Thor Explorations Announces First Quarter 2023 Financial and Operating Results, for the
Thor Explorations Announces First Quarter
2023 Financial and Operating Results, for the
Three Months Ending March 31, 2023
Vancouver, British Columbia--(Newsfile Corp. - May 30, 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 and Senegal for the three months to March 31, 2023 ("Q1
2023" or the "Period").
The Company's Unaudited Consolidated Financial Statements together with the notes related thereto,
as well as the Management's Discussion and Analysis for the three months ended March 31, 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
Segilola Production
Gold production for the Period totaled 20,629 ounces ("oz")
Mill feed grade was 2.95 grammes per tonne ("g/t") gold with recovery at 94.1%
An increase in mining rates and the mining of higher grade ore zones is expected in Q2
2023
The main operating units of the process plant continue to perform better than expected, with the
plant operating above nameplate capacity
Segilola Near-Mine Exploration
Identification of new high grade quartz vein system within 15 kilometers ("km") of Segilola, with
multiple high grade drillhole intercepts including 1 meter ("m") at 310 g/t gold which equates to 10
oz of gold per tonne
Ongoing drilling will test both the strike length and depth potential of this system with
additional drill results expected in Q2 2023
Regional exploration is continuing with ongoing drilling programs, stream sediment sampling
programs and soil/auger programs with drilling results also expected in Q2 2023.
Douta
Mineral Resource Estimate ("MRE") at Douta supported by a total of 64,567 meters of drilling
updated to a global resource of approximately 1.78 million oz of gold, an increase of 144% from its
maiden resource.
Updated Douta Resource encompasses the Makosa, Makosa Tail and the recently
discovered Sambara prospects, all of which remain open along strike and down dip
During the Period, workstreams designed to advance the project to the prefeasibility stage
("PFS") commenced including metallurgical and geotechnical drilling and also infill resource
drilling. Drilling results from Douta are also expected in Q2 2023.
Financial Highlights
21,553 oz of gold sold with an average gold price of US$1,902 per oz
Cash operating cost of US$899 per oz sold and all-in sustaining cost ("AISC") of US$1,346 per oz
sold
Q1 2023 revenue of US$40.3 million (Q1 2022: US$24.9 million)
Q1 2023 EBITDA of US$16.1 million (Q1 2022: US$13.4 million)
Q1 2023 net profit of US$4.3 million (Q1 2022: US$3.5 million)
Cash and cash equivalents of US$4.5 million as at 31 March 2023 (Q1 2022: US$6.3 million)
Senior debt facility with Africa Finance Corporation amended and restated to facilitate the
Company's growth opportunities
Senior debt facility reduced to US$27.9 million as at 31 March 2023
Repayment of all outstanding EPC invoices
Net debt of US$25 million as at 31 March 2023
Environment, Social and Governance
The full operation of 6 MW compressed natural gas ("CNG") generators was achieved in January
2023 so as to reduce GHG generated by diesel
In Q1 2023, the Company's GHG emissions were 5,303 tons. For the equivalent period in
2022, the GHG emissions were 8,392 tons, a reduction of 3,089 tons representing a drop of
36% in GHG emissions and a significant step in the reduction of its carbon footprint
Vegetable farm construction commenced in the Period, including the erection of a greenhouse.
Construction of fish farming ponds and associated processing and administration structures also
commenced using two contractors from the host communities
Outlook
Production guidance of 85,000 to 95,000 oz for 2023 maintained, weighted towards the second
half of the year, with an AISC guidance of US$1,150 to US$1,350 per oz
Advance exploration programs across the portfolio, including near mine and underground projects
at Segilola, extension and infill programs at Douta and the assessment of potential targets in
Nigeria
Completion of the Douta preliminary feasibility study ("PFS") in Q4 2023
Applications for and acquisition of identified prospective exploration properties in Nigeria
Segun Lawson, President & CEO, stated:
"This was envisaged to be a difficult quarter with a lower mined grade, difficult mining conditions in the
Segilola Pit west wall and a higher utilization of heavy equipment. The Company's performance
during the period demonstrates the amount of progress we have made at Segilola. The main
operating units continue to perform better than expected and operate above capacity, so our
production at the mine totaled 20,629 ounces. Our costs were at the higher end of our guidance,
however we expect our costs to reduce materially in the second half of the year as we complete our
mining in the current difficult areas. We have also had our first significant exploration success outside
the Segilola Mine footprint, identifying a new high grade quartz vein system within 15 kilometres of
mine and have already begun expanding exploration with multiple drillhole intercepts. We look
forward to updating the market with drill results from this program and an additional two ongoing
exploration drilling programs in Nigeria.
