448 17,912,146 19,486,150 8,356,121
Expenses relating to deferred income 1 $ - - - 2,681,819
Royalty expenses $ 2,379,110 882,093 946,252 550,765
Cash Operating costs $ 49,391,558 18,794,239 20,432,402 11,588,705
Gold ounces sold recognised in income statement Oz Au 67,617 28,787 22,172 16,658
Cash operating cost per ounce sold $/oz 730 653 922 771
(1)Deferred income relates to 3,196 ounces of gold sales that were in transit
as at March 31 2022.
All-in sustaining cost per ounce
AISC provides information on the total cost associated with producing gold
since December 1, 2021 and has been calculated on a basis consistent with
historic news releases by the Company.
The Company calculates AISC as the sum of total cash operating costs (as
described above), corporate social responsibility costs, treatment and
refining charges, accretion of restoration provision, and sustaining capital,
less silver revenue, all divided by the gold ounces sold to arrive at a per oz
amount.
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
Nine months to September 30, 2022 Three months to September 30, 2022 Three months to June 30, 2022 Three months to March 31, 2022
Cash operating costs $ 49,391,558 18,794,239 20,432,402 8,356,121
Treatment and refining charges $ 2,447,485 1,340,272 604,691 502,522
Sustaining capital1 $ 9,626,085 8,246,912 160,896 1,218,277
Total all-in sustaining cost $ 61,465,128 28,381,423 21,197,989 13,309,204
Gold ounces sold oz Au 67,617 28,787 22,172 16,658
All-in sustaining cost per ounce sold $/oz 909 986 956 799
1 Sustaining capital for the three months to September 30, 2022 includes
capital costs relating to the TMF project ($1.7m), workshop and building
construction ($461,000), process plant and mining spares and equipment ($1.3m)
and reallocated mine asset costs from Q1 and Q2 into Q3.
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 measure 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.
Previous quarters contained a provision for outstanding EPC invoices of $5.2
million. Following a full audit, the EPC contractor presented and the Company
has accepted, an additional late invoice of approximately $4 million. Total
EPC Payments due have been confirmed at $16 million.
The Net Debt reported at June 30, 2022 and March 31, 2022 have been revised to
include the deferred income component which was omitted from the Net Debt
calculations. The revised figures are presented in the Table below. The figure
reported for Net Debt in June 30, 2022 and March 31, 2022 was $37,306,971 and
$50,463,920 respectively.
Net Debt
1 Includes gold dore held in inventory valued at $1,700/oz.
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)
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)
Nine months to September 30, 2022 Three months to September 30, 2022 Three months to June 30, 2022 Three months to March 31, 2022
Net profit for the period $ 10,431,167 4,126,066 6,104,628 200,473
Amortisation and depreciation - owned assets $ 15,923,649 5,130,023 5,789,009 5,004,617
Amortisation and depreciation - right of use assets $ 3,477,995 1,244,005 1,075,735 1,158,255
Impairment of Exploration & Evaluation assets $ 9,581 2,360 4,520 2,701
Interest expense $ 11,351,690 3,657,827 3,935,732 3,758,131
EBITDA $ 41,194,082 14,160,281 16,909,624 10,124,177
Ounces sold1 oz Au 67,617 28,787 22,172 16,658
EBITDA per ounce sold $ 609 492 763 608
1 3,196 ounces of gold in transit at March 31, 2022 were adjusted for between
Q1 and Q2 sales.
RESULTS FOR NINE MONTHS ENDED SEPTEMBER 30, 2022
The review of the results of operations should be read in conjunction with the
Company's Consolidated Financial Statements and notes thereto.
The Company reported a net profit of $10,431,167 ($0.016 profit per share) for
the nine months to September 30, 2022, as compared to a net loss of
($4,644,514 ($0.007 loss per share) for the nine months ended September 30,
2021. The move to profit for the nine months was largely due to:
· Sales to Q3 2022 of $121,923,327 2021 (nil for 2021);
· Foreign exchange gains of $8,043,758 from loss of $967,679 for
the same period in 2021
These were offset partially by:
· Amortisation and depreciation of $19,401,644; and
· Interest of $11,351,690
The Company recorded sales revenue of $121,923,327 for the nine months ended
September 30, 2022, and $nil for the nine months to September 30,2021. No
interest was earned during the nine months ended September 30, 2022, and 2021.
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2022, the Company had cash of $2,459,709, and 2,226 ounces
of gold dore in inventory to be sold, and a working capital deficit of
$35,592,984.
The increase in cash from December 31, 2021 (cash of $1,276,270) is due mainly
to gold sales revenue of $121,923,327, offset by instalment payments on the
loan facility of $27,388,729, the purchase of property plant and equipment of
$9,575,425 and operational costs and corporate overheads of $89,111,233. This
cash expenditure was financed by operational cashflow and existing cash
balances.
The EPC Contractor has confirmed that it will continue to support the Company
by extending the payment period of the final EPC invoices and has acknowledged
that the Company will make payment of the final EPC invoices from available
cashflow by the end of H1 2023.
Working Capital Calculation
The Working Capital Calculation excludes $9,891,530 of gold stream
liabilities, and $3,492,023 in third party royalties included in current
accounts payable, that are contingent upon the achievement of the revised gold
sales forecast of 90,000-100,000 ounces for the year ending December 31, 2022.
Included in working capital, in Accounts payable and accrued liabilities, is a
balance of $16,025,837 due to our EPC contractors. The EPC Contractor and the
Company have agreed to make payment of the final EPC invoices from available
cashflow before June 30, 2023.
Working Capital
September 30 2022 June 30 2022 March 31 2022
Current Assets
Cash and Restricted Cash $ 2,459,709 5,055,930 6,276,376
Inventory $ 11,581,051 24,046,025 16,534,943
Less expenses related to Deferred Income $ (6,556,648) (2,681,819)
Amounts receivable, prepaid expenses, advances and deposits $ 3,758,295 2,667,106 1,110,095
Total Current Assets for Working Capital $ 17,799,055 25,212,413 21,239,595
Current Liabilities
Accounts Payable and accrued liabilities $ 48,670,354 39,128,410 31,834,095
Lease Liabilities $ 4,766,383 4,007,843 4,854,714
Gold Stream Liability $ 9,891,530 11,753,417 12,889,957
Loan and other borrowings $ 3,447,325 15,779,820 28,441,348
$ 66,775,592 70,610,992 78,020,114
less: Current Liabilities contingent upon future gold sales $ (13,383,553) (16,608,385) (18,268,990)
Total Current Liabilities for Working Capital $ 53,392,039 54,061,105 59,751,124
Inventory
Gold inventory is recognised 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
September 30 2022 June 30 2022 March 31 2022
Plant spares and consumables $ 2,285,788 3,071,586 1,513,438
Gold ore in stockpile $ 5,801,769 9,728,233 4,203,827
Gold in circuit $ 1,774,547 2,457,696 2,581,292
Gold dore (1) $ 1,718,947 8,788,510 8,236,386
Total assets measured at amortised cost $ 11,581,051 24,046,025 16,534,943
1:Gold dore is valued at cost ($772/oz), which comprises production cost,
depreciation and amortisation.
Liquidity and Capital Resources
The Company has generated strong operating cash flow during Q3 2022 and
expects to continue to do so based on its production and AISC guidance. This
strong operating cash flow will support debt repayments, regional exploration
and underground expansion drilling at Segilola, planned capital expenditures
and corporate overhead costs.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THOR EXPLORATIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In United States dollars (unaudited)
September 30, December 31,
Note 2022 2021
$
$
ASSETS
Current assets
Cash 2,459,709 1,276,270
Restricted cash 6 3,495,992
-
Inventory 7 11,581,051 18,146,558
Amounts receivable 8 466,575 237,651
Prepaid expenses, advances and deposits 9 3,291,720 586,865
Total current assets 17,799,055 23,743,336
Non-current assets
Deferred income tax assets 74,753 86,795
Prepaid expenses, advances and deposits 9 240,867 105,683
Right-of-use assets 10 17,143,126 20,843,612
Property, plant and equipment 15 144,289,041 147,373,656
Intangible assets 16 15,173,671 15,345,419
Total non-current assets 176,921,458 183,755,165
TOTAL ASSETS 194,720,513 207,498,501
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 17 48,670,354 38,827,489
Lease liabilities 10 4,766,383 4,849,088
Gold stream liability 11 9,891,530 12,837,633
Loans and other borrowings 12 4,586,279 27,984,078
Total current liabilities 67,914,546 84,498,288
Non-current liabilities
Accounts payable and accrued liabilities 17 1,564,191
-
Lease liabilities 10 11,528,190 13,425,286
Gold stream liability 11 16,774,634 17,424,646
Loans and other borrowings 12 26,129,889 25,754,525
Provisions 14 5,353,193 5,238,176
Total non-current liabilities 59,785,906 63,406,824
SHAREHOLDERS' EQUITY
Common shares 18 79,949,297 79,027,183
Option reserve 18 3,455,454 4,513,900
Currency translation reserve (6,816,119) (2,889,510)
Retained earnings (9,568,571) (21,058,184)
Total shareholders' equity 67,020,061 59,593,389
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 194,720,513 207,498,501
These consolidated financial statements were approved for issue by the
Board of Directors on November 29, 2022, and are signed on its behalf by:
(Signed) "Adrian Coates" (Signed) "Olusegun Lawson"
Director Director
The accompanying notes are an integral part of these consolidated financial
statements.
THOR EXPLORATIONS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
In United States dollars (unaudited)
Three Months Ended Nine Months Ended
September 30,
September 30,
Note 2022 2021 2022 2021
Continuing operations
Revenue $ 55,703,098 $ - $ 121,923,327 $ -
Production costs 5 $ 36,347,670 - 73,996,766 -
Transportation and refining 1,340,272 - 2,447,485 -
Royalties 882,093 - 2,379,110 -
Gain on forward sale of commodity contracts (161,750) - (338,230) -
Gross profit from operations 17,294,813 - 43,438,196 -
Amortisation and depreciation - owned assets 5 5,130,023 5,525 15,923,649 14,024
Amortisation and depreciation - right of use assets 5 1,244,005 11,291 3,477,995 33,808
Other administration expenses 5 5,353,995 789,403 10,287,872 2,250,239
Impairment of Exploration & Evaluation assets 16 2,360 2,452 9,581 100,298
Profit (loss) from operations 5,564,430 (808,671) 13,739,099 (2,398,369)
Interest expense (3,657,827) (44) (11,351,690) (564)
Foreign exchange gains 2,219,463 1,404,404 8,043,758 (967,679)
Extra-ordinary expenses (136,281) (1,277,902)
Net profit (loss) for the period 4,126,066 459,408 10,431,167 (4,644,514)
Attributable to:
Non-controlling interest
Equity shareholders of the Company 4,126,066 459,408 10,431,167 (4,644,514)
Net profit (loss) for the period 4,126,066 459,408 10,431,167 (4,644,514)
Other comprehensive profit (loss)
Foreign currency translation loss attributed to (2,350,363) 624,900 (3,926,609) (2,079,271)
equity shareholders of the company
Total comprehensive income profit (loss) for the period 1,775,703 1,084,308 6,504,558 (6,723,785)
Net profit (loss) per share - basic and diluted 19 $ 0.006 $ 0.001 $ 0.016 $ (0.007)
Weighted average number of common shares 637,605,227 626,280,674 636,941,340 622,722,592
outstanding - basic and diluted
The accompanying notes are an integral part of these unaudited condensed
consolidated interim financial statements.
