TIDMLEX
RNS Number : 2922E
Lexington Gold Limited
29 June 2023
29 June 2023
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Final Results for the year ended 31 December 2022
and Availability of Annual Report and Financial Statements
Lexington Gold (AIM: LEX), the gold exploration and development
company with projects in North and South Carolina, USA, is pleased
to announce its audited results for the year ended 31 December
2022.
Copies of the Company's full Annual Report and Financial
Statements for the financial year to 31 December 2022 will be made
available to download from the Company's website at
www.lexingtongold.co.uk and will be posted to shareholders on or
before 30 June 2023.
Financial Summary
-- Net loss for the year from continuing operations was US$0.9 million (2021: US$1.0 million).
-- Total assets were US$5.1 million (2021: US$4.8 million) at the year end.
-- Net cash position of US$0.42 million (2021: US$0.95 million) as at the year end.
-- Total liabilities of US$0.1 million (2021: US$0.1 million) as at the year end.
Corporate Summary
2022 was a very successful year for Lexington Gold. The team has
delivered on a series of important exploration milestones across
the Company's existing project portfolio, including the
commissioning and release of an updated and increased independent
JORC resource estimate for the Loflin deposit, the completion of
the latest reverse circulation ("RC") drilling campaign across both
the Carolina Belle and JKL Projects and the establishment of a
maiden independent JORC Mineral Resource Estimate for the
Jones-Keystone side of the JKL Project towards the end of the
year.
Post-year end, on 15 May 2023, the Company announced a major
corporate development namely the proposed acquisition of 76% of
White Rivers Exploration (Pty) Limited ("WRE") in South Africa,
which has a number of significantly larger projects and prospects
than those explored by Lexington Gold to date. The Company's
strategic emphasis will remain on the exploration for, and
development of, gold resources, with a particular focus on areas
with known significant historical gold production. Successful
completion of the proposed WRE acquisition will enable the Company
to explore in the Witwatersrand gold fields, an area which was
historically the largest single gold producing district in the
world, alongside progression of the Company's existing projects in
the Carolinas, USA, with the aim of maximising long term
shareholder value. At the Company's Special General Meeting held on
26 June 2023 the Company's shareholders voted to approve such
proposed acquisition.
Operational Highlights
During 2022, Lexington Gold conducted a number of key
exploration activities on its existing portfolio projects as
follows:
Initial and Maiden Drill Results for Carolina Belle
In February 2022, the Company announced assay results received
in respect of the first 11 holes from its 32 hole RC drill
programme at the Carolina Belle Project. These drill results
identified and confirmed the down-dip extension and main historical
ore-zone mined during the historical third-party Iola and Uwarra
gold mining operations. Selected highlights from the results
included:
-- 4m @ 2.1 g/t Au from 64m to 68m in hole CRBC-24
-- 11m @ 1.01 g/t Au from 68m to 79m (combined Hangingwall,
Footwall and mined out historical main ore-zone) in hole CRBC-22
including:
o Footwall intersection of 4m @ 1.62 g/t Au from 72m to 76m
o Hangingwall intersection of 4m @ 0.7 g/t from 68m to 72m
o Main historical ore-zone intersected between 72.2m and
73.2m
-- Potential second gold mineralised zone intersected
approximately 25m above the main historical Iola and Uwarra
ore-zone with:
o 4m @1.53 g/t Au from 48m to 52m in hole CRBC-22
RC Drilling Programme at Jones-Keystone-Loflin Project (
"JKL")
Progress continued in February 2022 as the Company also
announced the completion of its Phase 2 RC drilling programme on
the Loflin side of the JKL Project and mobilisation of the rig for
a maiden drilling programme on the Jones-Keystone side of this
project. A total of 18 drill holes for an aggregate of 1,695m were
drilled at Loflin, with two additional RC drill holes drilled in a
newly identified area due to the significant sulphide
mineralisation intersected on the southern side, later named Loflin
South, and outside of the previously known Loflin resource.
