TIDMTHX
RNS Number : 1106K
Thor Explorations Ltd
31 August 2021
NEWS RELEASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO U.S. WIRE SERVICES
August 31, 2021 TSXV/AIM: THX
Vancouver, British Columbia
This Announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon
the publication of this Announcement, this inside information is
now considered to be in the public domain.
THOR EXPLORATIONS ANNOUNCES SECOND QUARTER 2021 FINANCIAL AND
OPERATING RESULTS FOR THE THREE AND SIX MONTHSED JUNE 30, 2021
Thor Explorations Ltd. (TSXV / AIM: THX) ("Thor Explorations" or
the "Company") is pleased to provide an operational and financial
review for its mineral properties located in Nigeria, Senegal and
Burkina Faso for the three and six months to 30 June 2021 ("Q2
2021") (altogether the "Period").
The Company's Condensed Consolidated Interim Financial
Statements together with the notes related thereto, as well as the
Management's Discussion and Analysis for the three and six months
ended June 30, 2021, are available on Thor Explorations' website
https://thorexpl.com/investors/financials/
Operational Highlights of the Period
- Operational milestones at the Company's Segilola Gold Project
(the "Segilola Project" or the "Project") were achieved in this
Period including the arrival and phased installation of the process
plant equipment
- Process plant equipment, including the SAG and Ball Mills, was
delivered to site and installation commenced
- Mining operations advanced in this Period, including site
preparation , advanced work at the Tailings Management Facility and
Water Storage Dam and the arrival of contract mining fleet to
site
- 1,565,505 Lost Time Injury ("LTI") free shifts at the end of Q2 2021
- Protocols introduced to prevent the introduction of Covid-19
cases at site continue with no reported cases reported to date
- Recruitment for our technical team for survey, mine
engineering and grade control were enhanced during the Period and
the core of the process plant team are now in place
- Commenced trading on the AIM Market of the London Stock Exchange
Post Period Highlights
- First gold poured at the Segilola Mine on 30 July 2021
- Ramp up to commercial production remains on schedule for Q3 2021
- 72,000 tons of ore mined and stockpiled at Segilola
- The Segilola Project remains LTI free
- Completion of 4,000 metre Reverse Circulation drilling program
at Segilola with results expected in Q4 2021
- The Company received encouraging drill results from the Douta
Project, Senegal, including the newly discovered Makosa Bridge
prospect, where a continuous gold mineralisation over a strike
length of 7.5 kilometres was established between Makosa and Makosa
Tail
Outlook
- The Company is now ramping up to Commercial Production and is on schedule for Q3 2021
- Segilola Mine FY 2021 production guidance adjusted to 30,000
to 35,000 ounces ("oz") reflecting First Gold Pour occurring in
July 2021 as opposed to the initial target of June 2021
Segun Lawson, President & CEO, stated :
"This quarter was a particularly transformational period for the
Company as it saw us getting closer to commercial commissioning of
our 100% owned Segilola Gold Project in Nigeria, which has been in
construction since February 2020. Since the end of Q2, we have
achieved first gold pour, becoming Nigeria's first large scale gold
mine, an immense accomplishment, and the culmination of years of
dedication and hard work of the Thor team, especially during the
challenging circumstances of the pandemic.
"The work doesn't stop there, as we press forward, onto
commercial production and the eventual ramp up to a life of mine
average annual production of approximately 90,000 oz of gold per
year.
"Furthermore, the Company is aiming, from its own internally
generated financial resources, to comprehensively explore its
extensive licence holdings in the Segilola region. During this
current quarter, we increased our exploration activities, focussing
on generating high quality drilling targets, with the objective of
adding open pit ounces to the Segilola Plant to supplement
production and extend the Segilola mine life.
"Q2 2021 also marked the milestone of the Company dual listing
our shares onto the AIM Market of the London Stock Exchange, to
further raise the profile and status of the Company with the global
investment community.
"We look forward to updating the market in the coming months
with progress at Segilola, as well as the activity at our Douta
Project in Senegal, where we recently reported outstanding drill
results which demonstrated highly encouraging gold mineralisation
."
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 and development 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 of 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
Blytheweigh (Financial PR)
Tim Blythe / Megan Ray / Rachael Brooks
Tel: +44 207 138 3203
Segilola Project, Nigeria
Executive Summary
The Company continued to make excellent progress throughout the
Q2 2021, with construction progressing well. Protocols introduced
to prevent the introduction of Covid-19 cases at site continue with
no reported cases reported to date. There was no time lost to
injury during the Period and the Segilola Project continues to be
LTI free, with 1,565,505 LTI free shifts being recorded by the end
of the Period.
Process Plant equipment has now all been delivered to site and
civils work at the Process Plant is nearing completion with
concrete work remaining at the Crusher, Run of Mine ("ROM") pad and
Gold Room. Significant progress at the Camp has been made with
construction of the Mining Contractors camp now complete.
Installation of Process Plant equipment is well underway, and work
at the Tailings Management Facility and Water Storage Dam are
advanced.
Mining operations are advancing with site preparation work well
advanced and the contract mining fleet is now at site. The ROM pad
is at design height, with ore being delivered to the stockpiles
from July.
Health & Safety
Covid-19 restrictions which came into place at the end of the
first quarter of 2020 continue with no cases of Covid-19 recorded
at site to the end of the Period. Temperature checks, Social
Distancing and the wearing of masks have become a normal part of
operating procedures. Health and Safety efforts during the second
quarter focused on Contractor Management at Site with Site Health
and Safety rules being further consolidated. Systems and Safe
Operating Procedures continue to be developed to ensure compliance
with safety rules and the Project is adopting ISO45001:2018 and
intends to apply for accreditation in 2022. The Segilola Project
remains LTI Free.
Staffing and Project Office
Staffing of the Segilola Project is ongoing with the core of the
team in place. The engineering department is fully established with
benefits in quality control being realized. The Human Resources
Department is driving the establishment of HR policies and
effective working practice across the Company. The Finance
Department is being strengthened and financial controls and
procedures augmented. The security team, already in place,
continues to be developed further. Our technical team for survey,
mine engineering and grade control were enhanced during Q2 2021 and
the core of the Process Plant team are in place, with key positions
now being filled. A team of Process Plant Operators and Maintenance
Technicians is in place, with these teams participating in
installation work at the process plant, as part of their training
program. A Performance Management Process has been implemented and
a training department established.
Community
Compensation payments to landowners and farmers is 99% complete.
Over 250 Community Workers have benefited from employment at site
and a number of community projects have been initiated.
Engineering, Procurement and Construction
Construction work continued at the Process Plant, with civils
work nearing completion with concrete work remaining at the
Crusher, ROM and Gold Room. The installation of Process Plant
equipment is well underway with the SAG and Ball Mills installed,
while installation of the jaw crusher started, and leach tanks and
ancillary equipment installation is almost complete. Significant
progress at the Camp has been made, with most buildings now
occupied including the Mining Contractors camp. Work at the
Tailings Management Facility is advanced with the embankment at
commissioning height. Project handover remains on target for the
third quarter 2021. It is planned that the EPC contractor will
remain on site into 2022 to assist the Company in fixing snags and
providing operational guidance.
Mining Operations
Mining Operations are advancing with site preparation work
mostly complete. The Mining Contract has started with the mining
fleet arriving at site. Construction of the ROM Pad is advanced,
with the ROM at design height and is now also being expanded to
enable the establishment of the stockpiles.
Blasting operations have started. Grade control drilling is
progressing well with many of the initial mining areas now having
been drilled.
The Mine Laboratory has been constructed with power and services
now required prior to commissioning. All the necessary mining
permits are now in place.
A number of technical projects are being undertaken to
facilitate mining operations. Dewatering holes and water monitoring
holes have now been drilled. The dewatering system and fuller water
management system has been designed with the order for pumps, pipes
and ancillary equipment having been made. A study on the
geochemical attributes of ore, waste and tailings is ongoing to
enable informed decision making for waste management strategies and
a review of blasting performance has commenced with a view to
enhancing the control of dilution.
Management Systems
A number of operational and business management systems are
being developed across the business. Various planning systems are
in place and being further developed to aid our mining, geology and
exploration teams. GCX is being used for Grade Control and
Reconciliation purposes; we have selected Fusion for our Geological
Database; Surpac, Minesched and Deswick are being used for Mine
Planning and scheduling. A Gold accounting system has been
developed in-house for production monitoring. For business systems,
our Enterprise Resource Planning system (MS Dynamics) has been
implemented which will be the key tool in measuring performance
against KPIs. Across the business each department has developed an
Operations Management Plan with a Balanced Scorecard system under
development for full implementation by the fourth quarter of
2021.
Social & Environment
Construction of infrastructure (further development of the
tailings storage dam ("TSF"), process plant the pollution control
pond, progress on completing accommodation at camp, offices and
recreation/canteen blocks, site security wall and security
checkpoints) as well as commencement of mining in the Phase 1 pit
were the key drivers of Environment and Social activities in Q2
2021. The relocation of the emulsion and detonator stores and
access road near the TSF triggered further land and asset surveys
and compensation payments. Evaluating new exploration licences has
involved the Community Development and Stakeholder Team in meeting
with community leaders in new jurisdictions to sensitise them on
exploration activities.
Operational readiness has been the focus of environment and
social management plans, standards operating procedures and on-site
training during Q2 2021. The operational phase activities included
community training on blasting procedures (siren system, erection
of blasting notices in the three host communities and a step-up in
security posts on the Iperindo Road passing through the site).
Process /operations and focussed management plans for handling
Cyanide and Hazardous Chemicals and Reagents have been completed
prior to delivery of chemicals to site. Specialist PPE required for
Cyanide and Chemicals was procured in Nigeria and delivered to
site. A Community Health, Safety and Security Plan was completed to
comply with IFC Performance Standard for Environment and Social
Sustainability (IFC PS) 4.
The final mop up surveys for land, assets and spatial data
continued in Q2 2021 for the eastern and northern edge of the mine
site. Together with additional land requirements for the detonator
and emulsion stores and an additional truck parking area the Q2
2021 compensation budget for the Project has increased to
N1,407,500,000 ($3.13 million) but remains in line with the overall
compensation budget for the Project. This provides compensation for
216 landowners and 1019 asset owners (May 2021). A Nigerian
consultancy firm has been appointed to aid the Company in the
selection, analysis and preparation of business plans for
Livelihood Restoration Programmes for project affected persons -
those who lost land and /or assets within the mine footprint. These
programmes are required under IFC PS 5 - Involuntary
Resettlement.
Social listening continues (monitoring Segilola Resources
Operating Limited ("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. A public relations company has been appointed to aid SROL
in being more proactive in all media forms in Nigeria.
Progress on a range of Health, Safety, Social and Environment
(HSSE) management plans occurred with emphasis on requirements for
lenders (AFC) set out in their Environment and Social Action Plan
(ESAP) 2. HSSE Plans, policies, procedures and protocols delivered
to lenders' Environment and Social advisors in Q2 2021 in line with
ESAP2 included:
New:
-- Community Health Safety and Security Plan;
-- Monitoring Procedure;
-- Hazardous Chemicals and Reagents Management Plan;
-- Cyanide Management Plan; and
-- Cyanide Emergency Response Plan
Updates to:
-- Environmental and Social Management System;
-- Biodiversity Management Plan (incorporating findings from the
annual Dry Season Ecology Survey);
-- Aspects and Impacts Register - for hydrogeology, geochemical
waste, and water and salt balances; and
-- Training pack on IFC PS 1 to 8 - for of new HSSE team members (6)
Environment and social management inputs into Project Management
Plans and Technical Operations Manuals:
-- Tailings Storage Facility;
-- Waste Rock Management; and
-- Blasting Procedures.
