TIDMLEX
RNS Number : 3002O
Lexington Gold Limited
09 June 2022
9 June 2022
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Final Results for the year ended 31 December 2021,
Availability of Annual Report and Notice of Annual General
Meeting
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
2021.
Copies of the Company's full Annual Report and Financial
Statements for the financial year to 31 December 2021 will be made
available to download from the Company's website at
www.lexingtongold.co.uk and will shortly be posted to shareholders
together with a Notice of Annual General Meeting (incorporating an
Explanatory Memorandum), which will also be made available on the
Company's website, to be held at 10.00 a.m. (Bermudan time) on 11
July 2022 at the Company's registered office at Clarendon House, 2
Church Street, Hamilton, HM11, Bermuda.
Financial Summary
-- Net loss for the year from continuing operations was
US$1.0million against the prior year loss of US$0.7 million.
-- Total assets were US$4.8 million (2020: US$5.5 million) at the year end.
-- Net cash position of US$0.9 million (2020: US$2.9 million) as at the year end.
-- Total liabilities of US$0.1 million (2020: US$0.09 million) as at the year end.
-- Obtained GBP335,000 unsecured convertible loan in late April
2022, post the reporting period end, ensuring that the Group is
funded to continue with its exploration plans. Conversion price set
at a level 30.6 per. cent. above the then prevailing share
price.
Operational Summary
-- Completion of 207.3 line-kilometre Helicopter borne VTEM survey.
-- Completion of 937 line-kilometre magnetic, radiometric and
very-low-frequency ("VLF") fixed-wing airborne geophysical survey
over the JKL, Carolina Belle and Argo projects.
-- Completed Phase 1 drilling campaign at Loflin comprising six
diamond drill holes for a total of 562m. All six holes of the Phase
1 drilling campaign encountered intervals of gold mineralisation of
over 1g/t Au above 100m depth.
-- Establishment of a maiden independent JORC resource estimate
of approximately 2 million tonnes at 1 g/t gold for 65,000 oz of
contained gold.
-- Conducted a soil, surface and rock chip sampling campaign at
Carolina Belle. Rock chip and grab samples from the newly
identified mineralised zone returned 10 samples with gold grades
over 1g/t including 17g/t; 5.1g/t; 3.5g/t, 3.2g/t; 2.7g/t; and
2.2g/t. Soil sampling over the newly identified mineralised area
suggests an initial surface gold anomaly footprint of approximately
350m by 250m. The newly identified mineralised area was named
Martha Washington South.
-- Commenced a 5,000m Reverse Circulation ("RC") drill campaign
at the Carolina Belle and JKL projects, with very positive results
to date, including a significant southern extension to Loflin,.
Corporate Summary
2021 has been an extremely productive and encouraging period for
the Company, following a transformational 2020 in which the Company
completed its acquisition of majority interests in four gold
exploration projects in North and South Carolina in the United
States (the "Projects") and was readmitted to trading on AIM on 25
November 2020. The reporting period has seen the Company build on
such transformation, with exciting exploration success achieved
during 2021 on our gold projects in the Carolinas. Since the
reporting period end, the company has received encouraging
exploration results and with additional financing from the
convertible loan remains focused on implementing its gold
exploration programme.
Enquiries :
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 / James T: +44 207 409 3494
Harris
Peterhouse Capital Limited (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 7769 325 254
Tom Randell / Annabelle Wills
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.
Note to Editors :
Lexington Gold Ltd (AIM: LEX) 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 projects are situated in the highly prospective Carolina Super
Terrane ("CST"), which has seen significant historic gold
production and is host to a number of multi-million-ounce mines
operated by majors and 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.
Chairman's Statement
I am pleased to present Lexington Gold's second set of annual
results, for its financial year ended 31 December 2021, and to
report on the Company's ongoing activities to the date of this
statement.
