TIDMSOLG
RNS Number : 3668L
SolGold PLC
13 May 2022
13 May 2022
SolGold plc
("SolGold" or the "Company")
Quarterly Financial Report and MD&A
The Board of Directors of SolGold (LSE & TSX: SOLG) is
pleased to advise all shareholders and interested investors that
the Company's website contains access to a copy of the Quarterly
Financials and Management Discussion and Analysis ("MD&A")
required to be filed on SEDAR in Canada, in connection with the
Company's quarterly financial period ended 31 March 2022. The
Financial Reports are available t he Investor Centre page of the
Company's website: www.solgold.com.au .
By order of the Board
Dennis Wilkins
Company Secretary
Certain information contained in this announcement would have
been deemed inside information.
CONTACTS
Dennis Wilkins
SolGold Plc (Company Secretary) Tel: +61 (0) 417 945 049
dwilkins@solgold.com.au
Fawzi Hanano / Lia Abady
SolGold Plc (Investors / Communication) Tel: +44 (0) 20 3823
fhanano@solgold.com.au / labady@solgold.com.au 2130
Tavistock (Media)
Jos Simson/Gareth Tredway Tel: +44 (0) 20 7920 3150
Follow us on twitter @SolGold_plc
MANAGEMENT DISCUSSION AND ANALYSIS
2022 FINANCIAL YEAR
THIRD QUARTER REPORT
For the three months and nine months ended 31 March 2022
This management discussion and analysis ("MD&A") is
management's assessment of the results and financial condition of
SolGold plc ("SolGold" or the "Company") and its controlled
subsidiaries (the "Group") and should be read in conjunction with
the Group's unaudited interim condensed consolidated financial
statements for the period ended 31 March 2022 and 2021 and the
notes thereto. The financial statements have been prepared in
accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board
("IASB").
Management is responsible for the preparation of the financial
statements and this MD&A. Unless otherwise stated, all amounts
discussed in this MD&A are denominated in United States
dollars.
Mr Jason Ward (CP, B.Sc. Geol.), the Head of Exploration of the
Group is a "Qualified Person" as defined in NI 43-101 and has
reviewed and approved the technical information in this MD&A
with respect to all the Group's properties.
The information included in this MD&A is as of 13 May 2022
and all information is current as of such date. Readers are
encouraged to read the Company's Regulatory News Service ("RNS")
announcements filed on the London Stock Exchange and on the System
for Electronic Document Analysis and Retrieval ("SEDAR") under the
Company's issuer profile.
Description of Business
SolGold is a mineral exploration and development company
headquartered in Brisbane, Australia. The Company is a UK
incorporated public limited company, dual LSE and TSX-listed (SOLG
on both exchanges) and has a leading exploration and project team
focussed on copper-gold exploration and mine development with
assets in Ecuador, Solomon Islands and Australia. SolGold is a
large and active concession holder in Ecuador and is aggressively
exploring the length and breadth of this highly prospective and
gold-rich section of the Andean Copper Belt. SolGold's primary
objective is to discover, define and develop world-class
copper-gold deposits. Cascabel, SolGold's 85% owned "World Class"
(Refer to www.solgold.com.au/cautionary-notice/ ) flagship
copper-gold porphyry project (the "Project"), is located in
northern Ecuador.
SolGold is a registered shareholder with an unencumbered legal
and beneficial 85% interest in Exploraciones Novomining S.A.
("ENSA") and approximately 5.60% (excluding share options and
warrants) of TSX-V-listed Cornerstone Capital Resources Inc.
("Cornerstone"), which holds the remaining 15% of ENSA, the
Ecuadorean registered company which holds 100% of the Cascabel
concession, which includes the Alpala deposit.
Results of Operations
Leadership and key roles
The Board of Directors of SolGold plc has recently established a
Strategy Committee with the primary purpose to assist the Board in
fulfilling its overall responsibilities relating to the strategic
direction and development of the Company to deliver long-term
stakeholder value. The Strategy Committee will be chaired by the
Chair of the Company, Liam Twigger and consists of Nick Mather,
James Clare, Kevin O'Kane and CEO, Darryl Cuzzubbo. The main
responsibilities are to make recommendations to the board about
proposed M&A transactions and to assess the corporate and
strategic performance of the Company in its broadest sense and form
a wide view on the adequacy of progress made in achieving strategic
objectives and outcomes, and of the systems to measure, monitor and
deliver on them.
Tania Cashman was appointed Chief People Officer effective 10th
January 2022. Ms. Cashman brings over 20 years senior leadership
experience with global organisations including Orica, BHP, Shell
and Pasminco. She began her career in Human Resources and since
then has worked across many geographies and led several complex,
large scale transformation programmes, supporting the business
through significant change.
The Company announced on 11 May the appointment of Ayten Saridas
to the position of Group Chief Financial Officer ("CFO") of
SolGold. Ms. Saridas, who will assume her new role on 27 June,
brings over 30 years of international corporate finance experience
with a proven track record in delivering results and creating
value. Ayten is a high-impact executive who brings a compelling
blend of strategic and capital allocation discipline, well-honed
finance skills, and transformational leadership abilities.
In the quarter ended 31 March 2022 the Company hired three new
employees into the Finance function including a new Finance
Director and a Senior Accountant in Ecuador. A new HR Director was
also hired to lead the HR team in Ecuador.
A new Head of Ecuador is currently being sourced, with a current
short list of four candidates. The Head of Ecuador will report to
the MD & CEO, Darryl Cuzzubbo and is responsible for managing
SolGold operations day to day in Ecuador. As the most senior point
of contact for executive leadership within Ecuador, this is a key
role that will develop and grow significantly as the Cascabel
project transitions from PFS to DFS to execution.
Exploration Highlights
The Company continues to pursue its strategy as an integrated
explorer and developer, aiming to create maximum value for all
shareholders. The Company is applying its exploration blueprint of
systematically evaluating its exploration assets across Ecuador,
which are held by four wholly owned subsidiaries that are exploring
throughout the country. SolGold has identified several high
priority copper and gold resource targets, some of which the
Company believes have the potential to reach resource definition
and feasibility levels in close succession.
Early-stage results from the Company's regional exploration
programmes are testament to this approach following the discovery
of significant copper-gold mineralisation at surface at the
Cacharposa porphyry copper-gold target at Porvenir as well as
discovery of significant geochemical and geophysical hallmarks of
large porphyry systems identified at several project areas,
including the Rio Amarillo and Cisne Loja projects.