THOR EXPLORATIONS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
In United States dollars (unaudited)
Three Months Ended Nine Months Ended
September 30,
September 30,
Note 2022 2021 2022 2021
Cash flows from (used in):
Operating activities
Net profit / (loss) $ 4,126,066 $ 459,409 $ 10,431,167 $ (4,644,514)
Adjustments for:
Impairment of unproven mineral interest 16 2,360 2,452 9,581 100,298
Amortisation and depreciation 5 6,374,028 16,816 19,401,644 47,832
Loss on forward sale commodity contracts (161,750) - (338,230) -
Settlement of gold stream obligation - - - -
Foreign exchange (gain) loss (5,824,295) (422,907) (8,043,758) 1,453,721
Interest income / expense 3,657,827 44 11,351,690 564
8,174,236 55,814 32,812,094 (3,042,099)
Changes in non-cash working capital accounts
Restricted cash - (95,302) 3,495,922 688
Receivables 239,224 (887,820) (228,924) (825,671)
Prepaid expenses and deposits (1,330,413) 55,225 (2,704,855) 180,415
Deferred income (10,147,435) - - -
Inventory 12,464,974 26,203 6,565,507 26,203
Prepaids long term 29,666 - 49,865 -
Repayment of goldstream liabilities (2,411,164) - (3,596,115) -
Accounts payable and accrued liabilities 9,541,944 (689,369) 9,842,865 (1,880,187)
Cash flows from/(used in) operating activities 16,561,032 (1,535,249) 46,236,359 (5,540,651)
Adjustment to net loss for cash items
Realized foreign exchange (698,971) (23,599) 28,202 114,852
Net cash flows from/(used in) operating activities 15,862,061 (1,558,848) 46,264,561 (5,425,799)
Investing
Purchase of intangible assets - (41,073) (168) (177,133)
Assets under construction expenditures - (8,955,726) - (40,973,498)
Acquisition of Right of use assets (17,718) - (17,718) -
Property, Plant & Equipment (2,255,416) (359,095) (11,218,923) (1,932,537)
Exploration & Evaluation assets expenditures (998,795) (1,245,718) (2,096,383) (1,914,491)
Net cash flows used in investing activities (3,271,929) (10,601,612) (13,333,192) (44,997,659)
Financing
Proceeds from issuance of equity securities - 1,053,571 - 1,338,156
Share subscriptions received - - 922,114 -
(Repayment of) / Proceeds from loans and borrowings (9,458,865) 6,452,253 ########### 27,078,470
Net proceeds from short term currency swaps (3,011,954) - (663,726) -
Interest paid (1,181,269) - (3,725,137) -
Payment of lease liabilities (1,370,785) (6,511) (3,949,944) (30,903)
Net cash flows (used in)/from financing activities (15,022,873) 7,499,313 (31,643,727) 28,385,723
Effect of exchange rates on cash (163,480) (258,208) (104,273) 2,339,897
Net change in cash $ (2,596,221) $ (4,919,355) $ 1,183,369 $(19,697,838)
Cash, beginning of the period $ 5,055,930 $ 7,586,533 $ 1,276,270 $ 22,365,016
Cash, end of the period $ 2,459,709 $ 2,667,178 $ 2,459,709 $ 2,667,178
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
THOR EXPLORATIONS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
In United States dollars (unaudited)
Note Common shares Option reserve Currency translation reserve Deficit Total shareholders' equity
Balance on December 31, 2020 $ 76,858,769 $4,626,426 $ (594,661) $(19,562,232) $ 61,704,198
Reinstatement of warrants 19 - - - (45,899) -
Net loss for the period - - - (67,364) (67,364)
loss - - (804,019) - (804,019)
Balance on June 30, 2021 $ 76,858,769 $4,626,426 $ (1,398,680) $(19,675,495) $ 60,832,815
Exercise of warrants 19 2,073,451 - - 421,794 2,073,451
Options exercised 19 94,963 (112,527) - 112,527 94,963
Net loss for the period - - - (1,917,010) (1,917,010)
Comprehensive loss - - (1,490,830) - (1,490,830)
Balance on December 31, 2021 $ 79,027,183 $4,513,900 $ (2,889,510) $(21,058,184) $ 59,593,389
Share issuance costs 19 - - - - -
Issue of share options 19 - - - - -
Options exercised 19 922,114 (1,058,446) - 1,058,446 922,114
Net profit for the period - - - 10,431,167 10,431,167
Comprehensive loss - - (3,926,609) - (3,926,609)
Balance on September 30, 2022 $ 79,949,297 $3,455,454 $ (6,816,119) $ (9,568,571) $ 67,020,061
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022, AND 2021
In United States dollars, except where noted (unaudited)
1. CORPORATE INFORMATION
· Thor Explorations Ltd. is a West African focused gold producer
and explorer, dually listed on the TSX-V (THX.V) and AIM Market of the London
Stock Exchange (THX.L).
·
· The Company was formed in 1968 and is organised under the 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.
·
2. BASIS OF PREPARATION
a) Statement of compliance
These unaudited condensed consolidated interim financial statements, including
comparatives, have been prepared using accounting policies consistent with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board.
b) Basis of measurement
These unaudited condensed consolidated interim financial statements have been
prepared on a historical cost basis and are presented in United States
dollars, unless otherwise indicated.
The preparation of financial statements in compliance with IFRS requires
management to make certain critical accounting estimates. It also requires
management to exercise judgment in applying the Company's accounting policies.
A precise determination of many assets and liabilities is dependent upon
future events, the preparation of consolidated financial statements for a
period involves the use of estimates, which have been made using careful
judgment. Actual results may differ from these estimates. The areas involving
a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the unaudited condensed financial statements are
discussed in Note 4.
c) Nature of operations and going concern
As at September 30, 2022, the Company had cash of $2,459,709 and inventory of
2,226 ounces of gold dore and 2,298 ounces of gold in circuit to be sold.
During the nine-month period ended September 30, 2022, the Company produced
71,651 ounces of gold (Q2 2022: 45,128 ounces) and post period end, the
Company has continued production from its Segilola Gold Mine. The Company sold
67,617 ounces of gold from 1 January 2022 to the end of Q3 2022.
The Board has reviewed the Group's cash flow forecasts for the twelve-month
period from the date of this report including revised forecast production of
90,000 - 100,000 ounces of gold for 2022. The Board is satisfied that the
Group will generate sufficient financial resources from its operational cash
flow to meet commitments for at least the next twelve months.
The Board has considered the operational disruption that could be caused by
factors such as interruptions to production at commercial levels, illness
amongst workforce caused by global and regional pandemics, and potential
disruptions to supply chains. The forecast cashflows are based on a gold price
of US$1,836/oz and the all-in sustaining cost at Segilola of US$850 -
$US950/oz during the period under review (Refer to section 3 of the Q3 2022,
MD&A).
The final EPC invoices are recorded as due and payable and constitute a
material amount of the net working capital deficit. The EPC Contractor has
confirmed that it will continue to support the Company by extending the
payment period of the final EPC invoices and has acknowledged that the Company
will make payment of the final EPC invoices from available cashflow.
As at September 30, 2022, the Group had a net working capital deficit of
$35,592,984 which includes its Senior Secured Facility, Deferred Payment
Facility (refer to Note 12), Mining Contractor invoices which become due three
months after being invoiced, final EPC invoices which became due post EPC
handover, which occurred on January 31, 2022. The working capital calculation
excludes $9,891,530 of gold stream liabilities, and $3,492,023 in third party
royalties included in current accounts payable, that are contingent upon
revised gold sales forecast of 90,000-100,000 ounces for the year ending
December 31, 2022.
In Q3, 2022, the Company made its third scheduled debt repayment to the Africa
Finance Corporation of $10,311,969 consisting of principal and interest, in
accordance with the terms of its Senior Secured Facility.
At September 30, 2022, total principal repayments and cancellations amount to
$25,040,397, 46% of the original $54m Facility.
Having reviewed the cash flow forecast, the Board anticipates that continued
production at expected levels from its Segilola Gold Mine will provide
sufficient cash generation to enable the Group to service future debt
repayment obligations.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies described below have been applied consistently to all
periods presented in these unaudited condensed consolidated interim financial
statements unless otherwise stated.
a) Consolidation principles
Assets, liabilities, revenues and expenses of the subsidiaries are recognized
in accordance with the Company's accounting policies. Intercompany
transactions and balances are eliminated upon consolidation.
b) Details of the group
In addition to the Company, these unaudited condensed consolidated interim
financial statements include all subsidiaries of the Company. Subsidiaries are
all corporations over which the Company has power over the Subsidiary and it
is exposed to variable returns from the Subsidiary and it has the ability to
use its power to affect those variable returns. Control is reassessed whenever
facts and circumstances indicate that there may be a change in any of these
elements of control. The audited consolidated financial statements present the
results of the Company and its subsidiaries ("the Group") as if they formed a
single entity, with Subsidiaries being fully consolidated from the date on
which control is acquired by the Company. They are de-consolidated from the
date that control by the Company ceases.
The subsidiaries of the Company are as follows:
Company Location Incorporated Interest
Thor Investments (BVI) Ltd. ("Thor BVI") British Virgin Islands September 30, 2011 100%
African Star Resources Incorporated ("African Star") British Virgin Islands September 30, 2011 100%
Segilola Resources Incorporated ("SR BVI") British Virgin Islands March 10, 2020 100%
Thor Gold Ventures Ltd ("THX GV") United Kingdom February 11, 2022 100%
African Star Resources SARL ("African Star SARL") Senegal July 14, 2011 100%
Argento Exploration BF SARL Burkina Faso September 15, 2010 100%
("Argento BF SARL")
AFC Constelor Panafrican Resources SARL ("AFC Constelor SARL") Burkina Faso December 9, 2011 100%
Segilola Resources Operating Limited Nigeria August 18, 2016 100%
("SROL")
Segilola Gold Limited ("SGL") Nigeria August 18, 2016 100%
The only change to ownership interest from the previous year was the
incorporation of Thor Gold Ventures Ltd in February 2022.
c) Foreign currency translation
Functional and presentation currency
The Company's presentation currency is the United States dollar ("$"). The
functional currency for the Company, being the currency of the primary
economic environment in which the Company operates. The individual financial
statements of each of the Company's wholly owned subsidiaries are prepared in
the currency of the primary economic environment in which it operates (its
functional currency).
