Thor Explorations Announces Financial and Operating Results for the Three and Six Months Ending June 30, 2023
Thor Explorations Announces Financial and Operating Results for the Three and Six Months Ending June 30, 2023
Vancouver, British Columbia--(Newsfile Corp. - August 24, 2023) - Thor Explorations Ltd. (TSXV: THX) (AIM: THX) ("Thor Explorations", "Thor" or the "Company") is pleased to provide an operational and financial review for its Segilola Gold mine, located in Nigeria ("Segilola"), and for the Company's mineral exploration properties located in Nigeria, Senegal and Burkina Faso for three ("Q2 2023" or the "Period") and six months to June 30, 2023 ("H1 2023").
The Company's Consolidated Condensed 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, 2023, are available on Thor Explorations' website at https://thorexpl.com/investors/financials/.
All figures are in US dollars ("US$") unless otherwise stated.
Operational Highlights for Q2 2023 and H1 2023
Production
Gold production for the Period totaled 23,078 ounces ("oz") (H1 2023: 43,707 oz)
All main operating units of the process plant continue to perform better than expected, with the plant operating above nameplate capacity Several improvement projects at the process plant are being undertaken through the remainder of 2023 Three Loss Time Injuries ("LTIs") occurred in H1 2023, which triggered an increase in training and workplace inspections to improve working conditions
Exploration
The Company has prioritized exploration within a 25-kilometre ("km") radius of Segilola with the key objective being to extend the life of mine Four main advanced exploration targets that have been defined are the Kola Prospect, Igila, Aye- Ile Western Prospects and Ijarigbe The Kola Prospect is located 23km south of Segilola and is a new high-grade greenfield exploration discovery:
Reverse Circulation drilling ("RC") was carried out at a low-level stream sediment zone and showed initial positive results, which included 7 metres ("m") grading at 25.98 g/t gold in the near-surface weathered horizon and 4 m at 30.17 g/t gold in the primary horizon Exploration testing of the general area is continuing and drilling activities will continue through the remainder of the year The Igila Prospect is located 15km west of Segilola Exploration activities are ongoing and focused on delineating additional strike length and identifying additional lodes The Aye-Ile Prospect is located 1.2km south-east from Igila Drill testing has focused on the anomalous auger geochemistry located a north-east dipping vein-system that is developed on the same structural orientation as Igila In Senegal, exploration activities at the Douta Project ("Douta") have progressed throughout Q2 2023
Thor Lithium - Newstar Minerals Limited
Thor, through its fully owned subsidiary Newstar Minerals Ltd, acquired a significant tenure in south-west Nigeria that covers both known lithium bearing, pegmatite deposits and a large, unexplored, prospective, pegmatite-rich belt An initial drilling program is being undertaken on one of the Company's prospects located in the West Oyo Project Area to confirm and delineate lithium-bearing mineralisation, such as spodumene and lepidolite at depth Post Period, the Company announced its initial results with the below key highlights:
11m at 2.61% lithium oxide ("Li2O") from 15m 9m at 2.42% Li2O from 35m 11m at 1.53% Li2O from 14m, including 9m at 1.70% Li2O from 15m Spodumene is confirmed as the main lithium-bearing mineral, with minor lepidolite and shallow mineralisation
Financial Highlights of the Period and H1 2023
Q2 2023 revenue of US$41.3 million (Q2 2022: US$41.3 million) and H1 2023 of US$81.7 million (H1 2022: US$66.2 million)
Q2 2023 operating cost of US$942 per oz sold (Q2 2022: US$983 per oz) and an all-in sustaining cost ("AISC") of US$1,230 per oz sold (Q2 2022: US$1,236 per oz)
Q2 2023 EBITDA of US$19 million (Q2 2022: US$17.7 million) and H1 2023 of US$35.1 million (H1 2022: US$31,1 million)
Q2 2023 net profit of US$7.9 million (Q2 2022: US$6.7 million) and H1 2023 of US$12.2 million (H1 2022: US$10.2 million)
As of June 2023, the Company had cash of US$11.1 million (Q1 2023: US$4.5 million)
Q2 2023 net debt of US$16.8 million (Q1 2023: US$24.9 million)
Environment, Social and Governance