In March 2022, the Company completed its maiden drilling
programme on the Jones-Keystone side of the JKL Project, drilling a
total of 6 holes for an aggregate of 675m, and thereby concluded
the overall 5,000m RC drilling campaign. Initial logging identified
multiple intersections of alteration zones and sulphide
mineralisation, with the largest combined intersection identified
being over 50m. In the subsequent weeks, the Company announced the
first drill results from Jones-Keystone which exceeded
expectations, as they showed multiple intersections of 24m width
and over and grades of between 1.37 g/t and 1.69 g/t gold, with all
gold intersections starting above 100m depth and representing
commercial grades and mineable widths. Key results included:
-- Hole JKRC-002: 52m @ 0.99 g/t Au from 72m to 124m including:
o 24m @ 1.37 g/t Au from 80m to 104m
o 16m @ 1.7 g/t Au from 84m to 100m
o 4m @ 2.75 g/t Au from 92m to 96m
-- Hole JKRC-004: 40m @ 1.27 g/t Au from 20m to 60m including:
o 28m @ 1.69 g/t Au from 28m to 56m
o 16m @ 2.5 g/t Au from 28m to 44m
o 4m @ 4.56 g/t Au from 36m to 40m
-- Hole JKRC-003: 28m @ 1.37 g/t Au from 64m to 92m including:
o 8m @ 3.1 g/t Au from 64m to 72m
o 4m @ 4.96 g/t Au from 64m to 68m
Drill Results for Loflin
Following completion of the abovementioned drilling programme,
in March 2022 the Company announced initial assay results for
Loflin relating to 8 of the 18 RC drill holes from the campaign,
with 6 holes from Loflin South and 2 holes from the north-eastern
extension of the main Loflin deposit. The assay results confirmed a
significant new discovery, which was named Loflin South. Selected
highlights from the assay results included:
-- Hole LFRC-006: 36m @ 1.67 g/t Au and 1.89 g/t Ag from 20m to 56m including:
o 12m @ 3.27 g/t Au and 2.9 g/t Ag from 28m to 40m
o 4m @ 5.63 g/t Au and 3.5 g/t Ag from 32m to 36m
-- Hole LFRC-002: 20m @ 1.52 g/t Au and 1.67 g/t Ag from 16m to 36m including:
o 4m @ 3.01 g/t Au and 2.45 g/t Ag from 32m to 36m
-- Hole LFRC-003: 8m @ 1.32 g/t Au from 80m to 88m including:
o 4m @ 1.45 g/t Au from 80m to 84m
In May 2022, the Company announced the remaining assay results
from Loflin which involved shallow-level infill drilling and
testing of the North-Eastern, South-Western and Southern boundaries
and extensions.
Selected results included:
-- Hole LFRC-018: 24m @ 1.07 g/t Au and 2.76 g/t Ag from 4m to 28m including:
o 4m @ 2.34 g/t Au and 6.41 g/t Ag from 24m to 28m
-- Hole LFRC-009: 16m @ 1.27 g/t Au and 3.79 g/t Ag from 16m to 32m including:
o 8m @ 1.76 g/t Au and 6.48 g/t Ag from 20m to 28m; and
o 4m @ 1.93 g/t Au and 6.11 g/t Ag from 24m to 28m
-- Hole LFRC-010: 4m @ 0.58 g/t Au from 48m to 52m
-- Hole LFRC-016: 4m @ 0.73 g/t Au from 4m to 8m
27% upgrade to initial maiden JORC resource at Loflin
In July 2022, following completion of the drill programme, the
Company also announced the results of the 1m sample re-splits at
Loflin, which underlined the success of the RC drill campaign. The
deposit exhibited significant shallow mineralisation, with grades
of up to 10g/t gold achieved as well as multiple Intersections of
20m+ widths at mineable grades, including 34m at an average grade
of 1.75 g/t gold. These results were incorporated into the existing
geological model and database with the aim of achieving an upgrade
to the pre-existing JORC Resource estimate for Loflin. In August
2022, the Company was pleased to confirm a 27% increase in the
contained gold estimated for the Loflin deposit, with a total
Inferred Resource of 2,596,000t @ 0.99 g/t Au for 82,700 oz of
contained gold, which included over 9,000 gold ounces from the
newly discovered Loflin South.
In November 2022, the Company was pleased to announce receipt of
a maiden independent JORC Mineral Resource Estimate for the
Jones-Keystone side of the JKL Project prepared by Pivot Mining
Consultants Pty Limited. The results exceeded expectations, with an
estimated resource of 128,000oz, taking the aggregate inferred
Mineral Resource Estimate for the JKL Project to over 210,000 oz of
gold.
Fundraisings
Lexington Gold carried out two fundraisings in 2022. In April,
the Company signed unsecured convertible loan agreements with two
significant shareholders and three of its directors with respect to
borrowing an aggregate amount of GBP335,000, in order to provide it
with additional working capital and financial flexibility. In light
of market conditions at that time, and the subdued share price, the
Board felt that this was the most appropriate funding route to
avoid excessive dilution, which an equity raise would have caused.