Exchange rates published by Oanda were used to translate the Thor BVI, African
Star, SR BVI, African Star SARL, Argento BF SARL, AFC Constelor SARL, SROL and
SGL's financial statements into the United States dollar in accordance with
IAS 21 The Effects of Changes in Foreign Exchange Rates. This standard
requires, on consolidation, that assets and liabilities be translated using
the exchange rate at period end, and income, expenses and cash flow items are
translated using the rate that approximates the exchange rates at the dates of
the transactions (i.e., the average rate for the period). The foreign exchange
differences on translation of subsidiaries Thor GV, African Star, African Star
SARL, Argento BF SARL, AFC Constelor SARL, SROL and SGL are recognized in
other comprehensive income (loss). Exchange differences arising on the net
investment in subsidiaries are recognised in other comprehensive income.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing on the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at period-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit and
loss. Fluctuations in the value of the local currencies of our subsidiaries,
with most notably the US dollar will result in foreign exchange gains and
losses as assets and liabilities denominated in US dollar are revalued in the
Subsidiary's local currency at reporting dates.
a. Financial instruments
Financial assets and financial liabilities are recognised in the consolidated
statement of financial position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities are added to or deducted
from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition.
The effective interest method is a method of calculating the amortised cost of
a financial asset/liability and of allocating interest income/expense over the
relevant period. The effective interest rate is the rate that discounts
estimated future cash receipts/payments through the expected life of the
financial asset/liability or, where appropriate, a shorter period. Costs
directly relating to financing facilities are initially recognised against the
loan balance, and subsequently released to the income statement over the term
of the facility.
Derecognition of financial assets and liabilities
Financial assets
A financial asset (or, where applicable a part of a financial asset or part of
a group of similar financial assets) is derecognised when:
- the rights to receive cash flows from the asset have expired;
- the Group retains the right to receive cash flows from the asset,
but has assumed an obligation to pay them in full without material delay to a
third party under a 'pass through' arrangement; or
- the Group has transferred its rights to receive cash flows from the
asset and either (a) has transferred substantially all the risks and rewards
of the asset, or (b) has neither transferred nor retained substantially all
the risks and rewards of the asset but has transferred control of the asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised
in profit or loss.
Financial Assets
Under IFRS 9, the Group classifies its financial assets into the following
categories: those to be held at amortised cost, and those to be measured
subsequently at fair value through profit and loss.
Classification depends on the business model for managing the financial assets
and the contractual terms of the cash flows. Management determines the
classification of financial assets at initial recognition. The Group's
business model is primarily that of "hold to collect" (where assets are held
in order to collect contractual cash flows).
Amortised cost: these assets arise principally from the provision of goods
and services to customers, but also incorporate other types of financial
assets where the objective is to hold these assets in order to collect
contractual cash flows and the contractual cash flows are solely payments of
principal and interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their acquisition or issue
and are subsequently carried at amortised cost using the effective interest
rate method, less provision for impairment.
Amounts receivables are measured at amortised cost using the effective
interest rate method, less impairment.
Cash and cash equivalents
Cash and cash equivalents represent cash balances held at bank and on demand
deposits. Cash and cash equivalents are measured at amortised cost.
Restricted cash represented cash balances held in bank accounts that are ring
fenced to be applied to the construction costs at the Company's Segilola Gold
Mine in Nigeria.
The Group does not hold any financial assets that meet conditions for
subsequent recognition at fair value through other comprehensive income.
As at September 30, 2022, the Company had $nil that is accounted for
separately from cash and cash equivalents (December 31, 2021, $3.5 million).
All the Company's cash is now freely available for the Company's use and is no
longer classified as restricted cash. Refer to Note 6.
Impairment of Financial Assets
The Group recognizes a loss allowance for expected credit losses ("ECL") on
financial assets that are measured at amortised cost which comprise mainly of
receivables. The amount of expected credit losses is updated at each reporting
date to reflect changes in credit risk since initial recognition of the
respective financial instrument. Impairment provisions for other receivables
are recognised based on a forward-looking expected credit loss model. The
methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since initial recognition
of the financial asset. For those where the credit risk has not increased
significantly since initial recognition of the financial asset, twelve month
expected credit losses along with gross interest income are recognised. For
those for which credit risk has increased significantly, lifetime expected
credit losses along with the gross interest income are recognised. For those
that are determined to be credit impaired, lifetime expected credit losses
along with interest income on a net basis are recognised.
Financial Liabilities
The classification of financial liabilities at initial recognition depends on
the purpose for which the financial liability was issued and its
characteristics.
Financial liabilities are initially recorded on trade date, being the date on
which the Group becomes party to the contractual requirements of the financial
liability. Unless otherwise indicated the carrying amounts of the Group's
financial liabilities approximate to their fair values.
The Group's financial liabilities consist of financial liabilities measured at
amortised cost. These comprise
Loans and borrowings, short term advances pursuant to outstanding settlement
of currency exchange swaps undertaken in the normal course of operations,
accounts payable, accrued liabilities and deferred payment. Loans and
borrowings are initially recognised at fair value, net of transaction costs
incurred. They are subsequently stated at amortised cost with any difference
between the proceeds (net of transaction costs) and the redemption value
recognised in the statement of comprehensive loss over the period of the loans
and borrowings using the effective interest rate method. If estimates of
future payments are revised, the carrying amount of the financial liability is
adjusted to reflect actual and revised estimated cash flows.
Where financial liabilities are settled through the issue of shares, the
difference between the carrying amount of the financial liability and the fair
value of the equity instruments issued, is recognised in profit or loss.
Fair Value measurement hierarchy
IFRS 13 "Fair Value Measurement" requires certain disclosures which require
the classification of financial assets and financial liabilities measured at
fair value using a fair value hierarchy that reflects the significance of the
input used in making the fair value measurement.
The fair value hierarchy has the following levels:
· Quoted prices (unadjusted) in active markets for identical assets
or liabilities (level 1);
· Input other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e., as prices) or
indirectly (i.e., derived prices (level 2); and,
· Inputs for the asset or liability that are not based on
observable market data (unobservable input) (level 3).
The level in the fair value hierarchy within which the financial asset or
financial liability is categorized is determined on the basis of the lowest
level input that is significant to the fair value measurement. Financial
assets and financial liabilities are classified in their entirety into only
one of the three levels.
Gold Stream arrangement
On April 29, 2020, the Company announced the completion of financing
requirements for the development of the Segilola Gold Project in Nigeria. The
financing included a $21 million gold stream prepayment pursuant to a Gold
Stream Arrangement ("GSA") entered in to with the Africa Finance Corporation
("AFC").
Under the terms of the GSA an advance payment of $21 million was received.
Upon the commencement of production at Segilola the AFC had the right to
receive 10.27% of gold produced from the Group's ML41 mining license. Once the
initial liability has been repaid in full any further gold production will be
delivered under the terms of the GSA up to the money multiple limit of 2.25
times the initial advance. The total maximum amount payable to the AFC under
this agreement is $47.25m including the repayment of the initial US$21 million
advance. The advanced payment has been recorded as a contract liability based
on the facts and terms of the arrangement and own use exemptions
considerations.
The maximum $26.25 million payable after the initial $21 million has been
settled has been identified as a significant financing component. The deemed
interest rate is calculated at inception, using the production plan and gold
price estimates and released over the term of the arrangement as interest
expense in the income statement upon commencement of production. The deemed
interest rate is recalculated at each reporting period and restated based on
changes to the expected production profile and gold price estimates.
Revenue from the streaming arrangement was recognised under IFRS 15 when the
customer obtained control of the gold and the Group satisfied its performance
obligations. The revenue recognised reduced the contract liability balance.
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 for repayment of the gold stream
arrangement. This agreement triggered a modification to the contract
liability, resulting in the liability to be accounted for in accordance with
IFRS 9 whereby the liability is classified as a financial liability measured
at fair value through profit or loss.
Capitalisation of borrowing costs
Interest on borrowings directly relating to the financing of qualifying
capital projects under construction is
added to the capitalised cost of those projects during the construction phase,
until such time as the assets
are substantially ready for their intended use or sale which, in the case of
mining properties, is when they
are capable of commercial production. Where funds have been borrowed
specifically to finance a project, the amount capitalised represents the
actual borrowing costs incurred. Where the funds used to finance a project
form part of general borrowings, the amount capitalised is calculated using a
weighted average of rates applicable to relevant general borrowings of the
Group during the period. All other borrowing costs are recognised in the
income statement in the period in which they are incurred.
a. Property, plant and equipment
Recognition and Measurement
On initial recognition, property, plant and equipment is valued at cost, being
the purchase price and directly attributable cost of acquisition or
construction required to bring the asset to the location and condition
necessary to be capable of operating in the manner intended by the Company,
including appropriate borrowing costs and the estimated present value of any
future unavoidable costs of dismantling and removing items. The corresponding
liability is recognised within provisions. Property, plant and equipment is
subsequently measured at cost less accumulated depreciation, less any
accumulated impairment losses, with the exception of land which is not
depreciated.
When parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is
recognized in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the Company and
its cost can be measured reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day servicing of property, plant and
equipment are recognized in profit or loss as incurred.
Gains and Losses
Gains and losses on disposal of an item of property, plant and equipment are
determined by comparing the proceeds from disposal with the carrying amount
and are recognized net within other income in profit or loss.
Depreciation
Depreciation on property plant & equipment is recognised in profit or loss
except where depreciation is directly attributable to mineral properties owned
by the Group that are classified as either Exploration & Evaluation or
Assets Under Construction ("AUC"). Depreciation in this instance is
capitalised to the value of the mineral property asset (refer to Note 15).
Upon commencement of commercial production, the value of AUC is reclassified
as Mining and Plant assets (together "Mining Property") within Property, Plant
& Equipment. Mining Property is depreciated using the unit of production
method based on proven and probable reserves. Units of production are
significantly affected by resources, exploration potential and production
estimates together with economic factors, commodity prices, foreign currency,
exchange rates, estimates of costs to produce reserves and future capital
expenditure. Refer to Note 3b for further analysis of classification of AUC
for the year to December 31, 2021.
Depreciation of Mining and Other Equipment is provided on a straight-line
basis over the estimated useful life of the assets as follows:
Description within Mining and Other Equipment Rate
Motor vehicles 20-33%
Plant and machinery 20-25%
Office furniture 20-33%
Depreciation methods, useful lives and residual values are reviewed at each
financial year-end and adjusted if appropriate.
b. Assets under construction
Assets under construction comprise development projects and assets in the
course of construction at both the mine development and production phases.