SolGold's regional exploration programme in Ecuador coordinates
multiple highly skilled field teams systematically exploring its
concessions throughout the country. The Company's regional
concessions are located along the prolific Andean Copper Belt which
is renowned as the production base for a significant portion of the
world's copper and gold resources. The regional exploration
programme currently focusses on a number of high priority projects
identified for targeted exploration, of which several are
considered core targets that are drill ready.
SolGold has regulatory licencing approvals for scout drilling at
five projects including Porvenir and Rio Amarillo. This has been
made possible with the government recognising and approving the
need, in the Initial Exploration phase, for initial drilling to
identify any potential deposit. During the period the Company
obtained authorisation to collect water for the Rio Amarillo
project.
During the period, SolGold has focused on completing the
critical study work and data collection for the Preliminary
Feasibility Study ("PFS") at its Cascabel project, which is based
on the Alpala deposit containing 9.9Mt Cu, 21.7Moz Au and 92.2Moz
Ag. The results of the PFS were announced on 20 April 2022 (see
summary results on p.8). The Company also concentrated on
continuing to uncover the value in the Company's vast regional
exploration portfolio throughout Ecuador.
Figure 1 - Overview of Priority Projects and drill ready Core
Targets from SolGold's Regional Exploration portfolio in
Ecuador
Subsidiary Priority Project Priority Targets Core Targets
============================== ================= ========================== ===================================
Carnegie Ridge Resources S.A. Blanca* Cielito, Cerro-Quiroz Further work required
================= ========================== ===================================
Carnegie Ridge Resources S.A. Chical Esperanza, Espinosa Further work required
================= ========================== ===================================
Carnegie Ridge Resources S.A. Rio Amarillo* Varela, Palomar, Chalanes Varela
================= ========================== ===================================
Valle Rico Resources S.A. Salinas Target #1 Further work required
================= ========================== ===================================
Cruz Del Sol S.A. Cisne Victoria Victoria Further work required
================= ========================== ===================================
Cruz Del Sol S.A. Coangos Further work required Further work required
================= ========================== ===================================
Cruz Del Sol S.A. Helipuerto Tinkimints Further work required
================= ========================== ===================================
Cruz Del Sol S.A. La Hueca* Target #6, Target #1-5 Further work required
================= ========================== ===================================
Green Rock Resources S.A. Chillanes Central Chillanes Further work required
================= ========================== ===================================
Green Rock Resources S.A. Cisne Loja Celen Celen
================= ========================== ===================================
Green Rock Resources S.A. Porvenir* Cacharposa, Target #2-16 Cacharposa, Mula Muerte, Viño
================= ========================== ===================================
Green Rock Resources S.A. Sharug* Santa Martha Further work required
================= ========================== ===================================
Green Rock Resources S.A. Timbara Tunantza Further work required
================= ========================== ===================================
* Received regulatory licencing approvals for scout drilling
Figure 2 - SolGold actual drilling across Ecuador (metres
drilled)
PROJECT PROSPECT FY21 Q3 FY21 Q4 FY21 Total FY22 Q1 FY22 Q2 FY22 Q3 Grand Total
============== ======================== ======== ======== =========== ======== ======== ======== ============
Cascabel Alpala 6,599 5,679 28,880 604 - - 250,221
======================== ======== ======== =========== ======== ======== ======== ============
Tandayama-Ameríca 4,708 5,945 12,640 9,127 8,180 1,057 31,003
======================================= ======== ======== =========== ======== ======== ======== ============
Aguinaga 847 865 1,712 - - - 8,971
======================================= ======== ======== =========== ======== ======== ======== ============
Blanca Cielito - - - - - - 800
======================== ======== ======== =========== ======== ======== ======== ============
Cerro Quiroz - 533 1,774 601 - - 2,375
======================================= ======== ======== =========== ======== ======== ======== ============
La Hueca Target #6 - - 1,558 - - - 1,558
======================== ======== ======== =========== ======== ======== ======== ============
Porvenir Cacharposa 6,690 3,735 15,224 4,073 2,867 263 22,427
======================== ======== ======== =========== ======== ======== ======== ============
Mula Muerte - - - - 1,974 144 2,118
======================================= ======== ======== =========== ======== ======== ======== ============
Rio Amarillo Varela - - - 1,062 2,164 517 3,743
======================== ======== ======== =========== ======== ======== ======== ============
Sharug Santa Martha - - - 1,463 1,010 - 2,473
======================== ======== ======== =========== ======== ======== ======== ============
Quillosisa - - - - 421 - 421
======================================= ======== ======== =========== ======== ======== ======== ============
Grand Total 18,844 16,758 61,788 16,930 16,615 1,981 326,109
======== ======== =========== ======== ======== ======== ============
Ecuadorian business INTERNAL investigation
In early 2021 SolGold's Board of Directors commissioned a
special audit by KPMG LLP to help identify where the control
environment needed enhancing as part of the Board's focus on
strengthening internal controls and good corporate governance. As a
consequence, the Company started to strengthen its internal
financial capabilities and internal control framework. Immediate
needs identified were the recruitment of a group financial
controller in Brisbane and a group General Counsel in London, who
were appointed in February and March 2021 respectively. A group
Internal Audit function was also established, reporting to the
Audit and Risk Committee ("ARC"). The ARC agreed on an annual audit
plan focusing on enterprise risks. Increased scrutiny and analysis
by the Group finance team throughout 2021 led to cost reductions,
but also the discovery of the misappropriation of funds in Ecuador
in late 2021.
In December 2021, in immediate response to the discovery, the
Company instructed EY Ecuador to commence a forensic investigation
into the alleged misappropriation of funds. SolGold's Internal
Audit function was engaged to provide independent oversight of the
investigation, reporting directly to both the Chair of the Audit
& Risk Committee and the group CFO.
The forensic investigation revealed that during the years 2017
to 2021 US$4.6 million was misappropriated. The investigation
brought to light the material misstatement of exploration assets as
a result of false expenses being capitalised. The investigation
brought to light additional controls and failures in the risk
management framework, which need further investigation. Part of the
investigation is to identify if there was a material weakness in
the company's Internal Controls over Financial Reporting ("ICFR")
relating to design, which has not yet been determined.