Most documents submitted in Q2 2021 have been reviewed and
closed out by lenders' (African Finance Corporation) Environment
and Social Advisors - others will be reviewed following the site
visit of July 2021. Monthly environment baseline surveys
(summarized in quarterly reports to the Federal Ministry of
Environment) were in line with emissions standards.
Upcoming focus for HSSE management (for Q3 2021) relates to HSSE
inputs required for additional operations management plans and
procedures for the Process Plant, Site Security and updates to the
Stakeholder Engagement Plan and Emergency Response and Evacuation
Plan. SROLSafe will also continue to be updated with Standard
Operating Procedures prepared for cyanide and hazardous chemical
and reagents use and storage as well as further inputs into Mining
Procedures.
Community benefits via Community Development Agreements ("CDAs")
signed (in 2017-18) with the three host communities (in 2017-18)
around the Project footprint included SROL continuing to deliver
agreed benefits including a women's training initiative program,
grading of local roads and maintenance of community boreholes.
Local employment commitments outlined in the CDAs were also met
with 15 to 18% of employment on site from the three host
communities (averaging around 100 local employees for 650 employees
at the mine site).
Corporate Social Responsibility ("CSR") programs progressed in
Q2 2021 included construction of local markets, improvements to the
Iperindo Road (replacing road and fixing potholes), replacing
degraded wooden with steel electricity pylons; and training of
community members in applying for jobs/preparing a CV.
Nigerian Exploration Licences
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
explorations licences. Together with the mining lease over the
Segilola Gold Deposit, Thor's total exploration tenure amounts to
915 km(2). The Company's exploration strategy includes further
expansion of its Nigerian land package as and when attractive new
licences become available.
There has been a significant increase in exploration activities
during Q2 2021 which was focussed on generating high quality
drilling targets. Exploration during Q2 2021 comprised regional
steam sediment sampling, detailed auger soil sampling, trenching
and detailed geological mapping.
During the Period exploration, comprising regional stream
sediment sampling, surface and auger soil sampling, has been
focussed on the group of tenements that surround the Segilola
deposit (EL19066 and EL29977) as well as EL26357 located to the
north. The sampling programs were successful in identifying a large
area of scattered low-level gold anomalies in an area known as the
Freeway Anomaly and which is located on the northern extensions of
the structural corridor that, to the south, contains the Segilola
deposit. Additional geochemical sampling and trenching was carried
out to better define potential drilling targets.
The exploration program was successful in identifying a number
of targets and priority areas of interest defined by anomalies.
Further detailed geochemical surveys were undertaken to define
potential targets in these areas.
Further near mine exploration identified a structural trend,
extending north of the Segilola Pit, with gold anomalism occurring
along a three kilometre strike length.
After the Period, the Company commenced an initial 4,000 metre
Reverse Circulation drilling program with the objective of finding
truckable open pit ounces to the Segilola Plant to supplement
production and potentially extend the Segilola mine life. This
commenced following successful initial soil geochemistry, mapping
of the "Segilola Mine Package Sequence" and the appearance of
visible gold in a number of the trenches. Results from the drill
program are expected in Q4 2021.
Douta Project, Senegal
The Douta Gold P roject is a gold exploration permit that covers
an area of 58km(2) and is located within the Kéniéba inlier,
eastern Senegal. The permit is an elongate polygon.
The Douta licence is strategically positioned between the world
class deposits of Massawa and Sabadola to the west and the
Makabingui deposit to the east. Within the licence five separate
gold prospects have been identified using surface geochemical
sampling. These comprise the more advanced Makosa prospect, where
first-pass Reverse Circulation and diamond drilling has defined
mineralisation over a near 3km strike length, and the earlier
exploration stage Maka, Mansa, Samba and Makosa Tail prospects.
Reverse Circulation drilling continued at Makosa Tail and Makosa
North extending the mineralised strike length to a total of over
7.4km.
During the Period further target generative work, comprising
termite mound sampling and auger-assisted geochemical sampling,
continued at the Maka and Mansa prospects.
Activity during the Period generated a total of 16,894 samples
with analyses carried out by ALS Laboratories in Mali.
Company received and announced drilling results from the Makosa
Tail prospect.
The exploratory drilling program was designed to infill the
initial wide-spaced drilling that was completed in late 2020 which
led to the Makosa Tail discovery. The results received to date
confirm the continuation of the Makosa mineralised system along
strike to the south.
Highlights include:
-- Makosa Tail Prospect mineralisation confirmed over 1,000m of
strike length in a number of parallel lodes including a 300m high
grade zone in a previously untested area.
-- Drillhole DTRC155
-- 5m at 11.0g/tAu from 17m
-- Drillhole DTRC156
-- 5m at 10.1g/tAu from 7m
-- Drillhole DTRC181
-- 5m at 3.3g/t from 4m
Following the Period, the Company received all outstanding drill
results from its drilling program which confirmed mineralisation
extends Makosa to the north and remains open-ended. Mineralisation
was also confirmed between Makosa and Makosa Tail, resulting in the
identification of a 7,400m prospective mineralised system.
Burkina Faso
In Burkina Faso, in April 2021, Thor regained a 100% interest
from its Joint Venture with Barrick in the Central Houndé
Project.
Overall Performance
For the six months ended June 30, 2021, the Company incurred a
net loss of $6,449,573 ($0.010 loss per share) compared to a net
loss of $464,385 ($0.000 loss per share) for the six months ended
June 30, 2020. The increase in net loss is primarily due to foreign
exchange losses of $2,997,483 on US Dollar denominated liabilities,
and extra-ordinary costs incurred in listing the Company's shares
on the AIM Market of the London Stock Exchange of $1,442,610. The
loss of $464,385 in the comparable period is net of the reversal of
an impaired receivable of $1,769,663 where, if not for this
reversal, the loss for the six months to June 30, 2020, would have
been $2,234,048.
For the three and six months ended June 30, 2021, the Company
incurred the following costs excluding acquisition and impairments
across its mining tenements:
Three Months ended Six Months ended Total
June 30, June 30, cumulative
expenditure
--------------------------- --- ---------------------------- ---------------------------- -------------
June 30,
2021 2020 2021 2020 2021
------------------------------- ----------- ----------- ----------- ----------- -------------
Assets under construction $ 30,611,783 $ 19,258,867 $ 40,420,859 $ 24,937,438 $ 114,011,492
Exploration expenditures 1,295,193 191,418 1,738,875 279,633 11,270,098
-------------------------------- ----------- ----------- ----------- ----------- -------------
Total $ 31,906,976 $ 19,450,285 $ 42,159,734 $ 25,217,071 $ 125,281,591
--------------------------- --- ----------- ----------- ----------- ----------- -------------
The majority of the expenditure for the six months ended June
30, 2021, was on the construction of the Segilola Gold Mine in
Nigeria of $40,420,859, including $7,029,529 in capitalised Project
Finance costs, and exploration works at the Douta Gold Project in
Senegal of $1,440,181.
With the commencement of construction during 2020, the Company
has recognised a provision for restoration costs of $1,656,897 for
future rehabilitation work (refer to Note 13 of the Q2 Unaudited
Financial Statements).
During Q2 2021 no acquisition costs were incurred. The
cumulative acquisition costs for the Segilola Gold Project,
Nigerian exploration licences, Douta Gold Project and Central
Houndé Project expenditures at June 30, 2021, amount to
$20,065,625, $35,896, $6,199,492 and $664,145 respectively.
The value of the Central Houndé Project has been impaired fully
as at June 30, 2021, with a charge of $123,644 being recognised in
the Consolidated Statement of Comprehensive Loss.
As at June 30, 2021, the Company had cash of $9,402,749,
restricted cash of $4,338,728, and net working capital, excluding
Gold Stream repayments and borrowings, of $11,186,551 (December 31,
2020 - cash of $28,261,552, restricted cash of $4,460,026, and net
working capital, excluding Gold Stream repayments and borrowings,
of $22,307,767).
Summary of Quarterly Results
The table below sets forth selected results of operations for
the Company's eight most recently completed quarters (in Canadian
dollars, except per share amounts).
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Description June 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2021 2021 2020 2020 2020 2020 2019 2019
$ $ $ $ $ $ $ $
Revenues - - - - - - - -
--------------- --------------- --------------- --------------- --------------- ------------ ------------ -----------
Net
(loss)/profit
for period (6,849,148) 399,575 (2,033,901) (1,371,821) 1,124,648 (1,589,033) (3,069,974) (487,506)
--------------- --------------- --------------- --------------- --------------- ------------ ------------ -----------
Basic and
fully diluted
loss per
share 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------------- --------------- --------------- --------------- --------------- ------------ ------------ -----------
Total assets 159,443,519 137,104,210 141,505,374 108,989,434 100,439,234 54,754,250 53,712,727 46,408,726
--------------- --------------- --------------- --------------- --------------- ------------ ------------ -----------
Total
long-term
liabilities (56,615,998) (44,018,156) (46,499,308) (18,877,481) (28,657,690) (21,568) (35,354) (970)
--------------- --------------- --------------- --------------- --------------- ------------ ------------ -----------
Results of Operations
The review of the results of operations should be read in
conjunction with the Company's Consolidated Financial Statements
and notes thereto for the three and six months ended June 30,
2021.
Results of operations for the six months ended June 30, 2021,
and 2020
Loss for the Period
The Company reported a net loss of $6,449,573 ($0.010 loss per
share) for the six months June 30, 2021, as compared to a net loss
of $464,385 ($0.00 loss per share) for the six months ended June
30, 2020. The increase in loss was largely the result of:
-- an increase foreign exchange losses of $3,197,368 from gains
of $199,885 in 2020 to losses of $2,997,483 in 2021;
-- costs of listing on the AIM Market of the London Stock Exchange of $1,442,610; and
-- a gain realized of $1,769,663 in the comparable period to
June 30, 2020, upon the reversal of a receivables impairment which
had the effect of reducing the loss in the comparable period.
The increase in costs was offset partially by a decrease in
stock-based compensation costs of $1,021,271 from $1,021,271 in
2020 to $nil in 2021.
Revenue
The Company does not have any operating revenue. The Company's
sole source of income is interest income on cash balances. No
interest was earned during the six months ended June 30, 2021, and
2020.
Results of operations for the three months ended June 30, 2021,
and 2020
Loss for the Quarter
The Company reported a net loss of ($6,849,148) ($0.011 loss per
share) for the three months June 30, 2021, as compared to a net
profit of $1,124,648 ($0.000 profit per share) for the three months
ended June 30, 2020. The increase in loss was largely the result
of:
-- an increase foreign exchange losses of $4,561,416 from gains
of $96,217 in 2020 to losses of $4,457,748 in 2021;
-- costs of listing on the AIM Market of the London Stock Exchange of $1,442,610; and
-- a gain realized of $1,698,730 in the comparable period to
June 30, 2020, upon the reversal of a receivables impairment which
had the effect of reducing the loss in the comparable period.
Revenue
The Company does not have any operating revenue. The Company's
sole source of income is interest income on cash balances. No
interest was earned during the three months ended June 30, 2021,
and 2020.
