TIDMAEXG
RNS Number : 9613Z
AEX Gold Inc
27 May 2021
("AEX" or the "Corporation")
AEX Gold Inc. Reports First Quarter Financial Results
TORONTO, ONTARIO - MAY 27, 2021 - AEX Gold Inc. (AIM: AEXG;
TSXV: AEX), an independent gold company with a portfolio of gold
licences in Greenland, announces its unaudited condensed interim
consolidated financial statements ("Financial Statements") for the
first quarter ended March 31, 2021. All figures are in Canadian
dollars unless otherwise noted.
The Financial Statements and the accompanying Management
Discussion and Analysis are available on the Corporation's website
at www.aexgold.com and will be filed under the Corporation's SEDAR
profile at
www.sedar.com later today .
At the time of the AIM listing AEX announced the development of
the Nalunaq Project of which the main engineering and constructing
activities commenced in Q4-2020. A large part of the cost increases
between Q1-2020 and Q1-2021 relate to the transition of AEX from an
exploration and evaluation focused company to a development and
exploration company post the AIM listing.
Financial Highlights
-- The Corporation had a strong cash balance of $55.0 million at
March 31, 2021 ($61.9 million at December 31, 2020), with no debt,
and total working capital of $54.3 million ($61.4 million at
December 31, 2020).
-- Capital asset purchase commitments, net of deposits on order
as at March 31, 2021 was $6.6 million. These commitments as
previously reported, relate to the purchase of components of
process plant equipment, infrastructure and vehicles. Available
liquidity, net of commitments as at March 31, 2021 was $47.7
million.
-- Construction in progress increased by $0.6 million in Q1-21
(zero at December 31, 2020) as a result of capitalized engineering
on the Nalunaq Project prior to suspension on February 10,
2021.
-- Exploration and evaluation expenses during the period were
$1.3 million (Q1 2020: $0.6 million), predominantly on the Nalunaq
Property.
-- General and administrative expenses during the period were
$1.6 million (Q1 2020: $0.4 million), with the increase a result of
higher management, consulting and professional fees associated with
right-sizing the organizational structure to develop Nalunaq.
Selected Financial Information
The following selected financial data is extracted from the
Financial Statements for the three months ended March 31, 2021.
Financial Results
Three months
ended March 31,
2021 2020
$ $
----------- ---------
Exploration and evaluation
expenses 1,247,147 611,775
General and administrative 1,585,071 382,911
Net loss and comprehensive
loss (3,289,052) (966,437)
Basic and diluted loss per
common share (0.02) (0.01)
----------- ---------
Financial Position
As at March 31, 2021 As at December 31,
2020
$ $
-------------------- ------------------
Cash on hand 55,012,910 61,874,999
Total assets 62,868,344 65,944,682
Total current liabilities 1,109,749 897,799
Shareholders' equity 60,993,918 64,282,970
Working capital 54,318,593 61,411,208
-------------------- ------------------
Corporate and Operational Update
-- The tender process for the Internal 3(rd) party engineering
study is well under way with most interested parties having access
to the Nalunaq Project data room. The internal 3(rd) party
engineering study will advance the process plant cost, supporting
infrastructure cost and schedule to a AACE International
Recommended Practice No. 18R-97 (2005) Class I estimate, with
planned completion later this year.
-- Critical contracts to advance the 2021 exploration and
limited infrastructure 'early works' program have been signed and
work is expected to commence in early June.
-- In relation to permitting the Terms of Reference for the
Environmental Impact Assessment ("EIA") and Social Impact
Assessment ("SIA") were approved for public consultation with
various Greenlandic Stakeholders. The draft SIA and draft EIA
reports are in the process of being reviewed by the
Authorities.
Eldur Olafsson, CEO of AEX, commented:
"With strong liquidity and improved access to Greenland we are
looking forward to the commencement of the exploration program this
year while also setting ourselves up for the revised development
plan for Nalunaq."
Enquiries:
AEX Gold Inc.
Jaco Crouse, Director and CFO
1-416-271-4767
jc@aexgold.com
Eldur Olafsson, Director and CEO
+354 665 2003
eo@aexgold.com
Stifel Nicolaus Europe Limited (Nominated Adviser and
Broker)
Callum Stewart
Simon Mensley
Ashton Clanfield
+44 (0) 20 7710 7600
Camarco (Financial PR)
Gordon Poole
Nick Hennis
+44 (0) 20 3757 4980
AEX Gold Inc: Unaudited Condensed Interim Consolidated Financial
Statements for the Three Months Ended March 31, 2021
AEX Gold Inc.