This misappropriation resulted in the overstatement of our
exploration assets by US$4.6 million, with the associated false
expenses having been capitalised in-line with SolGold's accounting
policy. SolGold concluded that it was appropriate to write-down the
value of these assets accordingly and restate our accounts. The
profit and loss impact for the 9-month period 1(st) July 2021 to
31(st) March 2022 amounted to US$228k, reflecting the fact that
most losses were incurred in prior years and that increased
diligence by the group finance function had had an impact. Though
the misstatements are material to the quantum of exploration
assets, the Company does not consider the misstatements to be
material to the financial statements as a whole, either on an
individual or cumulative basis. The overstatement of the
exploration assets is cumulative and is made up of smaller annual
misstatements that were not material in their respective years.
Our corporate culture is designed to encourage transparency and
professionalism, protect our shareholders' funds and inspire
confidence in our workforce. SolGold recognises there is more to do
and the Company will continue to take steps to improve its control,
governance and risk management environment and processes. These
steps include increasing the resources and improving the
capabilities of senior management and the Finance function.
This behaviour is an extremely serious matter and it has no
place in SolGold. SolGold management is enhancing its risk,
governance and controls environment and is acting on both the
recommendations of KPMG (special audit) and EY (forensic audit) and
our own observations.
SolGold's immediate response includes:
-- Commissioning of a forensic audit by Ernst & Young
Ecuador EY Cía. Ltda. ("EY Ecuador")
-- The investigation was supervised by the SolGold Internal
Audit function and supported by our General Counsel, both based in
the UK
-- Hiring of three new employees into the Finance function since
1(st) January 2022, including a Senior Accountant and new Finance
Director in Ecuador, the latter reporting directly to the group
CFO
SolGold's ongoing actions include:
-- Restructuring the Finance organisation in Quito and hiring
several roles locally that will help us strengthen our processes
and improve our control culture
-- Recruitment of an in-house lawyer and a procurement manager in Ecuador, which is on-going
-- Commissioning an independent Anti-Bribery and Anti-Corruption
assessment in Ecuador, to be followed up with a tailored training
programme
-- Improvement and tightening of payment controls, enhancing
controls and improving procure-to-pay processes
-- Internal Audit analysing further specific processes in related to the Ecuadorian entity
Update Statement on 2021 AGM Voting Outcome
The Board of Directors of SolGold recognises that at the 2021
Annual General Meeting ("AGM") convened on 15 December 2021, a
meaningful proportion of shareholders did not support certain
resolutions.
In accordance with Provision 4 of the Financial Reporting
Council's ("FRC") 2018 UK Corporate Governance Code (the "Code"),
the Board is providing an update in response to the six (6) of the
thirteen (13) resolutions put to the 2021 AGM that received less
than 80% of votes in favour. These resolutions related to the
re-election of Messrs Ward, Moller and Marshall, the ability of the
Company to raise fresh capital via the allotment of shares, and the
disapplication and further disapplication of pre-emptive
rights.
The Board, via Chair Mr Twigger and MD & CEO Mr Cuzzubbo
have consulted with a range of the Company's corporate and
institutional shareholders over the past months in relation to the
2021 AGM to understand and discuss their concerns with respect to
these resolutions.
Director re-election
The total votes for resolutions 5, 6 and 7, to re-appoint Mr
Ward, Mr Moller and Mr Marshall were below 80% (at 56.46%, 36.81%
and 71.55%, respectively).
Feedback was received that the votes received against
resolutions 5 and 6 were influenced by an expectation by certain
shareholders of more independence at SolGold's Board of Directors.
In relation to resolution 6, votes received against were also
influenced by a recommended against vote by proxy advisors citing
potential overcommitment and related party transactions. As a
result of receiving less than 50% of votes in favour, Mr Moller
stepped down from the Board following the AGM on 15 December
2021.
SolGold's Board adheres to Principle 11 of the Code that at
least half the Board, excluding the Chair, should be Non-Executive
Directors whom the Board considers to be independent. The Board is
comprised of four independent Non-Executive Directors out of a
total of seven, excluding the independent Chair.
Votes received against resolution 7 were influenced by
shareholder frustration from delays to the publication of the
Cascabel pre-feasibility study. The Company has on 20 April
announced the results of the PFS that confirms the Cascabel
project's world class, Tier 1 potential to be a large, low-cost,
and long-life mining operation.
Allotment of shares
Resolution 10 to allot shares at the 2021 AGM received 77.98%
votes in favour. Feedback received indicates that the votes
received were influenced by certain shareholders objecting to part
(b) of the resolution that grants authority to allot shares
representing approximately two-thirds of the Company's existing
issued ordinary share capital. The Company has not generated
revenues from operations and in common with many exploration
companies the Company raises capital for its exploration and
appraisal activities in discrete tranches. As such, the ability of
the Group to continue as a going concern depends on its ability to
secure additional financing.
Disapplication of pre-emptive rights
Special resolutions 11 and 12 to disapply and to further
disapply pre-emption rights did not pass having received 57.05% and
56.90% votes in favour, respectively, below the 75% minimum
requirement for special resolutions. Feedback was received that the
votes were influenced by The Board not putting all Directors up for
re-election at the 2021 AGM as well as to protect shareholders'
pre-emption rights.
The SolGold Board is committed to complying with the Code from
mid-2022, including to Provision 18 that all Directors be subject
to annual re-election commencing from the Company's 2022 AGM. The
Company also intends to respect the principles of pre-emption as
far as practicable to protect shareholders' pre-emption rights.
The Board will continue to consult with its shareholders via
non-deal roadshows, conference attendances and other presentations.
Details of the Company's activities in this regard will be outlined
in the 2022 Annual Report.
government relations
A series of meetings took place in Ecuador with government
officials and SolGold CEO Darryl Cuzzubbo in January 2022,
including with President Lasso and a number of ministers. Key areas
of discussion included Ecuador's tax regime, investment incentives
and project permitting. The Government expressed its support and
interest to collaborate closely with SolGold to develop the
Cascabel project in an environmentally and socially responsible
way.
Industry representatives, including SolGold, held meetings with
President Lasso, six Ambassadors and Ministers in March 2022 to
discuss the opening of the Mining Cadastre, the development of a
law relating to prior consultation process (Consulta Previa) for
indigenous areas and improvements in permitting times. These
discussions were received positively by the industry members
present and reinforced the commitment to organised mining by the
Government of Ecuador.