Liquidity and resources
The Company had cash of $9,402,749, restricted cash allocated to
the Segilola Gold Project of $4,338,728, and net working capital,
excluding Gold Stream repayments and borrowings, of $11,186,551 as
at June 30, 2021 (December 31, 2020: cash of $28,261,552,
restricted cash allocated to the Segilola Gold Project of
$4,460,026, and net working capital, excluding Gold Stream
repayments and borrowings, of $22,307,767). The decrease in cash
and cash balance of $18,858,802 is due mainly to expenditure on
assets under construction of $39,724,859, intangible assets
expenditures of $1,579,494, the purchase of property plant and
equipment of $1,988,279, and operational overheads. This cash
expenditure was financed by existing cash balances and drawdowns
from a senior secured loan facility of $26,596,399.
The Company has no current source of income. As at June 30,
2021, in addition to cash and restricted cash balances, the Company
has undrawn debt facilities of $13 million (US$10.5 million) which
should provide sufficient funding for the completion of the
construction of its Segilola Gold Mine in Osun state, Nigeria. The
Board has reviewed the Group's cash flow forecasts up until
December 2022, having regard to its current financial position and
operational objectives. The Board is satisfied that the Group has
sufficient financial resources to meet its commitments for at least
the next twelve months. Refer to note 2c of the Q2 2021 Unaudited
Financial Statements for further detail on going concern.
Unaudited Financial Statements
THOR EXPLORATIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In Canadian dollars
----------------------------------------- ---- ------- ----------------------- ------------------------
(unaudited) (audited)
December
June 30, 31,
2021 2020
Note $ $
----------------------------------------- ---- ------- ----------------------- ------------------------
ASSETS
Current
Cash 9,402,749 28,261,552
Restricted cash 6 4,338,728 4,460,026
Amounts receivable 7 1,187,341 56,705
Prepaid expenses, advances and
deposits 8 1,752,889 552,696
----------------------------------------------- ------- ----------------------- ------------------------
Total current assets 16,681,707 33,330,979
Deferred income tax
assets 43,971 46,668
Prepaid expenses, advances and
deposits 8 155,640 195,284
Right of use assets 9 52,030 87,817
Property, plant and
equipment 14 125,084,202 91,576,876
Intangible assets 15 17,425,969 16,267,750
----------------------------------------------- ------- ----------------------- ------------------------
Total non-current assets 142,761,812 108,174,395
----------------------------------------------- ------- ----------------------- ------------------------
TOTAL ASSETS 159,443,519 141,505,374
----------------------------------------------- ------- ----------------------- ------------------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 16 5,486,679 10,915,964
Lease liabilities 9 8,477 38,969
Gold stream liability 10 12,913,492 6,068,017
Loans and other borrowings 11 16,011,120 68,279
----------------------------------------------- ------- ----------------------- ------------------------
Total current liabilities 34,419,768 17,091,229
Non-current liabilities
Gold stream liability 10 21,713,191 25,348,934
Loans and other borrowings 11 33,246,000 20,531,788
Provision for restoration
costs 13 1,656,807 618,586
----------------------------------------------- ------- ----------------------- ------------------------
Total non-current liabilities 56,615,998 46,499,308
SHAREHOLDERS' EQUITY
Common shares 17 97,422,200 97,122,584
Shares subscription 17, 25 60,000 -
Share purchase warrants 17 475,000 475,000
Option Reserve 17 5,846,190 5,846,190
Currency translation
reserve (4,186,816) (769,689)
Deficit (31,208,821) (24,759,248)
----------------------------------------------- ------- ----------------------- ------------------------
Total shareholders'
equity 68,407,753 77,914,837
----------------------------------------------- ------- ----------------------- ------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 159,443,519 141,505,374
-------------------------------------------------------- ----------------------- ------------------------
These consolidated financial statements were approved for issue
by the
Board of Directors on August 30 , 2021, and are signed on its
behalf by:
(Signed) "Adrian Coates" (Signed) "Olusegun Lawson"
Director Director
The accompanying notes are an integral part of these consolidated
financial statements.
THOR EXPLORATIONS
LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF
COMPREHENSIVE
LOSS
FOR THE THREE AND
SIX MONTHSED
JUNE
30,
In Canadian dollars
(unaudited)
-------------------- ----- -------------------- -------------------- --------------------- --------------------
Three Months Ended Six Months Ended
June 30, June 30,
Note 2021 2020 2021 2020
-------------------- ----- -------------------- -------------------- --------------------- --------------------
Continuing
operations
Amortisation and
depreciation -
owned
assets 2,935 13,767 10,740 28,085
Amortisation and
depreciation -
right
of use assets 9 14,107 14,134 28,453 28,253
Other
administrative
expenses 5 929,766 648,983 1,845,985 1,354,443
Impairment of
receivables /
(reversal) - (1,698,730) - (1,769,663)
Impairment of
Exploration &
Evaluation
assets 15 1,735 - 123,644 -
Share-based
payments 17 - - - 1,021,271
Profit / (loss)
from operations (948,543) 1,021,846 (2,008,822) (662,389)
Interest expense 9 (247) (866) (658) (1,881)
Foreign exchange
gain (loss) (4,457,748) 103,668 (2,997,483) 199,885
Extra-ordinary
expenses 5 (1,442,610) - (1,442,610) -
-------------------- ----- -------------------- -------------------- --------------------- --------------------
Net profit / (loss)
before taxes $ (6,849,148) $ 1,124,648 $ (6,449,573) $ (464,385)
Deferred income
taxes - - - -
Net profit / (loss)
for the period $ (6,849,148) $ 1,124,648 $ (6,449,573) $ (464,385)
-------------------- ----- -------------------- -------------------- --------------------- --------------------
Other comprehensive
income
Foreign currency
translation gain
(loss)
attributed to
equity
shareholders of
the company* (2,376,460) (1,308,652) (3,417,127) (116,358)
Total comprehensive
(loss) for the
period $ (9,225,608) $ (184,004) $ (9,866,700) $ (580,743)
-------------------- ----- -------------------- -------------------- --------------------- --------------------
Net loss per share
- basic and
diluted 18 $ 0.011 $ 0.002 $ (0.010) $ (0.001)
-------------------- ----- -------------------- -------------------- --------------------- --------------------
Weighted average
number of common
shares
outstanding -
basic and diluted 621,808,390 514,959,954 621,506,029 482,156,085
-------------------- ----- -------------------- -------------------- --------------------- --------------------
The accompanying notes are an integral part of these unaudited condensed consolidated
interim financial statements.
* Items that may be reclassified to profit or loss.
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 MONTHSED JUNE 30,
In Canadian dollars
(unaudited)
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Three Months Ended Six Months Ended
June 30, June 30,
Note 2021 2020 2021 2020
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Cash flows from (used in):
Operating activities
Net (loss) profit for the
period $ (6,849,148) $ 1,124,648 $ (6,449,573) $ (464,385)
Adjustments for:
Foreign exchange loss (gain) 7,385,768 271,214 6,254,698 (238,092)
Impairment of exploration
and evaluation assets 15 1,735 - 123,644
Depreciation 17,042 27,903 39,194 56,338
Write-off of receivable - (1,698,730) - (1,769,663)
Stock based compensation 17 - - - 1,021,271
Interest expense 9 247 866 658 1,881
Changes in non-cash working
capital items 20 2,130,368 155,209 (1,146,594) 217,971
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Cash utilized in operations 2,686,012 (118,890) (1,177,973) (1,174,679)
Adjustments to net loss for
cash items
Realized foreign exchange
loss (gain) (66,800) 2,029 174,954 (2,935)
Net operating cash flows 2,619,212 (116,861) (1,003,019) (1,177,614)
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Investing activities
Purchases of property, plant
and equipment 14 (869,074) (21,060) (1,988,279) (133,447)
Assets under construction
expenditures 14 (27,877,883) - (39,724,859) -
Exploration & Evaluation
assets expenditures 15 (837,130) (8,090,480) (1,579,494) (13,400,227)
Other intangible assets 15 (30,939) - (171,932) -
Net investing cash flows (29,615,026) (8,111,540) (43,464,564) (13,533,674)
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Financing
Proceeds from issuance of
equity securities 17, 25 359,616 5,816,448 359,616 6,885,253
Proceeds from loan drawdowns 11 26,596,399 - 26,596,399 -
Proceeds from gold stream
liability 10 - 28,197,757 - 28,197,757
Borrowing costs paid 11 (440,524) - (532,080) -
Payment of lease liabilities 9 (15,354) - (30,824) (15,405)
Share issue costs 17 - (6,006) - (35,213)
---------------------------- ------------------ ----------------- ------------------- -------------------
Net financing cash flows 26,500,137 34,008,199 26,393,111 35,032,392
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Effect of exchange rates on
cash (1,171,594) 627,773 (784,330) 1,102,085
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Net change in cash (1,667,271) 26,407,571 (18,858,802) 21,423,189
Cash, beginning of the
period 11,070,021 418,538 28,261,552 5,402,920
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Cash, end of the period $ 9,402,750 $ 26,826,109 $ 9,402,750 $ 26,826,109
---------------------------- ------- ------------------ ----------------- ------------------- -------------------
Supplemental cash flow
information (Note 20)
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 Canadian
dollars
(unaudited)
----------------- ----- ------------------- --------------- --------------- ---------------- ------------------ ------------------- --------------------
Currency Total
Share Share purchase Option translation shareholders'
Note Common Shares subscription warrants Reserve reserve Deficit equity
----------------- ----- ------------------- --------------- --------------- ---------------- ------------------ ------------------- --------------------
Balance on
December 31,
2019 $ 67,550,111 $ - $ 533,000 $ 4,902,308 $ 559,126 $(20,961,259) $ 52,583,286
Private
placements 17 12,593,150 - - - - - 12,593,150
Share issuance
costs 17 (5,435) - - - - - (5,435)
Share based
payments 17 - - - 1,078,000 - - 1,078,000
Net loss for
the period - - - - - (464,385) (464,385)
Comprehensive
income - - - - (116,358) - (116,358)
Balance on June
30, 2020 $ 80,137,826 $ - $ 533,000 $ 5,980,308 $ 442,768 $(21,425,644) $ 65,668,258
Private
placements 17 18,181,765 - - 18,181,765
Share issuance
costs 17 (1,239,007) - - - - - (1,239,007)
Writeback of
warrants
expired 17 - - (58,000) - - 58,000 -
Share based
payments 17 - - (120,000) - (120,000)
Options
exercised 17 42,000 - (14,118) - 14,118 42,000
Net loss for
the period - - - - - (3,405,722) (3,405,722)
Comprehensive
income
(loss) - - - - (1,212,457) - (1,212,457)
Balance on
December 31,
2020 $ 97,122,584 $ - $ 475,000 $ 5,846,190 $ (769,689) $(24,759,248) $ 77,914,837
Exercise of
warrants 17,
& options 25 299,616 60,000 - - - 359,616
Reinstatement
of warrants 17 - 58,000 - - (58,000) -
Exercise of
warrants 17 - - (58,000) - - 58,000 -
Net loss for
the period - - - - - (6,449,573) (6,449,573)
Comprehensive
income
(loss) - - - - (3,417,127) - (3,417,127)
-----------------
Balance on June
30, 2021 $ 97,422,200 $ 60,000 $ 475,000 $ 5,846,190 $ (4,186,816) $(31,208,821) $ 68,407,753
----------------- ----- ------------------- --------------- --------------- ---------------- ------------------ ------------------- --------------------
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial
statements.