"We also continue to progress exploration at a fast pace at the Douta Project. Further to the significant
growth in the MRE we are excited about the upcoming drilling results from the ongoing exploration
program. We also look forward to completing the various PFS work streams in the coming months.
"As always, we have remained committed to our ESG goals, and this Period really reflects our ability
to safeguard the environment and the local communities. The full operation of 6MW compressed
natural gas generators was achieved in January and will greatly aid in our attempt to reduce GHG
emissions. Elsewhere, we have been proudly progressing our livelihood restoration program and we
look forward to offering further updates on all things ESG related throughout the year.
"When compared to the same operating period last year, we have significantly improved our numbers
across the board, which is a testament to the hard work and efficiencies created in the Company.
"Our production guidance remains between 85,000 and 95,000 oz for 2023, one that is weighted
towards the second half of the year, where we foresee less difficult operating conditions and
correspondingly, a more efficient six months operationally."
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:
Canaccord Genuity (Nominated Adviser & Broker)
Henry Fitzgerald-O'Connor / James Asensio / Thomas Diehl
Tel: +44 (0) 20 7523 8000
Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield / Franck Nganou
Tel: +44 (0) 20 7907 8500
Fig House Communications (Investor Relations)
Tel: +1 416 822 6483
Email:
Ibu Lawson (Investor Relations)
Tel: +447909825446
Email:
BlytheRay (Financial PR)
Tim Blythe / Megan Ray / Said Izagaren
Tel: +44 207 138 3203
Management Discussion & Analysis for Q1 2023
HIGHLIGHTS AND ACTIVITIES - FIRST QUARTER 2023
Operating results for the quarter were highlighted by the selling of 21,553 ounces ("oz") of gold during the
year at a cash operating cost
1
of $899 per oz sold, with an AISC
1
of $1,346 per oz sold.
The Company maintains its production guidance at 85,000 to 95,000 oz for the year, while AISC
1
guidance for 2023 is also maintained at US$1,150 per ounce to US$1,350 per ounce.
During the Period, the international price of key consumables used by the Company, in particular
ammonium nitrate and diesel have reduced significantly from the levels experienced in the second half of
2022. These reductions in price are expected to result in lower than forecast consumable costs at
Segilola as the Company resupplies.
Table 1.1 Key Operating and Financial Statistics
Operating
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
Gold Sold
Au
21,553
13,463
Average realized gold price
1
$/oz
1,902
1,824
Cash operating cost
1
$/oz
899
688
AISC (all-in sustaining cost)
1
$/oz
1,346
1,108
EBITDA
1
$/oz
745
996
Financial
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
Revenue
$
40,287,830
24,865,482
Net Income/(Loss)
$
4,331,347
3,490,938
EBITDA
1
$
16,065,334
13,414,642
Financial
Three Month period
ended March 31, 2023
Year ended
December 31, 2022
Cash and cash equivalents
$
4,505,071
6,688,037
Deferred Income
$
-
6,581,743
Net Debt
1
$
24,940,762
31,650,722
1 Refer to "Non-IFRS Measures" section.
Segilola Gold Mine, Nigeria
Mining
During the three months ended March 31, 2023, 4,194,689 tonnes of material was mined, equivalent to
a mining rate of 46,608 tonnes of material per day. In this period, 198,425 tonnes of ore were mined,
equivalent to mining rates of 2,205 tonnes of ore per day, at an average grade of 2.85g/t. Tonnes were
affected by difficult mining conditions encountered in the West wall of the pit. Conditions are improving
and an increase in mining rates is expected in the second quarter of 2023.