The Segilola HSE team commissioned a team of standby emergency responders in Q2 2023, with 28 personnel specifically trained to respond to emergency related, medical and operational situations at the SROL site The Company progressed its livelihood restoration programs for the local communities Vegetable farms were completed in Q1 2023 and produced their first crops and improved tomato species in Q2 2023, with commercial off-takers purchasing the produce Fish farms in the local community neared completion in Q2 2023 with farming to commence in Q3 2023 Improved cocoa species seedlings were issued to the local community in Q2 2023 and training provided to the farmers to improve yields and commercial returns In Senegal, community projects undertaken included upgrading a local school's facilities block, clearing land at a local cemetery and providing a generator for the local police station
Outlook
Segilola production for the full year expected to be 85,000 oz with AISC expectations maintained at US$1,150 - US$1,350 per oz Q3 2023 production is expected to be below original expectations at the beginning of the financial year. However, Q4 gold production forecast remains in-line with original expectations, with potential upside as mining conditions continue to improve with the west wall push back nearing completion Continue to advance exploration programs across the portfolio, including:
Continuation of step-out drilling at Douta gold project in Senegal Continuation of drilling at Segilola gold regional targets Continuation of drilling at L06 lithium prospect in Nigeria Completion of the Douta preliminary feasibility study ("PFS") in Q4 2023
Segun Lawson, President & CEO, stated:
"The second quarter of 2023 has seen good developments across Thor's project portfolio. Operations are performing well, with the processing plant still operating above nameplate design. The Company posted strong revenues for H1 of US$81 million, with an EBITDA of US$35.1 million and a net profit of US$12 million for the same period.
"The Company expects to achieve its total material mined forecast for H2, however grade control drilling for Q3 indicates a lower than forecast recovered gold production for the period. While the Q4 gold production forecast remains in-line with our original target, with potential upside as mining conditions continue to improve as the west wall push back nears completion, the Company considers it prudent to update guidance for 2023 to 85,000oz of recovered gold - the lower end of the previously announced range for the full financial year.
"As we look to extend the life of mine at Segilola, Thor has located several exploration targets within close proximity to the project. These exploration targets are encouraging so far have demonstrated positive results from initial exploration drilling activities. We plan to follow up with further drilling activities in Q3 and Q4 2023. At Douta, Thor is making great progress towards completing the PFS, which is scheduled to be completed in Q4 this year.
"With our strategy to identify high-value resource opportunities, Thor acquired a significant tenure in south-west Nigeria, which is known for lithium-bearing pegmatite deposits. An initial drilling program is being undertaken on the West Oyo Project area, with the objective to confirm and delineate lithium bearing mineralization. I am pleased to confirm that, post period, the program confirmed spodumene as the main lithium-bearing mineral, together with minor lepidolite. We will continue to explore the area and believe this poses a great opportunity to increase shareholder value.
"We take the working conditions at our operations very seriously, and as such, Thor has increased training and workplace inspections to improve working conditions. The Segilola HSE team has also commissioned a team of standby emergency responders during the Quarter, with 28 personnel specifically trained to respond to emergency related, medical and operational situations at the SROL site. The program comprised classroom and practical sessions on how to respond to first aid cases, administering basic life support to unconscious victims and emergency response planning and activation processes to ensure there are fewer lost time injuries.
"The Company is in a good position to advance its projects in the next quarter, with further developments made at its exploration prospects as well as improvements in processing capabilities which should result in improved production. I look forward to updating the shareholders on the developments made in the next quarter."
About Thor Explorations
Thor Explorations Ltd. is a mineral exploration company engaged in the acquisition, exploration, development and production of mineral properties located in Nigeria, Senegal and Burkina Faso. Thor Explorations holds a 100% interest in the Segilola Gold Project located in Osun State, Nigeria and has a 70% economic interest in the Douta Gold Project located in south-eastern Senegal. Thor Explorations trades on AIM and the TSX Venture Exchange under the symbol "THX".