SolGold has initiated detailed discussions with the Ministry of
Environment and Water on the ESIA (Environmental and Social Impact
Assessment) studies to develop the Cascabel project. These
discussions will be carried out on a regular basis with the
intention of keeping the authorities fully informed and aligned on
project developments and related social and environmental
issues.
On 3 January 2022 ENSA received approval for the two-year
extension to the Economic Evaluation stage of the Cascabel license.
This period shall expire on 3 January 2024 by which time the
Company shall convert the current approval into the Exploitation
Agreement with the State.
Health and Safety
The Company achieved a Total Recordable Injury Frequency Rate
("TRIFR") of 2.68 in the three-month period ended 31 March 2022,
down from 14.92 in the three months ended 31 March 2021. TRIFR
refers to the frequency of recordable work-related injuries or
illness for each one million hours worked.
An increased programme of road inspections on access roads and
tracks was implemented in response to heavy rains during this
period to prevent prolonged road closures and travel delays. The
inspections targeted safety hazards, maintenance and safety signage
requirements to maintain safe access and allow timely repair and
maintenance to reduce the likelihood of safety incidents and road
closures.
COVID-19
In response to the increased risk of contagion due the Omicron
variant of COVID-19 in early 2022, and the high number
(approximately 40%) of positive tests recorded in our camps in
January, personnel were evacuated from SolGold controlled worksites
for a two-week period to avoid the spread of the virus.
A campaign delivering the third dose of COVID-19 vaccines
continues with 100% uptake achieved in the Cruz del Sol subsidiary
and strong response from other subsidiaries.
The latest resolution of the COE (Emergency Committee of
Ecuador) established in mid-March recommends that economic
activities be carried out at 100% capacity, however, the COE
requires that biosecurity measures such as social distancing, hand
washing and the use of a mask must continue to be a
requirement.
SolGold's medical team continues to enforce measures to maintain
healthy conditions at SolGold facilities including coordination of
testing, verification of results prior to entering camps,
surveillance and monitoring of any symptoms that occur in the camp
and implementation of immediate control actions to prevent the
spread of COVID-19.
Environment
In this reporting period further workshops on water management,
waste management and the conservation of flora and fauna were held
in the community of our stakeholders in the Cascabel and regional
projects. SolGold continues to fully comply with the environmental
requirements of the Government of Ecuador. SolGold has successfully
rehabilitated 619m(2) of disturbed lands in this period including
access tracks, areas of drilling platforms and geotechnical pits in
both the Cascabel and regional project areas. The following reports
were delivered in the first quarter of 2022 to the Ministry of the
Environment, Water and Ecological Transition ("MAATE"):
1. Annual Declaration of Hazardous Waste for 2021
2. Update of the Hazardous Waste Minimization Plan including results
3. Initial Exploration Semester Report for the period July-December 2021
4. Six-monthly report on compliance with the Environmental
Management Plan for the Advanced Exploration phase of the Cascabel
project
5. Semi-annual reports for projects Blanca Nieves, La Hueca,
Sharug 2, Río Amarillo I-II and Porvenir
6. Report on the flow of catchment points of the Blanca Nieves, Porvenir and Sharug 2 projects
7. Water measurement records for authorized water collection points for 2021
8. Forest Inventory of Porvenir 4, Chical 1 and Chical 2
9. Annual reports of the Timbara 1, Timbara 2, San Antonio,
Sharug projects. Río Amarillo III, Río Mira, Chical 1, Chical 2,
Coangos, Loyola, Sacapalca 1-2., Salampe Salinas and Agustín
1-2-3
10. Annual declaration of hazardous waste for the Blanca Nieves,
La Hueca and Porvenir projects
INPC of Cuenca
1. Annual report of the Archaeological Research Programme
Authorisations
The Complementary Environmental Impact Study for the Advanced
Exploration Phase of Metallic Minerals in the Cascabel project was
accepted by the Undersecretary of Environmental Quality of the
Ministry of the Environment, Water and Ecological Transition
(MAATE) on March 10, 2022. After submitting the fees and bank
guarantee to MAATE, SolGold expects to receive its Environmental
License. Other authorisations were received for projects throughout
SolGold's concessions portfolio in Ecuador allowing the Company to
progress with work in those areas.
Authorisations received in this period include:
-- Obtaining authorisation to collect water for the Rio Amarillo project
-- Approval of the Archaeological Research Programme of the Río
Amarillo I-II project by the INPC
-- Approval of the annual declaration of hazardous waste for the
Blanca Nieves project by the MAATE
-- Approval of the Terms of Reference for the Partial Waiver
Audit of the Río Amarillo I and Río Amarillo II concessions
-- Approval of the Terms of Reference for the Total Waiver Audit
of the Sharug, Cisne 1A, Cisne 1B and Loyola concessions
-- Issuance of the Water Availability Certificate granted by the
ARCA for the use of 6 water collection points of the Timbara
concession
Community
On March 7 and 8, cooperation agreements between SolGold and the
parishes of Lita and La Carolina were signed. These agreements
focus on the promotion of health, education, community development
and road infrastructure initiatives, and the promotion of social,
cultural and sports activities. ENSA, in partnership with the
parishes of Lita and La Carolina contributed to the construction of
health centres in these parishes.
The Comprehensive Solid Waste Management Project - GIRS: a
project co-financed by Franco Nevada and SolGold in partnership
with the regional government of Ibarra and effected parishes
completed its feasibility study on 31 March. The initiative aims to
improve solid waste management in the parishes of Lita and La
Carolina.
On March 7, 2022, the Specific Cooperation Agreement between the
parish of Lita and ENSA was signed with the objective of improving
the living conditions of 100 older adults and people with
disabilities in the community of Lita; the total investment is
$70,459.00, of which $32,259.00 will be contributed by ENSA.
At the time of this report SolGold is conducting a study how to
increase the rate of university attendance from the community of
Santa Cecilia. This initiative is an agreement between ENSA and the
Universidad Técnica del Norte.
An agreement between the regional parishes of La Carolina, and
the association "Mujeres Emprendedoras Por Un Futuro Mejor" (Women
entrepreneurs for a better future) of the Collapí community was
signed with the purpose of promoting commercial and tourism
activities.