Development projects comprise interests in mining projects where the ore body
is considered commercially recoverable, and the development activities are
ongoing. Expenditure incurred on a development project is recorded at cost,
less applicable accumulated impairment losses. Interest on borrowings,
incurred for the purpose of the establishment of mining assets, is capitalised
during the construction phase.
The cost of an asset in the course of construction comprises its purchase
price and any costs directly attributable to bringing it into working
condition for its intended use, at which point it is transferred from assets
under construction to other relevant categories and depreciation commences.
Assets under construction are not depreciated.
Upon commercial production being achieved on January 1, 2022, assets under
construction were re-categorized as Mining Property.
c. Exploration and evaluation expenditures
Acquisition costs
The fair value of all consideration paid to acquire an unproven mineral
interest is capitalized, including amounts due under option agreements.
Consideration may include cash, loans or other financial liabilities, and
equity instruments including common shares and share purchase warrants.
Exploration and evaluation expenditures
All costs incurred prior to legal title are expensed in the consolidated
statement of comprehensive loss in the year in which they are incurred. Once
the legal right to explore a property has been acquired, costs directly
related to exploration and evaluation expenditures are recognized and
capitalized, in addition to the acquisition costs. These direct expenditures
include such costs as materials used, surveying costs, drilling costs,
payments made to contractors and depreciation on plant and equipment during
the exploration phase. Costs not directly attributable to exploration and
evaluation activities, including general administrative overhead costs, are
expensed in the year in which they occur.
When a project is deemed to no longer have commercially viable prospects to
the Company, exploration and evaluation assets in respect of that project are
deemed to be impaired. As a result, those exploration and evaluation assets,
in excess of estimated realisable value, are written off to the statement of
comprehensive income (loss).
At such time as commercial feasibility is established, project finance has
been raised, appropriate permits are in place and a development decision is
reached, the costs associated with that property will be transferred to and
re-categorised as Assets under construction.
Farm-in agreements
As is common practice in the mineral exploration industry, the Company may
acquire or dispose of all, or a portion of, an exploration and evaluation
asset under a farm-in agreement. Farm-in agreements typically call for the
payment of cash, issue of shares and/or incurrence of exploration and
evaluation costs over a period of time, often several years, entirely at the
discretion of the party farming-in. The Company recognizes amounts payable
under a farm-in agreement when the amount is due and when the Company has no
contractual rights to avoid making the payment. The Company recognizes amounts
receivable under a farm-in agreement only when the party farming-in has
irrevocably committed to the transfer of economic resources to the Company,
which often occurs only when the amount is received. Amounts received under
farm-in agreements reduce the capitalized costs of the optioned unproven
mineral interest to nil and are then recognized as income.
d. Impairment of non-current assets
Impairment tests for non-current assets are performed when there is an
indication of impairment. At each reporting date, an assessment is made to
determine whether there are any indications of impairment. Prior to carrying
out impairment reviews, the significant cash generating units are assessed to
determine whether
they should be reviewed under the requirements of IAS 36 - Impairment of
Assets for property plant and equipment, or IFRS 6 - Exploration for and
Evaluation of Mineral Resources.
Impairment reviews performed under IAS 36 are carried out on a periodic basis
to ensure that the value recognised on the Statement of Financial Position is
not greater than the recoverable amount. Recoverable amount is defined as the
higher of an asset's fair value less costs of disposal, and its value in use.
Impairment reviews performed under IFRS 6 are carried out on a
project-by-project basis, with each project representing a potential single
cash generating unit. An impairment review is undertaken when indicators of
impairment arise; typically, when one of the following circumstances applies:
(i) sufficient data exists that render the resource uneconomic and
unlikely to be developed
(ii) title to the asset is compromised
(iii) budgeted or planned expenditure is not expected in the foreseeable
future
(iv) insufficient discovery of commercially viable resources leading to the
discontinuation of activities
If any indication of impairment exists, an estimate of the non-current asset's
recoverable amount is calculated. The recoverable amount is determined as the
higher of fair value less direct costs to sell and the asset's value in use.
If the carrying value of a non-current asset exceeds its recoverable amount,
the asset is impaired and an impairment loss is charged to the statement of
comprehensive loss so as to reduce the carrying amount of the non-current
asset to its recoverable amount.
e. Income taxes
Income tax expense is comprised of current and deferred income taxes. Current
and deferred income taxes are recognized in profit and loss, except for income
taxes relating to items recognized directly in equity or other comprehensive
income.
Current income tax, if any, is the expected amount payable or receivable on
the taxable income or loss for the year, calculated in accordance with
applicable taxation laws and regulations, using income tax rates enacted or
substantively enacted at the end of the reporting period, and any adjustments
to amounts payable or receivable relating to previous years.
Deferred income taxes are provided using the liability method based on
temporary differences arising between the income tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. Deferred income tax is determined using income tax rates and
income tax laws and regulations that have been enacted or substantively
enacted at the end of the reporting period and are expected to apply when the
related deferred income tax asset is realized or the deferred income tax
liability is settled.
Deferred income tax assets are recognized to the extent that it is probable
that future taxable income will be available against which the temporary
differences can be utilized. To the extent that the Company does not consider
it probable that a deferred tax asset will be recovered, the deferred tax
asset is reduced.
The following temporary differences do not result in deferred tax assets or
liabilities:
· the initial recognition of assets or liabilities, not arising in
a business combination, which do not affect accounting or taxable profit
· goodwill
· investments in subsidiaries, associates and jointly controlled
entities where the timing of reversal of the temporary differences can be
controlled and reversal in the foreseeable future is not probable.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
f. Revenue recognition
The Group enters in to forward sales contracts for the sale of gold at a
pre-determined and agreed price with an agent who remits the cash proceeds to
the Group.
The Group recognises the sale upon delivery at which point control of the
product has been transferred to the Customer Transfer of control generally
takes place when refined gold is credited to the metals account at the
refinery of the Customer who has sold the gold via forward sale. Revenue is
measured based on the consideration to which the Group expects to be entitled
under the terms of the Agreements with the Customer.
g. Royalties
The Group has royalty payment obligations from production from its Segilola
Gold Mine in Nigeria. A royalty is payable to the Nigerian government at a
rate of 16,218 Nigerian Naira (June 31, 2022: 16,218 Nigerian Naira) per ounce
produced. The royalty is paid before the Dore is exported from Nigeria for
refining. Royalties paid to the Nigerian government are recognised as cost of
sales in the Consolidated Statement of Comprehensive Loss at the point that
the royalty payments are made.
The Group also has royalty obligations to three former owners of the Segilola
Gold Project at rates of between 0.375% to 1.5% on the value of sales. Total
royalties to the former owners ("third party royalties") are capped at $7.5
million. Royalties are calculated using the outturn date as reference point,
whereby the number of ounces outturned are multiplied using the London Bullion
Market Association ("LBMA") p.m. rate on the outturn date to establish a
deemed sales value. The applicable royalty rate for each former owner is
applied to the deemed sales value to determine the royalty payable.
Third party royalties have been assessed to be contingent consideration in the
acquisition of the Segilola Gold Mine under IAS 3. In accordance with the
Group's accounting policy the contingent consideration has been recognised as
a financial liability at the point there was considered to be certainty over
the payment arising (commencement of production). The royalties have been
discounted using a rate of 4.7% and the discounted value of the third parties'
royalties has been included in the value of Assets Under Construction and
recognised as a financial liability in the Consolidated Statement of Financial
Position. The discount will be unwound over the estimated time it will take to
pay the entire $7.5 million obligation. The value of the royalties will be
depreciated over the estimated life of the mine, and royalty payments will be
applied in discharge of the financial liability. The financial liability was
initially measured at fair value with subsequent fair value re-measurement to
be recorded in the Consolidated Statement of Comprehensive Income/(Loss).
h. Inventory
Stores and consumables are stated at the lower of cost and net realizable
value. The cost of stores and consumables includes expenditure incurred in
acquiring the inventories and bringing them to their existing location and
condition.
Gold ore stockpiles are valued at the lower of weighted average cost and net
realizable value. Cost includes direct materials, direct labour costs and
production overheads.
Gold bullion and gold in process are stated at the lower of weighted average
cost and net realizable value. Cost includes direct materials, direct labour
costs and production overheads.
i. Basic and diluted income or loss per share
Basic loss per share is computed by dividing the loss for the year by the
weighted average number of commons shares outstanding during the year. Diluted
income per share reflects the potential dilution that could occur if
potentially dilutive securities were exercised or converted to common stock.
Fully diluted amounts are not presented when the effect of the computations
are anti-dilutive due to the losses incurred. Accordingly, there is no
difference in the amounts for the basic and diluted loss per share.
j. Comprehensive income (loss)
Comprehensive income (loss) is defined as the change in equity from
transactions and other events from non-owner sources. Other comprehensive
income refers to items recognized in comprehensive income (loss) that are
excluded from net earnings (loss). The main element of comprehensive income
(loss) is the foreign exchange effect of translating the financial statements
of the subsidiaries from local functional currencies into US dollars upon
consolidation. Movements in the exchange rates of the Canadian Dollar, Pound
Sterling, Nigerian Naira and West African Franc to the US dollar will affect
the size of the comprehensive income (loss).
k. Share-based payments
Where options are awarded for services the fair value, at the grant date, of
equity-settled share awards is either charged to income or loss, or
capitalized to assets under construction where the underlying personnel cost
is also capitalized, over the period for which the benefits of employees and
others providing similar services are expected to be received. The
corresponding accrued entitlement is recorded in the Options reserve. The
amount recognized as an expense is adjusted to reflect the number of share
options expected to vest. Where warrants are awarded in connection with the
issue of common shares the fair value, at the grant date, is transferred from
common shares with the corresponding accrued entitlement recorded in the share
purchase warrants reserve. The fair value of options and warrants awards is
calculated using the Black-Scholes option pricing model which considers the
following factors:
· Exercise price · Current market price of the underlying shares
· Expected life of the award · Risk-free interest rate
Expected volatility
When equity instruments are modified, if the modification increases the fair
value of the award, the additional cost must be recognised over the period
from the modification date until the vesting date of the modified award.
a. Decommissioning, site rehabilitation and environmental costs
The Group is required to restore mine and processing sites at the end of their
producing lives to a condition acceptable to the relevant authorities and
consistent with the Group's environmental policies. The net present value of
estimated future rehabilitation costs is provided for in the financial
statements and capitalised within property, plant and equipment on initial
recognition. The capitalised cost is amortised on a unit of production basis.