The conversion rights for the lenders concerned were set at a level
of 3.2p per share (subject to adjustment in certain prescribed
circumstances), which was approximately 30.6 per cent. above the
prevailing closing middle market share price of 2.45p per
share.
In October 2022, following a recovery in the Company's share
price, the Company successfully completed a placing, raising
GBP500,000 (before expenses) at 4.7p per share, which represented
an approximate 13.6 per cent. premium to the 30 day volume weighted
average price at that time. The abovementioned loan facility was
converted in full, together with the accrued interest thereon,
alongside such placing.
Joint Broker Appointment
On 15 August 2022, the Company appointed WH Ireland Limited as
its Joint Broker.
Post-year end events
The Company's momentum from 2022 has been maintained during the
first half of 2023 to date. Following completion of soil sampling
early on in the year at the Jennings-Pioneer Project, in April 2023
the Company announced the associated assays, with the results
reaffirming the high potential of Jennings-Pioneer, particularly
the mineralised extension from the historical Barite Hill pit onto
the Company's property, with surface sampling returning up to
1.735g/t Au. As well as elevated gold values, the samples also
indicated significant base metal assays, with the presence of
barite and tellurium, which could add further potential value to
the project given their diverse industrial applications.
In March 2023, the Company entered into a US$150,000 unsecured
loan facility with Lexington Gold's Chairman, Edward Nealon, to
support the group's ongoing working capital requirements and the
costs associated with evaluating potential additional new gold
projects/opportunities.
In May 2023, the Company announced a substantial development in
the form of the proposed acquisition of 76 per cent. of WRE, an
exploration and development company with significant gold assets in
the Witwatersrand gold fields in South Africa, which historically
was the largest single gold producing district in the world . The
aggregate amount payable by the Company under the associated WRE
Acquisition and Loan Agreements is GBP0.3m, by way of the provision
of a subordinated loan to WRE, and up to GBP6.4m to be settled by
way of the issue of new common shares in Lexington Gold based on
certain pre-determined milestones being satisfied, with any such
shares being subject to a 12-month lock-up arrangement followed by
a 12-month orderly market arrangement from the date of their
issue.
WRE's current tenement interests have been estimated by WRE's
management to contain non-code compliant potential resources of
over 37 million ounces of gold. WRE has focussed its exploration
efforts on shallow (200 to 1,200m depth) deposits close to
well-established infrastructure. Its tenement interests comprise 10
prospecting rights (six granted licences and four renewal
applications), which are grouped into five projects. This includes
a joint venture (the Jelani Resources JV) with Avgold Limited, a
subsidiary of Harmony Gold Mining Company Limited. Such JV project
has a non-code compliant independently estimated resource of 6.02
million ounces of gold at an average grade of 6.47 g/t.
WRE was established by well-known Australian explorer, Mark
Creasy, in 2002, with whom the Company has on 12 May 2023 entered
into a one year unsecured loan agreement for a principal amount of
GBP0.3m. Further details of the proposed WRE transaction and its
conditions precedent are set out in the Company's announcement of
15 May 2023 and Note 23 to the full annual report and financial
statements.
For further information, please contact :
Lexington Gold Ltd www.lexingtongold.co.uk
Bernard Olivier (Chief Executive Officer) via Yellow Jersey
Edward Nealon (Chairman)
Mike Allardice (Group Company Secretary)
Strand Hanson Limited (Nominated Adviser) www.strandhanson.co.uk
Matthew Chandler / James Bellman / Abigail T: +44 207 409 3494
Wennington
WH Ireland Limited (Joint Broker) www.whirelandplc.com
Katy Mitchell / Enzo Aliaj T: +44 207 220 1666
Peterhouse Capital Limited (Joint Broker) www.peterhousecap.com
Duncan Vasey / Lucy Williams (Broking) T: +44 207 469 0930
Eran Zucker (Corporate Finance)
Yellow Jersey PR Limited (Financial Public www.yellowjerseypr.com
Relations) T: +44 7948 758 681
Charles Goodwin / Annabelle Wills / Soraya
Jackson
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019.
Note to Editors :
Lexington Gold (AIM: LEX) is a gold exploration and development
company currently holding interests in four diverse gold projects,
covering a combined area of approximately 1,675 acres in North and
South Carolina, USA. The projects are situated in the highly
prospective Carolina Super Terrane ("CST"), which has seen
significant historic gold production and is host to several
multi-million-ounce mines operated by majors. It was also the site
of the first US gold rush in the early 1800s, before gold was
discovered in California.