THOR EXPLORATIONS LTD.
Segun Lawson President & CEO
For further information please contact:
Thor Explorations Ltd Email: [email protected]
Canaccord Genuity (Nominated Adviser & Broker)
Henry Fitzgerald-O'Connor / James Asensio
Tel: +44 (0) 20 7523 8000
Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield / Franck Nganou
Tel: +44 (0) 20 7907 8500
Fig House Communications (Investor Relations)
Tel: +1 416 822 6483 Email: [email protected]
Ibu Lawson (Investor Relations)
Tel: +447909825446 Email: [email protected]
BlytheRay (Financial PR)
Tim Blythe / Megan Ray / Said Izagaren Tel: +44 207 138 3203
Qualified Person
The technical information included in this report has been prepared under the supervision of Alfred Gillman (Fellow, AusIMM, CP Geology), who is designated as a "qualified person" under National Instrument 43-101 and AIM and has reviewed and approves the content of this news release. He has also reviewed QA/QC, sampling, analytical and test data underlying the information.
Management Discussion & Analysis for Q2 2023
HIGHLIGHTS AND ACTIVITIES - SECOND QUARTER 2023
Operating results for the quarter were highlighted by the selling of 20,852 ounces of gold during the period at a cash operating cost1 of $942 per oz sold, with an all-in sustaining cost1 of $1,230 per oz sold. AISC guidance for 2023 is maintained at US$1,150 per ounce to US$1,350 per ounce.
Gold recovered for the quarter was 23,078 ounces. The Company has updated its production guidance to 85,000oz for the year.
Key Operating and Financial Statistics
Three Months period Six Months period ended ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Operating
| Gold sold | Au | 20,852 | 21,553 | 22,173 | 42,405 | 35,636 |
| Gold recovered | Au | 23,078 | 20,629 | 26,331 | 43,707 | 45,128 |
| Average realised gold price | $/oz | 1,990 | 1,902 | 1,842 | 1,945 | 1,852 |
| Cash operating cost | $/oz | 942 | 899 | 983 | 920 | 873 |
| AISC | $/oz | 1,230 | 1,346 | 1,236 | 1,289 | 1,189 |
| EBITDA | $/oz | 913 | 745 | 802 | 828 | 873 |
Financial
| Revenue | $ | 41,364,169 | 40,287,830 | 41,354,747 | 81,651,999 | 66,220,229 |
| Net Profit | $ | 7,912,187 | 4,331,347 | 6,778,954 | 12,243,534 | 10,210,578 |
| EBITDA | $ | 19,044,002 | 16,065,334 | 17,772,616 | 35,109,336 | 31,127,944 |
| June 30, | March 31, | December 31, | ||||
| 2023 | 2023 | 2022 |
| Cash and cash equivalents | $ | 11,149,491 | 4,505,071 | 6,688,037 |
| Deferred Income | $ | 865,173 | - 6,581,743 | |
| Net Debt | $ | 16,807,972 | 24,940,762 | 31,650,722 |
Segilola Gold Mine, Nigeria
Mining
During the three months ended June 30, 2023, 5,633,688 tonnes of material were mined, equivalent to a mining rate of 61,909 tonnes of material per day. In this period, 278,583 tonnes of ore were mined, equivalent to a mining rate of 3,061 tonnes of ore per day, at an average grade of 2.43g/t. Mining of the West wall of the pit is progressing well, with most of the more challenging mining for the year completed. Production areas are increasing in width allowing for improved utilization and productivity. Grade was lower than planned due to delays in accessing higher-grade ore zones in the central mine.
The stockpile balance at the end of the period was 297,100 tonnes of ore at an average of 1.06g/t. This comprised 1,961 tonnes (4.42g/t) at high grade, 2,006 tonnes (2.09g/t) at medium grade, 288,401 tonnes (1.00g/t) at low grade and 4,693 tonnes (2.45g/t) on the coarse ore stockpile.
Processing
During the three months ended June 30, 2023, a total of 255,231 tonnes of ore, equivalent to a throughput rate of 2,805 tonnes per day, was processed. Throughput was higher than planned, with no significant downtime periods.