Unwinding of the discount is recognised as finance cost in the statement of
comprehensive income as it occurs. Changes in estimates are dealt with on a
prospective basis as they arise. The costs of on-going programmes to prevent
and control pollution and to rehabilitate the environment are charged to
profit or loss as incurred.
b. Leases
The Group accounts for a contract, or a portion of a contract, as a lease when
it conveys the right to use an asset for a period of time in exchange for
consideration. Leases are those contracts that satisfy the following criteria:
· There is an identified asset;
· The Group obtains substantially all the economic benefits from
use of the asset; and,
· The Group has the right to direct use of the asset.
The Group considers whether the supplier has substantive substitution rights.
If the supplier does have those rights, the contract is not identified as
giving rise to a lease. In determining whether the Group obtains substantially
all the economic benefits from use of the asset, the Group considers only the
economic benefits that arise from use of the asset. In determining whether the
Group has the right to direct use of the asset, the Group considers whether it
directs how and for what purpose the asset is used throughout the period of
use. If the contract or portion of a contract does not satisfy these criteria,
the Group applies other applicable IFRSs rather than IFRS 16.
All leases are accounted for by recognizing a right-of-use asset and a lease
liability except for:
· Leases of low value assets; and
· Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless this is not
readily determinable, in which case the Group's incremental borrowing rate on
commencement of the lease is used. Variable lease payments are only included
in the measurement of the lease liability if they depend on an index or rate.
In such cases, the initial measurement of the lease liability assumes the
variable element will remain unchanged throughout the lease term. Other
variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· Amounts expected to be payable under any residual value
guarantee;
· The exercise price of any purchase option granted in favour of
the Group if it is reasonably certain to assess that option; and,
· Any penalties payable for terminating the lease, if the term of
the lease has been estimated based on termination option being exercised.
Right-of-use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· Lease payments made at or before commencement of the lease;
· Initial direct costs incurred; and,
· The amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease.
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted
using a revised discount rate. The carrying value of lease liabilities is
similarly revised when the variable element of future lease payments dependent
on a rate or index is revised, except the discount rate remains unchanged. In
both cases an equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being amortised over the
remaining (revised) lease term. If the carrying amount of the right-of-use
asset is adjusted to zero, any further reduction is recognised in profit or
loss.
a. Interest income
Interest income is recognized as earned, provided that collection is assessed
as being reasonably assured.
b. Provisions
Provisions are recognised when the Group has a present obligation, legal or
constructive, resulting from past events and it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the obligation.
c. Contingent liabilities
Contingent liabilities are possible obligations whose existence will be
confirmed by uncertain future events that are not wholly within the control of
the Group.
Contingent liabilities also include obligations that are not recognised
because their amount cannot be measured reliably or because settlement is not
probable. Contingent liabilities do not include provisions for which it is
certain that the Group has a present obligation that is more likely than not
to lead to an outflow of cash or other economic resources, even though the
amount or timing is uncertain.
Unless the possibility of an outflow of economic resources is remote, a
contingent liability is disclosed in the notes to the financial statements.
a. Application of new and revised International Financial Reporting
Standards
There were no new standards or interpretations effective for the first time
for periods beginning on or after January 1, 2022, that had a significant
effect on the Group's financial statements.
b. Future accounting pronouncements
There are no standards issued by IASB, but not yet effective, that are
expected to have a material impact
of the group.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Company makes estimates and assumptions about the future that affect the
reported amounts of assets and liabilities. Estimates and judgments are
continually evaluated based on historical experience and other factors,
including expectations of future events that are believed to be reasonable
under the circumstances. In the future, actual experience may differ from
these estimates and assumptions.
The effect of a change in an accounting estimate is recognized prospectively
by including it in net and/or comprehensive loss in the year of the change, if
the change affects that year only, or in the year of the change and future
years, if the change affects both.
a) Critical accounting estimates
Significant assumptions about the future and other sources of estimation
uncertainty that management has made at the financial position reporting date,
that could result in a material adjustment to the carrying amounts of assets
and liabilities, relate to, but are not limited to, the following:
(i) Accounting treatment of Gold Stream Liability
· Determining the appropriate accounting treatment for the Gold
Stream Liability is not an accounting policy choice, rather it is an
assessment of the specific facts and circumstances and requires judgement. The
Company has reviewed the terms of the Gold Sale Agreement and determined that
it constitutes a commodity arrangement as it is an arrangement to deliver an
amount of the commodity from the Group's own Segilola Gold Project operation
and does not constitute a contract liability under IFRS 15.
· In 2021 the arrangement was modified to allow the Group to settle
the Gold Stream Liability in cash which led to the arrangement being
reclassified as a financial liability.
The principal accounting estimates in calculating the value of the Gold Stream
Liability are production plan, gold price, the implied interest rate and
future repayment profile. The buy-out option contained in the Gold Sale
Agreement has been estimated at nil.
In calculating the deemed interest rate for interest expense that will be
released over the term of the Agreement, estimates of both the production plan
and gold price will be the key variables. The deemed interest rate is
calculated at each reporting period and restated based on changes to the
expected production profile and gold price estimates, which will result in a
revision to estimated future payments. Any change in future payments will
result in a revision of the deemed interest rate.
The period-end Gold Stream obligation uses forward curve information based on
the period-end gold spot price, which was US$1,672 /oz at September 30, 2022.
A 1% change in gold production estimates would result in an impact of less
than $0.6 million on the Gold Stream liability.
(ii) Restoration, site rehabilitation and environmental costs
The Group's mining and exploration activities are subject to various laws and
regulations governing the protection of the environment. The Group recognises
management's best estimate of the rehabilitation costs in the period in which
they are incurred. This estimate includes judgements from management in
respect of which costs are expected to be incurred in the future, the timing
of these costs and their present value. Actual costs incurred in future
periods could differ materially from the estimates. Additionally, future
changes to environmental laws and regulations, life of mine estimates and
discount rates could affect the carrying amount of this provision. Such
changes could similarly impact the useful lives of assets depreciated on a
straight-line-basis, where those lives are limited to the life of mine. A 1%
change in the discount rate on the Group's rehabilitation estimates would
result in an impact of $0.25 million (2021: $0.25 million) on the provision
for environmental and site restoration. The value of the period-end
restoration provision is disclosed within Note 14.
(iii) Inventories
· Expenditures incurred, and depreciation and amortisation of
assets used in mining and processing activities are deferred and accumulated
as the cost of ore in stockpiles, ore in mill, and finished gold dore
inventories. These deferred amounts are carried at the lower of average cost
or net realizable value.
· Their measurement involves the use of estimation to determine the
tonnage, the attainable gold recovery, and the remaining costs of completion
to bring inventory to its saleable form. Changes in these estimates can result
in a change in mine operating costs of future periods and carrying amounts of
inventories.
·
· In determining the net realizable value of ore in stockpiles, ore
in mill, and gold dore the Company estimates future metal selling prices,
production forecasts, realized grades and recoveries, and timing of processing
to convert the inventories into saleable form. Reductions in metal price
forecasts, increases in estimated future production costs, reductions in the
number of recoverable ounces, and a delay in timing of processing can result
in a write down of the carrying amounts of the Company's ore in stockpiles,
ore in mill and gold dore inventories.
b) Critical accounting judgments
Information about critical judgments in applying accounting policies that have
the most significant risk of causing material adjustment to the carrying
amounts of assets and liabilities recognized in the financial statements
within the next financial year are discussed below:
(i) Impairment of exploration and evaluation assets
In accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources,
management is required to assess impairment in respect of the intangible
exploration and evaluation assets. In making
the assessment, management is required to make judgments on the status of each
project and the future plans towards finding commercial reserves. The nature
of exploration and evaluation activity is such that only a proportion of
projects are ultimately successful and some assets are likely to become
impaired in future periods.
Management has determined that it is appropriate to impair fully the value of
the Central Houndé Project in Burkina Faso following the unsuccessful attempt
by Barrick Gold to dispose of its 51% interest in the license. An impairment
charge of $9,581 has been charged to the Consolidated Statement of
Comprehensive Loss. There were no impairment indicators present in respect of
any of the other exploration and evaluation assets and as such, no additional
impairment test was performed.
(ii) Impairment of property, plant and equipment
The Company has determined that there were no impairment indicators present in
respect of the Segilola Gold Mine in accordance with IAS 36 and determined
that no impairment was required to be recognised.
(iii) Functional currency
·
An analysis of functional currency under IAS 21 was undertaken on Segilola
Resources Operations Limited ("SROL") in order to determine if significant
changes to operational activities provide indicators that the functional
currency for IFRS purposes should be reviewed and changed. Under IAS 21 an
entity's functional currency reflects the underlying transactions, events and
conditions that are relevant to it. Accordingly, once determined, the
functional currency is not changed unless there is a change in those
underlying transactions, events and conditions.
The principal focus of the analysis was on the continuing applicability of the
Nigerian Naira ("NGN") as the functional and reporting currency for SROL.
Potential indicators of a change in functional currency for SROL were the
commencement of the Mining Contract at Segilola and commencement of gold sales
from Segilola, both denominated in US Dollars. The financial impact of a
change in functional currency of SROL to US dollars was assessed at each of
the dates where potential indicators of a change in functional currency could
be considered to have been determined and it was concluded that a change in
functional currency to US Dollars would best reflect the underlying
transactions, events and conditions that are most relevant to the Company's
operations.
(iv) Commercial production
·
The Group achieved first gold sales from its Segilola Gold Mine ("Segilola")
in Osun state, Nigeria in December 2021, with first production from the Mill
occurring in October 2021. During Q4 2021 production from the Mill was
intermittent and below operating capacity per its mine plan, while overall
recovery was approximately 13% below capacity. The Group's focus during Q4
2021, was the ramp-up of production to mine plan level which was not achieved
on a consistent basis prior to year-end. After careful consideration
Management has determined that mining operations to December 31, 2021, were
not at sustainable commercial levels and that the correct classification of
Segilola was Assets under construction. Production and recovery rates reached
levels closer to mine plan in January 2022, and as such Management has
determined that commercial production was achieved from January 2022.