HUMAN RESOURCES
SolGold remains committed to establishing and implementing
sustainable practices and building the foundations for a positive
legacy for all stakeholders. Providing equal opportunities and
having a largely local workforce makes SolGold a strong contributor
to the local Ecuadorian economy.
As at 31 March 2022, SolGold group employed 792 employees with
99% Ecuadorian, 16% female, and 81% living in neighbouring
communities. Additionally, SolGold employs 4% of individuals
registered as disabled. 57 Ecuadorian employees have a science
degree in geology, giving SolGold a significant advantage exploring
the highly prospective and gold-rich section of the Andean Copper
Belt. SolGold employs 9 people in Australia, 5 in the United
Kingdom, and 1 in Switzerland.
SUBSEQUENT EVENTS
Cascabel Pre-Feasibility Study
The PFS confirms the Cascabel project's world class, Tier 1
potential to be a large, low-cost, and long-life mining operation
that is based on achievable, proven, and tested mining and
processing assumptions. Once constructed, Cascabel is expected to
be a top 20 South American copper & gold mine benefiting from a
high-grade core, advantageous infrastructure and an increasingly
investor friendly government. The mine is expected to produce a
clean copper-gold-silver concentrate, to be sold to Asian and
European smelters as part of a project construction financing
package.
Key highlights include:
-- Estimated US$5.2bn pre-tax Net Present Value ("NPV") and
25.3% Internal Rate of Return ("IRR")
-- Estimated US$2.9bn after-tax NPV, 19.3% IRR and 4.7-year
payback period from start of processing
-- After-tax NPV would be US$4.1bn (US$7.9bn pre-tax) and IRR
23.4% (30.5% pre-tax) at current spot commodity prices
-- Estimated average production of 132ktpa of copper, 358kozpa
of gold and 1Mozpa of silver - 212ktpa copper equivalent ("CuEq") -
with peak copper production of 210ktpa (391ktpa CuEq)
-- Initial project Life-of-Mine ("LOM") All-In-Sustaining Cost
("AISC") of US$0.06/lb of copper, placing Cascabel well within the
first decile of the copper industry cost curve
-- On achieving nameplate capacity, average of approximately
190ktpa of copper, 680kozpa of gold and 1.3Mozpa of silver
(>330ktpa CuEq) over initial 5 years at an average negative AISC
of US$(1.38)/lb
-- Estimated pre-production capital expenditure of US$2.7bn for
the initial cave development, first process plant module and
infrastructure
-- Initial Mineral Reserve of 558Mt containing 3.3Mt Cu @ 0.58%,
9.4Moz Au @ 0.52g/t and 30Moz Ag @ 1.65g/t over an initial 26-year
mine life
-- Potential mine life upside in excess of 50 years following initial LOM
-- Annual after-tax free cash flow ("FCF") to average US$740m, peaking at over US$1.6bn
-- Average annual EBITDA of nearly US$1.2bn, peaking at over US$2.4bn
-- Additional optimisations being progressed for a PFS Addendum
planned for completion in H2 CY22
-- Cascabel project Definitive Feasibility Study ("DFS") planned for completion in H2 CY23
Operating Results
The quarter ended 31 March 2022 compared with the quarter ended
31 March 2021
The Group incurred a loss after tax of US$9,042,382 and loss per
share of 0.4 cents per share for the quarter ended 31 March 2022
compared to a loss after tax of US$5,619,254 and loss per share of
0.3 cents per share for the quarter ended 31 March 2021.
Administrative expenses incurred during the quarter ended 31 March
2022 were US$4,043,503 compared to US$3,538,102 for the quarter
ended 31 March 2021. The movement in administrative expenses over
the prior year was due to a number of factors, the most notable of
which are:
Employment expenses increased by US$439,081 to US$1,096,778 for
the quarter ended 31 March 2022 compared to US$657,697 for the
quarter ended 31 March 2021. This increase was due to additional
payments to the new Company Secretary and additional key management
personnel.
Insurance payments increased by US$297,470 to US$923,534 for the
quarter ended 31 March 2022 compared to US$626,064 for the quarter
ended 31 March 2021. This increase is due to the increase in the
Company's political risk insurance premium.
Unrealised foreign exchange losses (gains) decreased by
US$109,285 to US$92,414 unrealised foreign exchange loss for the
quarter ended 31 March 2022 compared to an unrealised foreign
exchange gain of US$16,871 for the quarter ended 31 March 2021.
This was as a result of the United States dollar slightly
strengthening against both the AUD and GBP, currencies in which the
Company holds a portion of its treasury.
Exploration costs written-off were US$399,286 for the quarter
ended 31 March 2022 compared to US$230,110 (US$228,318 related to
misappropriation) for the quarter ended 31 March 2021. Exploration
costs written off during the quarter ended 31 March 2022 represents
the costs capitalised to date on 10 of the 72 concessions held
within the Company's four 100% owned subsidiaries in Ecuador that
the board decided to relinquish on 7 September 2021.
Other income and expenses for quarter ended 31 March 2022
Derivative liabilities in the quarter ended 31 March 2022
measured at fair value resulted in a loss of US$1,212,750 compared
to a gain of US$1,828,750 for the quarter ended 31 March 2021. The
movement represents the fair value remeasurement of the options
granted to BHP as part of the December 2019 placement, measured at
31 March 2022. Since the options issued to BHP were not granted in
exchange for goods or services and were exercisable in a currency
other than the functional currency, the options were treated as a
derivative financial liability measured at fair value on the date
of grant and are remeasured at each reporting period.
Finance costs for the quarter ended 31 March 2022 were
US$3,395,052 compared to US$3,042,240 for the quarter ended 31
March 2021. The sizeable finance costs predominantly relate to the
effective interest charge calculated on the NSR Financing
Agreement, of US$3,379,139, a non-cash item, which was US$3,020,050
for the quarter ended 31 March 2021. First payments under the NSR
Financing Agreement are due from either late 2028 or when
production is declared, whichever is earlier.
Finance income was US$236,252 for the quarter ended 31 March
2022 compared to US$115,104 for the quarter ended 31 March 2021.
The interest income comprises US$6,717 received from banking
institutions on short term deposits and US$229,535 from the
accretion of interest on the Company Funded Loan Plan.
Other income was US$41,740 for the quarter ended 31 March 2022
compared to US$50,299 for the quarter ended 31 March 2021. Other
income represents US$36,010 rent received from the subletting of
office space at 111 Eagle Street Brisbane and a gain on disposal of
PP&E of US$5,730.
