Thor Explorations Announces Second Quarter 2022 Financial and Operating Results, for the Three and Six Months Ending June 30, 2022

2022-08-30 / @newsfile

 

Vancouver, British Columbia--(Newsfile Corp. - August 29, 2022) - Thor Explorations Ltd. (TSXV: THX) (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 ("Q2 2022" or the "Period") and six months to June 30, 2022 ("H1 2022").

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 six months ended June 30, 2022, are available on Thor Explorations' website https://thorexpl.com/investors/financials/.

Operational Highlights of the Period and H1 2022

  • Achievement of commercial production with 23,785 oz of gold produced at Segilola in the Period (H1 2022: 45,128 oz)
    • Average mill feed grade during the Period was 3.66 grammes per tonne ("g/t") gold and recovery was 95.5%
    • The Company exported the gold regularly throughout the Period selling 22,172 oz (H1 2022: 38,830 oz) of gold and 1,351 oz (H1 2022: 2,273 oz) of silver in the Period
  • Gold dore inventory of 2,065 ounces on hand, with 6,069 ounces in transit as at the end of Q2 2022
  • Zero Lost Time Incidents during Q2 2022
  • The Company has funded a range of livelihood restoration programmes to aid the local community members who lost assets (crops and trees) and land within the mine's footprint
  • Community development included support for women's programmes, school scholarships for children from vulnerable families, road upgrades and construction of local market facilities

Financial Highlights of the Period and H1 2022

  • Net profit for the period US$6.163m
  • Gold sales in the Q2 2022 generating revenues of US$41,354,747 (H1 2022: US$66,220,229)
  • As at June 30, 2022, the Company had cash of US$5,055,930
  • Sales of 22,172 oz (H1 2022: 38,830 oz) at a cash operating cost of US$922 per oz (H1 2022: US$788 per oz) sold and an all-in sustaining cost ("AISC") of US$956 per oz sold (H1 2022: US$852 per oz)
  • As at June 30, 2022, the Company had Net debt of US$37,306,971 (Q1 2022: US$50,463,920)
  • In the Period, the Company repaid US$14,461,938 million, principal and interest, of its Senior Secured Debt Facility with Africa Finance Corporation ("AFC")
  • Instalment payments on the AFC Senior Secured Debt Facility of US$9,740,959 are due by December 31, 2022. These will be paid from cashflows during the year
  • The payment of the final EPC invoices has been extended by the EPC Contractor following the delay in commercial production experienced in Q4 2021 and will be paid from cash flows during H2 2022
  • In Q1 2022, the Company changed its presentation currency to the United States dollar ("$"). This being the functional currency for the Company, and the currency of the primary economic environment in which the Company operates.

Post Period Highlights

Senior Management Appointments

The Company has confirmed the permanent appointment of Chris Omo-Osagie, as Chief Financial Officer effective immediately following his position over the last three months as Acting Chief Financial Officer. Chris will report directly to the CEO and is not joining the Company's board.

Chris (47 years old) has served in various senior executive roles across North America, Europe, the Caribbean and Africa with PricewaterhouseCoopers, Deloitte, Centrica, Molson Coors and more recently as Deputy Regional Chief Finance Officer for Dangote Cement Plc in Nigeria. Chris has led and sponsored numerous business transformational projects and has extensive experience in financial reporting, finance operations, mergers and acquisitions, controls and assurance, and treasury management and also financial advisory and corporate finance services to organizations, with transaction values from US$30 million to US$45 billion, including supporting new listings on the TSX.V (Toronto Stock Exchange) and the Irish Stock Exchange. Chris was a director of Autonomy Business Solutions Limited within the five years prior to his appointment. He is a Chartered Accountant and Fellow of the Institute of Chartered Accountants in England and Wales, and member of the Institute of Chartered Accountants of Ontario, Canada.

There is no further information required to be disclosed under Rule 17 or paragraph (g) of Schedule 2 of the AIM Rules for Companies.

Outlook

  • Further revision of 2022 production guidance to 90,000 to 100,000 oz of gold (previously 85,000 to 100,000 oz of gold) at an AISC of US$850-950 per oz
  • Continue to advance the Douta project to preliminary feasibility study ("PFS")
  • Advance exploration programmes across the portfolio, focusing on near mine and underground exploration at Segilola, extension drilling at Douta as well as accessing regional targets in Nigeria

Segun Lawson, President & CEO, stated:

"This has been a milestone quarter for the Company, generating a net profit of over US$6m for the period. We are pleased to have completed another strong quarter at the upper end of our guidance, improving on our performance in the first quarter of the year. Significantly, the Company repaid its largest scheduled debt repayment in the period reducing its facility by 29% in the first six months of commercial production.

"We have also continued to prioritise our Environmental, Social and Governance efforts in and around the local communities and have funded a range of projects as agreed in our Community Development Agreements.

"This has been a very encouraging first six months of the year and, as such, we are pleased to narrow our full year production guidance for the second time to 90,000 to 100,000 ounces within a cost guidance of US$850 - US$950 per ounce."

Further details can be found on the Company's website: 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

Q2 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 June 30, 2022 the Segilola Mine produced 23,785 ounces of gold (Q1: 21,343 ounces).

The Company exported the gold regularly throughout the period selling 22,172 ounces of gold and 1,351 ounces of silver in the period and had a further gold dore inventory of 2,065 ounces on hand, with 6,069 ounces in transit. These ounces have all been sold in the third quarter of 2022.

Mining

During the three months ended June 30, 2022, 4,031,584 tonnes of material was mined, equivalent to mining rates of 44,795 tonnes of material per day. In this period, 284,079 tonnes of ore were mined, equivalent to mining rates of 3,122 tonnes of ore per day, at an average grade of 3.63g/t.

The stockpile balance at the end of the period was 249,281 tonnes of ore at an average of 1.46g/t.

Processing

During the three months ended June 30, 2022, a total of 211,582 tonnes of ore, equivalent to a throughput rate of 2,351 tonnes per day, was processed.

The mill feed grade was 3.66g/t gold and recovery was 95.5% for a total of 23,785 ounces of gold produced. We continue to review the process plant to optimize throughput and recoveries.

For the month of June, the Segilola process plant continued to operate at a steady state, above design mill throughput, with 87,021 tonnes of ore processed at an average head grade of 3.88g/t and an overall gold recovery of 95.5% for a total of 10,363 ounces of gold produced.

All of the main operating units are performing as expected, and the plant is consistently operating above nameplate capacity. Optimization of the gold recovery process is ongoing, and the start-up issues encountered have been addressed.

Production Metrics


Units

Q2 2022

Q1 2022 
Mining






 
Total Ore MinedTonnes

284,079

226,314
Ore ProcessedTonnes

211,582

221,900
Low Grade Ore StockpiledTonnes

249,281

179,758
Waste MinedTonnes

3,747,504

3,533,610
Total MinedTonnes

4,031,584

3,759,524
Total Ore Mined Gold Gradeg/t Au

3.63

2.68
Ore Processedg/t Au

3.66

3.18
Low Grade Ore Stockpiledg/t Au

1.46

1.23




 

 
Processing


 

  
Ore Milledtonnes

211,582

221,920
Daily Throughput Rate (average)tpd

2,784

2,760
Daily Throughput / Nameplate Capacity%

141%

128%




 

 
Ore Processed Gold Gradeg/t Au

 

  
Recovery%

95.5

94.1 
Gold Recoveredoz

23,785

21,343




 

  

 

Environment and Social Summary Q2 2022

The main achievements with respect to the Company's environment and social activities for Q2 2022 were focused on Thor Explorations' corporate governance aspects in finalising Thor policies (12 new and/or updated policies) and establishing an independent and free whistle blower hotline. Thor's 2021 Sustainability Report was 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 early Q3 2022.