1. CORPORATE INFORMATION
Thor Explorations Ltd. N.P.L. was incorporated on September 11,
1968, under certificate number 81705 as a specially limited company
pursuant to the Company Act (British Columbia, Canada). On December
4, 2001, Thor Explorations Ltd. N.P.L. changed its name to Thor
Explorations Ltd. ("Old Thor"). On March 28, 2006, Old Thor
transitioned to the British Columbia Business Corporations Act and
on August 24, 2007, Old Thor resolved to remove the pre-existing
company provisions applicable to Old Thor. Effective on September
1, 2009, Old Thor amalgamated with Magnate Ventures Inc. The
amalgamated entity continued as Thor Explorations Ltd. ("Thor" or
the "Company"). Thor trades on the TSX Venture exchange under the
symbol "THX-V".
The Company is a natural resources company with no revenue,
engaged in the acquisition, exploration and development of mineral
properties, and is currently focused on gold projects located in
West Africa.
The Company's registered office is located at 550 Burrard
Street, Suite 2900, Vancouver, BC, Canada, V6C 0A3.
2. BASIS OF PREPARATION
a) Statement of compliance
These unaudited condensed consolidated interim financial
statements, including comparatives, have been prepared using
accounting policies consistent with International Financial
Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board.
b) Basis of measurement
These unaudited condensed consolidated interim financial
statements have been prepared on a historical cost basis, and are
presented in Canadian 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, 2021, the Company had cash of $9,402,749,
restricted cash of $4,338,728 and net working capital, excluding
Gold Stream repayments and borrowings of $11,186,551. The Company
had undrawn debt facilities of $13 million (US$10.5 million) which
will provide sufficient funding for the completion of the
construction of its Segilola Gold Mine ("Segilola") in Osun state,
Nigeria.
The predominant focus of operational activities will be the
development of Segilola through to commercial production which is
scheduled to commence in Q3 2021. The Board has reviewed the
Group's cash flow forecasts up until December 2022, having regard
to its current financial position and operational objectives. The
Board is satisfied that the Group has sufficient financial
resources to meet its commitments for at least the next twelve
months.
The emergence of the Covid-19 coronavirus pandemic has caused a
severe adverse effect on the business environment on a global
scale. The Group may be affected by disruptions to its operations
in one or more locations, particularly for the foreseeable future
in light of government responses to the spread of Covid-19 or other
potential pandemics.
The Board is aware of the various risks that the pandemic
presents that include but are not limited to financial,
operational, staff and community health and safety, logistical
challenges and government regulation. At present the Board believes
that there should be no significant material disruption to its
operations in Nigeria and continues to monitor these risks and the
Group's business continuity plans. Management maintains constant
dialogue with local the Nigerian government and monitors the
situation among the local communities as well as the broader
environment.
The Group's operations in Senegal have not been impacted by
Covid-19 and exploration activities are continuing.
The Board has considered the operational disruption that could
be caused by factors such as delays to commercial production,
illness amongst workforce caused by Covid-19, and potential
disruptions to supply chains. The Board has conducted sensitivity
testing of its cash flow forecasts factoring in these potential
impacts and it has considered reasonable mitigating actions to its
forecasts and sensitivity scenarios. The major focus on sensitivity
testing was on the anticipated production from its soon to be
completed Segilola Gold Mine. Scenarios considered included a delay
by four months in commissioning of the mine and a fall in the gold
price were considered. The forecast cashflows are based on a gold
price of US$1,600/oz and the period end gold price of US$1,900/oz.
The life of mine all in sustaining cost at Segilola is US$685/oz
providing the Group with a significant margin of safety from any
material fall in the gold price. In the event of a material delay
in commissioning at Segilola, the Group has mitigating actions
available to minimize the impact of the delay including liquidated
damages that are payable under the EPC contract (US$1.6m per
month), DSU insurance which covers the full interest chargeable
under the Secured Senior Debt Facility (US$0.5m per month), and
triggering a suspension of mining under the terms of the Mining
Contract.
The Board is satisfied that the mitigating actions available
should there be a significant delay to commissioning of the
Segilola Gold Mine will not jeopardize the Group's ability to
continue as a going concern.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies described below have been applied
consistently to all periods presented in these unaudited condensed
consolidated interim financial statements unless otherwise
stated.
a) Consolidation principles
Assets, liabilities, revenues and expenses of the subsidiaries
are recognized in accordance with the Company's accounting
policies. Intercompany transactions and balances are eliminated
upon consolidation.
b) Details of the group
In addition to the Company, these unaudited condensed
consolidated interim financial statements include all subsidiaries
of the Company. Subsidiaries are all corporations over which the
Company has power over the Subsidiary and it is exposed to variable
returns from the Subsidiary and it has the ability to use its power
to affect those variable returns. Control is reassessed whenever
facts and circumstances indicate that there may be a change in any
of these elements of control. The audited consolidated financial
statements present the results of the Company and its subsidiaries
("the Group") as if they formed a single entity, with Subsidiaries
being fully consolidated from the date on which control is acquired
by the Company. They are de-consolidated from the date that control
by the Company ceases.
The subsidiaries of the Company are as follows:
Company Location Incorporated Interest
------------------------------------- ---------------- ----------------- ---------
Thor Investments (BVI) Ltd. British Virgin
("Thor BVI") Islands June 30, 2011 100%
African Star Resources Incorporated British Virgin
("African Star") Islands March 31, 2011 100%
Segilola Resources Incorporated British Virgin
("SRI BVI") Islands March 10, 2020 100%
African Star Resources SARL
("African Star SARL") Senegal July 14, 2011 100%
Argento Exploration BF SARL September 15,
("Argento BF SARL") Burkina Faso 2010 100%
AFC Constelor Panafrican
Resources SARL ("AFC Constelor December 9,
SARL") Burkina Faso 2011 100%
Segilola Resources Operating
Limited
("SROL") Nigeria August 18, 2016 100%
Segilola Gold Limited ("SGL") Nigeria August 18, 2016 100%
------------------------------------- ---------------- ----------------- ---------
There have been no changes in ownership interest from the
previous year.
c) Foreign currency translation
Functional and presentation currency
The Company's presentation currency is the Canadian dollar
("$"). The functional currency for the Company, being the currency
of the primary economic environment in which the Company operates,
is the Canadian dollar. 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 the Bank of Canada and 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 Canadian 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 BVI, African Star,
SRI BVI, 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 recognized in profit and
loss. There is a legal requirement in Nigeria for Nigerian
incorporated companies to maintain a functional currency of
Nigerian Naira ("the Naira"). Fluctuations in the value of the
Naira, with most notably the US Dollar and Canadian Dollar will
result in foreign exchange gains and losses as assets and
liabilities denominated in US Dollar and Canadian Dollar are
revalued in Naira 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 represent 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, 2021 the Company had $4.3 million (US$3.5
million) that is accounted for separately from cash and cash
equivalents. It is classified as restricted cash as the funds are
not freely available for the Company's use. 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, accounts payable, accrued liabilities and
deferred payment. Loans and borrowings are initially recognized 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
recognized 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
recognized in profit or loss.
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 US$21 million gold
stream prepayment pursuant to a Gold Stream Arrangement ("GSA")
entered in to with the African Finance Corporation ("AFC").
Under the terms of the GSA an advance payment of US$21 million
was received. Upon the commencement of production at Segilola the
AFC will have 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 US$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 US$26.25 million payable after the initial US$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 will be recalculated at each reporting period and
restated based on changes to the expected production profile and
gold price estimates.
Revenue from the streaming arrangement will be recognized under
IFRS 15 when the customer obtains control of the gold and the Group
has satisfied its performance obligations. The revenue recognized
reduces the contract liability balance.
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 recognized 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 recognized in
profit or loss except where depreciation is directly attributable
to mineral properties owned by the Group that are classified as
either Exploration & Evaluation of Assets Under Construction.
Depreciation in this instance is capitalized to the value of the
mineral property asset (refer to Note 14). Depreciation is provided
on a straight-line basis over the estimated useful life of the
assets as follows:
Description within Mining and
Other Equipment Rate
------------------------------- -------
Motor vehicles 20-33%
Plant and machinery 20-25%
Office furniture 20-33%
Depreciation methods, useful lives and residual values are
reviewed at each financial year-end and adjusted if
appropriate.
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 assets under
construction will be re-categorised as Mining Property, and any
costs will be depleted using a units of production method.
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
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) 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.
k) 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 Canadian dollars upon
consolidation. Movements in the exchange rates of the US Dollar,
Pound Sterling, Nigerian Naira and West African Franc to the
Canadian dollar will affect the size of the comprehensive income
(loss).
l) 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
* Risk-free interest rate
* Expected life of the award
Expected volatility
When equity instruments are modified, if the modification
increases the fair value of the award, the additional cost must be
recognised over the period from the modification date until the
vesting date of the modified award.
m) 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.
n) 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.
o) Interest income
Interest income is recognized as earned, provided that
collection is assessed as being reasonably assured.
p) 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.
q) 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.
r) 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, 2021, that
had a significant effect on the Group's financial statements.
s) Future accounting pronouncements
There are no standards issued by IASB, but not yet effective,
that are expected to have a material impact
of the group.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Company makes estimates and assumptions about the future
that affect the reported amounts of assets and liabilities.
Estimates and judgments are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions.
The effect of a change in an accounting estimate is recognized
prospectively by including it in net and/or comprehensive loss in
the year of the change, if the change affects that year only, or in
the year of the change and future years, if the change affects
both.
a) Critical accounting estimates
Significant assumptions about the future and other sources of
estimation uncertainty that management has made at the financial
position reporting date, that could result in a material adjustment
to the carrying amounts of assets and liabilities, relate to, but
are not limited to, the following:
(i) Accounting treatment of Gold Stream Liability
Determining the appropriate accounting treatment for the Gold
Stream Liability is not an accounting policy choice, rather it is
an assessment of the specific facts and circumstances and requires
judgement. The Company has reviewed the terms of the Gold Sale
Agreement and determined that it constitutes a commodity
arrangement as it is an arrangement to deliver an amount of the
commodity from the Group's own Segilola Gold Project operation, and
does not constitute a contract liability under IFRS 15.
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 will be recalculated 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$1,900 /oz at June 30, 2021. A 1% change in gold production
estimates would result in an impact of less than US$0.041 million
on the Gold Stream liability.
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 E xploration 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 $123,644 has been
charged in the six months to June 30, 2021, in the Condensed
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) 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 $0.05 million (2020: $nil) on the provision for
environmental and site restoration. The value of the year- end
restoration provision is disclosed within note 13.
5. OTHER ADMINISTRATIVE EXPENSES
Three Months Ended Six Months Ended
Note June 30, June 30,
--------------------------------- ------- ----------------------- --------------------------
2021 2020 2021 2020
--------------------------------- ------- --------- -------- ---------- ----------
Audit and legal $ (11,752) $ 22,257 $ 110,210 $ 42,037
Consulting fees 93,405 43,088 180,137 202,716
Directors' fees 19 111,130 241,394 222,286 453,509
Salaries and benefits 393,424 193,490 795,573 300,743
Listing and filing fees 22,573 7,903 26,615 14,253
Investor relations and transfer
agent 70,579 110,417 133,293 185,599
Bank charges 142,877 13,683 159,293 19,738
Office and miscellaneous 74,165 25,472 156,031 82,883
Travel 33,365 (8,721) 62,547 52,965
--------------------------------- ------- --------- -------- ---------- ----------
$ 929,766 $ 648,983 $ 1,845,985 $ 1,354,443
--------------------------------- ------- --------- -------- ---------- ----------
Extra-ordinary expenses of $1,442,610 incurred in the 3 months
ended 30(th) June 2021 are costs incurred in listing the Company's
shares on the AIM Market of the London Stock Exchange.