All other expenses for the quarter ended 31 March 2022 remain
consistent to those for the quarter ended 31 March 2021.
The operating variances for the period were:
For the quarter ended 31 March 2022 2021 Variance
US$ US$ US$
restated
Expenses
Exploration costs written-off (399,286) (230,110) (169,176)
Administrative expenses (4,043,503) (3,538,102) (505,401)
Share based payments expense (454,336) (268,059) (186,277)
===================================== =========== =========== ===========
Operating loss (4,897,125) (4,036,271) (860,854)
Other income 41,740 50,299 (8,559)
Finance income 236,252 115,104 121,148
Finance costs (3,395,052) (3,042,240) (352,812)
Movement in fair value of derivative
liability (1,212,750) 1,828,750 (3,041,500)
===================================== =========== =========== ===========
Loss before tax (9,226,935) (5,084,358) (4,142,577)
Tax (expense) / benefit 184,553 (534,896) 719,449
===================================== =========== =========== ===========
Loss for the period (9,042,382) (5,619,254) (3,423,128)
===================================== =========== =========== ===========
Other comprehensive (loss) / profit
Items that may be reclassified to
profit and loss
Exchange differences on translation
of foreign operations 264,462 (135,131) 399,593
Items that will not be reclassified
to profit or loss
Change in Ecuador pension value - - -
Change in fair value of financial
assets net of tax 683,447 (1,254,567) 1,938,014
===================================== =========== =========== ===========
Other comprehensive (loss) / profit,
net of tax 947,909 (1,389,698) 2,337,607
===================================== =========== =========== ===========
Total comprehensive (loss) / income
for the period (8,094,473) (7,008,952) (1,085,521)
===================================== =========== =========== ===========
The nine months ended 31 March 2022 compared with the nine
months ended 31 March 2021
The Group incurred a loss after tax of US$27,100,883 and loss
per share of 1.2 cents per share for the nine months ended 31 March
2022 compared to a loss after tax of US$14,910,365 and loss per
share of 0.7 cents per share for the nine months ended 31 March
2021. Administrative expenses incurred during the nine months ended
31 March 2022 were US$12,768,363 compared to US$7,752,447 for the
nine months ended 31 March 2021. The movement in administrative
expenses for the nine months ended 31 March 2022 over the
comparable nine months ended 31 March 2021 were due to a number of
factors, the most notable of which are:
Employment Expenses increased by US$2,266,581 to US$4,395,274
for the nine months ended 31 March 2022 from US$2,128,693 for the
nine months ended 31 March 2021. This increase was mainly due to
the fair value adjustment of the Company Funded Loan plan extension
to 30 June 2022, payments to the new Company Secretary, and payment
of bonuses to corporate employees based on established key
performance indicators.
Insurance payments increased by US$455,609 to US$2,869,909 for
the nine months ended 31 March 2022 compared to US$2,414,300 for
the nine months ended 31 March 2021. This increase is due to the
increase in the Company's political risk insurance premium.
Unrealised foreign exchange losses (gains) for the nine months
ended 31 March 2022 saw an unrealised foreign exchange loss of
US$259,548, compared to an unrealised foreign exchange gain of
US$1,914,601 for the nine months ended 31 March 2021. This was as a
result of the United States dollar strengthening against both the
AUD and GBP, currencies in which the Company holds a portion of its
treasury.
Exploration costs written-off were US$3,965,871 for the nine
months ended 31 March 2022 compared to US$682,919 (US$679,079
related to misappropriation) for the nine months ended 31 March
2021. Exploration costs written off during the nine months ended 31
March 2022 represents the costs capitalised to date on 10 of the 72
concessions held within the Company's four 100% owned subsidiaries
in Ecuador that the board decided to relinquish on 7 September
2021.
Derivative liabilities in the nine months ended 31 March 2022
measured at fair value resulted in a loss of US$924,000 compared to
a gain of US$483,504 for the nine months ended 31 March 2021. The
movement represents the fair value remeasurement of the options
granted to BHP as part of the December 2019 placement, measured at
31 March 2022. Since the options issued to BHP were not granted in
exchange for goods or services and were exercisable in a currency
other than the functional currency, the options were treated as a
derivative financial liability measured at fair value on the date
of grant and are remeasured at each reporting period.
Finance costs for the nine months ended 31 March 2022 were
US$9,895,561 compared to US$6,965,853 for the nine months ended 31
March 2021. The increase in finance costs predominantly relates to
the effective interest charge calculated on the NSR Financing
Agreement, which for the previous period was only for the period 11
September to 31 March. First payments under the NSR Financing
Agreement are due from either late 2028 or when production is
declared, whichever is earlier.
Finance income was US$610,531 for the nine months ended 31 March
2022 compared to US$337,347 for the nine months ended 31 March
2021. The interest income comprises US$34,773 received from banking
institutions on short term deposits and US$575,758 from the
accretion of interest on the Company Funded Loan Plan.
Other income was US$165,964 for the nine months ended 31 March
2022 compared to US$195,042 for the nine months ended 31 March
2021. Other income represents US$151,346 rent received from the
subletting of office space at 111 Eagle Street Brisbane and a gain
on disposal of PP&E of US$14,618.
All other expenses for the nine months ended 31 March 2022
remain consistent to those for the nine months ended 31 March
2021.
Financial Position
Total assets at 31 March 2022 were US$435,753,893 compared to
US$452,553,028 (restated) at 30 June 2021, representing a decrease
of US$16,799,135.
Current assets overall decreased by US$73,316,101, which was
primarily cash used to fund the Group's flagship Cascabel project
and related overheads, the Group's regional exploration programme
and general overhead expenses. Other receivables and prepayments
decreased by US$2,305,476 as a result of land deposits being
capitalised during the nine months ended 31 March 2022. Initial
deposits and payments for land purchases are classified as other
receivables until such time the land processes in Ecuador are
finalised and title deeds are issued, whereupon they are
capitalised.
Non-current assets increased by US$58,563,335 mainly due to
increases in exploration and evaluation assets, classified as
intangible assets. Exploration assets increased by US$54,475,410
predominantly due to the exploration expenditure incurred on the
Alpala project and the various regional projects in Ecuador during
the nine months ended 31 March 2022. Financial assets held at fair
value through OCI increased by US$681,863 representing the mark to
market adjustments that the Company makes on its investment in
Cornerstone. Property, plant and equipment increased by
US$3,097,736 primarily due to strategic land purchases at the
Alpala project.