Consolidated Statements of Financial Position
( Unaudited, i n Canadian Dollars)
As at As at December
March 31, 31,
Notes 2021 2020
-------------------------------------------- ----- ------------ ---------------
$ $
ASSETS
Current assets
Cash 55,012,910 61,874,999
Sales tax receivable 67,754 62,750
Prepaid expenses and others 347,678 371,258
Total current assets 55,428,342 62,309,007
Non-current assets
Deposit on order 4 5,018,556 1,711,970
Escrow account for environmental monitoring 435,328 460,447
Mineral properties 3 62,244 62,244
Capital assets 4 1,923,874 1,401,014
Total non-current assets 7,440,002 3,635,675
-------------------------------------------- ----- ------------ ---------------
TOTAL ASSETS 62,868,344 65,944,682
-------------------------------------------- ----- ------------ ---------------
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 1,060,781 831,899
Lease liabilities - current portion 5 48,968 65,900
-------------------------------------------- ----- ------------ ---------------
Total current liabilities 1,109,749 897,799
Non-current liabilities
Lease liabilities 5 764,677 763,913
Total non-current liabilities 764,677 763,913
Total liabilities 1,874,426 1,661,712
Equity
Capital stock 88,500,205 88,500,205
Contributed surplus 2,925,952 2,925,952
Accumulated other comprehensive loss (36,772) (36,772)
Deficit (30,395,467) (27,106,415)
-------------------------------------------- ----- ------------ ---------------
Total equity 60,993,918 64,282,970
-------------------------------------------- ----- ------------ ---------------
TOTAL LIABILITIES AND EQUITY 62,868,344 65,944,682
-------------------------------------------- ----- ------------ ---------------
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
AEX Gold Inc.
Consolidated Statements of Comprehensive Loss
( Unaudited, i n Canadian Dollars)
Three months
ended March 31,
----------------------------------------- ----- -----------------------
Notes 2021 2020
----------------------------------------- ----- ----------- ----------
$ $
Expenses
Exploration and evaluation expenses 7 1,247,147 611,775
General and administrative 8 1,585,071 382,911
Foreign exchange loss (gain) 490,599 (25,397)
Operating loss 3,322,817 969,289
Other expenses (income)
Interest income (44,070) (5,042)
Finance costs 10,305 2,190
----------------------------------------- ----- ----------- ----------
Net loss and comprehensive loss (3,289,052) (966,437)
----------------------------------------- ----- ----------- ----------
Weighted average number of common shares
outstanding - basic and diluted 177,098,737 73,438,570
Basic and diluted loss per common share (0.02) (0.01)
----------------------------------------- ----- ----------- ----------
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
AEX Gold Inc.
Consolidated Statements of Changes in Equity
( Unaudited, i n Canadian Dollars)
Accumulated
Number of other
common shares Capital Contributed comprehensive Total
Notes outstanding Stock Warrants surplus loss Deficit Equity
-------------- -------- -------------- ---------- --------- ----------- ------------- ------------ -----------
$ $ $ $ $ $
Balance at January 1,
2020 70,946,394 13,883,611 1,459,604 1,535,400 (36,772) (14,767,303) 2,074,540
Net loss and
comprehensive
loss - - - - - (966,437) (966,437)
Warrants exercised 8,399,556 4,506,143 (726,343) - - - 3,779,800
------------------------ -------------- ---------- --------- ----------- ------------- ------------ -----------
Balance at March 31,
2020 79,345,950 18,389,754 733,261 1,535,400 (36,772) (15,733,740) 4,887,903
------------------------ -------------- ---------- --------- ----------- ------------- ------------ -----------
Balance at January 1,
2021 177,098,737 88,500,205 - 2,925,952 (36,772) (27,106,415) 64,282,970
Net loss and
comprehensive
loss - - - - - (3,289,052) (3,289,052)
------------------------ -------------- ---------- --------- ----------- ------------- ------------ -----------
Balance at March 31,
2021 177,098,737 88,500,205 - 2,925,952 (36,772) (30,395,467) 60,993,918
------------------------ -------------- ---------- --------- ----------- ------------- ------------ -----------
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
AEX Gold Inc.