Further information is available on the Company's website:
www.lexingtongold.co.uk . Neither the contents of the Company's
website nor the contents of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
Key Extracts from the Company's audited
Annual Report and Financial Statements are set out below :
Chairman's Statement
I am delighted to report on another highly successful year for
Lexington Gold Ltd ("Lexington" or the "Company") for the twelve
months ended 31 December 2022. Since providing our half-year
update, we have continued to advance our exploration activities
across all of our existing projects, meeting our objectives in
terms of significantly increasing our independently reported gold
resource estimate and building shareholder value. We have also made
significant progress during 2023 to date, having recently announced
details of a proposed acquisition which we believe will potentially
serve to transform our prospects and the scale of the Company.
The first half of 2022 was dominated by our focus on completing
the drill programme on both the Loflin and Jones-Keystone sides of
the Jones-Keystone-Loflin ("JKL") Project. Assay results confirmed
a significant new discovery, named Loflin South, whilst we also
received exceptional assay results for the six reverse circulation
("RC") drill holes at Jones-Keystone. In August 2022, we announced
an updated independent JORC (2012) Mineral Resource Estimate for
the Loflin deposit, including over 9,000 gold ounces from Loflin
South, which increased the Loflin deposit resource estimate by 27%.
The JORC resource estimation of 128,000 gold ounces for the
Jones-Keystone side of the project announced towards the end of the
year also surpassed our expectations, taking the total JORC
inferred mineral resource estimate for the JKL Project to over
210,000 gold ounces.
Further to completion of the Company's maiden 2021 drill
campaign at Carolina Belle, the Company reviewed and updated its
geological model for this project over the course of 2022. The
maiden 2021 drill campaign achieved multiple intersections of 1g/t
Au or more and improved the delineation of the historic third-party
mining operations and the nature of the ore-zones targeted by such
operations. Following extensive review of the project, a Phase II
drilling campaign is currently being prepared.
Advancements were also made at our Jennings-Pioneer Project with
assays from soil sample grid and rock sampling announced in April
2023. The analysis of soil assays in conjunction with field
mapping, identified 13 gossans within three separate mineralisation
trends: the Barite Hill Trend, the Jennings Trend and the Self
Trend. The Barite Hill Trend is particularly exciting and
represents the northeast extension of the historic Barite Hill
Mine, which produced 59,000 oxide ounces in the early 1990s. The
Barite Hill Trend continues 600m along strike onto the Company's
tenured property, and surface sampling has outlined a siliceous
alteration halo extending 600m to the northeast and sulphide
mineralisation extending over 350m to the northeast, with gossanous
surface rock chips returning up to 1.735g/t Au.
Post-period end, on 15 May 2023, the Company announced the
exciting news that it had entered into conditional share
subscription and loan agreements to acquire 76% of White Rivers
Exploration Proprietary Limited ("WRE") (the "Proposed WRE
Acquisition"), which has a substantial portfolio of gold assets
estim ated by WRE's management to potentially contain over 37
million ounces in a world-renowned gold-producing area of
Witwatersrand in South Africa. This proposed transaction, which has
been approved by the Company's shareholders at a shareholders
meeting on 26 June 2023 is subject, inter alia, to conditions, has
the potential to significantly enhance Lexington's future prospects
whilst we continue to advance our existing projects in the
Carolinas to build further shareholder value and further
announcement(s) will be made in due course regarding the Proposed
WRE Transaction.
Completion of the Proposed WRE Acquisition would see Mark
Creasy, one of the mining industry's most successful entrepreneurs
and founder of WRE, become a significant shareholder in Lexington
and continue to play an important role in developing WRE's assets.
At the same time, we will be looking to capitalise on WRE's Joint
Venture arrangement with Avgold Limited, a subsidiary of Harmony
Gold Mining Company Limited, the largest gold producer by volume in
South Africa. If completed, the consideration payable in respect of
the acquisition of WRE principally comprises up to GBP6.4m of new
common shares in Lexington based on certain pre-determined
milestones being satisfied and the provision of a GBP0.3m
subordinated loan to WRE.
2023 is set to be a very significant year for Lexington. As
always, we are most grateful for the team's unwavering commitment
to advancing our projects and helping to build shareholder value.
As a Company, we look forward to updating shareholders on our
future progress.
Edward Nealon
Non-Executive Chairman
28 June 2023
Chief Executive's Operational and Financial Review
1 . Overview
2022 was a very successful year for Lexington. The team has
delivered on a series of important exploration milestones across
our existing project portfolio, including the commissioning and
release of an updated and increased independent JORC resource
estimate for the Loflin deposit, the completion of the latest RC
drilling campaign across both the Carolina Belle and JKL Projects
and the establishment of a maiden independent JORC Mineral Resource
Estimate for the Jones-Keystone side of the JKL Project towards the
end of the year.