The mill feed grade was 2.99g/t gold with recovery at 94.0% for a total of 23,078 ounces of gold recovered. The mill rejected ore bearing material crusher was commissioned during the quarter. Smelting performance was improved with the commissioning of the new smelter.
All of the main operating units of the process plant continue to perform better than expected, with the plant operating above nameplate capacity. Several improvement projects are being undertaken through the remainder of 2023.
Production Metrics
Units Q2 - 2023 Q1 - 2023 Q4 - 2022 Q3 - 2022 Q2 - 2022 Q1 - 2022
Mining
| Total Mined | Tonnes | 5,633,688 | 4,194,689 | 4,296,494 | 4,018,431 | 4,031,584 | 3,759,524 |
| Waste Mined | Tonnes | 5,355,105 | 3,996,264 | 3,974,073 | 3,793,249 | 3,747,504 | 3,533,610 |
| Ore Mined | Tonnes | 278,583 | 198,425 | 322,421 | 225,182 | 284,079 | 226,314 |
| Grade | g/t Au | 2.43 | 2.85 | 3.51 | 4.43 | 3.63 | 2.68 |
| Daily Total Mining Rate | Tonnes/Day | 61,909 | 46,608 | 46,701 | 43,679 | 44,303 | 41,772 |
| Daily Ore Mining Rate | Tonnes/Day | 3,061 | 2,205 | 3,505 | 2,448 | 3,122 | 2,515 |
Stockpile
| Ore Stockpiled | Tonnes | 297,060 | 270,215 | 300,531 | 229,909 | 249,281 | 179,758 |
| Ore Stockpiled | g/t Au | 1.06 | 1.14 | 1.48 | 1.19 | 1.46 | 1.23 |
| Ore Stockpiled | oz | 10,124 | 9,904 | 14,300 | 8,796 | 11,701 | 7,109 |
Processing
| Ore Processed | Tonnes | 255,231 | 231,001 | 254,824 | 241,434 | 211,582 | 221,900 |
| Grade | g/t Au | 2.99 | 2.95 | 3.38 | 3.58 | 3.66 | 3.18 |
| Recovery | % | 94.0 | 94.1 | 95.0 | 95.5 | 95.5 | 94.1 |
| Gold Recovered | oz | 23,078 | 20,629 | 26,331 | 26,523 | 23,785 | 21,343 |
| Milling Throughput | Tonnes/Day | 2,805 | 2,567 | 2,770 | 2,624 | 2,325 | 2,466 |
| Units | Q2 - 2023 | Q1 - 2023 | Q4 - 2022 | Q3 - 2022 | Q2 - 2022 | Q1 - 2022 |
Exploration Activity Summary Q2 2023
Nigeria Gold
Exploration remained a priority for the Company in 2023 in both Nigeria and Senegal. In Nigeria, the Company continued to prioritize exploration within a 25 kilometre radius of the Segilola Gold Mine. The Company also expanded and diversified its portfolio through the acquisition of over 600 sq km of lithium exploration licences via the grant of new licences and also entering into joint venture agreements with existing licence holders.
The key objective of the exploration strategy is to extend the life of mine ("LOM") at Segilola.
Approximately 80% of the Company's Nigerian gold exploration effort is concentrated within a 25km radius of the Segilola operation such that potential gold-bearing material can be easily trucked to the existing plant. In areas that are further from the mine generative exploration is targeting potential new stand-alone operations.
The majority of the exploration activities carried out on all the Company's licences, consisted of RC drilling, Diamond Drilling, geochemical stream sediment sampling, auger drilling and soil sampling. Amongst other target areas that have been located, a new high-grade target, the Kola target, was discovered and is located about 23km from the Segilola Mine. The Kola target produced an initial significant geochemical signature with follow up drill testing intersecting several mineralized drilling intersections including 11m grading 22g/tAu.