6. RESTRICTED CASH
June 30, December
31, 2020
2021
----------------- ---- ---------- --- ----------
Restricted cash $ 4,338,728 $ 4,460,026
----------------- ---- ---------- --- ----------
On December 1, 2020, announced that its subsidiary Segilola
Resources Operating Limited ("SROL") had completed the financial
closing of a US$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 US$5 million. As at June 30, 2021, SROL has received total
disbursements of US$43.5 million ($53.9 million), with US$22
million ($26.6 million) drawn down during the period under review.
Total disbursements received represent 80% of the facility. Under
the terms of the facility, the Company was required to place a
total of US$3.5 million ($4.4 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. Accordingly, the balance of the cost overrun bank
account at the reporting date has been shown separately from Cash
on the Statement of Financial Position. Refer to Note 11 for
further detail on the facility. The restricted cash balance will be
released to the Company upon satisfaction of the following
conditions:
1. Project construction being within budget; and
2. commissioning of the Segilola Gold Mine.
7. AMOUNTS RECEIVABLE
June 30, 2021 December
31, 2020
------------------- --- -------------- ----------
GST / VAT $ 1,107,910 $ 1,414
Other receivables 79,431 55,291
$ 1,187,341 $ 56,705
----------------------- -------------- ----------
The value of receivables recorded on the balance sheet is
approximate to their recoverable value and there are no expected
material credit losses.
8. PREPAID EXPENSES, ADVANCES AND DEPOSITS
June 30, December
31, 2020
2021
---------------------------------------- ---- ---------- --- ----------
Current:
Insurance $ 95,466 $ 47,973
Gold Stream liability arrangement fees 48,114 52,910
Other deposits 1,504,208 295,795
Other prepayments 105,101 156,018
---------------------------------------------- ---------- --- ----------
$ 1,752,889 552,696
--------------------------------------------- ---------- --- ----------
Non-current:
Gold Stream liability arrangement fees $ 132,313 $ 171,957
Other prepayments 23,327 23,327
---------------------------------------------- ---------- --- ----------
$ 155,640 $ 195,284
--------------------------------------------- ---------- --- ----------
9. LEASES
The Group accounting 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. $29,111
(2020 year: $59,778) has been expensed in the period in relation to
low value and short- term leases. In addition, the Group will no
longer recognise provisions for operating leases that it assesses
to be onerous. Instead, the Group will include the payments due
under the lease in its lease liability.
The key impacts on the Statement of Comprehensive Loss and the
Statement of Financial Position for the period ended June 30, 2021,
were as follows:
Right Lease liability Income
of use statement
asset
----------------------------- --- ---------- ---------------- -----------
Carrying value December 31,
2020 $ 87,817 $ (38,969) $ -
New leases entered in to - - -
during the period
Depreciation (32,025) - (28,453)
Interest - (658) (658)
Lease payments - 30,824 -
Foreign exchange movement (3,762) 326 (3,436)
------------------------------------ ---------- ---------------- -----------
Carrying value at June 30,
2021 $ 52,030 $ (8,477) $ (32,547)
------------------------------- ---------- ---------------- -----------
Total depreciation for the period under IFRS 16 was $32,025. Of
the total depreciation charge, $28,453 was charged to the Statement
of Comprehensive Loss, and $3,572 was capitalized to Assets Under
Construction.
The key impacts on the Statement of Comprehensive Loss and the
Statement of Financial Position for the year ended December 31,
2020, were as follows:
Right Lease liability Income
of use statement
asset
------------------------------- --- ---------- ---------------- -----------
Balance on transition $ 108,177 $ (96,665) $ -
New leases entered in to
during the year 41,969 (41,969) -
Depreciation (60,559) - (56,619)
Interest - (3,159) (3,159)
Lease payments - 103,009 -
Foreign exchange movement (1770) (185) (1,955)
-------------------------------------- ---------- ---------------- -----------
Carrying value at 31 December
2019 $ 87,817 $ (38,969) $ (61,733)
--------------------------------- ---------- ---------------- -----------
10. GOLD STREAM LIABILITY
Gold stream liability
June 30, December 31,
2021 2020
Total Total
------------------------------------------- --- ------------ -------------
Balance at Beginning of period $ 31,416,951 $ -
Drawdown - 28,197,777
Interest at the effective interest rate 4,359,146 4,545,134
Foreign exchange movement (1,149,414) (1,325,960)
------------------------------------------------ ------------ -------------
Balance at End of period $ 34,626,683 $ 31,416,951
------------------------------------------- --- ------------ -------------
Current liability 12,913,492 6,068,017
------------------------------------------------ ------------ -------------
Non-current liability 21,713,191 25,348,934
------------------------------------------------ ------------ -------------
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 US$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 US$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 US$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 US$26.25 million represents 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 are based
on market forecast reports for the years 2021 to 2025 and, the
production profile is based on the latest life of mine plan model.
The liability will be re-estimated on a periodic basis to include
changes to the production profile, any extension to the life of
mine plan and movement in the gold price. Upon commencement of
production, any change to the implied interest rate will be
expensed through the Consolidated Statement of Loss.
Interest expense of $4,359,146 was recognised for the six months
ended June 30, 2021, and has been capitalized and is included in
the value of Assets Under Construction (Refer to Note 14). To the
date of this report a cumulative total of $8,904,280 has been
capitalized and included in the value of Assets Under Construction.
The interest expense will be released to the income statement upon
commencement of production in line with units of gold produced.
11. LOANS AND BORROWINGS
June 30, December
31, 2020
2021
------------------------------------------------- ---- ----------- --- -----------
Current liabilities:
Loans payable to the Africa Finance Corporation $ 14,829,879 $ -
less than 1 year
Deferred element of EPC contract 1,181,241 68,279
------------------------------------------------------- ----------- --- -----------
$ 16,011,120 68,279
------------------------------------------------------ ----------- --- -----------
Non-current liabilities:
Loans payable to the Africa Finance Corporation
more than 1 year $ 30,993,064 $ 18,140,636
Deferred element of EPC contract 2,252,936 2,391,152
------------------------------------------------------- ----------- --- -----------
$ 33,246,000 $ 20,531,788
------------------------------------------------------ ----------- --- -----------
Loans from the Africa Finance Corporation
June 30, December 31,
2020
2021 Total
Total
------------------------------------- ---- ----------- --- -------------
Balance at Beginning of period $ 18,140,636 $ -
Drawdown 26,596,399 27,927,401
Equity component - (5,666,011)
Arrangement fees (532,080) (4,016,642)
Unwinding of interest in the year 1,040,991 186,205
Foreign exchange movement 576,997 (290,317)
------------------------------------------- ----------- --- -------------
Balance at End of period $ 45,822,943 $ 18,140,636
------------------------------------- ---- ----------- --- -------------
Current liability 14,829,879 -
------------------------------------- ---- ----------- --- -------------
Non-current liability 30,993,064 18,140,636
------------------------------------------- ----------- --- -------------
On December 1, 2020, the Company announced that its subsidiary
Segilola Resources Operating Limited ("SROL") had completed the
financial closing of a US$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 US$5 million. As at June 30, 2021, SROL
has received total disbursements of US$43.5 million ($53.9
million), with US$22 million ($26.6 million) drawn down during the
period under review. Total disbursements received represent 80% of
the Facility. The Facility is secured over the share capital of
SROL and its assets, with repayments expected to commence in March
2022 and 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 $4,548,722 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 recognized
at amortised cost using an effective rate of interest, with the
fair value of the shares issued in April 2020 of $5,666,011
recognized within equity.
Interest paid during the period of $1,646,172 has been
capitalized under Assets Under Construction. (Refer to Note 14). As
at June 30, 2021, $13 million (US$10.5 million) of the facility
remains available for drawdown.
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 US$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 Facility") of
up to 10% of the fixed price. As at June 30, 2021, a total of
$3,434,177 (US$2,792,906) (December 31, 2020: $2,459,431
(US$2,009,314)) was deferred under the facility. Interest accrues
at 8% per annum from the time the completion certificate is issued.
Repayments are due to commence in March 2022 and conclude in 2025.
The amount deferred was initially measured at fair value and
subsequently at amortised cost using the effective interest
method.
June 30, December
2021 31, 2020
Total Total
--------------------------- --- ---------- ----------
Deferred payment facility $ 3,434,177 $ 2,459,431
Balance at period end $ 3,434,177 $ 2,459,431
--------------------------- --- ---------- ----------
Current liability 1,181,241 68,279
-------------------------------- ---------- ----------
Non-current liability 2,252,936 2,391,152
-------------------------------- ---------- ----------
12. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING
ACTIVITIES
AFC loan EPC deferred Total
facility
------------------------------ --- ----------- ------------- -----------
January 1,
2021 $ 18,140,636 2,459,431 20,600,067
Cash flows:
Drawdowns 26,596,399 - 26,596,399
Transaction costs ( 532,080) - ( 532,080)
Non-cash changes:
Unwinding of interest in the
year 1,040,991 - 1,040,991
Foreign exchange movements 576,997 - 576,997
Offset against EPC payment - 974,746 974,746
----------------------------------- ------------------ ----------- ------------- -----------
June 30, 2021 $ 45,822,943 3,434,177 49,257,120
--------------------------------------------------- ----------- ------------- -----------
13. PROVISION FOR RESTORATION
June 30, December
2021 31, 2020
Total Total
------------------------------------ --- ---------- ----------
Balance at Beginning of period $ 618,586 $ -
Initial recognition of provision - 618,586
Increase in provision 1,172,752 -
Foreign exchange movement (134,531) -
------------------------------------ --- ---------- ----------
Balance at period end $ 1,656,807 $ 618,586
------------------------------------ --- ---------- ----------
Current liability - -
------------------------------------ --- ---------- ----------
Non-current liability 1,656,807 618,586
----------------------------------------- ---------- ----------
The above provision relates to 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 2020
US inflation rate of 2.28% and the interest rate of 0.25% 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 completed or
commenced as at June 30, 2021. The restoration liability will
increase in future accounting periods as construction is
completed.