2021 was a year of further progress as we continued to deliver
on our exploration programmes across our four gold projects:
Carolina Belle, Jennings-Pioneer, Argo and Jones-Keystone-Loflin
("JKL"). Through extensive exploration work, including two drilling
campaigns, the second involving the commencement of a 5,000m
reverse circulation drilling programme across the Carolina Belle
and JKL projects, we have made substantial progress with our
projects and significantly increased our understanding of the
nature and opportunities available in the Carolina Super Terrane
region. We also announced our first independent JORC resource
estimate of 65,000 oz of contained gold for the Loflin side of the
JKL project. Based on the progress achieved we were confident in
investing in additional leased acreage, with options to purchase,
covering an additional 129 acres of mineral exploration rights at
the JKL project, taking our total project acreage in the Carolinas
to approximately 1,675 acres.
Further to obtaining a GBP335,000 unsecured convertible loan
note in late April 2022, post the reporting period end, the Group
is now funded to continue with its exploration plans, with the
intention of establishing a maiden JORC resource estimate for
Jones-Keystone, to increase our current JORC resource and develop a
thorough understanding of the total opportunity across all four
gold projects in our portfolio. The conversion price was set at a
level 30.6 per. cent. above the prevailing market share price,
thereby serving to demonstrate the lenders, compromising two
significant shareholders and three directors, belief in the
Company's future potential.
Operating in a stable jurisdiction, the US, with transparent
permitting, rules and regulations, reliable infrastructure, wide
choice of contractors and in a region with recent and historic
records of substantial million ounce plus producing gold mines we
have been able to focus all our attention on finding gold. Having
made a good start with our exploration work, despite the challenges
posed by COVID-19, we remain focused on implementing our remaining
work programmes, and further scoping out the potential size of our
gold assets. We look forward to an exciting period of discovery
ahead.
I would like to take this opportunity to thank our entire team
for their commitment to delivering results in line with our
exploration plan. Together with our highly experienced local joint
venture partner in the Carolinas, Uwharrie Resources Inc., we have
been able to undertake a high impact exploration campaign, spending
over US$1.3 million on exploration during 2021 and generating
significant value in the process.
Global uncertainty appears likely to continue to support a
robust gold price but our focus is on delivering our exploration
programmes and building long-term shareholder value regardless of
wider economic and financial conditions. Finally, on behalf of the
Board, I wish to express thanks for the support received from our
various stakeholders, all of whom share our vision for the Carolina
Super Terrane region of the US.
Edward Nealon
Non-Executive Chairman
8 June 2022
Chief Executive's Operational and Financial Review
1. Overview
2021 has been an extremely productive and encouraging period for
the Company, following a transformational 2020 during which the
Company completed its acquisition of majority interests in four
gold exploration projects in North and South Carolina in the United
States (the "Projects") and was readmitted to trading on AIM on 25
November 2020. The reporting period has seen the Company build on
such transformation, with both exciting and substantial exploration
success achieved during the year on our gold projects in the
Carolinas.
During 2021, Lexington Gold conducted the following exploration
activities on its portfolio projects:
Helicopter borne VTEM survey
A 207.3 line-kilometre survey was conducted by Ontario based
Geotech Airborne Geophysical Surveys ("Geotech") utilising their
helicopter-borne geophysical system which collects both VTEM and
Horizontal Magnetic Gradiometer Survey data. The aim of the VTEM
survey was to identify any conductors located within and
surrounding the Jennings-Pioneer project area that could be
associated with volcanic massive sulphide ("VMS") style
mineralisation.
The interpretation and modelling of the VTEM geophysical survey
data obtained over the Jennings-Pioneer project was also completed.
The survey successfully identified two potential anomalies at
Jennings-Pioneer that will be further investigated through soil
sampling, trenching and potential drilling in 2022.
Fixed-wing geophysics survey
In April 2021 Questor Surveys Ltd completed a 937 line-kilometre
magnetic, radiometric and very-low-frequency ("VLF") fixed-wing
airborne geophysical survey over the JKL, Carolina Belle and Argo
projects. The aim of the survey was to further define and delineate
the known areas of mineralisation over the three projects as well
as identifying new targets for geological studies and potential
drilling.
Core Geophysics, based in Perth, Australia, subsequently
conducted the modelling and interpretation of the geophysical data.
The results, combined with the results of a rock and soil sampling
programme in conjunction with the Company's existing database, were
used to design a maiden drill programme for Caroline Belle and a
Phase 2 drilling campaign for JKL.