During Q2 2022, significant progress has been made on the Segilola Gold Mine Project's Greenhouse Gas ("GHG") Procedure and Tool. The Procedure sets out how carbon equivalent (CO2 e) calculations will be undertaken for the project and how they will be reported. This has involved back casting and forecasting for the Life of Mine ("LOM") within the GHG Tool (spreadsheet) which is updated monthly. The GHG Procedure and Tool is now signed off and was operational in Q2 2022. Monthly figures are being reported in SROL's monthly reports. A key milestone was also achieved in May 2022 when Segilola Mine Projects' power supply was switched over to compressed natural gas ("CNG"). The 6 MW CNG generators reduce GHG by 53% over that generated by diesel generators. This is a key step in SROL's reduction of its carbon footprint.

HSE statistics to end Q2 2022

Safety topic for the week: CLOSE CALLS30-JunM-T-DY-T-DP-T-D
HSE Statistics - Reactive (Lagging) Indicators
Number of Man Shifts Worked (Total)82622567139,390427,660
Man Hours7450216,0541,258,1033927506
Lost Time Injury (LTI) recorded0011
Fatality (FAT) recorded0001
Medical Treatment Case(MTC) reported00415
Near Miss (NM) reported041534
First Aid Case (FAC) reported01540
Property Damage (PD) reported051719
HSE Statistics - Proactive (Leading) Indicators
Number of Safety Inductions conducted245274659
Toolbox Meeting conducted1027414172,783
HSE Meetings conducted073884
HSE Inspections conducted0497211
HSE Trainings conducted11035344
Number of Unsafe Conditions reported4391513,680
Number of Unsafe acts reported5652993,288
LTI Free Days1 30 114

 

Celebrations were held at site in Q2 2022 to commemorate World Safety at Work Day. It was an occasion that celebrated SROL Safe Heroes and Departmental HSE Champions.

The ISO 45001 Health and Safety Certification process is ongoing with gap analysis and audit undertaken. The SROL Safety Committee across all Departments was inaugurated chaired by the Security Manager.

Additional water quality testing commenced south of the mining footprint to provide information on environmental issues triggered by illegal mining in a local community. SROL is part of the task force to address illegal mining issues in the locality.

An EIA for a helipad within the existing Segilola mine site is progressing and will be submitted to the Federal Ministry of Environment in Q3 2022.

Social and community development parameters for the Segilola Project were also progressed in Q2 2022. Of significance was detailed costings for seed funded livelihood restoration programmes to aid those local community members who lost assets (crops and trees) and land within the mine's footprint. Fish farms and vegetable plots have been designed to be constructed on land surrounding the water storage dam and bill of quantities prepared. Land clearing has occurred and construction is slated to commence in Q3 through to Q4 2022. Commitments to livelihood programmes were outlined in SROL's Livelihood Restoration Plan. The programmes are expected to be self-sustaining within a two year period and operate beyond the lifetime of the mine. An agricultural expert has been seconded into the SROL team to assist in the development of the agricultural programmes. Through funding agreed via Community Development Agreements ("CDA") signed with the three communities surrounding the Segilola Mine, community programmes were progressed in Q2 2022. These included road upgrades (grading of local roads and reconstruction of one main road) and construction of local market facilities. Local employment targets were also set within with the CDAs and local employment makes up ~20% of Segilola's site employment component, exceeding the CDA target. CSR programmes were also progressed in 2022 including the maiden edition of the Segilola football tournament held in May at Iperindo and Odo-Ijesha football fields. The popular sporting event is aimed at promoting youth development and fostering unity amongst Host Communities and SROL.

Compensation for the Segilola project footprint continued in Q2 2022. The compensation budget for the Project sits at $3.8 million in line with the overall compensation budget for the Project. This provides compensation for 277 landowners and 1113 asset owners (June 2022). Additionally, compensation for temporary loss of assets and lands impacted by exploration activities (at 10 explorations sites across 3 states in Nigeria) stands at $297,000 for 445 asset and 7 landowners (as of June 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.

Exploration Activity Summary Q2 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 now comprises nine explorations licences and five joint venture partnership exploration licences. Together with the mining lease over the Segilola Gold Deposit, Thor's total exploration tenure amounts to over 1,268 km2.

Exploration Activity

Exploration during the quarter comprised on-going regional stream sediment sampling, surface soil sampling, auger soil sampling, trench sampling and termite mound sampling in the exploration lease located both north and south of the Segilola Gold Deposit and reverse circulation drilling on two high priority targets within a 15 kilometre radius of the Segilola Mine.

Cannot view this image? Visit: https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_002.jpg

Figure 1: Segilola Tenement Map showing Geochemical Sample Locations

To view an enhanced version of Figure 1, please visit:
https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_002full.jpg

Reverse circulation ("RC") and Diamond drilling commenced during the quarter. 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. The drilling was also targeting the occurrence of gold mined in shallow pits mined by artisanal miners.
  2. To test the gold-in soil anomalies generated by auger soil and trench sampling at Odo within EL19066, 3km north of Segilola deposit.

Assay results are pending for the majority of the drilled holes with no significant results received on assays received to date.

Post Period, the Exploration Lab arrived on site. The Lab is expected to be fully operational from September 1, 2022 and will allow the Company to fully implement its exploration drilling program and critically, will significantly reduce assay turnaround times.

Senegal

Introduction

The Douta Gold Project is a gold exploration permit, E02038, which covers an area of 58km2 and is located within the Kéniéba inlier, eastern Senegal. The northeast-trending licence (Figure 2) has an area of 58 km2. 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 the Massawa North and Massawa Central deposits, which form part of the world-class Sabadola-Massawa Project owned by Endeavour Mining (Figure 2). The Makabingui deposit, belonging to Bassari Resources Ltd, is immediately located east of the northern portion of E02038.

The Douta Gold Project has an initial inferred resource estimate of 15 million tonnes ("Mt") grading 1.53g/t gold for 730,000 ounces gold. The resource encompasses the Makosa, Makosa North and Makosa Tail zones, which are collectively named the Makosa Resource.

Exploration Activity

Following a first phase ("Phase 1") of drilling to test the northern extension of the Makosa Resource, the focus of the quarter has been a 12,000 metre RC drilling programme.

The main objectives of this programme are :

- to test infill, lateral and down-dip extension of gold mineralisation of the new Sambara target;
- infill and upgrade the categorization of the Makosa and Makosa Tail discoveries; and
- further test additional targets generated through the auger drilling programme.

Phase 1 RC drilling programme started on 7 March and finished on 15 April. A total of 122 holes were drilled for 8,083m comprising:

  • Sambara: 46 holes were drilled for 3,036m.
  • Makosa North 76 holes drilled for 5,047m.
ProspectNumber of HolesTotal MetresNumber of Samples
Makosa North76 5,047 545
Sambara46 3,036 5,935
Total122 8,083 9,509

 

Table 2.4: Douta RC Drilling Statistics

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Figure 2: Douta Project Location Map

To view an enhanced version of Figure 2, please visit:
https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_003full.jpg

Results

Makosa North Extension
Whilst the drilling programme shows the continuity of the gold-bearing structure along the Makosa corridor in the northern part (Figure 3), the low grade nature of the mineralisation resulted in focussing the Phase 2 drilling programme on upgrading high grade areas of Makosa and Makosa tail.