14. PROPERTY, PLANT AND EQUIPMENT
Mining & other Assets under
equipment Land Decommissioning Asset construction Total
--------------- ----------------- ----------------- ---------------------------- ---------------------- ----------------------
Costs
Balance,
December 31,
2019 $ 938,180 $ - $ - $ - $ 938,180
Transfer from
exploration
& evaluation
assets - - - 37,015,004 37,015,004
Acquisition
payments - 23,012 - 318,152 341,164
Additions 1,793,111 - 618,586 55,448,668 57,860,365
Foreign
exchange
movement (87,927) - - (3,447,668) (3,535,595)
---------------
Balance,
December 31,
2020 $ 2,643,364 $ 23,012 $ 618,586 $ 89,334,156 $ 92,619,120
Acquisition
payments - - - - -
Additions 1,767,605 - 1,172,752 39,248,107 42,188,464
Foreign
exchange
movement (316,029) (2,146) (134,531) (8,010,602) (8,463,308)
---------------
Balance, June
301, 2021 $ 4,094,940 $ 20,866 $ 1,656,807 $ 120,571,661 $ 126,344,277
--------------- ----------------- ----------------- ---------------------------- ---------------------- ------------------------
Accumulated
depreciation
and impairment
losses
Balance,
December 31,
2019 $ 801,032 $ - $ - $ - $ 801,032
Depreciation 254,046 - - - 254,046
Foreign
exchange
movement (12,834) - - - (12,834)
---------------
Balance,
December 31,
2020 $ 1,042,244 $ - $ - $ - $ 1,042,244
Depreciation 327,133 - - - 327,133
Foreign
exchange
movement (109,301) - - - (109,301)
---------------
Balance, June
30, 2021 $ 1,260,076 $ - $ - $ - $ 1,260,075
--------------- ----------------- ----------------- ---------------------------- ---------------------- ------------------------
Carrying
amounts
Carrying value
at December
31, 2019 $ 137,148 $ - $ - $ - $ 137,148
--------------- ----------------- ----------------- ---------------------------- ---------------------- ------------------------
Carrying value
at December
31, 2020 $ 1,601,120 $ 23,012 $ 618,586 $ 89,334,156 $ 91,576,876
--------------- ----------------- ----------------- ---------------------------- ---------------------- ------------------------
Balance, June
30, 2021 $ 2,834,864 $ 20,866 $ 1,656,807 $ 120,571,661 $ 125,084,202
--------------- ----------------- ----------------- ---------------------------- ---------------------- ------------------------
Included within Assets Under Construction additions is a total
of $7,029,529 borrowing costs capitalized during the period,
including interest on the AFC loan of $1,646,172. The costs relate
to both the Gold Stream Prepayment and AFC Secured Loan. The
associated borrowings are secured over the assets under
construction, and other property, plant & equipment of Segilola
Resources Operating Limited.
A summary of depreciation capitalized is as follows:
Three Months Six Months Total depreciation
ended ended capitalized
June 30, June 30,
--------------------------- --- --------------------- --------------------- ------------------------------
June 30, December
2021 2020 2021 2020 2021 31, 2020
------------------------------- -------- ------- -------- ------- ---------- ----------
Assets under construction $ 197,031 $ 21,153 $ 354,215 $ 36,068 $ 691,955 $ 181,576
Exploration expenditures 20,533 1,854 29,640 3,704 562,896 522,075
-------------------------------- -------- ------- -------- ------- ---------- ----------
Total $ 217,564 $ 23,007 $ 383,855 $ 39,772 $ 1,254,851 $ 703,651
--------------------------- --- -------- ------- -------- ------- ---------- ----------
a) Segilola Project, Osun Nigeria:
Classification of Expenditure on the Segilola Gold Project
On April 29, 2020, the Company announced the execution of
definitive documents with the Africa Finance Corporation to reach
full funding of the Segilola Gold Project in Nigeria ("the
Project") and made the Final Investment Decision to proceed with
construction of the Project. In accordance with the provisions of
IFRS 6, this milestone achievement triggers a change in accounting
treatment for expenditure on the Project whereby the costs incurred
on the Project were transferred from Exploration and Evaluation
Assets to tangible assets as Assets under construction. This
transfer in the audited financial statements for the year ended
December 31, 2020. Upon transfer of the Segilola Gold Project from
Exploration and Evaluation assets to Assets under Construction, the
Company undertook an impairment assessment in accordance with IAS
36 and determined that no impairment was required to be recognised
based on the Open Pit DFS valuation of US$138 million, which was
significantly above the value of the project recorded on the
balance sheet of $37 million (US$29 million) as at the date of
investment decision.
Decommissioning Asset
The decommissioning asset relates to estimated restoration costs
at the Group's Segilola Gold Mine as at June 30, 2021. Refer to
Note 13 for further detail.
15. EXPLORATION AND EVALUATION ASSETS
The Company's exploration and evaluation assets costs are as
follows:
Douta Gold Project, Central Houndé Segilola Gold Project, Exploration licenses,
Senegal Project, Burkina Faso Osun Nigeria Nigeria Software Total
--------------- ---------------------- ----------------------- ----------------------- ---------------------- ---------------------- ---------------------
Costs
Balance,
December 31,
2019 $ 13,708,142 $ 1,555,938 $ 31,336,433 $ 79,379 $ - $ 46,679,892
Additions $ - $ - $ - $ - $ 316,936 316,936
Exploration
costs 1,705,210 1,121 5,678,571 36,560 - 7,421,462
Transfer to
tangible
assets - - (37,015,004) - - (37,015,004)
Impairment - (1,604,564) - - - (1,604,564)
Depreciation - - - - (19,710) (19,710)
Foreign
exchange
movement 464,356 47,505 - (4,904) (18,219) 488,738
---------------
Balance,
December 31,
2020 $ 15,877,708 $ - $ - $ 111,035 $ 279,007 $ 16,267,750
Additions $ - $ - $ - $ - $ 222,819 222,819
Exploration
costs 1,440,181 125,376 - 173,318 - 1,738,875
Impairment - (125,473) - - - (125,473)
Amortisation - - - - (95,291) (95,291)
Foreign
exchange
movement (534,613) 97 - (20,017) (28,178) (582,711)
---------------
Balance, June
30, 2021 $ 16,783,276 $ - $ - $ 264,336 $ 378,357 $ 17,425,969
--------------- ---------------------- ----------------------- ----------------------- ---------------------- ---------------------- ---------------------
15. EXPLORATION AND EVALUATION ASSETS (continued)
a) Douta Gold Project, Senegal:
The Douta Gold Project consists of an early-stage gold
exploration license located in southeastern Senegal, approximately
700km east of the capital city Dakar.
The Company is party to an option agreement (the "Option
Agreement") with International Mining Company ("IMC"), by which the
Company has acquired a 70% economic 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% economic interest in the Douta Gold Project pursuant
to the terms of the Option Agreement between the Company and IMC.
As consideration for the exercise of the option, the Company issued
to IMC 11,646,663 common shares, based on a VWAP for the 20 trading
days preceding the option exercise date of $0.2014 (or US$0.2018)
per share, valued at $2,678,732 based on the Company's closing
share price on February 24, 2012. The share payment includes
consideration paid to IMC for extending the time period for
exercise of the option.
Pursuant to the terms of the Option Agreement, IMC's 30%
interest will be a "free carry" interest until such time as the
Company announces probable reserves on the Douta Gold Project (the
"Free Carry Period"). Following the Free Carry Period, IMC must
either elect to sell its 30% interest to African Star at a purchase
price determined by an independent valuer commissioned by African
Star or fund its 30% share of the exploration and operating
expenses.
b) Central Houndé Project, Burkina Faso:
(i) Bongui and Legue gold permits, Burkina Faso:
AFC Constelor SARL held a 100% interest in the Bongui and Legue
gold permits covering an area of approximately 233 km(2) located
within the Houndé belt, 260 km southwest of the capital
Ouagadougou, in western Burkina Faso.
(ii) Ouere Permit, Central Houndé Project, Burkina Faso:
Argento BF SARL held a 100% interest in the Ouere gold permit,
covering an area of approximately 241 km(2) located within the
Houndé belt.
The three permits together cover a total area of 474km(2) over
the Houndé Belt which form the Central Houndé Project.
(iii) Barrick Option Agreement, Central Houndé Project, Burkina Faso:
On April 8, 2015, the Company entered into the Acacia Option
Agreement with Acacia Mining plc ("Acacia"), whereby Acacia will
have the exclusive option to earn up to a 51% interest in Central
Houndé Project by satisfying certain conditions over a specified
4-year period and then the right to acquire an additional 29%, for
an aggregate 80% interest in the Central Hounde 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 Hounde 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 six months to June 30, 2021,
recognize an impairment charge of $125,644 through the Condensed
Consolidated Statement of Comprehensive Loss.
b) 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
explorations licenses. Together with the mining lease over the
Segilola Gold Deposit, Thor's total exploration tenure amounts to
915 km(2). The Company's exploration strategy includes further
expansion of its Nigerian land package as and when attractive new
licenses become available.
16. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
June 30, December 31,
2021 2020
--------------------- ---- ---------- --- -------------
Trade payables $ 3,937,387 $ 10,363,935
Accrued liabilities 1,549,292 552,029
--------------------------- ---------- --- -------------
$ 5,486,679 $ 10,915,964
-------------------------- ---------- --- -------------
Accounts payable and accrued liabilities are classified as
financial liabilities and approximate their fair values.
17. CAPITAL AND RESERVES
a) Authorized
Unlimited common shares without par value.
b) Issued
June 30, June 30, December December
31, 31,
2021 2021 2020 2020
Number Number
----------------------------- ------------ --- ----------- ------------- --- ------------
As at start of the
year 621,405,975 $ 97,122,584 449,352,215 $ 67,550,111
Issue of new shares:
- Share warrants
exercised i 1,664,534 299,616 - -
- Share options exercised
ii - - 210,000 42,000
- Issue July 13,
2020 iii - - 75,548,530 13,558,254
- Issue costs July
13, 2020 - - - (1,223,457)
- Issue April 29,
2020 iv - - 28,215,750 5,643,150
- Issue April 29,
2020 creditor settlement
v - - 34,750,000 5,907,500
- Issue April 29,
2020 bonus shares
vi - - 33,329,480 5,666,011
- Issue December
4, 2019 vii - - - (20,985)
----------------------------- ------------ --- ----------- ------------- --- ------------
623,070,509 $ 97,422,200 621,405,975 $ 97,122,584
----------------------------- ------------ --- ----------- ------------- --- ------------
i Value of 1,664,534 warrants exercised on June 8, 2021, at a
price of $0.18 per share.
ii Value of 210,000 options exercised on December 10, 2020, at a
price of $0.20 per share.
iii Private placement of 75,548,530 common shares at a price of
$0.18 per share.
iv Private placement of 28,215,750 common shares at a price of
$0.20 per share.
v Issue of 34,750,000 common shares in settlement of US$5
million owed to creditors. The fair value of the shares issued was
determined at the share price at the date of issue of $0.17 per
share. The difference between the fair value of the shares issued
of $5,907,500 and the carrying amount of creditors settled of
$6,950,000 is recognised in the statement of comprehensive loss as
gain of settlement of liabilities of $1,042,000.
vi Issue of 33,329,480 bonus common shares in connection with
secured borrowing facility shares at a price of $0.17 per share
(Refer to Note 11).
vii Additional costs associated with the private placement of
78,669,250 common shares in December 2019.
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 $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 $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 $0.145 per share for a period of five
years.
-- On May 7, 2017, 500,000 stock options were granted at an
exercise price of $0.12 per share for a period of three years. 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.
-- On January 16, 2017, 9,750,000 stock options were granted at
an exercise price of $0.12 per share for a period of three years.
On July 5, 2019, the Company announced an extension of the expiry
date from January 16, 2020, to January 16, 2022. In addition the
vesting conditions attached to 1.75 million options were removed
with the options vesting immediately and the resulting charge
recorded in the Consolidated Statement of Comprehensive Loss.