Post-year end, on 15 May 2023, the Company announced a major
corporate development namely the proposed acquisition of 76% of
White Rivers Exploration (Pty) Limited ("WRE") in South Africa,
which has a number of significantly larger projects and prospects
than those we have been exploring to date. The Company's strategic
emphasis will remain on the exploration for, and development of,
gold resources, with a particular focus on areas with known
significant historical gold production. Successful completion of
the Proposed WRE Acquisition will enable us to explore in the
Witwatersrand gold fields, an area which was historically the
largest single gold producing district in the world, alongside
progression of our existing projects in the Carolinas, USA, with
the aim of maximising long term shareholder value.
During 2022, Lexington conducted the following exploration
activities on its portfolio projects:
Initial and Maiden Drill Results for Carolina Belle
In February 2022, we announced assay results received in respect
of the first 11 holes from the Company's 32 hole RC drill programme
at the Carolina Belle Project. These drill results identified and
confirmed the down-dip extension and main historical ore-zone mined
during the historical third-party Iola and Uwarra gold mining
operations. Selected highlights from the results included:
-- 4m @ 2.1 g/t Au from 64m to 68m in hole CRBC-24
-- 11m @ 1.01 g/t Au from 68m to 79m (combined Hangingwall,
Footwall and mined out historical main ore-zone) in hole CRBC-22
including:
o Footwall intersection of 4m @ 1.62 g/t Au from 72m to 76m
o Hangingwall intersection of 4m @ 0.7 g/t from 68m to 72m
o Main historical ore-zone intersected between 72.2m and
73.2m
-- Potential second gold mineralised zone intersected
approximately 25m above the main historical Iola and Uwarra
ore-zone with:
o 4m @1.53 g/t Au from 48m to 52m in hole CRBC-22
RC Drilling Programme at Jones-Keystone-Loflin Project (
"JKL")
Progress continued in February 2022 as we also announced the
completion of our Phase 2 RC drilling programme on the Loflin side
of the JKL Project and mobilisation of the rig for a maiden
drilling programme on the Jones-Keystone side of this project. A
total of 18 drill holes for an aggregate of 1,695m were drilled at
Loflin, with two additional RC drill holes drilled in a newly
identified area due to the significant sulphide mineralisation
intersected on the southern side, later named Loflin South, and
outside of the previously known Loflin resource.
In March 2022, we completed the maiden drilling programme on the
Jones-Keystone side of the JKL Project, drilling a total of 6 holes
for an aggregate of 675m and thereby concluded the overall 5,000m
RC drilling campaign. Initial logging identified multiple
intersections of alteration zones and sulphide mineralisation, with
the largest combined intersection identified being over 50m. In the
subsequent weeks, we announced the first drill results from
Jones-Keystone which exceeded our expectations, as they showed
multiple intersections of 24m width and over and grades of between
1.37 g/t and 1.69 g/t gold, with all gold intersections starting
above 100m depth and representing commercial grades and mineable
widths. Key results included:
-- Hole JKRC-002: 52m @ 0.99 g/t Au from 72m to 124m including:
o 24m @ 1.37 g/t Au from 80m to 104m
o 16m @ 1.7 g/t Au from 84m to 100m
o 4m @ 2.75 g/t Au from 92m to 96m
-- Hole JKRC-004: 40m @ 1.27 g/t Au from 20m to 60m including:
o 28m @ 1.69 g/t Au from 28m to 56m
o 16m @ 2.5 g/t Au from 28m to 44m
o 4m @ 4.56 g/t Au from 36m to 40m
-- Hole JKRC-003: 28m @ 1.37 g/t Au from 64m to 92m including:
o 8m @ 3.1 g/t Au from 64m to 72m
o 4m @ 4.96 g/t Au from 64m to 68m
Drill Results for Loflin
Following completion of the abovementioned drilling programme,
in March 2022 we announced initial assay results for Loflin
relating to 8 of the 18 RC drill holes from the campaign, with 6
holes from Loflin South and 2 holes from the north-eastern
extension of the main Loflin deposit. The assay results confirmed a
significant new discovery, which we named Loflin South. Selected
highlights from the assay results included:
-- Hole LFRC-006: 36m @ 1.67 g/t Au and 1.89 g/t Ag from 20m to 56m including:
o 12m @ 3.27 g/t Au and 2.9 g/t Ag from 28m to 40m
o 4m @ 5.63 g/t Au and 3.5 g/t Ag from 32m to 36m
-- Hole LFRC-002: 20m @ 1.52 g/t Au and 1.67 g/t Ag from 16m to 36m including:
o 4m @ 3.01 g/t Au and 2.45 g/t Ag from 32m to 36m
-- Hole LFRC-003: 8m @ 1.32 g/t Au from 80m to 88m including:
o 4m @ 1.45 g/t Au from 80m to 84m
In May 2022, we announced the remaining assay results from
Loflin which involved shallow-level infill drilling and testing of
the North-Eastern, South-Western and Southern boundaries and
extensions.