Four main advanced exploration targets have been defined within a 25km radius of the Segilola Gold Mine. These comprise the following target areas:
Kola Prospect Igila (Western Prospects)
Aye-Ile (Western Prospects)
Ijarigbe
New Exploration Prospect - Kola Prospect
The Kola Prospect is a new high-grade greenfield exploration discovery that is located 23km south of the Segilola Gold Mine within a 100% Thor-owned exploration permit The prospect developed from a low-level stream sediment anomaly which was confirmed by follow-up auger-assisted soil geochemistry that returned values of up to 4 g/t Au. Targeting of this anomalous zone was carried out with RC drilling. Initial positive results included 7m grading 25.98 g/t Au in the near-surface weathered horizon. Additional drilling located primary bedrock mineralisation grading 8m at 30.19 g/t Au. Initial data suggest that the geological controls relate to a steeply dipping north-easterly trending zone within a biotite gneiss sequence. Exploration testing of the general area is continuing. Whilst the initial drilling results from the Kola Prospect are encouraging, the Company has not yet identified significant strike length extensions that would add material mine life extensions to Segilola. Drilling activities will continue through Q3 and Q4.
Exploration Results from the Kola Prospect
(0.5g/t Au lower cut off; maximum 1m internal dilution)
| x | y | Depth | Dip | Azimuth | From (m) | To (m) | Interval (m) | Grade (g/tAu) | True Width (m) | |
|---|---|---|---|---|---|---|---|---|---|---|
| SGRC168 | 699897 | 807875 | 56 | -60 | 90 | 1.0 | 2.0 | 1.0 | 0.96 | 1.0 |
| SGRC188 | 699925 | 807871 | 90 | -60 | 90 | 14.0 | 18.0 | 4.0 | 30.17 | 3.0 |
| SGRC189 | 699954 | 807866 | 120 | -60 | 90 | 56.0 | 64.0 | 8.0 | 3.01 | 6.0 |
| SGRC190 | 699896 | 807877 | 60 | -60 | 90 | 2.0 | 9.0 | 7.0 | 25.98 | 6.0 |
| -60 | 90 | 58.0 | 59.0 | 1.0 | 0.78 | 0.8 | ||||
| SGRC191 | 699924 | 807872 | 55 | -60 | 90 | 1.0 | 6.0 | 5.0 | 5.64 | 4.0 |
| SGRC194 | 699961 | 807893 | 105 | -60 | 90 | 49.0 | 57.0 | 8.0 | 30.19 | 7.0 |
| SGRC195 | 699980 | 807886 | 110 | -60 | 270 | 76.0 | 78.0 | 2.0 | 0.77 | 1.4 |
| SGRC201 | 699926 | 807879 | 29 | -90 | 0 | 31.0 | 32.0 | 1.0 | 0.63 | 1.0 |
| 38.0 | 41.0 | 3.0 | 0.55 | 3.0 | ||||||
| SGRC202 | 699920 | 807870 | 30 | -90 | 0 | 0.0 | 7.0 | 7.0 | 0.86 | 7.0 |
| 12.0 | 13.0 | 1.0 | 0.57 | 1.0 | ||||||
| SGRC203 | 699913 | 807870 | 26 | -90 | 0 | 0.0 | 13.0 | 13.0 | 11.57 | 13.0 |
| 14.0 | 17.0 | 3.0 | 0.71 | 3.0 | ||||||
| 21.0 | 24.0 | 3.0 | 0.97 | 3.0 | ||||||
| SGRC204 | 699938 | 807889 | 70 | -60 | 270 | 5.0 | 11.0 | 6.0 | 0.73 | 6.0 |
| 16.0 | 17.0 | 1.0 | 0.38 | 1.0 |
Kola Prospect Cross Section
Western Prospects
Igila
The Western Prospects are located about 15km directly west of the Segilola Gold Mine and are held under a joint venture agreement between Thor's wholly owned subsidiary Segilola Gold Limited ("SGL") and a local mineral exploration company.
Exploration activities at the Western Prospects are now focused on delineating additional strike length and identifying additional lodes such as the Aye-Ile prospect.
Aye-Ile
The Aye-Ile prospect is located approximately 1.2km to the south-east from Igila. Drilling is planned to expand the zone of mineralisation and to investigate a possible strike between Igila and Aye-Ile.