Grade was lower than planned due to geotechnical problems encountered in the North of the pit,
delaying access to the higher-grade ore zones in this area. These zones will now be mined during the
second quarter of 2023.
The stockpile balance at the end of the period was 270,215 tonnes of ore at an average of 1.14g/t. This
comprised 2,130 tonnes (4.35g/t) at high grade, 4,327 tonnes (2.03g/t) at medium grade, 273,903
tonnes (1.04g/t) at low grade and 3,442 tonnes (2.65g/t) on the coarse ore stockpile.
Processing
During the three months ended March 31, 2023, a total of 231,001 tonnes of ore, equivalent to a
throughput rate of 2,567 tonnes per day, was processed. Throughput was affected by an unplanned
reline of the SAG mill.
The mill feed grade was 2.95g/t gold with recovery at 94.1% for a total of 20,629 ounces of gold
produced. A delay in the commissioning of an additional crusher, specifically used to reduce mill
rejected ore bearing material ("scats"), which was held for several weeks at the Nigerian border
crossing, affected grade during the quarter. The scats will be processed during quarter 2.
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.
Table 1.2: Production Metrics
Units
Q1 - 2023
Q4 - 2022
Q3 - 2022
Q2 - 2022
Q1 - 2022
Mining
Total Mined
Tonnes
4,194,689
4,296,494
4,018,431
4,031,584
3,759,524
Waste Mined
Tonnes
3,996,264
3,974,073
3,793,249
3,747,504
3,533,610
Ore Mined
Tonnes
198,425
322,421
225,182
284,079
226,314
Grade
g/t Au
2.85
3.51
4.43
3.63
2.68
Daily Total Mining Rate
Tonnes/Day
46,608
46,701
43,679
44,303
41,772
Daily Ore Mining Rate
Tonnes/Day
2,205
3,505
2,448
3,122
2,515
Stockpile
Ore Stockpiled
Tonnes
270,215
300,531
229,909
249,281
179,758
Ore Stockpiled
g/t Au
1.14
1.48
1.19
1.46
1.23
Ore Stockpiled
oz
9,904
14,300
8,796
11,701
7,109
Processing
Ore Processed
Tonnes
231,001
254,824
241,434
211,582
221,900
Grade
g/t Au
2.95
3.38
3.58
3.66
3.18
Recovery
%
94.1
95.0
95.5
95.5
94.1
Gold Recovered
oz
20,629
26,331
26,523
23,785
21,343
Milling Throughput
Tonnes/Day
2,567
2,770
2,624
2,325
2,466
NON-IFRS MEASURES
This MD&A refers to certain financial measures, such as average realized gold price, cash operating
costs, all-in sustaining costs , net debt and EBITDA 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.
Table 2.1: Average annual realised price per ounce sold
Units
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
1
Revenues
$
40,287,830
24,865,482
By product revenue
$
(43,773)
(15,520)
Gold Revenue
$
40,244,057
24,849,962
Gain/(Loss) on forward sale of commodity contracts
$
750,482
(294,922)
Gold Revenue
$
40,994,539
24,555,040
Gold ounces sold
oz Au
21,553
13,463
Average realized price per ounce sold
$
1,902
1,824
1 The figures for the Three Month period ended March 31, 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.
Table 2.2: Average annual cash operating cost per ounce of gold
Units
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
1
Production costs
$
18,306,502
8,219,530
Transportation and refining
$
342,291
502,222
Royalties
$
768,282
550,765
By product revenue
$
(43,773)
(15,520)
Cash Operating costs
$
19,373,302
9,256,997
Gold ounces sold
Oz Au
21,553
13,463
Cash operating cost per ounce sold
$/oz
899
688
1 The figures for the Three Month period ended March 31, 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 detail s.
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 Month periods ended March 31, 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.