Sambara Target
Gold mineralisation is associated with greywacke with smoky quartz, disseminated pyrite, sericite and silica stockworks.

Significant intersections received to date are shown in Table 2.5.
The location of these results are shown in Figure 4.

Cannot view this image? Visit: https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_004.jpg

Figure 3: Makosa north drilling results showing the continuity of the gold-bearing.

To view an enhanced version of Figure 3, please visit:
https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_004full.jpg

Cannot view this image? Visit: https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_005.jpg

Figure 4: Sambara prospect early drilling results demonstrating the presence of gold mineralisation

To view an enhanced version of Figure 4, please visit:
https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_005full.jpg

Douta RC Drilling Results

HOLE IDEastingNorthingElevationLengthAzimuthDipFrom (m)To (m)Downhole Interval (m)True Width (m)Average Grade (Aug/t)Prospect
DTRC369178301143946719866130-50NSR



Makosa North
DTRC370178272143949420066130-50NSR



Makosa North
DTRC371178243143952219866130-50NSR



Makosa North
DTRC372178220143954119760130-50373810.80.51Makosa North
DTRC373178188143956219954130-503035541.13Makosa North
DTRC374178157143958619766130-50NSR



Makosa North
DTRC375178410143964819266130-50NSR



Makosa North
DTRC376178383143967118960130-50NSR



Makosa North
DTRC377178360143969018660130-50NSR



Makosa North
DTRC378178328143971318070130-50NSR



Makosa North
DTRC379178296143973717854130-50384464.80.63Makosa North
DTRC380178273143975717790130-507889118.80.85Makosa North
DTRC381178516143981617566130-50NSR



Makosa North
DTRC382178484143984117466130-50NSR



Makosa North
DTRC383178452143986517266130-50212321.60.53Makosa North
DTRC384178421143988917240130-50NSR



Makosa North
DTRC385178398143990817272130-50666710.80.71Makosa North
DTRC386178560144003817166130-502310.81.24Makosa North
and





525310.80.65Makosa North
DTRC387178537144005716954130-50323310.80.77Makosa North
DTRC388178506144008216772130-50NSR



Makosa North
DTRC389178591144001217266130-50NSR



Makosa North
DTRC390178621143998517366130-50NSR



Makosa North
DTRC391178651143996017566130-50NSR



Makosa North
DTRC392178682143993417766130-50NSR



Makosa North
DTRC393178712143990817866130-50NSR



Makosa North
DTRC394178746144014417266130-50NSR



Makosa North
DTRC395178715144016917172130-50NSR



Makosa North
DTRC396178684144019317072130-50NSR



Makosa North
DTRC397178652144021716966130-50NSR



Makosa North
DTRC398178854144031717266130-50NSR



Makosa North
DTRC399178822144034117066130-50202221.60.53Makosa North
and





373810.81.18Makosa North
DTRC400178790144036516866130-50NSR



Makosa North
DTRC401178759144039016666130-50NSR



Makosa North
DTRC402178732144041116560130-50NSR



Makosa North
DTRC403178813144022017366130-50NSR



Makosa North
DTRC404178775144024416872130-506932.40.58Makosa North
and





697010.80.62Makosa North
DTRC405178738144027116984130-50676921.60.66Makosa North
DTRC406178712144029016960130-50NSR



Makosa North
DTRC407187763145155013466130-50NSR



Sambara
DTRC408187734145157713366130-50NSR



Sambara
DTRC409187703145160313466130-50NSR



Sambara
DTRC410187672145162813666130-50NSR



Sambara
DTRC411187981145172414066130-502310.83.12Sambara
and





171810.80.83Sambara
DTRC412187950145174814066130-50212210.80.88Sambara
and





585910.81.7Sambara
and





646621.61.49Sambara
DTRC413187919145177313866130-50252610.81.31Sambara
DTRC4141878851451795138100130-50717210.81.44Sambara
and





828310.81.17Sambara
and





949510.80.7Sambara
DTRC415187854145181914166130-50NSR



Sambara
DTRC416187823145184414266130-50NSR



Sambara
DTRC417187792145187014378130-50NSR



Sambara
DTRC418187761145189414466130-50NSR



Sambara
DTRC419187730145191814666130-50NSR



Sambara
DTRC420187697145194214866130-50NSR



Sambara
DTRC421188401145140414434130-50NSR



Sambara
DTRC422188379145142314578130-50NSR



Sambara
DTRC423188089145188815366130-50NSR



Sambara
DTRC424188063145191115260130-50NSR



Sambara
DTRC425188029145193114772130-501210.81.45Sambara
and





192010.80.5Sambara
and





242510.85.42Sambara
DTRC426187999145195814672130-50293010.80.62Sambara
and





454721.63.33Sambara
incl





454610.85.98Sambara
and





565710.81.63Sambara
and





657164.82.48Sambara
incl





707110.810.1Sambara
DTRC427187967145198314666130-50NSR



Sambara
DTRC428187935145200814666130-50545510.80.65Sambara
DTRC429187904145203214778130-50NSR



Sambara
DTRC430188196145205114966130-50NSR



Sambara
DTRC431188165145207615084130-501432.41.39Sambara
and





7810.80.9Sambara
and





121864.83.6Sambara
incl





151610.89.03Sambara
and





272810.827Sambara
DTRC432188134145210215066130-50NSR



Sambara
DTRC433188104145212715072130-50262710.82.35Sambara
DTRC434188073145215315066130-50NSR



Sambara
DTRC435188042145217815066130-50232410.80.55Sambara
DTRC436188477145209413266130-50NSR



Sambara
DTRC437188445145211813266130-50NSR



Sambara
DTRC438188415145214413366130-50NSR



Sambara
DTRC439188382145216613466130-50NSR



Sambara
DTRC440188358145218413560130-50NSR



Sambara
DTRC441188333145219813850130-50NSR



Sambara
DTRC442188305145222314366130-50NSR



Sambara
DTRC443188461145236114578130-50454610.81.43Sambara
DTRC444188493145233614666130-50NSR



Sambara
DTRC445188429145238514478130-50151610.85.1Sambara
DTRC446188396145240814466130-50NSR



Sambara
DTRC447188366145243514566130-50NSR



Sambara
DTRC448188333145246014662130-50NSR



Sambara
DTRC449188302145248314766130-50NSR



Sambara
DTRC450188466145148114542130-50NSR



Sambara
DTRC451188417145139014424130-50NSR



Sambara
DTRC452188440145137014466130-50NSR



Sambara
DTRC453179030144042618466130-50313210.80.94Makosa North
DTRC454179001144045318266130-50NSR



Makosa North
DTRC455178972144048017766130-50NSR



Makosa North
DTRC456178943144050717266130-50121421.61.38Makosa North
DTRC457178915144053517166130-50313321.60.7Makosa North
DTRC458179305144072818066130-50656610.80.5Makosa North
DTRC459179272144075117766130-50NSR



Makosa North
DTRC460179239144077717466130-50NSR



Makosa North
DTRC461179210144079916966130-50NSR



Makosa North
DTRC462179177144082216790130-50525310.80.64Makosa North
DTRC463180427144213616366130-50505664.80.96Makosa North
DTRC464180395144216016266130-50NSR