Consolidated Statements of Cash Flows
( Unaudited, i n Canadian Dollars)
Three months
Notes ended March 31,
------------------------------------------------ ----- ----------------------
2021 2020
------------------------------------------------ ----- ----------- ---------
$ $
Operating activities
Net loss for the period (3,289,052) (966,437)
Adjustments for:
Depreciation 4 71,862 57,158
Finance costs - 2,190
Foreign exchange loss (gain) 504,799 (25,246)
------------------------------------------------ ----- ----------- ---------
(2,712,391) (932,335)
Changes in non-cash working capital items:
Sales tax receivable (5,004) (15,520)
Prepaid expenses and others 23,580 80,424
Trade and other payables 96,077 90,348
------------------------------------------------ ----- ----------- ---------
114,653 155,252
------------------------------------------------ ----- ----------- ---------
Cash flow used in operating activities (2,597,738) (777,083)
------------------------------------------------ ----- ----------- ---------
Investing activities
Acquisition of mineral properties 3 - (978)
Acquisition of capital assets 4 (594,722) -
Deposit on order 4 (3,306,586) -
Cash flow used in investing activities (3,901,308) (978)
------------------------------------------------ ----- ----------- ---------
Financing activities
Principal repayment - lease liabilities 5 (16,168) -
Exercise of warrants - 3,779,800
Deferred share issuance costs - (153,423)
Cash flow from financing activities (16,168) 3,626,377
------------------------------------------------ ----- ----------- ---------
Net change in cash before effects of exchange
rate changes on cash during the period (6,515,214) 2,848,316
Effects of exchange rate changes on cash (346,875) 3,051
------------------------------------------------ ----- ----------- ---------
Net change in cash during the period (6,862,089) 2,851,367
Cash, beginning of period 61,874,999 1,515,406
------------------------------------------------ ----- ----------- ---------
Cash, end of period 55,012,910 4,366,773
------------------------------------------------ ----- ----------- ---------
Supplemental cash flow information
Interest received 44,070 5,042
Acquisition of mineral properties included in
trade and other payables - 6,370
Exercise of warrants credited to capital stock - 726,343
Deferred share issuance costs included in trade
and other payables - 506,967
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
AEX Gold Inc.
Condensed Notes to the interim Consolidated Financial
Statements
Three months ended March 31, 2021 and 2020
( Unaudited, i n Canadian Dollars)
1. NATURE OF OPERATIONS, BASIS OF PRESENTATION
AEX Gold Inc. (the "Corporation") was incorporated on February
22, 2017 under the Canada Business Corporations Act. The
Corporation's head office is situated at 3400, One First Canadian
Place, P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada. The
Corporation operates in one industry segment, being the
acquisition, exploration and development of mineral properties. It
owns interests in properties located in Greenland. The
Corporation's financial year ends on December 31. Since July 2017,
the Corporation's shares are listed on the TSX Venture Exchange
(the "TSX-V") under the AEX ticker and since July 2020, the
Corporation's shares are also listed on the AIM market of the
London Stock Exchange ("AIM") under the AEXG ticker.
These unaudited condensed interim consolidated financial
statements for the three months ended March 31, 2021 ("Financial
Statements") were approved by the Board of Directors on May 26,
2021.
1.1 Basis of presentation
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by
the International Accounting Standards Board ("IASB") including
International Accounting Standard ("IAS") 34, Interim Financial
Reporting. The Financial Statements have been prepared under the
historical cost convention.
The Financial Statements should be read in conjunction with the
annual financial statements for the year ended December 31, 2020
which have been prepared in accordance with IFRS as issued by the
IASB. The accounting policies, methods of computation and
presentation applied in these Financial Statements are consistent
with those of the previous financial year ended December 31,
2020.
During the 2020 year, an outbreak of a new strain of coronavirus
(COVID-19) resulted in a major global health crisis which continues
to have impacts on the global economy and the financial markets at
the date of completion of the Financial Statements. These events
may cause significant changes on the Corporation's ability to
complete planned exploration and evaluation activities in the
future, meet its other obligations and existing commitments for the
exploration and evaluation programs or our ability to obtain debt
and equity financing. Following these events, the Corporation has
taken and will continue to take action to minimize the impact of
the COVID-19 pandemic. However, it is impossible to ultimately
determine the financial implications of these events.
2. CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS
The preparation of the Financial Statements requires Management
to make judgments and form assumptions that affect the reported
amounts of assets and liabilities at the date of the Financial
Statements and reported amounts of expenses during the reporting
period. On an ongoing basis, Management evaluates its judgments in
relation to assets, liabilities and expenses. Management uses
historical experience and various other factors it believes to be
reasonable under the given circumstances as the basis for its
judgments. Actual outcomes may differ from these estimates under
different assumptions and conditions.
In preparing the Financial Statements, the significant
judgements made by Management in applying the Corporation
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the Corporation's audited
annual financial statements for the year ended December 31, 2020.
Estimates and assumptions are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
3. MINERAL PROPERTIES
As at December
31, 2020 As at March 31,
Additions 2021
------------------------- -------------- --------- ---------------
$ $ $
Nalunaq 1 - 1
Tartoq 18,431 - 18,431
Vagar 11,103 - 11,103
Naalagaaffiup Portornga 6,334 - 6,334
Nuna Nutaaq 6,076 - 6,076
Saarloq 7,348 - 7,348
Anoritooq 6,389 - 6,389
Kangerluarsuk 6,562 - 6,562
Total mineral properties 62,244 - 62,244
------------------------- -------------- --------- ---------------
.
As at As at
December December
31, 31,
2019 Additions 2020
-------------------------- --- ---------- ---------- ----------
$ $ $
Nalunaq 1 - 1
Tartoq 18,431 - 18,431
Vagar 11,103 - 11,103
Naalagaaffiup Portornga 6,334 - 6,334
Nuna Nutaaq 6,076 - 6,076
Saarloq - 7,348 7,348
Anoritooq - 6,389 6,389
Kangerluarsuk - 6,562 6,562
Total mineral properties 41,945 20,299 62,244
------------------------------- ---------- ---------- ----------
4. CAPITAL ASSETS
Field Vehicles Equipment Construc-tion Right-of-use Total
equipment and rolling (including In Progress assets
and infrastruc- stock intangible)
ture
$ $ $ $ $ $
-------------------------- ----------------- ------------- ------------- -------------- ------------- ----------
Three months ended
March 31, 2021
Opening net book
value 146,203 256,865 177,052 - 820,894 1,401,014
Additions - - - 594,722 - 594,722
Depreciation (30,611) (15,805) (5,260) - (20,186) (71,862)
-------------------------- ----------------- ------------- ------------- -------------- ------------- ----------
Closing net book
value 115,592 241,060 171,792 594,722 800,708 1,923,874
As at March 31,
2021
Cost 387,323 533,800 185,878 594,722 841,080 2,542,803
Accumulated depreciation (271,731) (292,740) (14,086) - (40,372) (618,929)
-------------------------- ----------------- ------------- ------------- -------------- ------------- ----------
Closing net book
value 115,592 241,060 171,792 594,722 800,708 1,923,874
-------------------------- ----------------- ------------- ------------- -------------- ------------- ----------
4. CAPITAL ASSETS (CONT'D)
Depreciation of capital assets related to exploration and
evaluation properties is being recorded in exploration and
evaluation expenses in the consolidated statement of comprehensive
loss, under depreciation. Depreciation of $49,316 ($57,158 for the
three months ended March 31, 2020) was expensed as exploration and
evaluation expenses during the three months ended March 31,
2021.
As at March 31, 2021, the Corporation had capital asset purchase
commitments, net of deposit on order, of $6,597,326. These
commitments relate to purchases of equipment, infrastructure and
vehicles.
5. LEASE LIABILITIES
As at
March 31
2021
---------------------------------------- ------------
$
Balance beginning 829,813
Principal repayment (16,168)
---------------------------------------- ------------
Balance ending 813,645
Non-current portion - lease liabilities (764,677)
Current portion - lease liabilities 48,968
---------------------------------------- ------------
6. STOCK OPTIONS
An incentive stock option plan (the "Plan") was approved
initially in 2017 and renewed by shareholders on June 17, 2020. The
Plan is a "rolling" plan whereby a maximum of 10% of the issued
shares at the time of the grant are reserved for issue under the
Plan to executive officers and directors, employees and
consultants. The Board of directors attributes the stock options
and the exercise price of the options shall not be less than the
closing price on the last trading day preceding the grant date. The
options have a maximum term of ten years. Options granted pursuant
to the Plan shall vest and become exercisable at such time or times
as may be determined by the Board, except options granted to
consultants providing investor relations activities shall vest in
stages over a 12 month period with a maximum of one-quarter of the
options vesting in any three-month period. The Corporation has no
legal or constructive obligation to repurchase or settle the
options in cash.