Selected results included:
-- Hole LFRC-018: 24m @ 1.07 g/t Au and 2.76 g/t Ag from 4m to 28m including:
o 4m @ 2.34 g/t Au and 6.41 g/t Ag from 24m to 28m
-- Hole LFRC-009: 16m @ 1.27 g/t Au and 3.79 g/t Ag from 16m to 32m including:
o 8m @ 1.76 g/t Au and 6.48 g/t Ag from 20m to 28m; and
o 4m @ 1.93 g/t Au and 6.11 g/t Ag from 24m to 28m
-- Hole LFRC-010: 4m @ 0.58 g/t Au from 48m to 52m
-- Hole LFRC-016: 4m @ 0.73 g/t Au from 4m to 8m
27% upgrade to initial maiden JORC resource at Loflin
In July 2022, following completion of the drill programme, we
also announced the results of the 1m sample re-splits at Loflin,
which underlined the success of the RC drill campaign. The deposit
exhibited significant shallow mineralisation, with grades of up to
10g/t gold achieved as well as multiple Intersections of 20m+
widths at mineable grades, including 34m at an average grade of
1.75 g/t gold. These results were incorporated into the existing
geological model and database with the aim of achieving an upgrade
to the pre-existing JORC Resource estimate for Loflin. In August
2022, we were pleased to confirm a 27% increase in the contained
gold estimated for the Loflin deposit, with a total Inferred
Resource of 2,596,000t @ 0.99 g/t Au for 82,700 oz of contained
gold, which included over 9,000 gold ounces from the newly
discovered Loflin South.
In November 2022, we were pleased to announce receipt of a
maiden independent JORC Mineral Resource Estimate for the
Jones-Keystone side of the JKL Project prepared by Pivot Mining
Consultants Pty Limited. The results exceeded our expectations,
with an estimated resource of 128,000oz, taking the aggregate
inferred Mineral Resource Estimate for the JKL Project to over
210,000 oz of gold.
2 . Financial Performance
Net loss for the year from continuing operations was US$0.9
million (2021: US$1.0 million).
Total assets were US$5.1 million (2021: US$4.8 million) at the
year end.
Net cash position of US$0.42 million (2021: US$0.95 million) as
at the year end.
Total liabilities of US$0.1 million (2021: US$0.1 million) as at
the year end.
3 . Dividend
The directors have not declared a dividend (2021: Nil).
4 . Corporate Activities
Fundraisings
Lexington carried out two fundraisings in 2022. In April, the
Company signed unsecured convertible loan agreements with two
significant shareholders and three of its directors with respect to
borrowing an aggregate amount of GBP335,000, in order to provide it
with additional working capital and financial flexibility. In light
of market conditions at that time, and the subdued share price, the
Board felt that this was the most appropriate funding route to
avoid excessive dilution, which an equity raise would have caused.
The conversion rights for the lenders concerned were set at a level
of 3.2p per share (subject to adjustment in certain prescribed
circumstances), which was approximately 30.6 per cent. above the
closing middle market share price at the time of 2.45p per
share.
In October 2022, following a recovery in the Company's share
price, we successfully completed a placing, raising GBP500,000
(before expenses) at 4.7p per share, which represented an
approximate 13.6 per cent. premium to the 30 day volume weighted
average price at that time. The abovementioned loan facility was
converted in full, together with the accrued interest thereon,
alongside the placing.
Joint Broker Appointment
On 15 August 2022, the Company appointed WH Ireland Limited as
its Joint Broker.
5 . Post-Period Events
Our momentum from 2022 has been maintained during the first half
of 2023 to date. Following completion of soil sampling early on in
the year at the Jennings-Pioneer Project, in April 2023 we
announced the associated assays, with the results reaffirming the
high potential of Jennings-Pioneer, particularly the mineralised
extension from the historical Barite Hill pit onto our property,
with surface sampling returning up to 1.735g/t Au. As well as
elevated gold values, the samples also indicated significant base
metal assays, with the presence of barite and tellurium, which
could add further potential value to the project given their
diverse industrial applications.