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:
Expected
Vesting First remaining Risk Volatility
period vesting life free Exercise of share Fair Options Options
(years) date (years) rate price price value vested granted Expiry
------------------ ----------- ----------- ------ ---------- ------------ ------- --------------- --------------- -----------
5 01/16/2017 0.56 1.05% $0.12 197.32% $0.14 9,750,000 9,750,000 01/16/2022
5 05/07/2017 0.85 0.87% $0.12 192.23% $0.15 500,000 500,000 05/07/2022
5 03/12/2018 1.70 2.00% $0.145 105.09% $0.14 12,800,000 12,800,000 03/12/2023
5 10/05/2018 2.27 2.43% $0.14 100.69% $0.14 750,000 750,000 10/05/2023
5 01/16/2020 3.55 1.49% $0.20 66.84% $0.07 14,250,000 14,250,000 01/16/2025
The share price volatility measure for options granted in 2017
was the historical volatility in Thor's share price measured over
the same number of years as the life of the options granted. In
2018 the Company 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,
2021, to June 30, 2021, and the outstanding and exercisable options
at June 30, 2021:
January
1, June 30, June 30, 2021
Contractual
Lives 2021 During the period 2021 Number of Options
----------------------------------------------------------------- ---------------------------------------------
Grant Expiry Exercise Remaining Opening Expired Closing Vested
Date Date Price (Years) Balance Granted Exercised / Forfeited Balance and Exercisable Unvested
------------- ------------- ---- --------- --------------------- ------------------ --------------------- -------------------- -------------------- --------------------------- ------------------- ------------------------
16-Jan-2017 16-Jan-2022 i $0.12 0.56 9,750,000 - - - 9,750,000 9,750,000 -
7-May-2017 7-May-2022 ii $0.12 0.85 500,000 - - - 500,000 500,000 -
12-Mar-2018 12-Mar-2023 $0.145 1.70 12,800,000 - - - 12,800,000 12,800,000 -
5-Oct-2018 5-Oct-2023 $0.14 2.27 750,000 - - - 750,000 750,000 -
16-Jan-2020 16-Jan-2025 $0.20 3.55 14,040,000 - - - 14,040,000 14,040,000 -
Totals 2.09 37,840,000 - - - 37,840,000 37,840,000 -
------------------ --------------------- -------------------- -------------------- --------------------------- ------------------- ------------------------
Weighted Average Exercise Price $0.159 $0.200 $0.200 - $0.159 $0.159 -
------------------ --------------------- -------------------- -------------------- --------------------------- ------------------- ------------------------
(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.
The following is a summary of changes in options from January 1,
2020, to December 31, 2020, and the outstanding and exercisable
options at December 31, 2020:
January December
1, 31, December 31, 2020
Contractual
Lives 2020 During the period 2020 Number of Options
----------------------------------------------------------------- ---------------------------------------------
Grant Expiry Exercise Remaining Opening Expired Closing Vested
Date Date Price (Years) Balance Granted Exercised / Forfeited Balance and Exercisable Unvested
------------- ------------- ---- --------- --------------------- ---------------------- --------------------- -------------------- -------------------- --------------------------- ------------------- ------------------------
16-Jan-2017 16-Jan-2022 i $0.12 1.05 9,750,000 - - - 9,750,000 9,750,000 -
7-May-2017 7-May-2022 ii $0.12 1.35 500,000 - - - 500,000 500,000 -
12-Mar-2018 12-Mar-2023 $0.145 2.19 12,800,000 - - - 12,800,000 12,800,000 -
5-Oct-2018 5-Oct-2023 $0.14 2.76 750,000 - - - 750,000 750,000 -
16-Jan-2020 16-Jan-2025 $0.20 4.05 - 14,250,000 (210,000) - 14,040,000 14,040,000 -
Totals 2.59 23,800,000 14,250,000 (210,000) - 37,840,000 37,840,000 -
---------------------- --------------------- -------------------- -------------------- --------------------------- ------------------- ------------------------
Weighted Average Exercise Price $0.134 $0.200 $0.200 - $0.159 $0.159 -
---------------------- --------------------- -------------------- -------------------- --------------------------- ------------------- ------------------------
(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) Share purchase warrants
On August 31, 2018, the Company issued 44,453,335 warrants
pursuant to the private share placement closed on the same date,
whereby one warrant was issued for every common share subscribed
for ("Placement Warrants"). The warrants were issued with an
exercise price of $0.28 for a period of thirty-six (36) months.
On August 31, 2018, the Company issued a total of 1,664,534
warrants to a broker for advisory services pursuant to the private
share placement closed on the same date ("Broker Warrants"). The
warrants were issued with an exercise price of $0.18 for a period
of thirty-six (36) months.
During the three months ended June 30, 2021, 1,664,534 broker
warrants were exercised and converted in to common shares at C$0.18
each.
Right to accelerate exercise of warrants
If at any time after four months and one day after August 31,
2018, the Common Shares trade on the TSX Venture Exchange (the
"TSX-V") at a closing price equal to or greater than $0.36 for a
period of twenty (20) consecutive trading days, the Company may
exercise a right to accelerate the expiry date of the Placement
Warrants by giving notice to the holders of the Placing Warrants
within five trading days after such event that the Placing Warrants
shall expire (30) days from the date of such notice.
Weighted
Number of Average
Warrants Exercise Carrying
Price Value
------------------------------------- ------------ ---------- -----------
Balance, December 31, 2017 $ -
Private placement 44,453,335 $0.28 475,000
Broker 1,664,534 $0.18 58,000
------------------------------------- ------------ ---------- -----------
Balance, December 31, 2018 46,117,869 533,000
------------------------------------- ------------ ---------- -----------
Balance, December 31, 2019 46,117,869 533,000
------------------------------------- ------------ ---------- -----------
Broker warrants expiry August 31,
2020 (1,664,534) $0.18 (58,000)
------------------------------------- ------------ ---------- -----------
Balance, December 31, 2020 44,453,335 475,000
------------------------------------- ------------ ---------- -----------
Reinstatement of broker warrants 1,664,534 $0.18 58,000
------------------------------------- ------------ ---------- -----------
Balance, March 31, 2021 46,117,869 553,000
------------------------------------- ------------ ---------- -----------
Exercise of broker warrants (1,664,534) $0.18 (58,000)
------------------------------------- ------------ ---------- -----------
Balance, June 30, 2021 44,453,335 475,000
------------------------------------- ------------ ---------- -----------
The value of the private placement warrants is net of the value
of the Company's right to accelerate exercise of the warrants.
The aggregate value of the Placement Warrants and Broker
Warrants outstanding at the reporting date is $475,000 which was
determined using the Black Scholes model. The inputs to the model
are listed in the table below:
Vesting First Expected Risk Volatility
period vesting life free Exercise of share Fair Warrants Warrants
(years) date (years) rate price price value vested granted Expiry
-------------- ----------- ---------- ------ ---------- ------------ ------- ------------- ------------- -----------
3 31/08/2018 0.17 2.08% $0.28 82.43% $0.08 44,453,335 44,453,335 31/08/2021
The volatility was determined by calculating the average
volatility of a collection of three peer companies historical share
prices for the exercise period of each parcel of warrants.
The Company's right to accelerate the exercising of the warrants
arises in the event that the Common Shares trade on the TSX Venture
Exchange (the "TSX-V") at a closing price equal to or greater than
$0.36 for a period of twenty (20) consecutive trading days. The
Company may give notice to the holders of the warrants requiring
that they exercise the warrants with a period of thirty (30) days
from the date of notice, failing which the Warrants shall
expire.
The inputs to the model for the Company's right to accelerate
the exercising of the warrants are listed in the table below:
Vesting First Expected Risk Volatility
period vesting life free Exercise of share Fair Warrants Warrants
(years) date (years) rate price price value vested granted Expiry
-------------- ----------- ---------- ------ ---------- ------------ ------- ------------- ------------- -----------
3 31/08/2018 0.17 2.08% $0.36 82.43% $0.07 44,453,335 44,453,335 31/08/2021
e) 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'.
'Share subscription' is used to record the share subscription
monies received before a share
placement has closed and shares issued.
'Share purchase warrants' is used to recognize the value of
share purchase warrants prior to exercise or forfeiture.
'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.
18. LOSS PER SHARE
Basic and diluted loss per share is calculated by dividing the
loss attributed to shareholders for the six months to June 30,
2021, of $6,449,573 (June 30, 2020: $464,385) by the weighted
average number of shares of 621,506,029 (June 30, 2020:
482,156,085) in issue during the year.
Due to the losses incurred during the period a diluted loss per
share has not been calculated as this would serve to reduce the
basic loss per share. Out of 37,840,000 (2020: 37,840,000) share
incentives outstanding at the end of the period 37,840,000 (2020:
37,840,000) had already vested, which if exercised could
potentially dilute basic earnings per share in the future.
19. 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 10, and the secured loan as
disclosed in Note 11.
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, 2021, and
2020 were as follows:
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- --- ----------------------- ------------------------
2021 2020 2021 2020
Consulting fees &
salaries
Current directors
& officers $ 163,399 $ 177,252 $ 330,058 $ 350,655
Directors' fees
Current directors 111,130 111,412 222,286 197,518
Share-based payments
Current directors
and officers - - - 813,115
--------------------------- --------- -------- -------- ----------
$ 274,529 $ 288,665 $ 552,344 $ 1,361,288
-------------------------- --------- -------- -------- ----------
(i) Key management personnel were not paid post-employment
benefits, termination benefits, or other long-term benefits during
the three and six months ended June 30, 2021, and 2020.
(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, 2021, include $136,606 (December 31, 2020 -
$44,288) 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.
20. SUPPLEMENTAL CASH FLOW INFORMATION
a) Changes in non-cash working capital are as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
--------------------------- ----- ------------ ---- ------------ ---- -------------- ---- ------------
Amounts receivable $ 1,937,103 $ (55,563) $ (1,209,171) $ (53,691)
Prepaid expenses and
deposits (1,217,687) (67,528) (1,318,745) 8,245
Accounts payable and
accrued liabilities 87,902 4,654,587 (5,370,533) 5,192,387
---------------------------------- ------------ ---- ------------ ---- -------------- ---- ------------
Change in non-cash
working capital accounts $ 807,317 $ 4,531,496 $ (7,898,449) $ 5,146,941
Relating to:
Operating activities $ 2,130,274 $ 155,209 $ (1,146,751) $ 217,971
Financing activities - (10,511) - 101,897
Investing activities (1,322,956) 4,386,798 (6,751,698) 4,827,073
---------------------------------- ------------ ---- ------------ ---- -------------- ---- ------------
$ 807,317 $ 4,531,496 $ (7,898,449) $ 5,146,941
--------------------------------- ------------ ---- ------------ ---- -------------- ---- ------------
Accounts payable and accrued liabilities includes $3,010,232
(December 31, 2020 - $9,862,060) related to Assets under
Construction and Exploration.
b) During the three and six months ended June 30, 2021 the
Company had $632,042 and $1,646,172 outlays respectively (2020:
$nil) in respect of interest, and $nil (2020: $nil) outlays in
respect of income taxes.
21. FINANCIAL INSTRUMENTS
The Group's financial instruments consist of 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 based on the following methods. 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, accounts receivable, and accounts
payable, accrued liabilities 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, 2021 Total
Assets
Cash and cash equivalents $ 9,402,749
Restricted cash 4,338,728
Amounts receivable 1,187,341
------------------------------------------------ -----------
Total assets measured at amortised
cost 14,928,818
------------------------------------------------ -----------
Total
Liabilities
Accounts payable and accrued liabilities $ 5,486,679
Loans and Borrowings 49,257,120
Lease liabilities 8,477
------------------------------------------------ -----------
Total liabilities measured at amortised
cost $ 54,752,276
------------------------------------------- -----------
December 31, 2020 Total
Assets
Cash and cash equivalents $ 28,261,552
Restricted cash 4,460,026
Amounts receivable 56,705
------------------------------------------------ -----------
Total assets measured at amortised
cost 32,778,283
------------------------------------------------ -----------
Total
Liabilities
Accounts payable and accrued liabilities $ 10,915,964
Loans and Borrowings 20,600,067
Lease liabilities 38,969
------------------------------------------------ -----------
Total liabilities measured at amortised
cost $ 31,555,000
------------------------------------------- -----------
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 is exposed to cash flow interest rate risk from the AFC
secured loans with the interest at LIBOR plus 9% (Refer to Note
11). The Group's management monitors the interest rate fluctuations
on a continuous basis and acts accordingly.