5. PRODUCTION COSTS
Three Months Ended Nine Months Ended
September 30, September 30,
Note 2022 2021 2022 2021
Mining contract 14,390,406 - 32,880,134 -
Contractors and consultants 125,453 - 892,549 -
Professional fees 6,883 - 593,993 -
Drilling and assays 906,246 - 3,639,317 -
Salaries 1,835,337 - 4,537,513 -
Materials and consumables 348,268 - 403,834 -
Drilling operations 33,412 - 136,848 -
Movement in inventories 18,435,524 - 25,844,981 -
Maintenance 32,263 - 4,292,620 -
Other 233,878 774,977
$ 36,347,670 $ - $ 73,996,766 $ -
5b. AMORTISATION AND DEPRECIATION
Three Months Ended Nine Months Ended
September 30, September 30,
Note 2022 2021 2022 2021
Amortisation and depreciation - owned assets 5,130,023 5,525 15,923,649 14,024
Amortisation and depreciation - right-of-use assets 1,244,005 11,291 3,477,995 33,808
$ 6,374,028 $ 16,816 $ 19,401,644 $ 47,832
5d. OTHER ADMINISTRATIVE EXPENSES
Three Months Ended Nine Months Ended
September 30, September 30,
Note 2022 2021 2022 2021
Audit and legal 218,123 14,001 356,558 101,216
Bank charges 109,802 21,163 210,944 147,221
Consulting and security fees 797,998 117,405 1,808,097 259,958
Directors' fees 21 73,813 89,776 272,927 265,684
Equipment hire (243) (5,096) 51,346 -
Investor relations and transfer agent 63,339 83,407 279,730 188,889
Listing and filing fees 6,487 3,947 25,491 25,009
Mining property costs 1,050,664 - 2,344,856 -
Near mine exploration 545,452 - 1,308,066 -
Office and miscellaneous 1,912,008 88,215 2,052,859 206,596
Salaries and benefits 428,689 321,034 1,116,449 950,618
Travel 147,863 55,551 460,549 105,048
$ 5,353,995 $ 789,403 $ 10,287,872 $ 2,250,239
6. RESTRICTED CASH
September 30, December 31, 2021
2022
Restricted cash $ - $ 3,495,992
On December 1, 2020, the Company 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 for the construction of the Segilola Gold Project
in Nigeria. As at September 30, 2022, SROL has received total disbursements of
$52.6 million, with $nil drawn down during the period under review, and the
remaining $1.35m of the facility was cancelled by the Company. Total
disbursements received represent 97% of the facility. Under the terms of the
facility, the Company was required to place a total of US$3.5 million into a
cost overrun bank account that can only be used for expenditure on the
development of the Segilola Gold Project in the event of construction costs
exceeding budget. Upon receipt of the Certificate of Completion on January 31,
2022, the cash ceased to be treated as restricted.
7. INVENTORY
September 30, 2022 December 31, 2021
Plant spares and consumables $ 2,285,788 $ 1,337,792
Gold ore in stockpile 5,801,769 8,663,728
Gold in CIL 1,774,547 1,614,267
Gold Dore 1,718,947 6,530,771
$ 11,581,051 $ 18,146,558
There were no write downs to reduce the carrying value of inventories to net
realizable value during the period ended September 30, 2022.
8. AMOUNTS RECEIVABLE
September 30, 2022 December 31, 2021
Accounts receivable $ 357,337 $ 20,495
GST 941 3,715
Other receivables 108,297 213,441
$ 466,575 $ 237,651
The value of receivables recorded on the balance sheet is approximate to their
recoverable value and there are no expected material credit losses.
9. PREPAID EXPENSES, ADVANCES AND DEPOSITS
September 30, December 31, 2021
2022
Current:
Gold Stream liability arrangement fees 31,593 38,829
Advance deposits to vendors 2,406,213 235,408
Other prepayments 853,914 312,628
$ 3,291,720 586,865
Non-current:
Gold Stream liability arrangement fees 47,390 87,310
Other prepayments 193,477 18,373
$ 240,867 105,683
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.
10. 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 recognise 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 period ended September
30, 2022.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position for the period ended September 30, 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 710,127 (674,187) -
Depreciation (3,477,995) - (3,477,995)
Interest - (1,044,726) (1,044,726)
Lease payments - 3,949,944 -
Foreign exchange movement (932,618) (251,230) (251,231)
Carrying value at September 30, 2022 $ 17,143,126 $ (16,294,573) $ (4,773,952)
Total depreciation charged to the Statement of Comprehensive Income for the
period under IFRS 16 was $3.477,995.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position for the year ended December 31, 2021, were as follows:
Right-of- use asset Lease liability Income statement
Carrying value December 31, 2020 $ 69,066 $ (30,648) $ -
New leases entered in to during the year 22,612,362 (19,668,810) -
Depreciation (2,355,674) - (41,106)
Interest - (782,088) (563)
Lease payments - 2,800,407 -
Foreign exchange movement 517,858 (593,235) (75,743)
Carrying value at December 31, 2021 $ 20,843,612 $ (18,274,374) $ (117,412)
11. GOLD STREAM LIABILITY
Gold stream liability
September 30, 2022 December 31, 2021
Total Total
Balance at Beginning of period $ 30,262,279 $ 24,708,573
Interest at the effective interest rate 4,817,479 6,562,830
Repayments (8,826,318) (443,915)
Foreign exchange movement 412,724 (565,209)
Balance at End of period $ 26,666,164 $ 30,262,279
Current liability 9,891,530 12,837,633
Non-current liability 16,774,634 17,424,646
On April 29, 2020, the Company 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 in to between the Company'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.
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 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 would be expensed through the Consolidated Statement of Income
(Loss).
Interest expense of $4,817,479 was recognised for the Nine Months Ended
September 30, 2022 and has been expensed to the Consolidated Statement of
Income. Prior to the commencement of commercial production on January 1, 2022,
interest was capitalized and included in the value of the Segilola Gold Mine
(Refer to Note 15). A cumulative total of $12,889,773 has been capitalized
prior to commercial production and included in the value of the Segilola Gold
Mine.
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. Refer to Note 3d for further information on the accounting
treatment of the gold stream liability.
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 $ - 26,666,164 - 26,666,164
The liabilities included in the above table are carried at fair value through
profit and loss.
12. LOANS AND BORROWINGS
September 30, December 31, 2021
2022
Current liabilities:
Loans payable to the Africa Finance Corporation less than 1 year $ 1,579,615 $ 24,192,518
Deferred element of EPC contract 3,006,664 3,122,990
Short term advances - 668,570
$ 4,586,279 27,984,078
Non-current liabilities:
Loans payable to the Africa Finance Corporation more than 1 year $ 23,175,849 $ 22,667,448
Deferred element of EPC contract 2,954,040 3,087,077
$ 26,129,889 $ 25,754,525
Loans from the Africa Finance Corporation
September 30, December 31, 2021
2022 Total
Total
Balance at Beginning of period $ 46,859,966 $ 14,267,114
Drawdown - 31,153,833
Repayments (27,421,644) -
Arrangement fees - (508,856)
Unwinding of interest in the period 5,031,220 1,714,041
Foreign exchange movement 285,922 233,834
Balance at End of period $ 24,755,464 $ 46,859,966
Current liability 1,579,615 24,192,518
Non-current liability 23,175,849 22,667,448
On December 1, 2020, the Company 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 can be drawn down at the Group's request in
minimum disbursements of $5 million. As at September 30, 2022, SROL has
received total disbursements of $52.6 million, with $nil drawn down and the
remaining $1.35m undrawn facility cancelled by the Company during the period
under review. 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 LIBOR plus 9% and is payable on a quarterly basis in
arrears. The Facility also is subject to a Commitment Fee of 2.5% per annum on
the Facility with the Commitment Fee being 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 was determined
at $45,822,943 taking into account the transaction costs and equity component
and recognised at amortised cost using an effective rate of interest, with the
fair value of the shares issued in April 2020 of $5,666,011 recognised within
equity.
Interest paid during the year ended December 31, 2021, of $3,667,835 has been
capitalised to the cost of the Segilola Gold Mine. (Refer to Note 15).
The loan from the AFC has financial and non-financial covenants. These
covenants were triggered upon the first repayment obligation which took place
in March 2022.
Deferred payment facility on EPC contract for the construction of the Segilola
Gold Mine
The Company is constructing its Segilola Gold Mine through an engineering,
procurement, and construction contract ("EPC Contract") signed with Norinco
International Cooperation Limited. 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 September 30, 2022, a total of $5,960,704
(December 31, 2021: $6,210,090) 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 are due to commence in March 2022 and 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 is issued.
September 30, 2022 December 31, 2021
Total Total
Deferred payment facility $ 5,960,704 $ 6,210,067
Balance period end $ 5,960,704 $ 6,210,067
Short term advances
September 30, December 31, 2021
2022 Total
Total
Balance at beginning of period $ 668,570 $ -
Drawdowns 8,295,747 678,935
Repayments (8,959,473) -
Foreign exchange movement (4,844) (10,365)
Balance period end $ - $ 668,570
13. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
September 30, 2022 Gold stream liability Short term advance AFC loan EPC deferred facility Total
January 1, 2022 $ 30,262,279 668,570 46,859,966 6,210,067 84,000,882
Cash flows:
Drawdowns - 8,295,747 - - 8,295,747
Repayments (8,826,318) (8,959,473) (27,421,644) (281,141) (45,488,576)
Non-cash changes:
Unwinding of interest in the year 4,817,479 - 5,031,220 222,960 10,071,659
Foreign exchange movements 412,724 (4,844) 285,922 (145,042) 548,760
September 30, 2022 $ 26,666,164 - 24,755,464 5,960,704 57,382,332
December 31, 2021 Gold stream liability Short term advance AFC loan EPC deferred facility Total
January 1, 2021 $ 24,708,573 - 14,267,114 1,934,275 40,909,962
Cash flows:
Drawdowns - 678,935 31,153,833 - 31,832,768
Repayments (443,915) - - - (443,915)
Transaction costs - (508,856) - (508,856)
Non-cash changes:
Unwinding of interest in the year 6,562,830 - 1,714,041 250,402 8,527,273
Foreign exchange movements (565,209) (10,365) 233,834 25,575 (316,165)
Offset against EPC payment - - - 3,999,815 3,999,815
December 31, 2021 $ 30,262,279 668,570 46,859,966 6,210,067 84,000,882
14. PROVISIONS
September 30, 2022 Fleet demobilisation costs
Restoration costs
Other Total
Balance at Beginning of period $ - $ 173,241 $ 5,064,935 $ 5,238,176
Initial recognition of provision 18,222 - - 18,222
Unwinding of discount - - 9,734 9,734
Foreign exchange movements (1,517) (6,402) 94,980 87,061
Balance at period end $ 16,705 $ 166,839 $ 5,169,649 $ 5,353,193
Current liability - - - -
Non-current liability 16,705 166,839 5,169,649 5,353,193
December 31, 2021 Fleet demobilisation costs
Restoration costs
Total
Balance at Beginning of year $ - $ 486,500 $ 486,500
Initial recognition of provision 173,241 - 173,241
Increase in provision - 4,628,124 4,628,124
Foreign exchange movements - (49,689) (49,689)
Balance at year end $ 173,241 $ 5,064,935 $ 5,238,176
Current liability - - -
Non-current liability 173,241 5,064,935 5,238,176
The restoration costs provision is for the site restoration at Segilola Gold
Project in Osun State Nigeria. The fair 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 the 2021 US inflation rate of 4.7% and the interest rate of 1.263% on
5-year US bonds were used to calculate the expected future cash flows. 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.