Makosa North
DTRC465180366144218716066130-50NSR



Makosa North
DTRC466180331144221316066130-50NSR



Makosa North
DTRC467180297144223916066130-50NSR



Makosa North
DTRC468180267144226116566130-50NSR



Makosa North
DTRC469180761144137916766130-50NSR



Makosa North
DTRC470180729144140216866130-50NSR



Makosa North
DTRC471180699144142516866130-50NSR



Makosa North
DTRC472180216144179317366130-50NSR



Makosa North
DTRC473180186144181917166130-5091232.40.75Makosa North
DTRC474180153144184316966130-50434632.40.6Makosa North
and





606221.60.6Makosa North
DTRC475180122144186816866130-50NSR



Makosa North
DTRC476180092144189016766130-50NSR



Makosa North
DTRC477179971144147917266130-50NSR



Makosa North
DTRC478179939144150317166130-50NSR



Makosa North
DTRC479179910144153016866130-50NSR



Makosa North
DTRC480179878144155416766130-5091010.80.55Makosa North
DTRC481179850144157516678130-50333410.80.57Makosa North
and





505110.80.74Makosa North
DTRC482179728144115618866130-50NSR



Makosa North
DTRC483179699144118418671130-50NSR



Makosa North
DTRC484179668144120918266130-50NSR



Makosa North
DTRC485179637144123317866130-50NSR



Makosa North
DTRC486179605144125717966130-50101886.40.85Makosa North
incl





151832.41.1Makosa North







252610.80.56Makosa North
DTRC487179581144102318466130-50NSR



Makosa North
DTRC488179548144104718066130-50NSR



Makosa North
DTRC489179517144107317772130-50NSR



Makosa North
DTRC490179486144109717466130-507810.80.52Makosa North
and





131410.80.54Makosa North

 

COVID-19 Pandemic

The COVID-19 pandemic continued in 2022 and has had a significant impact on businesses through restrictions put in place by governments around the world including the jurisdictions in which we conduct our business. Over the last two years, aspects of the Company's operations have been impacted by COVID-19 for a variety of reasons, such as government and other restrictions on transportation and the mobility of personnel and mandatory quarantine periods and border closures.

As of the date of this MD&A, it is not possible to determine the extent of the impact that this pandemic will have on our activities as the impacts will depend on future developments which themselves are uncertain and cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, its extent and intensity, the duration of the outbreak, and possible government, societal, and individual responses to the situation.

Possible impacts of the continuing or worsening spread of COVID-19, including new variants of the virus, may include mandated or voluntary closures of operations, illness among the Company's workforce, restricted mobility of personnel, interruptions in the Company's logistics and supply chain, delay at or closure of the Company's refining and smelting service providers and global travel restrictions, all of which could disrupt the Company's operations and negatively impact its financial performance.

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 Productionoz90,000-100,000
All-in Sustaining Cost ("AISC")US$/oz Au sold$850 - $950
Capital ExpenditureUS$9,243,000
Exploration Expenditure:

NigeriaUS$4,200,000
SenegalUS$2,000,000

 

  • The critical factors that influence whether Segilola can achieve these targets include:
    • Segilola's ability to maintain an adequate supply of consumables (in particular ammonium nitrate, flux and cyanide) and equipment, particularly if there is any resurgence in the COVID-19 pandemic
    • Fluctuations in the price of key consumables, in particular ammonium nitrate, and diesel
    • Segilola's workforce remaining healthy
    • Continuing to receive full and on-time payment for gold sales
    • Continuing to be able to make local and international payments in the ordinary course of business

  • Continue to advance the Douta project towards preliminary feasibility study ("PFS")

  • Continue to advance exploration programmes across the portfolio:
    • Segilola near mine exploration
    • Segilola underground project
    • Segilola regional exploration programme
    • Douta extension programme
    • Douta infill programme
    • Assess regional potential targets in Nigeria

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 Q2
Jun 30


2022 Q1
Mar 31


2021 Q4
Dec 31


2021 Q3
Sep 30
 
Revenues
66,220,229

24,865,482

6,205,345

-
Net profit/(loss) for period
6,305,101

200,473

2,665,653

460,745
Basic and fully diluted profit/(loss) per share (cents)
0.01

0.00

0.40

0.08 

 

$
2021 Q2
Jun 30


2021 Q1
Mar 31


2020 Q4
Dec 31


2020 Q3
Sep 30
 
Revenues
 

-

-

-
Net profit/(loss) for period
(5,582,090)
(67,365)
(1,560,694)
(1,030,715)
Basic and fully diluted profit/(loss) per share (cents)
(0.90)
(0.05)
(0.25)
(0.17)

 

RESULTS FOR SIX MONTHS ENDED JUNE 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 $6,305,101 ($0.01 profit per share) for the six months to June 30, 2022, as compared to a net (loss) of ($5,103,924($0.90 loss per share) for the six months ended June 30, 2021. The move to profit for the six months was largely due to:

  • sales in H1 2022 of $66,220,229 in H1 2021 (nil);
  • foreign exchange gains of $5,824,295 from loss of $2,372,083 in H1 2021

These were offset partially by:

  • Amortisation and depreciation of $13,027,616; and
  • Interest of $7,693,863

The Company recorded sales revenue of $66,220,229 for the six months ended June 30, 2022, and $nil for the six months to June 30,2021. No interest was earned during the six months ended June 30, 2022, and 2021.

LIQUIDITY AND CAPITAL RESOURCES

As at June 30, 2022, the Company had cash of $5,055,930, 6,069 ounces of gold in transit and 2,066 ounces of gold dore in inventory to be sold, and a working capital deficit of ($28,790,194).

The increase in cash from December 31, 2021 (cash of $1,276,270) is due mainly to gold sales revenue of $66,220,299, offset by instalment payments on the loan facility of $14,461,938, the purchase of property plant and equipment of $5,662,492 and operational costs and corporate overheads of $26,946,453. This cash expenditure was financed by operational cashflow and existing cash balances.

As previously announced, the EPC Contractor has confirmed that it will 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.

Unaudited Financial Statements

THOR EXPLORATIONS LTD.














CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION


 
In United States dollars (unaudited)





 



June 30,

December 31,

Note
2022
$


2021
$
 








ASSETS






Current assets






Cash

5,055,930

1,276,270
Restricted cash6
-

3,495,992
Inventory7
24,046,025

18,146,558
Amounts receivable8
705,799

237,651
Prepaid expenses, advances and deposits9
1,961,307

586,865 
Total current assets

31,769,061

23,743,336
Non-current assets

 

 
Deferred income tax assets

79,771

86,795
Prepaid expenses, advances and deposits9
287,338

105,683
Right-of-use assets10
19,361,972

20,843,612
Property, plant and equipment15
141,445,926

147,373,656
Intangible assets16
15,497,414

15,345,419 
Total non-current assets

176,672,421

183,755,165
TOTAL ASSETS

208,441,482

207,498,501 



 

 
LIABILITIES

 

 
Current liabilities

 

 
Accounts payable and accrued liabilities17
39,128,410

38,827,489
Deferred income18
10,147,435

-
Lease liabilities10
4,007,843

4,849,088
Gold stream liability11
11,753,417

12,837,633
Loans and other borrowings12
15,779,820

27,984,078 
Total current liabilities

80,816,925

84,498,288
Non-current liabilities

 

 
Accounts payable and accrued liabilities17
354,459

1,564,191
Lease liabilities10
13,135,582

13,425,286
Gold stream liability11
17,323,911

17,424,646
Loans and other borrowings12
26,207,109

25,754,525
Provisions14
5,358,322

5,238,176 
Total non-current liabilities

62,379,383

63,406,824



 

 
SHAREHOLDERS' EQUITY

 

 
Common shares19
79,949,297

79,027,183
Option Reserve19
3,455,454

4,513,900
Currency translation reserve

(4,464,940)
(2,889,510)
Retained earnings

(13,694,637)
(21,058,184)
Total shareholders' equity

65,245,174

59,593,389
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

208,441,482

207,498,501 



 

 



 

 
These consolidated financial statements were approved for issue by the
Board of Directors on August 29 , 2022, and are signed on its behalf by:




 

 



 

 
(Signed) "Adrian Coates"(Signed) "Olusegun Lawson"
DirectorDirector

 



 

 
The accompanying notes are an integral part of these consolidated financial statements.