Total liabilities at 31 March 2022 were US$127,644,683 compared
to US$118,290,830 at 30 June 2021 representing an increase of
US$9,353,853 largely as a result of an increase in the NSR royalty,
relating to accrued interest, accounted for at amortised cost.
Current liabilities at 31 March 2022 were US$6,907,619 compared
to US$8,183,399 at 30 June 2021, representing a decrease of
US$1,275,780. Trade and other payables decreased by
US$1,376,947.
Non-current liabilities increased by US$10,629,633 mainly due to
the capitalisation of the interest on the NSR and increase in the
valuation of the derivative liability associated with the BHP
options issued in December 2019.
Selected Financial Data
The Company prepares its consolidated annual financial
statements in accordance with International Financial Reporting
Standards, UK adopted International Accounting Standards and
Interpretations (collectively "IFRS") applied in accordance with
the provisions of the Companies Act 2006. The following table
provides selected annual financial information derived from the
most recently completed audited annual financial statements and
should be read in conjunction with the Company's audited
consolidated financial statements for the periods below.
Year ended 30 June 2021 2020 2019
US$ US$ US$
restated restated
Operations
Loss for the year after tax (23,621,972) (16,501,272) (32,069,793)
Total comprehensive loss for
the year
Owners of the parent company (23,540,214) (16,445,497) (31,941,715)
Non-controlling interest (81,758) (55,775) (128,078)
Basic and diluted loss per (1.8) /
share (cents per share) (1.1) / (1.1) (0.9) / (0.9) (1.8)
Balance Sheet
Working capital 116,668,877 43,718,966 38,122,935
Total assets 452,553,028 303,435,961 244,716,163
Total liabilities 118,290,830 24,810,414 6,514,592
Distributions or cash dividends
declared per share Nil Nil Nil
Summary of Quarterly Results
The following table sets forth a comparison of revenues and
earnings for the previous eight quarters ending with 31 March 2022.
Financial information is prepared in accordance with IFRS as issued
by the IASB and is reported in United States Dollars.
Quarter ended Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021
US$ US$ US$ US$
restated restated restated
Loss for the quarter after tax (9,042,377) (7,270,260) (10,788,241) (8,862,781)
Net loss per share (cents per share) (0.4) (0.3) (0.5) (0.4)
Loss for the quarter after tax attributable to
the owners of the parent (9,009,202) (7,251,888) (10,742,095) (8,850,458)
Net loss per share attributable to the owners of
the parent (cents per share) (0.4) (0.3) (0.5) (0.4)
Quarter ended Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020
US$ US$ US$ US$
restated restated restated restated
Loss for the quarter after tax (5,619,254) (7,123,531) (2,167,471) (10,657,180)
Net loss per share (cents per share) (0.3) (0.3) (0.1) (0.6)
Loss for the quarter after tax attributable to
the owners of the parent (5,619,254) (7,099,989) (2,137,541) (10,646,621)
Net loss per share attributable to the owners of
the parent (cents per share) (0.3) (0.3) (0.1) (0.6)
Net loss presented over the eight quarters generally reflects
general and administrative costs which includes unrealised foreign
exchange gains and losses, share-based payment expenses and finance
costs including non-cash interest charges.
Equity Financing
During the quarter ended 31 March 2022, the Company did not
issue any additional equities.
Exploration and Evaluation Assets
Total capitalised expenditures on exploration and evaluation
assets at 31 March 2022 were US$358,547,425 compared to
US$304,072,015 (restated) at 30 June 2021. Exploration expenditure
of US$58,440,125 was incurred during the nine months ended 31 March
2022 compared to US$59,576,106 during the nine months ended 31
March 2021. An impairment charge of US$3,965,871 (March 2021:
US$682,918 - restated) was recognised for exploration expenditure
associated with concessions that the Board decided to surrender, as
per the announcement on 7 September 2021 and additional US$227,846
relating to the internal investigation
The following table represents the capitalised expenditures on
exploration and evaluations to date by project area.
Project Capitalised Capitalised Impairment Foreign Capitalised
at during period during the exchange at
30 June ended period ended impact during 31 March
2021 31 March 31 March period ended 2022
US$ 2022 2022US$ 31 March US$
Restated US$ 2022 US$
Cascabel 225,095,626 30,281,960 (227,846) - 255,149,740
------------ --------------- -------------- --------------- ------------
Ecuador regional
exploration 68,119,089 27,948,459 (3,738,025) - 92,329,523
------------ --------------- -------------- --------------- ------------
Australia 10,430,948 40,774 - (3,065) 10,468,657
------------ --------------- -------------- --------------- ------------
Solomon Islands 426,352 168,932 - 4,221 599,505
------------ --------------- -------------- --------------- ------------
TOTAL 304,072,015 58,440,125 (3,965,871) 1,156 358,547,425
------------ --------------- -------------- --------------- ------------
PROJECT ACTIVITIES
The Alpala deposit at the Cascabel project in northern Ecuador,
with its 1km-plus copper-gold-silver intersections, is the first of
potentially many discoveries in the country. The recent release of
the maiden Mineral Resource Estimates ("MRE") for the
Tandayama-America deposit at Cascabel and the Cacharposa deposit at
the Porvenir project is a testament to the quality of the Company's
exploration portfolio. The Company's focus since 2012 has been on
the riches of the underexplored section of the Andean Copper Belt
in Ecuador. In addition to the Tier 1 Cascabel project, SolGold has
identified a number of highly prospective priority projects
throughout Ecuador and is exploring these in parallel with the
development of Cascabel. Activities conducted on the priority
projects are described by subsidiary in the following sections.
Figure 3 - Overview of SolGold concessions throughout
Ecuador
EXPLORACIONES NOVOMINING S.A.
Cascabel Project
Location: Imbabura province, Northern Ecuador
Ownership: 85%
Subsidiary: Exploraciones Novomining S.A.