Geochemical sampling to the south-east of Aye-Ile returned several anomalous values of up to 10g/t Au which suggest extensions of the structure.
Thor Lithium - Newstar Minerals Limited
As part of its strategy of identifying high-value mineral resource opportunities, Thor, through its fully owned subsidiary Newstar Minerals Ltd, announced the acquisition of significant tenure in south-west Nigeria that covers both known lithium bearing, pegmatite deposits and a large unexplored, prospective, pegmatite-rich belt. Thor's initial focus is on the south-west quadrant of Nigeria where vital infrastructure is located within close proximity.
An initial drilling program is being undertaken on one of the Company's prospects located in the West Oyo Project Area to confirm and delineate lithium-bearing mineralisation, such as spodumene and lepidolite, at depth. The Company announced its initial results on August 16 with the below key highlights:
- 11m at 2.61% Li2O from 15m
- 9m at 2.42% Li2O from 35m
- 11m at 1.53% Li2O from 14m, including 9m at 1.70% Li2O from 15m
Spodumene confirmed as main lithium-bearing mineral together with minor lepidolite Mineralization is shallow
Thor Explorations Nigeria Licence Location Map
Senegal
Introduction
The Douta Gold Project is a gold exploration permit E02038, located within the Kéniéba inlier, eastern Senegal. The northeast-trending license has an area of 58 km2. Thor, through its wholly owned subsidiary African Star Resources Incorporated ("African Star"), has a 70% economic interest in partnership with the permit holder International Mining Company SARL ("IMC"). IMC has a 30% free carried interest in its development until the announcement by Thor of a Probable Reserve.
The Douta licence is strategically positioned 4km east of Massawa North and Massawa Central deposits, which form part of the world-class Sabadola-Massawa Project owned by Endeavour Mining. The Makabingui deposit, belonging to Bassari Resources Ltd, is immediately located east of the northern portion of E02038.
Exploration Activity
During the quarter, workstreams designed to advance the project to the prefeasibility stage ("PFS") commenced. This included a diamond drilling program that was designed to obtain sufficient core samples for comprehensive metallurgical test work and mineralogical studies.
Thor intends to progress the Makosa Resource expansion and infill drilling together with parallel workstreams including environmental and social baseline monitoring as part of an Environmental and Social Impact Assessment, geotechnical and hydrological studies.
NON-IFRS MEASURES
This MD&A refers to certain financial measures, such as average realized gold price, which are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. These measures have been derived from the Company's financial statements because the Company believes that, with the achievement of gold production, they are of assistance in the understanding of the results of operations and its financial position.
Average realised gold price per ounce sold
The Group believes that, in addition to conventional measures prepared in accordance with GAAP, the average realised gold price, which takes into account the impact of gain/losses on forward sale of commodity contracts, is a metric used to better understand the gold price realised during a period. Management believes that reflecting the impact of these contracts on the Group's realised gold price is a relevant measure and increases the consistency of this calculation with our peer companies.
In addition to the above, in calculating the realised gold price, management has adjusted the revenues as disclosed in the consolidated financial statement to exclude by product revenue, relating to silver revenue, and has reflected the by product revenue as a credit to cash operating costs. The revenues as disclosed in the interim financial statements have been reconciled to the gold revenue for all periods presented.
Average annual realised price per ounce sold
Three Months period ended Six Months period ended June 30, March 31, June 30, June 30, June 30, Units
| 2023 | 2023 | 20221 | 2023 | 20221 | ||||||
| Revenues | $ | 41,364,169 | 40,287,830 | 41,354,747 | 81,651,999 | 66,220,229 | ||||
| By product revenue | $ | (68,587) | (43,773) | (30,549) | (112,360) | (46,069) | ||||
| Gold revenue | $ | 41,295,582 | 40,244,057 | 41,324,198 | 81,539,639 | 66,174,160 |
Gain/(Loss) on forward sale of commodity
| contracts | $ | 200,534 | 750,482 | (471,403) | 951,016 | (176,480) |
| Adjusted gold revenue | $ | 41,496,116 | 40,994,539 | 40,852,795 | 82,490,655 | 65,997,680 |
| Gold ounces sold | Oz Au | 20,852 | 21,553 | 22,173 | 42,405 | 35,636 |
| Average realized price per ounce sold | $ | 1,990 | 1,902 | 1,842 | 1,945 | 1,852 |
1 The figures for the Three and Six months period ended June 30, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.
Cash operating cost per ounce
Cash operating cost per oz sold, combined with revenues, can be used to evaluate the Company's performance and ability to generate operating income and cash flow from operating activities. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors may find this information useful to evaluate the costs of production per ounce.