 

THOR EXPLORATIONS LTD.
 
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022
In United States dollars (unaudited)

 

      Three Months Ended
June 30,
    Six Months Ended
June 30,
 
  Note   2022     2021     2022     2021  
Continuing operations                          
                           
Revenue   $ 41,354,747   $ -   $ 66,220,229   $ -  
                           
Production costs 5   24,262,437     -     37,649,096     -  
Transportation and refining     604,991     -     1,107,213     -  
Royalties     946,252     -     1,497,017     -  
Loss on forward sale of commodity contracts     (471,403 )   -     (176,480 )   -  
Gross profit from operations     16,012,470     -     26,143,383     -  
                           
Amortisation and depreciation - owned assets 5   5,789,009     2,323     10,793,626     8,499  
Amortisation and depreciation - right of use assets 5   1,075,735     11,164     2,233,990     22,517  
Other administration expenses 5   2,684,016     735,778     4,933,877     1,460,836  
Impairment of Exploration & Evaluation assets 16   4,520     1,373     7,221     97,847  
Profit (loss) from operations     6,459,190     (750,637 )   8,174,669     (1,589,698 )
                           
Interest expense     (3,935,732 )   (195 )   (7,693,863 )   (521 )
Foreign exchange gains     3,640,484     (3,527,676 )   5,824,295     (2,372,083 )
Extra-ordinary expenses           (1,141,621 )         (1,141,621 )
Net profit (loss) for the period     6,163,942     (5,420,131 )   6,305,101     (5,103,924 )
Attributable to:                          
Non-controlling interest                          
Equity shareholders of the Company     6,163,942     (5,420,131 )   6,305,101     (5,103,924 )
Net profit (loss) for the period     6,163,942     (5,420,131 )   6,305,101     (5,103,924 )
                           
Other comprehensive profit (loss)                          
  Foreign currency translation loss attributed to
    equity shareholders of the company*
    (775,718 )         (1,575,430 )      
                           
Total comprehensive income profit (loss) for the period     5,388,224     (5,420,131 )   4,729,671     (5,103,924 )
                           
                           
Net profit (loss) per share - basic and diluted 20 $ 0.010   $ (0.009 ) $ 0.010   $ (0.008 )
                           
Weighted average number of common shares
  outstanding - basic and diluted
    637,605,227     621,808,390     636,603,895     621,506,029  

 

 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 SIX MONTHS ENDED JUNE 30, 2022









In United States dollars (unaudited)























Three Months Ended
June 30,


Six Months Ended
June 30,


Note
2022

2021

2022

2021 














Cash flows from (used in):


























Operating activities












Net profit / (loss)
$6,163,942
$(5,420,131)$6,305,101
$(5,103,924)
Adjustments for:

 

 

 

 
Impairment of unproven mineral interest16
4,519

1,373

7,221

97,847
Amortisation and depreciation

6,864,744

13,486

13,027,616

31,016
Loss on forward sale commodity contracts

(471,403)
-

(176,480)
-
Settlement of gold stream obligation

 

-

 

-
Foreign exchange (gain) loss

837,517

(52,668)
1,552,511

138,972
Interest income / expense

3,935,732

-

7,693,863

-
Net operating cash flows

17,335,051

(5,457,939)
28,409,832

(4,836,088)



 

 

 

 
Changes in non-cash working capital accounts

 

 

 

 
Restricted cash

464

-

3,467,617

-
Receivables

(517,146)
-

(475,996)
-
Prepaid expenses and deposits

(961,870)
 

(1,312,037)
 
Deferred income

3,910,703

 

10,144,050

 
Inventory

(7,485,612)
 

(6,038,731)
 
Prepaids long term

(240,767)
 

(230,869)
 
Repayment of goldstream liabilities

(2,997,495)
 

(4,804,185)
 
Accounts payable and accrued liabilities

7,422,248

-

1,065,330

 
Cash utilized in operations

16,465,576

1,685,810

30,225,011

(907,491)



 

 

 

 
Adjustment to net loss for cash items

 

 

 

 
Realized foreign exchange

(320,849)
-

(170,769)
-
Total operating

16,144,727

 

30,054,242

 



 

 

 

 
Investing

 

 

 

 
Purchase of intangible assets

-

(24,484)
(169)
(136,060)
Assets under construction expenditures

-

(22,061,396)
 

(31,436,600)
Property, Plant & Equipment

(1,247,464)
(687,749)
(7,808,673)
(1,573,441)
Exploration & Evaluation assets expenditures

(509,280)
(662,470)
(1,097,588)
(1,249,946)
Total investing

(1,756,744)
(23,436,099)
(8,906,430)
(34,396,047)



 

 

 

 
Financing

 

 

 

 
Proceeds from issuance of equity securities

 

284,585

 

284,585
Share subscriptions received

2,952

 

922,114

 
(Repayment of)/Proceeds from loans and borrowings

(13,440,749)
21,047,283

(15,424,675)
21,047,283
Net proceeds from short term currency swaps

594,748

 

2,348,228

 
Interest paid

(1,329,281)
 

(2,543,868)
 
Payment of lease liabilities

(1,365,480)
(12,151)
(2,579,159)
(24,393)
Total Financing

(15,537,810)
21,319,717

(17,277,360)
21,307,475



 

 

 

 
Effect of exchange rates on cash

(70,618)
(927,151)
(90,792)
(620,686)



 

 

 

 
Net change in cash
$(1,220,445)$(1,319,410)$3,779,660
$(14,924,072)



 

 

 

 
Cash, beginning of the period
$6,276,375
$8,760,354
$1,276,270
$22,365,016



 

 

 

 
Cash, end of the period
$5,055,930
$7,440,944
$5,055,930
$7,440,944



 

 

 

 



 

 

 

 
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 warrants19
-

-

-

(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 warrants19
2,073,451

-

-

421,794

2,073,451
Options exercised19
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 costs19
-

-

-

-

-
Issue of share options19
-

-

-

-

-
Options exercised19
922,114

(1,058,446)
-

1,058,446

922,114
Net profit for the period

-

-

-

6,305,101

6,305,101
Comprehensive loss

-

-

(1,575,430)
-

(1,575,430)
Balance on June 30, 2022
$79,949,297
$3,455,454
$(4,464,940)$(13,694,637)$65,245,174 



 

 

 

 

 



 

 

 

 

 
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 SIX MONTHS ENDED JUNE 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.