Table 2.3: Average annual all-in sustaining cost per ounce of gold
Units
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
1
Cash operating costs
2
$
19,373,302
9,256,997
Adjusted other administration expenses
$
3,775,777
1,458,731
Sustaining capital
3
$
5,864,894
4,196,996
Total all-in sustaining cost
$
29,013,973
14,912,724
Gold ounces sold
Oz Au
21,553
13,463
All-in sustaining cost per ounce sold
$/oz
1,346
1,108
1 The figures for the Three Month period ended March 31, 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 Table - 3.2 Cash operating costs.
3 Refer to Table - 3.3a Sustaining and Non-Sustaining Capital
The Group's all-in sustaining costs include sustaining capital expenditures which management has
defined as those capital expenditures related to producing and selling gold from its on-going mine
operations. Non-sustaining capital is capital expenditure related to major projects or expansions at
existing operations where management believes that these projects will materially benefit the operations.
The distinction between sustaining and non-sustaining capital is based on the Company's policies and
refers to the definitions set out by the World Gold Council.
This non-GAAP measure provides investors with transparency regarding the capital costs required to
support the on-going operations at its operating mine, relative to its total capital expenditures. Readers
should be aware that these measures do not have a standardized meaning. It is intended to provide
additional information and should not be considered in isolation, or as a substitute for measures of
performance prepared in accordance with IFRS.
Table 2.3a: Sustaining and Non-Sustaining Capital
Units
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
1
Property, plant and equipment additions during the period
$
5,719,158
8,484,914
Non-sustaining capital expenditures
2
$
(1,109,993)
(5,501,596)
Payment for sustaining leases
$
1,255,729
1,213,678
Sustaining capital
3
$
5,864,894
4,196,996
1 The figures for the Three Month period ended March 31, 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 Includes EPC and other construction costs for the Segilola Mine
3
Includes capitalized production stripping costs of $4,609,165 (March 31, 2022: $2,983,318)
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 measure is used by
management to measure the Company's debt leverage. The Group considers that in addition to
conventional measures prepared in accordance with IFRS, net debt is useful to evaluate the Group's
performance.
Table 2.4: Net Debt
Three Month period
ended March 31, 2023
Year Ended
December 31, 2022
Loans from the Africa Finance Corporation
$
24,257,746
24,459,939
Due to EPC contractor
$
1,463,353
10,196,105
Deferred element of EPC contract
$
3,724,734
3,682,715
Less:
Cash
(4,505,071)
(6,688,037)
Net Debt
$
24,940,762
31,650,722
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)
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.
Table 2.5: Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
Units
Three Month period
ended March 31, 2023
Three Month period
ended March 31, 2022
1
Net profit/(loss) for the period
$
4,331,347
3,490,938
Amortization and depreciation - owned assets
$
7,165,523
5,004,617
Amortization and depreciation - right of use assets
$
1,194,587
1,158,255
Impairment of Exploration & Evaluation assets
$
3,096
2,701
Interest expense
$
3,370,781
3,758,131
EBITDA
$
16,065,334
13,414,642
Gold ounces sold
Oz Au
21,553
13,463
EBITDA per ounce sold
$/oz
745
996
1 The figures for the Three Month period ended March 31, 2022 have been restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further details.
OUTLOOK AND UPCOMING MILESTONES
This Section 5 of the MD&A contains forward looking information as defined by National Instrument 51-
102. Refer to Section 16 of this MD&A for further information on forward looking statements.
We are focused on advancing the Company's strategic objectives and near-term milestones which
include:
2023 Operational Guidance and Outlook
Gold Production
oz
85,000-95,000
All-in Sustaining Cost
US$/oz Au sold
$1,150 - $1,350
Capital Expenditure
1
US$
8,000,000 - 10,000,000
Exploration Expenditure:
Nigeria
2
US$
4,200,000
Senegal
US$
3,000,000
1 This excludes production stripping costs capitalizations.
2 This includes 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