Phase 1 Drilling Campaign on Loflin (part of the JKL
project)
The Phase 1 drilling campaign comprised six diamond drill holes
for a total of 562m at the JKL project. The campaign sought to
confirm and expand on the historical third-party drilling performed
at Loflin as well as assisting in defining the 3-dimensional shape,
continuity and orientation of the mineralisation. A primary goal
was also to enable the estimation of a maiden JORC resource
estimate for the JKL project.
On 26 May 2021 and 15 June 2021, we announced two batches of
assay results from this drilling campaign. The results indicated
the continuation of broad zones of shallow gold mineralisation and
also demonstrated good correlation to the historical drilling. All
six holes in the Phase 1 drilling campaign encountered intervals of
gold mineralisation of over 1g/t Au above 100m depth.
Highlighted intersections include:
-- 35.7m @ 1.15 g/t Au from surface to 35.7m including:
o 18.9m @ 1.57 g/t Au from surface to 18.9m
-- 32m @ 0.97 g/t Au from 53.9m to 85.9m including:
o 6.1m @ 3.36 g/t Au from 79.9m to 86m
o 1.5m @ 9.5 g/t Au from 79.9m to 81.4m
-- 12.2m @ 1.39 g/t Au from 23.5m to 35.7m including:
o 4.1m @ 2.57 g/t Au from 23.5m to 27.6m
-- 35m @ 0.79 g/t Au from 9.8m to 44.8m including:
o 6m @ 2.26 g/t Au from 9.8m to 15.8m; and
o 4.6m @ 1.43 g/t Au from 29.5m to 34.1m
This Phase 1 drilling campaign added significantly to our
understanding of JKL's mineralisation and confirmed the presence of
broad zones of particularly shallow gold mineralisation as well as
enabling the establishment of a maiden JORC resource estimate for
the JKL project as discussed further below.
Maiden JORC Resource Estimate for Loflin (part of the JKL
project)
The Phase 1 drilling campaign enabled the estimation of a maiden
independent JORC Resource for Loflin. On 22 September 2021, the
Company announced a major step forward for the JKL project by way
of a Maiden JORC (2012) Mineral Resource Estimate completed by
Pivot Mining Consultants Pty Ltd ("Pivot") for the Loflin side of
the JKL project.
Pivot established a maiden JORC resource of approximately 2
million tonnes at 1 g/t gold for 65,000 oz of contained gold. Their
report further highlighted the following:
-- Potential for the mineralisation at Loflin to remain open to
the north-east and south-west, along the plunge of the syncline
with the resource expected to grow via additional drilling
-- A 3D geological model suggests that the gold mineralisation
is associated with an isoclinal fold structure
-- Potential for extensions, significant upgrading of the maiden
resource classification and additional discoveries at JKL through
additional drilling campaigns.
Securing of additional Mineral Rights
During the reporting period the Company expanded its mineral
exploration rights at the JKL project via the execution of three
additional Lease with Option to Purchase agreements with certain
landowners for an additional 129 acres of mineral exploration
rights and a further 22 acres of surface rights. Accordingly, the
total mineral exploration rights at Loflin increased from 50.66
acres to 179.66 acres, taking the Group's total project acreage to
approximately 1,675 acres. In December 2021 the Company also
extended a pre-existing 4.05 acre mining lease with an option to
purchase agreement on the south-western ("Loflin") side of the JKL
project for an additional six-year period to 17 December 2027.
Soil, surface and rock chip sampling campaign at Carolina
Belle
Soil sampling was conducted on a 50m x 100m grid, covering the
entire 391.98 acre Carolina Belle project area. A total of 325 soil
samples were submitted to American Assay Laboratories in Nevada,
for processing and fire assay, including sample duplicates, blanks
and standards. In addition to the soil sampling, 37 surface rock
chip and grab samples were submitted to SGS laboratories in
Vancouver, Canada for fire assay. The surface exploration programme
is the first known systematic surface sampling programme to be
conducted at the Carolina Belle project and successfully evaluated,
delineated and extended the known prospects within the project
area. The results from the soil and rock chip sampling programmes
were incorporated into the project database and assisted with the
planning of a drill programme for Carolina Belle.