  1. 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 June 30, 2022, the Company had cash of $5,055,930, and inventory of 2,275 ounces of gold to be sold, with 6,069 ounces in transit. During the six months period ended June 30, 2022, the Company produced 45,128 ounces of gold (Q2 2022: 23,785 ounces) and post period end, the Company has continued production from its Segilola Gold Mine. The Company sold 38,830 ounces of gold from 1 January 2022 to the end of Q2 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 85,000 - 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 Q2 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 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 June 30, 2022, the Group had a net working capital deficit of $28,790,194 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 and a Deferred Income component, less related inventory, which was earned in July 2022 (See note 18 for details). The working capital calculation excludes $11,753,417 of gold stream liabilities, and $4,854,968 in third party royalties included in current accounts payable, that are contingent upon revised gold sales forecast of 85,000-100,000 ounces for the year ending December 31, 2022.

In Q2, 2022, the Company made its second scheduled debt repayment to the Africa Finance Corporation of $14,461,938 consisting of principal and interest, in accordance with the terms of its Senior Secured Facility.

At June 30, 2022, total principal repayments and cancellations amount to $15,825,971, 29% 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.

  1. 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:

CompanyLocationIncorporatedInterest
Thor Investments (BVI) Ltd. ("Thor BVI")British Virgin IslandsJune 30, 2011100%
African Star Resources Incorporated ("African Star")British Virgin IslandsJune 30, 2011100%
Segilola Resources Incorporated ("SR BVI")British Virgin IslandsMarch 10, 2020100%
Thor Gold Ventures Ltd ("THX GV")United KingdomFebruary 11, 2022100%
African Star Resources SARL ("African Star SARL")SenegalJuly 14, 2011100%
Argento Exploration BF SARL
("Argento BF SARL")
Burkina FasoSeptember 15, 2010100%
AFC Constelor Panafrican Resources SARL ("AFC Constelor SARL")Burkina FasoDecember 9, 2011100%
Segilola Resources Operating Limited
("SROL")
NigeriaAugust 18, 2016100%
Segilola Gold Limited ("SGL")NigeriaAugust 18, 2016100%

 

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.

d) 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 June 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.

e) 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 will be reclassified as Mining and Plant assets (together "Mining Property") within Property, Plant & Equipment. Mining Property will be 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 3f 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 EquipmentRate
Motor vehicles20-33%
Plant and machinery 20-25%
Office furniture20-33%

 

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

f) 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.

g) 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.

h) 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.

i) 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, that 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.

j) 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.

k) 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 (March 31, 2022: 5,400 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).

l) 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.

m) 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.

n) 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).

o) 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
    Expected volatility
  • Risk-free interest rate

 

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.

p) 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.

q) 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.

r) Interest income

Interest income is recognized as earned, provided that collection is assessed as being reasonably assured.

s) 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.

t) 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.

u) 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.

v) 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.

  1. 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$1,817 /oz at June 30, 2022. A 1% change in gold production estimates would result in an impact of less than $0.8 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 $7,221 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.

  1. PRODUCTION COSTS


 Three Months Ended
June 30,

Six Months Ended
June 30,


Note 2022

2021

2022

2021 
Mining contract
 11,958,353

-

18,489,728

-
Contractors and consultants
 564,202

-

767,096

-
Professional fees
 449,926

-

587,110

-
Drilling and assays
 2,129,020

-

2,733,071

-
Salaries
 1,466,417

-

2,702,176

-
Materials and consumables
 34,565

-

55,566

-
Drilling operations
 74,950

-

103,436

-
Movement in inventories
 4,776,285

-

7,409,457

-
Maintenance
 2,478,256

-

4,260,357

-
Other
 330,463

-

541,099

- 


$
24,262,437
$-
$37,649,096
$- 

 

5b. AMORTISATION AND DEPRECIATION



Three Months Ended
June 30,

Six Months Ended
June 30,


Note
2022

2021

2022

2021 
Amortisation and depreciation - owned assets

5,789,009

2,323

10,793,626

8,499
Amortisation and depreciation - right-of-use assets

1,075,735

11,164

2,233,990

22,517 


$6,864,744
$13,487
$13,027,616
$31,016 

 

5d. OTHER ADMINISTRATIVE EXPENSES



Three Months Ended
June 30,

Six Months Ended
June 30,


Note
2022

2021

2022

2021 
Audit and legal

91,262

(9,300)
138,435

87,222
Bank charges

71,168

113,067

101,142

126,067
Consulting fees

685,745

73,917

1,010,099

142,563
Directors' fees21
90,452

87,944

199,114

175,920
Equipment hire

7

-

51,589

-
Investor relations and transfer agent

105,165

55,853

216,391

105,490
Listing and filing fees

13,448

17,863

19,004

21,063
Mining property costs

927,727

-

1,294,192

-
Near mine exploration

455,467

-

762,614

-
Office and miscellaneous

(223,352)
58,691

140,851

123,384
Salaries and benefits

320,795

311,339

687,760

629,627
Travel

146,132

26,404

312,686

49,500


$2,684,016
$735,778
$4,933,877
$1,460,836 

 

  1. RESTRICTED CASH


June 30,
2022


December 31, 2021 


 

 
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. The Facility can be drawn down at the Group's request in minimum disbursements of $5 million. As at June 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.

  1. INVENTORY


June 30, 2022

December 31, 2021 
Plant spares and consumables$3,071,586
$1,337,792
Gold ore in stockpile
9,728,233

8,663,728
Gold in CIL
2,457,696


1,614,267

Gold Dore
8,788,510

6,530,771 

$24,046,025 
$18,146,558 

 

There were no write downs to reduce the carrying value of inventories to net realizable value during the period ended June 30, 2022.

  1. AMOUNTS RECEIVABLE


June 30, 2022

December 31, 2021 
Accounts receivable$524,926
$20,495
GST
15,671

3,715
Other receivables
165,202

213,441 

$705,799
$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.

  1. PREPAID EXPENSES, ADVANCES AND DEPOSITS


June 30,
2022


December 31, 2021 
Current:





Insurance$106,154
$53,985
Gold Stream liability arrangement fees
38,508

38,829
Advance deposits to vendors
1,585,480

235,408
Other prepayments
231,165

258,643 

$1,961,307

586,865 
Non-current:
 

 
Gold Stream liability arrangement fees$67,389
$87,310
Other prepayments
219,949

18,373 

$287,338
$105,683 

 

  1. 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 June 30, 2022.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position for the period ended June 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
726,019

(674,187)
-
Depreciation
(2,233,990)
-

(2,233,990)
Interest
-

(750,355)
(750,355)
Lease payments
-

2,579,159

-
Foreign exchange movement
26,331

(23,668)
(2,663)


 

 

 
Carrying value at June 30, 2022$19,361,972
$(17,143,425)$(2,987,008)

 

Total depreciation charged to the Statement of Comprehensive Income for the period under IFRS 16 was $2.233,990.

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)

 

  1. GOLD STREAM LIABILITY

Gold stream liability



June 30, 2022
Total


December 31, 2021
Total
 
Balance at Beginning of period$30,262,279
$24,708,573
Interest at the effective interest rate
3,228,128

6,562,830
Repayments
(4,804,185)
(443,915)
Foreign exchange movement
391,106

(565,209)
Balance at End of period$29,077,328
$30,262,279 
Current liability
11,753,417

12,837,633 
Non-current liability
17,323,911

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 $3,228,128 was recognised for the six months ended June 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$-

29,077,328

-

29,077,328 

 

The liabilities included in the above table are carried at fair value through profit and loss.