In March 2023, the Company entered into a US$150,000 unsecured
loan facility with Lexington's Chairman, Edward Nealon, to support
the group's ongoing working capital requirements and the costs
associated with evaluating potential additional new gold
projects/opportunities.
In May 2023, we announced a substantial development in the form
of the Proposed WRE Acquisition to acquire 76 per cent. of WRE, an
exploration and development company with significant gold assets in
the Witwatersrand gold fields in South Africa, which historically
was the largest single gold producing district in the world . The
aggregate amount payable by the Company under the associated WRE
Acquisition and Loan Agreements is GBP0.3m, by way of the provision
of a subordinated loan to WRE, and up to GBP6.4m to be settled by
way of the issue of new common shares in Lexington based on certain
pre-determined milestones being satisfied, with any such shares
being subject to a 12-month lock-up arrangement followed by a
12-month orderly market arrangement from the date of their
issue.
WRE's current tenement interests have been estimated by WRE's
management to contain non-code compliant potential resources of
over 37 million ounces of gold. WRE has focussed its exploration
efforts on shallow (200 to 1,200m depth) deposits close to
well-established infrastructure. Its tenement interests comprise 10
prospecting rights (six granted licences and four renewal
applications), which are grouped into five projects. This includes
a joint venture (the Jelani Resources JV) with Avgold Limited, a
subsidiary of Harmony Gold Mining Company Limited. Such JV project
has a non-code compliant independently estimated resource of 6.02
million ounces of gold at an average grade of 6.47 g/t.
WRE was established by well-known Australian explorer, Mark
Creasy, in 2002, with whom the Company has on 12 May 2023 entered
into a one year unsecured loan agreement for a principal amount of
GBP0.3m. Further details of the proposed WRE transaction and its
conditions precedent are set out in the Company's announcement of
15 May 2023 and Note 23 to the full annual report and financial
statements.
Bernard Olivier
Chief Executive Officer
28 June 2023
Financial Statements
Lexington Gold Ltd
Consolidated statement of profit or loss and other comprehensive
income
for the Year Ended 31 December 2022
(Audited)
2022 2021
US$'000 US$'000
CONTINUING OPERATIONS
Other income -
Operating expenses (708) (1,022)
Operating loss (708) (1,022)
Fair value loss on derivative liability (149) -
Finance cost (67) -
Loss before taxation (924) (1,022)
Income tax charge - -
-------- ---------
Loss for the year (924) (1,022)
======== =========
Attributable to:
-------- ---------
Equity owners of the parent (924) (1,021)
Non-controlling interest - (1)
-------- ---------
Other comprehensive income
Loss for the year (924) (1,022)
Items that may be reclassified to profit
or loss:
Foreign exchange loss on translation
of discontinued operations - 1
-------- ---------
Total comprehensive loss for the year (924) (1,021)
======== =========
Attributable to :
Equity owners of the parent (924) (1,020)
Non-controlling interest - (1)
-------- ---------
Total comprehensive loss for the year (924) (1,021)
======== =========
Loss per share attributable to the owners
of the parent during the year
Basic and diluted loss per share from
continuing operations (US cents/share) (0.35) (0.39)
The above Consolidated statement of profit or loss and other
comprehensive income should be read in conjunction with the
accompanying notes in the Company's full Annual Report and
Financial Statements.
Lexington Gold Ltd
Consolidated statement of financial position
as at 31 December 2022
(Audited)
2022 2021
US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 4,556 3,764
--------- ---------
Total non-current assets 4,556 3,764
--------- ---------
Current assets
Trade and other receivables 74 45
Cash and cash equivalents 424 953
--------- ---------
Total current assets 498 998
Total assets 5,054 4,762
========= =========
Equity
Share capital 851 787
Share premium 60,163 59,096
Share option reserve 651 555
Foreign currency translation reserve (2) (2)
Accumulated loss (57,674) (56,750)
--------- ---------
Total equity attributable to equity
owners of the parent 3,989 3,686
Non-controlling interest 970 970
--------- ---------
Total equity 4,959 4,656
--------- ---------
Current liabilities
Trade and other payables 95 106
Total current liabilities 95 106
--------- ---------
Total equity and liabilities 5,054 4,762
========= =========
The above Consolidated statement of financial position should be
read in conjunction with the accompanying notes in the Company's
full Annual Report and Financial Statements.