15. PROPERTY, PLANT AND EQUIPMENT
A summary of depreciation capitalized is as follows:
Three Months Ended September 30, Nine Months Ended September 30, Total depreciation
capitalized
September 30, 2022 December 31, 2021
2022 2021 2022 2021
Exploration expenditures 27,923 38,796 88,647 76,812 746,487 597,117
Total $ 27,923 $ 38,796 $ 88,647 $ 76,812 $ 746,487 $ 597,117
a) Segilola Project, Osun Nigeria:
Classification of Expenditure on the Segilola Gold Project
On January 1, 2022, the Company 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 September 30, 2022. Refer to Note 14 for
further detail.
16. INTANGIBLE ASSETS
The Company's exploration and evaluation assets costs are as follows:
Classification of Expenditure on the Segilola Gold Project
Refer to Note 14 for details on classification.
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 Company is party to an option agreement (the "Option Agreement") with
International Mining Company ("IMC"), by which the Company has acquired a 70%
interest in the Douta Gold Project located in southeast Senegal held through
African Star SARL.
Effective February 24, 2012, the Company exercised its option to acquire a 70%
interest in the Douta Gold Project pursuant to the terms of the Option
Agreement between the Company and IMC. As consideration for the exercise of
the option, the Company issued to IMC 11,646,663 common shares, based on a
VWAP for the 20 trading days preceding the option exercise date of $0.2014 (or
US$0.2018) per share, valued at $2,678,732 based on the Company's closing
share price on February 24, 2012. The share payment includes consideration
paid to IMC for extending the time period for exercise of the option.
Pursuant to the terms of the Option Agreement, IMC's 30% interest will be a
"free carry" interest until such time as the Company 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 held 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 held 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.
(iii) Barrick Option Agreement, Central Houndé Project, Burkina Faso:
On April 8, 2015, the Company entered into the Acacia Option Agreement with
Acacia Mining plc ("Acacia"), whereby Acacia will have the exclusive option to
earn up to a 51% interest in Central Houndé Project by satisfying certain
conditions over a specified 4-year period and then the right to acquire an
additional 29%, for an aggregate 80% interest in the Central Houndé Project,
upon declaration of a Pre-Feasibility Study. Acacia met the minimum spending
requirement for the Phase 1
Earn-in in September 2018. As a result, Acacia earned a 51% interest in the
Central Houndé Project. The Group currently holds a 49% interest in the
Central Houndé Project.
In 2019, Barrick Gold Corporation ("Barrick") completed an acquisition of
Acacia through the purchase of the ordinary share capital of Acacia that
Barrick did not already own. The acquisition did not affect work undertaken at
the Central Houndé Gold Project in Burkina Faso where Barrick continued its
exploration work as per its Joint Operation with Thor.
In April 2021, Thor re-acquired Barrick's 51% ownership of the Project in
exchange for a 1% Net Smelter Royalty. Thor now holds 100% of the Central
Houndé Project.
Following the unsuccessful attempt by Barrick Gold to dispose of its 51%
interest in the licenses, the Company carried out an impairment assessment at
December 31, 2020, and determined that the unsuccessful sale attempt was an
indication for impairment. It is the Company'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. As a
result, the decision was taken to impair fully the value of the Central
Houndé Project, and for the three months to September 30, 2021, recognize an
impairment charge of $121,909 through the Condensed Consolidated Statement of
Comprehensive Loss.
c) Exploration Licenses, Nigeria
The high grade Segilola gold deposit is located on the major regional shear
zone that extends for several hundred kilometres through the gold-bearing
Ilesha schist belt (structural corridor) of Nigeria. Thor's exploration tenure
currently comprises 13 exploration licenses and four joint venture partnership
exploration licenses. Together with the mining lease over the Segilola Gold
Deposit, Thor's total exploration tenure amounts to 1,400 km². The Company's
exploration strategy includes further expansion of its Nigerian land package
as and when attractive new licenses become available.
17. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
September 30, December 31,
2022 2021
Trade payables $ 40,270,725 $ 32,222,580
Accrued liabilities 4,907,605 3,058,121
Other payables 3,492,023 5,110,979
$ 48,670,354 $ 40,391,680
Current liability 48,670,354 38,827,489
Non-current liability - 1,564,191
Accounts payable and accrued liabilities are classified as financial
liabilities and approximate their fair values.
Included in trade payables is a total of $3,492,023 that relates to third
party royalties that will become payable upon future gold sales. All this
royalties' creditors are included in current liabilities (refer to Note 3k for
further detail).
Also included in trade payables is a balance of $16,025,837 due to our EPC
contractor. Previous quarters contained a provision of US$5,000,000 for
outstanding invoices of the EPC Contract. Following a full audit, the Company
has accepted final EPC invoices of an additional US$4,000,000. The total EPC
amount has been finalized and is below the initial EPC Contract amount. The
Company and the EPC Contractor have agreed a repayment of these invoices will
be by June 30, 2023.
18. CAPITAL AND RESERVES
a) Authorized
Unlimited common shares without par value.
b) Issued
September 30, September 30, December 31, December 31,
2022 2022 2021 2021
Number Number
As at start of the year 632,358,009 $ 79,027,183 621,405,975 $ 76,858,769
Issue of new shares:
- Share options exercised i 9,539,000 922,114 - -
- Share warrants exercised ii - - 9,952,034 2,073,450
- Share options exercised iii - - 1,000,000 94,964
641,897,009 $ 79,949,297 632,358,009 $ 79,027,183
i Value of 9,250,000 options exercised on January 19, 2022, at a price of
CAD$0.12 per share, and 289,000 options exercised at a price of CAD$0.145 per
share.
ii Value of 1,664,534 warrants exercised on June 8, 2021, at a price of
CAD$0.18 per share, and 8,287,500 warrants exercised on August 31, 2021, at a
price of CAD$0.28 per share.
iii Value of 1,000,000 options exercised at a price of CAD$0.12 per share.
c) Share-based compensation
The Company has granted directors, officers and consultants share purchase
options. These options were granted pursuant to the Company's stock option
plan.
Under the current Share Option Plan, 44,900,000 common shares of the Company
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 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:
In Canadian Dollars
The Company 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 Company has undergone since the
acquisition of the Segilola Gold Project in August 2016, the Company's
historical share price is not reflective of the current stage of development
of the Company, 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, 2022, to
September 30, 2022, and the outstanding and exercisable options at September
30, 2022:
In Canadian Dollars
The following is a summary of changes in options from January 1, 2020, to
December 31, 2021, and the outstanding and exercisable options at December 31,
2021:
In Canadian Dollars
(i) On July 5, 2019, the Company announced an extension of the expiry date
from January 16, 2020, to January 16, 2022. All other conditions of the
options remain the same.
(ii) On July 5, 2019, the Company announced an extension of the expiry date
from May 7, 2020, to May 7, 2022. All other conditions of the options remain
the same.
d) Nature and purpose of equity and reserves
The reserves recorded in equity on the Company's statement of financial
position include 'Reserves,' 'Currency translation reserve,' 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 Canadian dollars.
'Deficit' is used to record the Company's accumulated deficit.
19. EARNINGS PER SHARE
Basic and diluted profit (loss) per share is calculated by dividing the profit
(attributed to shareholders for the nine months to September 30, 2022, of
$10,431,167 (September 30, 2021: loss $4,644,514) by the weighted average
number of shares of 636,941,340 (September 30, 2021: 622,722,592) in issue
during the period.
20. 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 11, and the secured loan as disclosed in Note 12.
b) Compensation of key management personnel
The remuneration of directors and other members of key management during the
three and Nine Months Ended September 30, 2022, and 2021 were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Salaries
Current directors and officers (i) (ii) $ 191,529 $ 130,701 $ 523,524 $ 383,628
Former directors and officers - - 71,557 -
Directors' fees
Current directors and officers (i) (ii) 73,813 89,918 272,927 265,684
Share-based payments
Current directors and officers - - - -
$ 265,342 $ 220,619 $ 868,008 $ 649,312
(i) Key management personnel were not paid post-employment benefits,
termination benefits, or other long-term benefits during the three months
ended September 30, 2022, and 2021.
(ii) The Company paid consulting and director fees to both individuals and
private companies controlled by directors and officers of the Company for
services. Accounts payable and accrued liabilities at September 30, 2022,
include $328,909 (December 31, 2021 - $346,275) due to directors or private
companies controlled by an officer and director of the Company. Amounts due to
or from related parties are unsecured, non-interest bearing and due on demand.
21. FINANCIAL INSTRUMENTS
The Group's financial instruments consist of cash, restricted cash, amounts
receivable, accounts payable, accrued liabilities, gold stream liability,
loans and other borrowings and lease liabilities.
Fair value of financial assets and liabilities
Fair values have been determined for measurement and/or disclosure purposes.
When applicable, further information about the assumptions made in determining
fair values is disclosed in the notes specific to that asset or liability.
The carrying amount for cash, restricted cash, accounts receivable, and
accounts payable, accrued liabilities, loans and borrowings and lease
liabilities on the statement of financial position approximate their fair
value because of the limited term of these instruments.
Financial risk management objectives and policies
The Group has exposure to the following risks from its use of financial
instruments
· Interest rate risk
· Credit risk
· Liquidity and funding risk
· Market risk
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these
risks is presented throughout these consolidated financial statements.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous years unless otherwise
stated in these notes.
The Board of Directors has overall responsibility for the establishment and
oversight of the Group's risk management framework. The overall objective of
the Board is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group's competitiveness and flexibility. Further
details regarding these policies are set out below.
Financial instruments by category
The accounting policies for financial instruments have been applied to the
line items below:
September 30, 2022 Measured at amortised cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 2,459,709 - 2,459,709
Amounts receivable 466,575 - 466,575
Total assets $ 2,926,284 - 2,926,284
Liabilities
Accounts payable and accrued liabilities $ 45,178,331 3,492,023 48,670,354
Loans and borrowings 30,716,168 - 30,716,168
Gold stream liability - 26,666,164 26,666,164
Lease liabilities 16,294,573 - 16,294,573
Total liabilities $ 92,189,072 30,158,187 122,347,259
December 31, 2021 Measured at amortised cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 1,276,270 - 1,276,270
Restricted cash 3,495,992 - 3,495,992
Amounts receivable 237,651 - 237,651
Total assets $ 5,009,913 - 5,009,913
Liabilities
Accounts payable and accrued liabilities
$ 33,284,701 7,106,979 40,391,680
Loans and borrowings 53,738,603 - 53,738,603
Gold stream liability - 30,262,279 30,262,279
Lease liabilities 18,274,374 - 18,274,374
Total liabilities $ 105,297,678 37,369,258 142,666,936
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates. The Group's income and
operating cash flows will be impacted by changes in market interest rates as
the Group's secured loans from the AFC incurs Interest at LIBOR plus 9% (Refer
to Note 12). The Group's management monitors the interest rate fluctuations on
a continuous basis and assesses the impact of interest rate fluctuations on
the Group's cash position and acts to ensure that sufficient cash reserves are
maintained in order to meet interest payment obligations.