  1. LOANS AND BORROWINGS


June 30,
2022


December 31, 2021 
Current liabilities:





Loans payable to the Africa Finance Corporation less than 1 year$10,301,628
$24,192,518
Deferred element of EPC contract
3,129,964

3,122,990
Short term advances
2,348,228

668,570 

$15,779,820

27,984,078 
Non-current liabilities:
 

 
Loans payable to the Africa Finance Corporation more than 1 year$23,131,927
$22,667,448
Deferred element of EPC contract
3,075,182

3,087,077 

$26,207,109
$25,754,525 

 

Loans from the Africa Finance Corporation



June 30,
2022
Total


December 31, 2021
Total
 
Balance at Beginning of period$
46,859,966
$14,267,114
Drawdown
-

31,153,833
Repayments
(14,479,808)
-
Arrangement fees
-

(508,856)
Unwinding of interest in the period
875,396

1,714,041
Foreign exchange movement
178,001

233,834 
Balance at End of period$33,433,555
$46,859,966 
Current liability
10,301,628

24,192,518
 
Non-current liability
23,131,927

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 June 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 June 30, 2022, a total of $6,205,146 (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.



June 30, 2022
Total


December 31, 2021
Total
 
Deferred payment facility$6,205,146
$6,210,067
Foreign exchange movement
-

- 
Balance period end$6,205,146
$6,210,067 

 

Short term advances



June 30,
2022
Total


December 31, 2021
Total
 
Balance at beginning of period$668,570
$-
Drawdowns
8,295,747

678,935
Repayments
(6,611,245)
-
Foreign exchange movement reign
(4,844)
(10,365)
Balance period end$2,348,228
$668,570 

 

The Company enters into currency swap agreements with third parties. As at June 30, 2022, the currency being purchased was received before reporting date and the currency being sold was paid to the third party and settled in full after reporting date, on July 1, 2022. The advance outstanding at reporting date did not incur any interest.

  1. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
June 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
(4,804,185)
(6,611,245)
(14,479,808)
(281,141)
(26,176,379)
Non-cash changes:
 

 

 

 

 
Unwinding of interest in the year
3,228,128

-

875,396

222,960

4,326,484
Foreign exchange movements
391,106

(4,844)
178,001

7,120

571,383
Offset against EPC payment
-

-

-

46,140

46,140 
June 30, 2022$29,077,328

2,348,228

33,433,555

6,205,146

71,064,257 

 

December 31, 2021
Gold stream liability

Short term advance

A FC 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 

 

  1. PROVISIONS
June 30, 2022
Other

Fleet demobilisation costs

Restoration costs

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 of
-

-

6,480

6,480 
Foreign exchange movements e
-

440

95,004

95,444 
Balance at period end$18,222
$173,681
$5,166,419
$5,358,322 
Current liability
-

-

-

- 
Non-current liability
18,222

173,681

5,166,419

5,358,322 

 

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 of discount
-

4,628,124

4,628,124
Foreign exchange movements e
-

(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.

  1. PROPERTY, PLANT AND EQUIPMENT

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Property, Plant and Equipment Table

To view an enhanced version of this table, please visit:
https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_006full.jpg

A summary of depreciation capitalized is as follows:



Three months ended
June 30,


Six months ended
June 30,

Total depreciation
Capitalized
 


2022

2021

2022

2021

June 30, 2022

December 31, 2021 


 

 

 

 

 

 
Exploration expenditures
37,306

1,732

60,724

3,461

657,840

597,117 
Total$37,306
$1,732
$60,724
$3,461
$657,840
$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 June 30, 2022. Refer to Note 14 for further detail.

  1. INTANGIBLE ASSETS

The Company's exploration and evaluation assets costs are as follows:

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Exploration and Evaluation Assets Costs Table

To view an enhanced version of this table, please visit:
https://images.newsfilecorp.com/files/7003/135295_1445cb4db4c75be6_007full.jpg

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 km2 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 km2 located within the Houndé belt.

The three permits together cover a total area of 474km2 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 June 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 nine exploration licenses and five joint venture partnership exploration licenses. Together with the mining lease over the Segilola Gold Deposit, Thor's total exploration tenure amounts to 1,268 km². The Company's exploration strategy includes further expansion of its Nigerian land package as and when attractive new licenses become available.

  1. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES


June 30,
2022


December 31,
2021
 
Trade payables$29,112,284
$32,222,580
Accrued liabilities
5,102,660

3,058,121
Other payables
5,209,427

5,110,979 

$39,424,371
$40,391,680 
Current liability
39,069,912

38,827,489 
Non-current liability
354,459

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 $5,209,427 that relates to third party royalties that will become payable upon future gold sales. $4,854,967 of this royalties' creditors is included in current liabilities, and $354,460 is included in non-current liabilities (refer to note 3k for further detail).

  1. DEFFERED INCOME


June 30,
2022


December 31, 2021
Deferred income$10,147,435
$- 

 

Deferred income liability was recorded upon receipt of funds for a gold shipment with a delivery date of July 4, 2022, post reporting date. In accordance with the Group's Revenue Recognition accounting policy (See note 3j for further detail), revenue is deemed to arise at the point of delivery. This liability will be transferred and recognised as sales revenue in Q3 2022. The value of the gold shipment of 6,069 ounces was recognised as Gold Dore inventory at June 30, 2022 at a cost of $1,081/oz and measured in accordance with the Group's inventory accounting policy (refer to note 3l for further detail).

  1. CAPITAL AND RESERVES

a) Authorized

Unlimited common shares without par value.

b) Issued



June 30,
2022
Number


June 30,
2022


December 31, 2021
Number


December 31,
2021
 
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:

Vesting period (years) First vesting date Expected remaining life (years) Risk free rate Exercise price Volatility of share price Fair value Options vested Options granted Expiry
5 03/12/20180.952.00%$0.145105.09%$0.14 12,800,000 12,800,000 03/12/2023
5 10/05/20181.522.43%$0.14100.69%$0.14 750,000 750,000 10/05/2023
5 01/16/20202.801.49%$0.2066.84%$0.07 14,250,000 14,250,000 01/16/2025

 

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 June 30, 2022, and the outstanding and exercisable options at June 30, 2022:







Contractual Lives

January 1,
2022


During the period




June 30,
2022


June 30, 2022
Number of Options
 
Grant
Date
Expiry
Date

Exercise
Price


Remaining (Years)

Opening
Balance


Granted

Exercised

Expired / Forfeited

Closing
Balance


Vested and Exercisable

Unvested 





























16-Jan-201716-Jan-2022$0.12

-

9,250,000

-

(9,250,000)
-

-

-

-
12-Mar-201812-Mar-2023$0.145

0.70

12,800,000

-

(289,000)
-

12,511,000

12,511,000

-
5-Oct-20185-Oct-2023$0.14

1.27

750,000

-

-

-

750,000

750,000

-
16-Jan-202016-Jan-2025$0.20

2.55

14,040,000

-

-

-

14,040,000

14,040,000

-



 

 

 

 

 

 

 

 

  
Totals

 

1.67

36,840,000

-

(9,539,000)
-

27,301,000

27,301,000

-
Weighted Average Exercise Price
 

 
$0.160
$0.000
$0.121

-
$0.173
$0.173

-

 

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:

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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.

  1. EARNINGS PER SHARE

Basic and diluted profit (loss) per share is calculated by dividing the profit (attributed to shareholders for the six months to June 30, 2022, of $6,305,101 (June 30, 2021: loss ($5,103,924)) by the weighted average number of shares of 636,603,895 (June 30, 2021: 621,405,975) in issue during the period.