Lexington Gold Ltd
Consolidated statement of cash flows
for the Year Ended 31 December 2022
(Audited)
2022 2021
US$'000 US$'000
Cash flows from operating activities
Cash utilised by operations (684) (678)
Net cash flows utilised in operating
activities (684) (678)
-------- ---------
Cash flows from investing activities
Payments for exploration (792) (1,265)
Net cash flows utilised by investing
activities (792) (1,265)
-------- ---------
Cash flows from financing activities
Proceeds from issue of shares 579 -
Share issue cost (26) -
Proceeds from convertible loans 416 -
Net cash flows generated from financing
activities 969 -
-------- ---------
Net (decrease)/increase in cash and cash
equivalents (507) (1,943)
======== =========
Movement in cash and cash equivalents
Net foreign currency exchange losses (22) 1
At the beginning of the year 953 2,895
Net decrease in cash and cash equivalents (507) (1,943)
-------- ---------
Cash and cash equivalents at the end
of the year 424 953
======== =========
The above Consolidated statement of cash flows should be read in
conjunction with the accompanying notes in the Company's full
Annual Report and Financial Statements.
Notes to the consolidated financial information
1. General Information
Lexington Gold Ltd (the "Company", "Lexington Gold" or
"Lexington") and its subsidiaries (together, "the Group") is
focused on the exploration and development of its four diverse gold
projects, covering a combined area of approximately 1,675 acres in
North and South Carolina, USA.
The Company is a limited liability company incorporated and
domiciled in Bermuda. The address of its registered office is
Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda.
The Company is quoted on the Alternative Investment Market
("AIM") of the London Stock Exchange.
2. Basis of preparation and significant accounting policies
The principal accounting policies applied in the preparation of
the consolidated financial information are consistent with those
set out in the full Annual Report and Financial Statements. These
policies have been consistently applied to all the years presented
unless otherwise stated.
(a) Going concern basis of accounting
For the year ended 31 December 2022, the Group recorded a loss
of US$0.9 million and had net cash outflows from operating
activities of US$0.7 million. An operating loss is expected in the
year subsequent to the date of the financial statements. The
ability of the entity to continue as a going concern is dependent
on the Group generating positive operating cash flows and/or
securing additional funding through the raising of debt or equity
to fund its projects.
These conditions indicate a material uncertainty that may cast a
significant doubt about the entity's ability to continue as a going
concern and, therefore, that it may be unable to realise its assets
and discharge its liabilities in the normal course of business.
The financial statements have been prepared on the basis that
the entity is a going concern, which contemplates the continuity of
normal business activity, realisation of assets and settlement of
liabilities in the normal course of business for the following
reasons:
-- The Company secured additional funding by way of a US$150,000
unsecured loan facility on 14 March 2023;
-- The Directors are confident that they will be able to raise
additional funds to satisfy its immediate cash requirements;
and
-- The Directors have the ability to reduce expenditure in order to preserve cash if required.
Should the entity not be able to continue as a going concern, it
may be required to realise its assets and discharge its liabilities
other than in the ordinary course of business, and at amounts that
differ from those stated in the financial statements. The full
Annual Report and Financial Statements does not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or liabilities that might be necessary
should the entity not continue as a going concern.
(b) Basis of preparation
The consolidated financial information set out above does not
constitute the Group's financial statements for the years ended 31
December 2022 or 31 December 2021 but is derived from those
financial statements. The auditors have reported on the 2022 and
2021 financial statements which carried unqualified audit reports.
The 2022 financial statements included reference to a matter to
which the auditors drew attention by way of emphasis, namely the
existence of material uncertainty related to going concern as
outlined in Note 2(a) above. The auditor's opinion was not modified
in respect of such matter. The 2021 financial statements included a
similar emphasis of matter regarding the existence of material
uncertainty related to going concern and the auditor's opinion was
similarly not modified in respect of such matter.
While the financial information included in this announcement
has been compiled in accordance with, inter alia, International
Financial Reporting Standards ("IFRS"), this announcement does not
in itself contain sufficient information to comply with IFRS.
The full consolidated financial statements have been prepared in
accordance with IFRS, interpretations of the International
Financial Reporting Interpretations Committee ("IFRIC") and Bermuda
Companies Act, 1981. The consolidated financial statements have
also been prepared under the historical cost convention, as
modified by:
-- Share options measured at fair value; and
-- Financial assets and liabilities at fair value through profit or loss.
**ENDS**
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FR FZGZVVRGGFZM
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