The following table discusses the Company's sensitivity to a 1% increase or
decrease in interest rates:
Interest rate Interest rate
Appreciation Depreciation
By 1% By 1%
September 30, 2022
Comprehensive income (loss)
Financial assets and liabilities $ 355,413 $ (355,413)
December 31, 2021
Comprehensive income (loss)
Financial assets and liabilities $ 413,600 $ (413,600)
Credit risk
Credit risk is the risk of an unexpected loss if a counterparty to a financial
instrument fails to meet its contractual obligations. The credit risk
associated with cash and receivables is believed to be minimal.
Cash consists of cash on deposit in Canadian, UK, Mauritian, Nigerian, and
Senegalese Chartered banks that are believed to be creditworthy.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at September 30, 2022, and
December 31, 2021, were as follows:
September 30, December 31,
2022 2021
Cash $ 2,459,709 $ 1,276,270
Restricted cash - 3,495,992
Amounts receivable 466,575 237,651
Total $ 2,926,284 $ 5,009,913
Liquidity and funding risk
Liquidity risk is the risk that the Company will not be able to meet its
financial obligations as they fall due. The Company ensures that there is
sufficient capital in order to meet short-term business requirements, after
taking into account the Company's holdings of cash. The Company's cash is held
in business accounts and are available on demand with the exception of
restricted cash which is only available to be applied against the cost of the
construction of the Segilola Gold Mine until construction is completed, at
which point it will then be available on demand.
In the normal course of business, the Company enters into contracts and
performs business activities that give rise to commitments for future minimum
payments.
The following table summarizes the Company's significant remaining contractual
maturities for financial liabilities at September 30, 2022, and December 31,
2021.
Contractual maturity analysis as at September 30, 2022
Less than 3 - 12 1 - 5 Longer than
3 months Months Year 5 years Total
$ $ $ $ $
Accounts payable and accrued liabilities 46,182,842 2,487,512 - 48,670,354
-
Gold Stream Liability 2,383,071 9,891,530 14,391,563 - 26,666,164
Loans and borrowings 95,137 3,352,188 27,268,843 - 30,716,168
48,661,050 15,731,230 41,660,406 - 106,052,686
Contractual maturity analysis as at December 31, 2021
Less than 3 - 12 1 - 5 Longer than
3 months Months Year 5 years Total
$ $ $ $ $
Accounts payable and accrued liabilities 33,959,553 4,862,676 1,952,408 - 32,581,480
Gold Stream Liability 2,237,631 10,614,896 33,955,921 46,808,448
Loans and borrowings 1,984,714 26,031,054 32,400,920 - 60,416,688
38,181,898 41,508,625 68,309,249 - 147,999,772
Market risk
The Company is subject to normal market risks including fluctuations in
foreign exchange rates and interest rates. While the Company manages its
operations in order to minimize exposure to these risks, the Company has not
entered into any derivatives or contracts to hedge or otherwise mitigate this
exposure.
a) Foreign currency risk
The Group seeks to manage its exposure to this risk by holding its cash
balances in the same denomination as that of the majority of expenditure to be
incurred. The Group also seeks to ensure
that the majority of expenditure and cash of individual subsidiaries within
the Group are denominated in the same currency as the functional currency of
that subsidiary.
The Group's loan facilities, certain exploration expenditures, certain
acquisition costs and operating expenses are denominated in United States
Dollars, Nigerian Naira, and UK Pounds Sterling. The Group's exposure to
foreign currency risk arises primarily on fluctuations between the United
States Dollar and the Canadian Dollar, Nigerian Naira, and UK Pounds Sterling.
The Group has not entered into any derivative instruments to manage foreign
exchange fluctuations. The Group does enter into foreign exchange agreements
during the ordinary course of operations in order to ensure that it has
sufficient funds in order to meet payment obligations in individual
currencies. These agreements are entered in to at agreed rates and are not
subject to exchange rate fluctuations between agreement and settlement dates.
The following table shows a currency of net monetary assets and liabilities by
functional currency of the underlying companies for the period ended September
30, 2022:
Functional currency
US dollar Pound West
Sterling African Total
Franc
Currency of net monetary asset/(liability) September 30, 2022 September 30, 2022 September 30, 2022 September 30, 2022
USD$ USD$ USD$ USD$
Canadian dollar 83,645 - - 83,645
US dollar (111,902,618) - - (111,902,618)
Pound Sterling (503,809) (394,471) - (898,280)
Nigerian Naira (6,687,407) 0 - (6,687,407)
West African Franc - - (16,315) (16,315)
Australian dollar - - - -
Total (121,835,298) (3,946) (31,079) (119,420,975)
The following table shows the currency of net monetary assets and liabilities
by functional currency of the underlying companies for the year ended December
31, 2021:
Functional currency
Canadian US dollar Pound Nigerian West
dollar Sterling Naira African Total
Franc
Currency of net monetary asset/(liability) December 31, 2021 December 31, 2021 December 31, 2021 December 31, 2021 December 31, 2021 December 31, 2021
USD$ USD$ USD$ USD$ USD$ USD$
Canadian dollar (484,067) - - - - (484,067)
US dollar (190,391) - - (132,585,040) - (132,775,431)
Pound Sterling (361,244) - - (80,926) - (442,170)
Nigerian Naira - - - (3,910,833) - (3,910,833)
West African Franc - - - - 11,481 11,481
Australian dollar (36,626) - - (19,377) - (56,003)
Total (1,072,328) - - (136,596,176) 11,481 (137,657,023)
The following table discusses the Company's sensitivity to a 5% increase or
decrease in the United States Dollar against the Nigerian Naira:
United States United States
Dollar Dollar
Appreciation Depreciation
September 30, 2022 By 5% By 5%
Comprehensive income (loss)
Financial assets and liabilities $ 318,448 $ (351,969)
December 31, 2021
Comprehensive income (loss)
Financial assets and liabilities $ 194,000 $ (194,000)
22. CAPITAL MANAGEMENT
The Company manages, as capital, the components of shareholders' equity. The
Company'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. During the year under review the
Company made additional drawdowns from secured loan facilities in order to
advance construction of the Segilola Gold Mine.
The Company 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 Company
may attempt to issue common shares, borrow, acquire or dispose of assets or
adjust the amount of cash.
23. CONTRACTUAL COMMITMENTS AND CONTINGENT LIABILITIES
Contractual Commitments
The Group has no contractual obligation that are not disclosed on the
Consolidated Statement of Financial Position.
Contingent liabilities
As part of the nature of its business the Group on occasion receives claims
from parties. A number of such claims do exist, but these are assessed
robustly by the Group and its legal advisers and will be strongly rebutted
where claims are considered to be spurious.
24. SEGMENTED DISCLOSURES
Segment Information
The Company's operations comprise three reportable segments, being the
Segilola Mine Project, Exploration Projects, and Corporate compared to one
reportable segment, being the exploration of mineral resource properties in
the prior year. These three reporting segments have been identified based on
operational focuses of the Group following the decision to develop the
Segilola Mine Project during the period. The segment assets, liabilities and
results are as follows:
September 30, 2022 Segilola Mine Project Exploration Projects Corporate Total
Current assets $ 17,025,397 $ 69,258 $ 704,400 $ 17,799,055
Non-current assets
Deferred income tax assets - 74,753 0 74,753
Prepaid expenses and deposit 55,818 - 185,049 240,867
Right-of-use assets 16,543,290 - 599,836 17,143,126
Property, plant and equipment 143,858,367 343,259 87,415 144,289,041
Intangible assets 127,414 15,046,257 - 15,173,671
Total assets $ 177,610,286 $ 15,533,527 $ 1,576,700 $ 194,720,513
Non-current asset additions $ 18,595,008 $ 2,155,454 $ 99,903 $ 20,850,365
Liabilities $ (126,183,874) $ (26,892) $ (1,489,686) $ (127,700,452)
Profit (loss) for the period $ 13,958,461 $ (167,180) $ (3,360,114) $ 10,431,167
- consulting fees (1,252,430) (84,803) (470,864) (1,808,097)
- salaries and benefits (216,564) - (899,885) (1,116,449)
- depreciation owned assets (15,913,326) (6,617) (3,706) (15,923,649)
- impairments - (9,581) - (9,581)
Non-current assets by geographical location:
British Virgin Islands
Burkina Faso
Senegal Nigeria Canada Total
September 30, 2022
Prepaid expenses and deposit - - 8,428 47,390 185,049 -
Right-of-use assets - - - 16,543,290 599,836 -
Property, plant and equipment 155,780 - - 144,045,845 81,303 6,113
Intangible assets 14,323,198 - - 850,473 - -
Total non-current assets 14,478,978 - 8,428 161,486,998 866,188 6,113
December 31, 2021 Segilola Mine Project Exploration Projects Corporate Total
Current assets $ 23,245,206 $ 76,104 $ 422,026 $ 23,743,336
Non-current assets
Deferred income tax assets - 86,795 - 86,795
Prepaid expenses and deposit 87,223 - 18,460 105,683
Right-of-use assets 20,843,612 - - 20,843,612
Property, plant and equipment 146,914,353 455,339 2,964 147,373,656
Intangible assets 224,808 15,120,611 - 15,345,419
Total assets $ 191,315,202 $ 15,739,849 $ 443,450 $ 207,498,501
Non-current asset additions $ 71,990,597 $ 3,999,195 $ 3,661 $ 75,993,453
Liabilities $ (146,558,941) $ (43,436) $ (1,302,735) $ (147,905,112)
Profit (loss) for the year $ 1,975,712 $ (261,559) $ (3,783,350) $ (2,069,197)
- consulting fees (8,096) (148,781) (194,086) (350,963)
- salaries and benefits (256,228) - (1,029,378) (1,285,606)
- depreciation owned assets (59,611) (4,249) (1,158) (65,018)
- impairments - (99,059) - (99,059)
Non-current assets by geographical location:
British Virgin Islands
Burkina Faso
December 31, 2021 Senegal Nigeria Canada Total
Prepaid expenses and deposit - - 12,623 74,686 18,374 105,683
Right-of-use assets - - - 20,843,612 - 20,843,612
Property, plant and equipment 201,264 - - 147,168,374 4,018 147,373,656
Intangible assets 14,529,771 - - 815,648 - 15,345,419
Total non-current assets 14,731,035 - 12,623 168,902,320 22,392 183,668,370
25. SUBSEQUENT EVENTS
There are no material subsequent events to report.
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