By product revenues are included as a credit to cash operating costs.
Average annual cash operating cost per ounce of gold
Three Months period ended Six Months period ended June 30, June 30, June 30, March 31, June 30, Units
| 2023 | 2023 | 20221 | 2023 | 20221 | ||
| Production costs | $ | 17,795,685 | 18,306,502 | 20,273,742 | 36,102,187 | 28,493,272 |
| Transportation and refining | $ | 810,080 | 342,291 | 604,991 | 1,152,371 | 1,107,213 |
| Royalties | $ | 1,102,308 | 768,282 | 946,252 | 1,870,590 | 1,497,017 |
| By product revenue | $ | (68,587) | (43,773) | (30,549) | (112,360) | (46,069) |
| Cash Operating costs | $ | 19,639,486 | 19,373,302 | 21,794,437 | 39,012,788 | 31,097,502 |
| Gold ounces sold | Oz Au | 20,852 | 21,553 | 22,173 | 42,405 | 35,636 |
| Cash operating cost per ounce sold | $/oz | 942 | 899 | 983 | 920 | 873 |
1 The figures for the Three and Six months period ended June 30, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.
All-in sustaining cost per ounce
AISC provides information on the total cost associated with producing gold.
The Group calculates AISC as the sum of total cash operating costs (as described above), other administration expenses and sustaining capital, all divided by the gold ounces sold to arrive at a per oz amount.
Other administration expenses includes administration expenses directly attributable to the Segilola Gold Mine plus a percentage of corporate administration costs allocated to supporting the operations of the Segilola Gold Mine. For the three and six months periods ended June 30, 2023 and 2022, this was deemed to be 50%.
Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied.
Average annual all-in sustaining cost per ounce of gold
Three Months period ended Six Months period ended June 30, March 31, June 30, June 30, June 30, Units
2023 2023 20221 2023 20221 Cash operating costs2 $ 19,639,486 19,373,302 21,794,437 39,012,788 31,097,502
| Adjusted other administration expenses | $ | 1,093,344 | 3,775,777 | 3,895,264 | 4,869,121 | 5,353,995 |
| Sustaining capital3 | $ | 4,914,550 | 5,864,894 | 1,713,692 | 10,779,444 | 5,910,688 |
| Total all-in sustaining cost | $ | 25,647,380 | 29,013,973 | 27,403,393 | 54,661,353 | 42,362,185 |
| Gold ounces sold | oz Au | 20,852 | 21,553 | 22,173 | 42,405 | 35,636 |
| All-in sustaining cost per ounce sold | $/oz | 1,230 | 1,346 | 1,236 | 1,289 | 1,189 |
1 The figures for the Three and Six months period ended June 30, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.
2 Refer to Cash operating costs.
3 Refer to Sustaining and Non-Sustaining Capital
Net Debt
Net debt is calculated as total debt adjusted for unamortized, deferred, financing charges less cash and cash equivalents and short-term investments at the end of the reporting period. This metric is used by management to measure the Company's debt leverage. The Company considers that in addition to conventional measures prepared in accordance with IFRS, net debt is useful to evaluate the Company's performance.