Furthermore, the surface exploration programme identified a new
gold anomaly not associated with the known gold mineralisation in
the project area. Rock chip and grab samples from the newly
identified mineralised zone returned 10 samples with gold grades
over 1g/t including 17g/t; 5.1g/t; 3.5g/t, 3.2g/t; 2.7g/t; and
2.2g/t. Soil sampling over the newly identified mineralised area
suggests an initial surface gold anomaly footprint of approximately
350m by 250m. The newly identified mineralised area was named
Martha Washington South.
5,000m Reverse Circulation ("RC") drill programme at the JKL and
Carolina Belle projects
On 19 October 2021, drilling commenced at Carolina Belle as part
of a 5,000m RC drilling campaign to be conducted on the Carolina
Belle and JKL projects (both the Loflin and Jones-Keystone
deposits). The primary objectives of the 5,000m drilling campaign
included:
-- First reconnaissance drilling of the Carolina Belle project
-- Investigation of the potential extensions of mineralisation
at Loflin, with the aim of further expanding the maiden resource
estimate as detailed above.
-- Drilling of the Loflin South geophysical anomaly
-- Drilling on the Jones-Keystone side of the JKL project with the aim of enabling the potential establishment of a maiden resource estimate for this area of the project.
Drilling at Carolina Belle was completed in November 2021 and
then commenced at the JKL project. A total of 32 drill holes for
2,630m were drilled at Carolina Belle.
In general terms, the exploration activities being conducted by
Lexington Gold are similar in nature to those conducted by TSX
listed junior, Romarco Minerals Inc which conducted modern
exploration activities on its Haile property in South Carolina,
USA, which led to the establishment of a formal NI43-101 compliant
resource estimate of 4.5M oz @ 1.8 g/t and subsequent acquisition
of Romarco by OceanaGold (ASX) for approximately C$856m in
2015.
The COVID-19 pandemic continued throughout 2021 and measures
taken by various governments to contain the virus have affected
global economic activity throughout the year and beyond the
year-end. The pandemic impacted our business with regards to delays
in delivery times, especially with regards to assay results as well
as the availability of parts and contractors and resulted in
various operational delays in respect of to the drilling campaigns
conducted during 2021.
2. Financial Performance
Net loss for the year was US$1.0 million from continuing
operations against the prior year loss of US$0.7 million.
Total assets were US$4.8 million (2020: US$5.5 million) at the
year end.
Net cash position of US$0.95 million (2020: US$2.9 million) as
at the year end.
Total liabilities of US$0.1 million (2020: US$0.09 million) as
at the year end.
3. Dividend
The directors have not declared a dividend (2020: Nil).
4. Corporate Activities
Fundraisings
There were no fundraising activities during the 2021 reporting
period.
5. Post Period End
Post the reporting period end, the Company began receiving the
assay results in respect of its Phase 2 5,000m RC Drilling campaign
conducted over the Carolina Belle and JKL projects.
The Carolina Belle project is sub-divided into three targets or
gold anomalies, namely Uwarra and Iola; MacMaster and the recently
discovered Martha Washington South. Highlighted results for all
three targets are shown below.