  1. 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 six months ended June 30, 2022, and 2021 were as follows:



Three months ended June 30,
Six months ended June 30, 



2022

2021

2022

2021 
Salaries












Current directors and officers(i) (ii)$163,566
$95,725
$331,995
$193,548
Former directors and officers

34,739

38,890

71,557

78,366



 

 

 

 
Directors' fees

 

 

 

 
Current directors and officers(i) (ii)
90,452

87,944

199,114

175,920



 

 

 

 
Share-based payments

 

 

 

 
Current directors and officers

-

-

-

- 


$288,757
$222,559
$602,666
$447,0834 

 

(i) Key management personnel were not paid post-employment benefits, termination benefits, or other long-term benefits during the three months ended June 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 June 30, 2022, include $169,695 (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.

  1. SUPPLEMENTAL CASH FLOW INFORMATION

a) Changes in non-cash working capital are as follows:


Three months ended June 30,

Six months ended June 30, 


2022

2021

2022

2021 
Amounts receivable$(517,146)$1,527,925
$(475,996)$(2,531,421)
Inventory
(7,485,612)
-

(6,038,731)
-
Restricted cash and deferred income
3,911,167

-

13,611,667

50
Prepaid expenses and deposits
(1,202,637)
(960,472)
(1,542,906)
(63,744)
Accounts payable and accrued liabilities
1,808,394

69,334

(5,301,764)
4,330,017 
Change in non-cash working capital accounts$(3,485,834)$636,786
$252,270
$1,734,902
Relating to:
 

 

 

 
Operating activities$(810,163)$1,680,292
$1,815,179
$(2,463,755)
Financing activities
-

-

-

-
Investing activities
(2,675,671)
(1,043,505)
(1,562,909)
4,198,657 

$(3,485,834)$636,786
$252,270
$1,734,902 

 

Accounts payable and accrued liabilities includes $nil (December 31, 2021 - $25,417,829) related to Assets under Construction and Exploration.

23. 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:

June 30, 2022
Measured at amortised cost

Measured at fair value through profit and loss

Total 
Assets








Cash and cash equivalents$5,055,930

-

5,055,930
Restricted cash
-

-

-
Amounts receivable
705,799

-

705,799 
Total assets$5,761,729

-

5,761,729 


 

 

 
Liabilities
 

 

 
Accounts payable and accrued liabilities$34,214,944

5,209,427

39,424,371
Loans and borrowings
42,178,832

-

42,178,832
Gold stream liability
-

29,077,328

29,077,328
Lease liabilities
17,143,425

-

17,143,425
Total liabilities$93,537,201

34,286,755

127,823,956 

 

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:

June 30, 2022
Interest rate
Appreciation
By 1%


Interest rate
Depreciation
By 1%
 
Comprehensive income (loss)





Financial assets and liabilities$381,700
$(381,700)
       
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 June 30, 2022, and December 31, 2021, were as follows:



June 30,
2022


December 31,
2021
 
Cash$5,055,930
$1,276,270
Restricted cash
-

3,495,992
Amounts receivable
705,799

237,651 
Total$5,761,729
$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 June 30, 2022, and December 31, 2021.

Contractual maturity analysis as at June 30, 2022


Less than
3 months
$


3 - 12
Months
$


1 - 5
Year
$


Longer than
5 years
$


Total
$
 
Accounts payable
24,796,249

3,961,576

450,218

-

29,208,043
Accrued liabilities
5,241,042

-

-

-

5,241,042
Other payables
5,116,764

-

-

-

5,116,764
Gold stream liabilities
3,158,054

8,595,363

30,250,846

 

42,004,263
Loans and borrowings
13,247,005

3,025,224

31,116,197

-

47,338,426 


51,559,115

15,582,163

61,817,261

-

128,958,538 
  
Contractual maturity analysis as at December 31, 2021


Less than
3 months
$


3 - 12
Months
$
1 - 5
Year
$


Longer than
5 years
$


Total
$
 
Accounts payable
25,766,3964,862,6761,952,408

-

32,581,480
Accrued liabilities
3,076,393--

-

3,076,393
Other payables
5,116,764--

-

5,116,764
Gold stream liabilities
2,237,63110,614,89633,955,921

 

46,808,448
Loans and borrowings
1,984,71426,031,05432,400,920

-

60,416,688 


38,181,89841,508,62568,309,249

-

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 June 30, 2022:


 
Functional currency 




US dollar

Pound
Sterling


West
African
Franc


Total
Currency of net monetary asset/(liability)
June 30, 2022
USD$


June 30, 2022
USD$


June 30, 2022
USD$


June 30, 2022
USD$
 
Canadian dollar
(378,946)
-

-

(378,946)
US dollar
(111,725,140)
-

-

(111,725,140)
Pound Sterling
(299.637)
(3,946)
-

(303,583)
Nigerian Naira
(9,327,366)
-

-

(9,327,366)
West African Franc
-

-

(31,079)
(31,079)
Australian dollar
(104,209)
-

-

(104,209)
Total
(121,835,298)
(3,946)
(31,079)
(121,870,324)

 

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
dollar


US dollar

Pound
Sterling


Nigerian
Naira


West
African
Franc


Total
Currency of net monetary asset/(liability)
December 31, 2021
USD$


December 31, 2021
USD$


December 31, 2021
USD$


December 31, 2021
USD$


December 31, 2021
USD$


December 31, 2021
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:

June 30, 2022
United States
Dollar
Appreciation
By 5%


United States
Dollar
Depreciation
By 5%
 
Comprehensive income (loss)





Financial assets and liabilities$142,000
$(142,000)
       
December 31, 2021
 

  
Comprehensive income (loss)
 

 
Financial assets and liabilities$194,000
$(194,000)

 

24. 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.

25. 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.

26. 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:

June 30, 2022
Segilola Mine Project

Exploration Projects

Corporate

Total 
Current assets$31,121,310
$67,967
$579,784
$31,769,061


 

 

 

 
Non-current assets
 

 

 

 
Deferred income tax assets
-

79,725

-

79,725
Prepaid expenses and deposit
67,389

-

219,949

287,338
Right-of-use assets
18,672,610

-

689,362

19,361,972
Property, plant and equipment
141,021,632

379,736

44,558

141,445,926
Intangible assets
160,018

15,337,396

-

15,497,414
Total assets$191,042,959
$15,864,824
$1,533,653
$208,441,436
Non-current asset additions$7,194,054
$1,533,204
$-
$8,727,258 
Liabilities$(141,177,835)$(79,055)$(1,880,920)$(143,137,810)
Profit (loss) for the period$8,615,786
$(111,126)$(2,199,559)$6,305,101
- consulting fees
(640,676)
(58,003)
(311,419)
(1,010,098)
- salaries and benefits
(77,594)
-

(610,166)
(646,781)
- depreciation owned assets
(10,788,583)
(4,468)
(575)
(10,793,626)
- impairments
-

(7,221)
-

(7,221)

 

Non-current assets by geographical location:



Senegal

Burkina Faso

British Virgin Islands

Nigeria

United Kingdom

Canada

Total 
Prepaid expenses and deposit
-

-

9,833

57,556

201,854

18,095

287,338
Right of use assets
-

-

-

18,672,610

689,362

-

19,361,972
Property, plant and equipment
165,485

-

-

141,235,883

42,219

2,339

141,445,926
Exploration and evaluation assets
14,675,141

-

-

822,273

-

-

15,497,414 
Total non-current assets$14,840,626
$-
$9,833
$160,788,322
$933,435
$20,434
$176,592,650 

 

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:

December 31, 2021
Senegal

Burkina Faso

British Virgin Islands

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 

 

27. SUBSEQUENT EVENTS

There are no material subsequent events to report.

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/135295

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