Net Debt
| June 30, | March 31, | December 31, | |
|---|---|---|---|
| 2023 | 2023 | 2022 | |
| Project Loan | 24,187,306 | 24,257,746 | 24,459,939 |
| EPC Payments | - 1,463,353 | 10,196,105 | |
| Deferred EPC Facility | 3,770,157 | 3,724,734 | 3,682,715 |
| Less: Cash and cash equivalents1 | (11,149,491) | (4,505,071) | (6,688,037) |
| Net Debt | 16,807,972 | 24,940,762 | 31,650,722 |
Earnings Before Interest, Taxes, Depreciation and Amortisation
EBITDA is calculated as the total earnings before interest, taxes, depreciation and amortisation. This measure helps management assess the operating performance of each operating unit.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
Three Months period ended Six Months period ended June 30, June 30, June 30, March 31, June 30,
Unit
2023 2023 20221 2023 20221 Net profit for the period $ 7,912,187 4,331,347 6,778,954 12,243,534 10,210,578
Amortisation and depreciation - owned assets $ 6,679,708 7,165,523 5,977,675 13,845,231 10,982,292 Amortisation and depreciation - right of use assets $ 1,195,213 1,194,587 1,075,735 2,389,800 2,233,990 Impairment of Exploration & Evaluation
| assets | $ | 3,365 | 3,096 | 4,520 | 6,461 | 7,221 |
| Interest expense | $ | 3,253,529 | 3,370,781 | 3,935,732 | 6,624,310 | 7,693,863 |
| EBITDA | $ | 19,044,002 | 16,065,334 | 17,772,616 | 35,109,336 | 31,127,944 |
| Ounces sold | Oz Au | 20,852 | 21,553 | 22,173 | 42,405 | 35,636 |
| EBITDA per ounce sold | $ | 913 | 745 | 802 | 828 | 873 |
1 The figures for the Three and Six months period ended June 30, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.
OUTLOOK AND UPCOMING MILESTONES
This Section 5 of the MD&A contains forward looking information as defined by National Instrument 51- 102. Refer to Section 16 of this MD&A for further information on forward looking statements.
We are focused on advancing the Company's strategic objectives and near-term milestones which include:
2023 Operational Guidance and Outlook
Gold Production oz 85,000 All-in Sustaining Cost US$/oz Au sold $1,150 - $1,350 US$ 10,000,000 Capital Expenditure1 Exploration Expenditure:
Nigeria2 US$ 4,200,000 Senegal US$ 3,000,000
1 This excludes production stripping costs capitalizations.
2 This relates to all Nigeria exploration, including lithium and purchase of licenses.
The critical factors that influence whether Segilola can achieve these targets include:
Segilola's ability to maintain an adequate supply of consumables (in particular ammonium nitrate, flux and cyanide) and equipment Fluctuations in the price of key consumables, in particular ammonium nitrate, and diesel Segilola's workforce remaining healthy Continuing to receive full and on-time payment for gold sales Continuing to be able to make local and international payments in the ordinary course of business
Continue to advance the Douta project towards preliminary feasibility study ("PFS")
Continue to advance exploration programmes across the portfolio:
Segilola near mine exploration Segilola underground project Segilola regional exploration programme Douta extension programme Douta infill programme Assess regional potential targets in Nigeria Acquiring new concessions and joint venture options on potential targets
SUMMARY OF QUARTERLY RESULTS
The table below sets forth selected results of operations for the Company's eight most recently completed quarters.
Summary of quarterly results
2023 Q2 2023 Q1 2022 Q4 2022 Q3 2022 Q2 2022 Q1 2021 Q4 2021 Q3 $
| Jun-31 | Mar-31 | Dec-31 | Sep-30 | Jun-30 | Mar-31 | Dec-31 | Sep-30 | |
|---|---|---|---|---|---|---|---|---|
| Revenues | 41,364,169 | 40,287,830 | 43,251,204 | 55,703,098 | 41,354,747 | 24,865,482 | 6,049,485 | - |
| Net profit for period | 7,912,187 | 4,331,347 | 14,908,460 | 4,126,066 | 6,778,954 | 3,490,938 | 3,116,416 | 463,844 |
Basic profit/(loss) per share (cents) 1.20 0.67 2.21 0.65 1.1 0.55 0.47 0.07
RESULTS FOR SIX MONTHS ENDED JUNE 30, 2023
The review of the results of operations should be read in conjunction with the Interim Financial Statements and notes thereto.