Selected results from the Uwarra and Iola target:
-- 4m @ 2.1 g/t Au from 64m to 68m
-- 11m @ 1.01 g/t Au from 68m to 79m including:
o 4m @ 1.62 g/t Au from 72m to 76m
-- 4m @ 1.53 g/t Au from 48m to 52m
-- 4m @ 0.71 g/t from 44m to 48m
Selected results from the McMaster target:
-- 3m @ 3.68 g/t Au from 64m to 67m
-- 4m @ 1 g/t Au from 28m to 32m
-- 4m @1.8 g/t Au from 28m to 32m
-- 4m @ 1.06 g/t Au from 20m to 24m
Selected results from the Martha Washington South target:
-- 8m @ 1.07 g/t Au from surface to 8m
-- 4m @ 1.1 g/t Au from 8m to 12m
-- 4m @ 1.15 g/t Au from 52m to 56m
-- 4m @ 1.19 g/t Au from 36m to 40m
The JKL project is subdivided into two main targets or gold
anomalies namely, Loflin (which includes Loflin South) and
Jones-Keystone. At the time of writing this review, the assay
results for Loflin have been returned, but the Jones-Keystone
results remain pending. Highlighted assay results for Loflin from
the recent drilling campaign include:
-- 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
-- 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
-- 8m @ 1.32 g/t Au from 80m to 88m including:
o 4m @ 1.45 g/t Au from 80m to 84m
-- 12m @ 1.26 g/t Au from 16m to 28m including:
o 4m @ 1.78 g/t Au from 20m to 24m
-- 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
-- 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
6. Outlook
In line with the Company's stated strategy, the Directors
believe that its gold projects in North and South Carolina in the
United States represent an excellent opportunity to create
long-term shareholder value through the identi cation and
exploration of gold deposits within a well-mineralised but under
explored Carolina Super Terrane.
Bernard Olivier
Chief Executive Officer
8 June 2022
Financial Statements
Lexington Gold Ltd
Consolidated statement of profit or loss and other comprehensive
income
for the Year Ended 31 December 2021
(Audited)
2021 2020
US$'000 US$'000
CONTINUING OPERATIONS
Other income - -
Operating expenses (1,022) (712)
Operating loss (1,022) (712)
Loss before taxation (1,022) (712)
Income tax charge - -
--------- --------
Loss for the year (1,022) (712)
========= ========
Attributable to:
--------- --------
Equity owners of the parent (1,021) (712)
Non-controlling interest (1) -
--------- --------
Other comprehensive income
Loss for the year (1,022) (712)
Items that may be reclassified to profit
or loss:
Foreign exchange loss on translation
of discontinued operations 1 (3)
--------- --------
Total comprehensive loss for the year (1,021) (715)
========= ========
Attributable to:
Equity owners of the parent (1,020) (715)
Non-controlling interest (1) -
--------- --------
Total comprehensive loss for the year (1,021) (715)
========= ========
Loss per share attributable to the owners
of the parent during the year
Basic and diluted loss per share from
continuing operations (US cents/share) (0.39) (0.58)
Lexington Gold Ltd
Consolidated statement of financial position
as at 31 December 2021
(Audited)
2021 2020
US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 3,764 2,499
--------- ---------
Total non-current assets 3,764 2,499
--------- ---------
Current assets
Trade and other receivables 45 56
Cash and cash equivalents 953 2,895
--------- ---------
Total current assets 998 2,951
Total assets 4,762 5,450
========= =========
Equity
Share capital 787 787
Share premium 59,096 59,096
Share option reserve 555 234
Foreign currency translation reserve (2) (3)
Accumulated loss (56,750) (55,729)
--------- ---------
Total equity attributable to equity
owners of the parent 3,686 4,385
Non-controlling interest 970 971
--------- ---------
Total equity 4,656 5,356
--------- ---------
Current liabilities
Trade and other payables 106 94
Total current liabilities 106 94
--------- ---------
Total equity and liabilities 4,762 5,450
========= =========
Lexington Gold Ltd
Consolidated statement of cash flows
for the Year Ended 31 December 2021
(Audited)
2021 2020
US$'000 US$'000
Cash flows from operating activities
Cash utilised by operations (678) (266)
Net cash flows utilised in operating
activities (678) (266)
--------- --------
Cash flows from investing activities
Payments for exploration (1,265) (518)
Acquisition of subsidiary, net of cash - (165)
Net cash flows utilised by investing
activities (1,265) (683)
--------- --------
Cash flows from financing activities
Proceeds from issue of shares - 3,741
Loan from director - 100
Net cash flows generated from financing
activities - 3,841
--------- --------
Net (decrease)/increase in cash and cash
equivalents (1,943) 2,892
========= ========
Movement in cash and cash equivalents
Net foreign currency exchange losses 1 (9)
At the beginning of the year 2,895 12
Net (decrease)/increase in cash and cash
equivalents (1,943) 2,892
--------- --------
Cash and cash equivalents at the end
of the year 953 2,895
========= ========
**ENDS**
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