The following table discusses the Company's sensitivity to a 1%
increase or decrease in interest rates:
Interest Interest
rate rate
Appreciation Depreciation
June 30, 2021 By 1% By 1%
---------------------------------- --- -------------- --------------
Comprehensive income (loss)
Financial assets and liabilities $ 566,000 $ (566,000)
---------------------------------- --- -------------- --------------
December 31, 2020
---------------------------------- --- -------------- --------------
Comprehensive income (loss)
Financial assets and liabilities $ 280,700 $ (280,700)
---------------------------------- --- -------------- --------------
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,
2021, and December 31, 2020, were as follows:
June 30, December 31,
2021 2020
-------------------- --- ---------- --- --------------
Cash $ 9,402,749 $ 28,261,552
Restricted cash 4,338,728 4,460,026
Amounts receivable 1,187,341 56,705
-------------------- --- ---------- --- --------------
Total $ 14,928,818 $ 32,778,283
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. Funding risk is the risk that the Company may not be
able to raise additional financing in a timely manner and on terms
acceptable to management. There are no assurances that such
financing will be available when, and if, the Company requires
additional financing.
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, 2021, and December 31, 2020.
Contractual maturity analysis as at June 30, 2021
Less than 3 - 12 1 - 5 Longer
3 months Months Year than Total
$ $ $ 5 years $
$
Accounts payable 3,390,182 547,205 - - 3,937,387
Accrued liabilities 1,549,292 - - - 1,549,292
Loans and borrowings 23,077 15,984,204 41,368,147 - 57,375,428
4,962,551 16,531,408 41,368,147 - 62,862,106
Contractual maturity analysis as at December 31, 2020
Less than 3 - 12 1 - 5 Longer
3 months Months Year than Total
$ $ $ 5 years $
$
Accounts payable 9,855,297 508,638 - - 10,363,935
Accrued liabilities 552,029 - - - 552,029
Loans and borrowings - 68,279 30,127,064 - 30,195,343
10,407,326 576,917 30,127,064 - 41,111,307
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 Company's exploration expenditures, certain acquisition
costs and other operating expenses are denominated in United States
Dollars, Nigerian Naira and UK Pounds Sterling. The Company's
exposure to foreign currency risk arises primarily on fluctuations
between the Canadian Dollars and the United States Dollars,
Nigerian Naira and UK Pounds Sterling. The Company has not entered
into any derivative instruments to manage foreign exchange
fluctuations.
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, 2021:
Functional currency
Canadian US dollar Pound Nigerian West
dollar Sterling Naira African Total
Franc
Currency of June 30, June 30, June 30, June 30, June 30, June 30,
net monetary 2021 2021 2021 2021 2021
asset/(liability)
CAD$ CAD$ CAD$ CAD$ 2021 CAD$
CAD$
--------- -------------
Canadian dollar (377,607) - - - - (377,607)
US dollar 2,847,508 - - (42,911,357) - (40,063,849)
Pound Sterling (616,051) - - (104,447) - (720,499)
Nigerian Naira - - - 1,333,529 - 1,333,529
West African
Franc - - - - 30,878 30,878
Australian dollar (25,910) - - - - (25,910)
--------- -------------
Total 1,827,940 - - (41,682,274) 30,878 (39,823,457)
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, 2020:
Functional currency
Canadian US dollar Pound Nigerian West African
dollar Sterling Naira Franc Total
Currency of December December December December December December 31,
net monetary 31, 2020 31, 2020 31, 2020 31, 2020 31, 2020 2020
asset/(liability) CAD$ CAD$ CAD$ CAD$ CAD$ CAD$
Canadian dollar (291,551) - - - - (291,551)
US dollar 7,735,527 - - (5,903,513) - 1,832,014
Pound Sterling (226,825) - (38,910) - - (265,735)
Nigerian Naira - - - (26,744) - (26,744)
West African
Franc - - - - 1,656 1,656
Australian
dollar (26,358) - - - - (26,358)
Total 7,190,794 - (38,910) (5,903,513) 1,656 1,223,282
-------------------
The following table discusses the Company's sensitivity to a 5%
increase or decrease in the Canadian Dollar against the United
States Dollar:
Canadian Canadian
Dollar Dollar
Appreciation Depreciation
June 30, 2021 By 5% By 5%
---
Comprehensive income (loss)
Financial assets and liabilities $ 2,400,000 $ (2,400,000)
---
December 31, 2020
---
Comprehensive income (loss)
Financial assets and liabilities $ 1,934,000 $ (1,934,000)
---
22. CAPITAL MANAGEMENT
The Company manages, as capital, the components of shareholders'
equity. The Company's objectives, when managing capital, are to
safeguard its ability to continue as a going concern in order to
develop and its mineral interests through the use of capital
received via the issue of common shares and via debt instruments
where the Board determines that the risk is acceptable and in the
shareholders' best interest to do so. During the year under review
the company obtained funding for the construction of the Segilola
Gold Mine through a combination of senior secured debt, a gold
stream prepayment against future production and the partial
deferral of payment on the EPC contraction for Gold Mine
Construction.
The Company manages its capital structure, and makes adjustments
to it, in light of changes in economic conditions and the risk
characteristics of the underlying assets. To maintain or adjust its
capital structure, the Company may attempt to issue common shares,
borrow, acquire or dispose of assets or adjust the amount of
cash.
23. CONTINGENT LIABILITIES
Under the terms of the Sale and Purchase Agreements ("SPA")
dated June 27, 2016, for the acquisition of the Segilola Gold
Project in Nigeria, the Group has an obligation to pay royalties to
former owners on net smelter return from all materials mined
("Production") from the ML41 and EL19066 licenses ("the Licenses")
owned by Segilola Resources Operating Limited. Royalty expenses
will be recognised in the income statement in line with production
from the Licenses. These royalties to former owners are as
follows:
-- Vox Royalty Corp (acquired from Ratel Group Limited) 1.5% of
Production up to a maximum of US$3.5 million;
-- Tropical Mines Limited ("TML") 1.125% of Production up to a maximum of US$3.0 million; and
-- Delano Gold Mining Industries Limited ("Delano") 0.375% of
Production up to a maximum of US$1 million.
The Group has a contractual obligation of approximately US$38
million in payments under the EPC contract for the construction of
the Segilola Gold Mine. These liabilities are not reflected in the
balance sheet as at reporting date as payment is contingent upon
the completion of further construction work post reporting
date.
24. SEGMENTED DISCLOSURES
Segment Information
The Company's operations comprise three reportable segments,
being the Segilola Mine Project, Exploration Projects, and
Corporate compared to one reportable segment, being the exploration
of mineral resource properties in the prior year. These three
reporting segments have been identified based on operational
focuses of the Group following the decision to develop the Segilola
Mine Project during the year. The segment assets, liabilities and
results are as follows:
June 30, 2021 Segilola Exploration Corporate Total
Mine Project Projects
Current assets $ 12,042,183 $ 118,764 $ 4,520,760 $ 16,681,707
Non-current assets
Deferred income tax
assets - 43,971 - 43,971
Prepaid expenses and
deposit 132,313 - 23,327 155,640
Right of use assets 28,579 - 23,451 52,030
Property, plant and
equipment 124,648,275 434,723 1,203 125,084,202
Intangible assets 378,356 17,047,614 - 17,425,969
Total assets $ 137,229,706 $ 17,645,072 $ 4,568,741 $ 159,443,519
Non-current asset additions $ 42,076,925 $ 2,073,229 $ - $ 44,150,154
Liabilities $ (88,581,465) $ (17,888) $(2,436,413) $(91,035,766)
Loss for the period $ (3,270,096) $ (231,935) $(2,947,542) $ (6,449,573)
- consulting fees (571) (88,428) (91,138) (180,137)
- salaries and benefits (139,044) - (656,529) (795,573)
- impairments - (123,644) - (123,644)
Non-current assets by geographical location:
British
Burkina Virgin
June 30, 2021 Senegal Faso Islands Nigeria Canada Total
Prepaid expenses
and deposit - - 19,151 113,162 23,327 155,640
Right of use
assets - - - 28,579 23,451 52,030
Property, plant
and equipment 252,979 - - 124,830,019 1,203 125,084,202
Intangible assets 16,956,618 - - 469,351 - 17,425,969
Total non-current
assets $ 17,209,597 $ - $ 19,151 $125,441,112 $ 47,981 $142,717,840
December 31, 2020 Segilola Exploration Corporate Total
Mine Project Projects
Current assets $ 24,967,021 $ 65,535 $ 8,298,423 $ 33,330,979
Non-current assets
Deferred income tax
assets - 46,668 - 46,668
Prepaid expenses and
deposit 171,957 - 23,327 195,284
Right of use assets 35,457 - 52,360 87,817
Property, plant and
equipment 91,713,474 140,862 1,547 91,855,883
Exploration and evaluation
assets - 15,988,743 - 15,988,743
Total assets $ 116,887,909 $ 16,241,808 $ 8,375,657 $ 141,505,374
Non-current asset additions $ 64,065,496 $ 1,872,290 $ 2,141 $ 65,939,927
Liabilities $ (62,523,231) $ (48,497) $(1,018,809) $(63,590,537)
Loss for the year $ (201,258) $(1,634,381) $(2,034,468) $ (3,870,107)
- consulting fees (102,218) (78,959) (582,624) (763,801)
- salaries and benefits (95,134) - (2,004,235) (2,099,369)
- share-based payments - - (907,574) (907,574)
- gain on settlement
of liabilities - - 1,042,500 1,042,500
- impairments - (1,604,564) - (1,604,564)
Non-current assets by geographical location:
British
Burkina Virgin
December 31, Senegal Faso Islands Nigeria Canada Total
2020
Prepaid expenses
and deposit - - 24,472 147,485 23,327 195,284
Right of use
assets - - - 35,457 52,360 87,817
Property, plant
and equipment 139,895 939 - 91,713,502 1,547 91,855,883
Exploration and
evaluation assets 15,907,515 - - 81,228 - 15,988,743
Total non-current
assets $ 16,047,410 $ 939 $ 24,472 $91,977,672 $ 77,234 $108,127,727
25. SUBSEQUENT EVENTS
On July 6, 2021, the Company announced 500,000 options had been
exercised by a PDMR at C$0.12 each and converted in to common
shares.
On July 19, 2021, the Company announced that it had commenced
the commissioning of its gold processing plant at Segilola
following the successful turning of the mills. The Company also
announced the commencement of Mining, with 700,000 tonnes of waste
mined and 30,000 tonnes of ore stockpiled in preparation for
Process Plant commissioning.
On July 30, 2021, the Company announced the first gold pour at
Segilola.
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END
IR EANPEDLDFEFA
(END) Dow Jones Newswires
August 31, 2021 02:00 ET (06:00 GMT)
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