Changes in stock options are as follows:
Three months ended Year ended December 31,
March 31, 2021 2020
------------------- ---------------------------- ----------------------------
Weighted Weighted
Number of average exercise Number of average exercise
options price options price
------------------- --------- ----------------- --------- -----------------
$ $
Balance, beginning 7,745,000 0.51 5,650,000 0.43
Granted - - 2,195,000 0.70
Exercised - - (100,000) 0.38
Balance, end 7,745,000 0.51 7,745,000 0.51
------------------- --------- ----------------- --------- -----------------
6. STOCK OPTIONS (CONT'D)
Stock options outstanding and exercisable as at March 31, 2021
are as follows:
Number of options
outstanding and Exercise
exercisable price Expiry date
----------------- -------- -----------------
$
1,360,000 0.50 July 13, 2022
1,660,000 0.45 August 22, 2023
2,530,000 0.38 December 31, 2025
2,195,000 0.70 December 31, 2026
----------------- -------- -----------------
7,745,000
----------------- -------- -----------------
7. EXPLORATION AND EVALUATION EXPENSES
Three months
ended March 31,
------------------------------------ ---------------------
2021 2020
------------------------------------ ----------- --------
$ $
Geology 143,538 270,561
Underground works - 22,807
Drilling - (635)
Analysis 79,219 23,863
Transport 957 60,733
Logistic support 21,202 78,487
Insurance 8,663 1,226
Maintenance infrastructure 931,866 84,854
Government fees 12,386 12,721
Depreciation 49,316 57,158
-------------------------------------- ----------- --------
Exploration and evaluation expenses 1,247,147 611,775
-------------------------------------- ----------- --------
8. GENERAL AND ADMINISTRATION
Three months
ended March 31,
----------------------------------- -------------------
2021 2020
----------------------------------- ---------- -------
$ $
Salaries and benefits 387,508 -
Management and consulting fees - 116,072
Director's fees 119,500 25,000
Professional fees 556,355 123,755
Marketing and industry involvement 165,723 86,375
Insurance 117,965 10,561
Travel and other expenses 130,209 14,574
Regulatory fees 85,265 6,574
Depreciation 22,546 -
------------------------------------- ---------- -------
General and administration 1,585,071 382,911
------------------------------------- ---------- -------
Further Information:
About AEX
AEX's principal business objectives are the identification,
acquisition, exploration and development of gold properties in
Greenland. The Corporation's principal asset is a 100% interest in
the Nalunaq Project, an advanced exploration stage property with an
exploitation license including the previously operating Nalunaq
gold mine. The Corporation has a portfolio of gold assets covering
3,870km(2) , the largest portfolio of gold assets in Southern
Greenland covering the two known gold belts in the region. AEX is
incorporated under the Canada Business Corporations Act and wholly
owns Nalunaq A/S, incorporated under the Greenland Public Companies
Act.
Forward-Looking Information
This press release contains forward-looking information within
the meaning of applicable securities legislation, which reflects
the Corporation's current expectations regarding future events and
the future growth of the Corporation's business. In this press
release there is forward-looking information based on a number of
assumptions and subject to a number of risks and uncertainties,
many of which are beyond the Corporation's control, that could
cause actual results and events to differ materially from those
that are disclosed in or implied by such forward-looking
information. Such risks and uncertainties include, but are not
limited to the factors discussed under "Risk Factors" in the Final
Prospectus available under the Corporation's profile on SEDAR at
www.sedar.com. Any forward-looking information included in this
press release is based only on information currently available to
the Corporation and speaks only as of the date on which it is made.
Except as required by applicable securities laws, the Corporation
assumes no obligation to update or revise any forward-looking
information to reflect new circumstances or events. No securities
regulatory authority has either approved or disapproved of the
contents of this press release. Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Inside Information
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No. 596/2014 on
Market Abuse ("UK MAR"), as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018, and Regulation
(EU) No. 596/2014 on Market Abuse ("EU MAR").
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