Tenement area: 50 km(2)
Primary Targets: Copper gold porphyry
The Cascabel project base is located at Rocafuerte in northern
Ecuador, approximately three hours' drive north of the capital
Quito, close to water, power supply and Pacific ports. Having
fulfilled its earn-in requirements, SolGold is a registered
shareholder with an unencumbered legal and beneficial 85% interest
in ENSA which holds 100% of the Cascabel tenement covering
approximately 50km(2) , and subject to a 2% net smelter return
royalty held by Santa Barbara Resources Ltd which may be purchased
for US$4.0 million in two stages, the latest following a production
decision. Following the completion of a Definitive Feasibility
Study by ENSA, Cornerstone, which currently holds a 15% interest in
ENSA, will be obligated to contribute to the funding of ENSA.
During the nine months ended 31 March 2022, the Group
capitalised US$30,281,960 on the Cascabel project.
At the Tandayama-Ameríca deposit drilling continues for
geotechnical, hydrogeological and metallurgical testwork. Resource
extension and infill drilling continues.
Figure 4 - Major activities undertaken in the reporting
period
Drilling 1,057m of drilling was completed at TAM in the three
* Tandayama-Ameríca months ended 31 March 2022. Geologists are consolidating
data and significant results from completed holes at
TAM. Activities include:
(1 rig) * Resource drilling
* Updating of interpretation of 3D geology and
alteration models
* Resource modelling and reporting is underway
* Logging and collection of geotechnical parameters and
samples for lab testwork
Water monitoring Site-wide hydrological monitoring and hydrogeological
monitoring in and around the Alpala deposit and potential
infrastructure sites. This work continues and includes:
* Installation of additional piezometers
* Surface, near surface and underground water
monitoring
-----------------------------------------------------------------
Geotechnical Ongoing geological and geotechnical site investigations
for areas identified for project infrastructure including:
* Detailed surface mapping
* Geotechnical sampling for geotechnical lab testwork
* Metallurgical testwork is ongoing
-----------------------------------------------------------------
Ancillary
programmes * Ongoing geomorphological risk management including
stability monitoring at identified locations
(observations did not identify significant movement)
* Surface mapping campaign over proposed infrastructure
locations
* Sampling for geochemical characterisation across
multiple location commenced
-----------------------------------------------------------------
Current Drilling - Tandayama-Ameríca
To date a total of approximately 31,000m has been drilled at the
TAM deposit with drill hole 41 currently in progress at a depth of
500m. Assay results from hole 41 are pending. An updated TAM MRE#2
is currently underway with a dataset that comprises 30,925.2m of
diamond drilling from holes 1-41, 458m of surface rock-saw channel
assays from 72 outcrops and a total of 29,631.6m of final assay
results from holes 1-40.
Cascabel Mineral Resource and Mineral Reserve Estimates
Alpala Mineral Resource Estimate (MRE#3)
The Alpala porphyry copper-gold-silver deposit, at a cut-off
grade of 0.21% CuEq, comprises 2,663 Mt at 0.53% CuEq in the
Measured plus Indicated categories, which includes 1,192 Mt at
0.72% CuEq in the Measured category and 1,470 Mt at 0.37% CuEq in
the Indicated category. The Inferred category contains an
additional 544 Mt at 0.31% CuEq.
The estimate comprises a contained metal content of 9.9 Mt Cu
and 21.7 Moz Au in the Measured plus Indicated categories, which
includes 5.7 Mt Cu and 15 Moz Au in the Measured category, and 4.2
Mt Cu and 6.6 Moz Au in the Indicated category. The Inferred
category contains an additional 1.3 Mt Cu and 1.9 Moz Au.
Cut-off Mineral Mt Grade Contained Metal
grade Resource
category
======== ============= ====== -------------------------------- ---------------------------------------
CuEq Cu Au Ag (g/t) CuEq Cu (Mt) Au (Moz)
(%) (%) (g/t) (Mt)
Ag (Moz)
======== ============= ====== ===== ===== ======= ========= ====== ======== ========= ==========
0.21% Measured 1,192 0.72 0.48 0.39 1.37 8.6 5.7 15.0 52.4
============= ====== ===== ===== ======= ========= ====== ======== ========= ==========
Indicated 1,470 0.37 0.28 0.14 0.84 5.5 4.2 6.6 39.8
============= ====== ===== ===== ======= ========= ====== ======== ========= ==========
Measured
+ Indicated 2,663 0.53 0.37 0.25 1.08 14.0 9.9 21.7 92.2
============= ====== ===== ===== ======= ========= ====== ======== ========= ==========
Inferred 544 0.31 0.24 0.11 0.61 1.7 1.3 1.9 10.6
============= ====== ===== ===== ======= ========= ====== ======== ========= ==========
Planned
dilution 5 0.00 0.00 0.00 0.00 0.0 0.0 0.0 0.0
============= ====== ===== ===== ======= ========= ====== ======== ========= ==========
Notes:
1. Mrs. Cecilia Artica, SME Registered Member, Principal Geology
Consultant of Mining Plus , is responsible for this Mineral
Resource statement and is an "independent Qualified Person" as such
term is defined in NI 43-101.
2. The Mineral Resource is reported using a cut-off grade of
0.21% CuEq calculated using [copper grade (%)] + [gold grade (g/t)
x 0.613].
3. The Mineral Resource is considered to have reasonable
prospects for eventual economic extraction by underground mass
mining such as block caving.
4. Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
5. The statement uses the terminology, definitions and
guidelines given in the CIM Standards on Mineral Resources and
Mineral Reserves (May 2014) as required by NI 43-101.
6. MRE is reported on 100 percent basis within an optimised shape.
7. Figures may not compute due to rounding.
Alpala Mineral Reserve Estimate
As part of the PFS, the Company announced for the first time a
Mineral Reserve for the Alpala deposit, which has been estimated
using block caving as the sole underground mining method, taking
into account the effect of dilution of indicated material with
lower grade or barren material originating from within the caved
zone and the overlying cave backs, representing the economically
mineable part of the measured and indicative resource, based on
achievable mine plan and production schedule. The initial Mineral
Reserve represents 21% of Measured and Indicated Resources tonnes
and approximately 38% of contained metal in dollar terms.
Mineral Mt Grade Contained Metal
Reserve
Category
----------------------- ------------------------
Au Ag Cu Au Ag
(g/t) (g/t) (Mt) (Moz) (Moz)
Cu
(%)
===== ======= ======= ====== ======= =======
Probable 558 0.58 0.52 1.65 3.26 9.37 30
===== ===== ======= ======= ====== ======= =======
Total 558 0.58 0.52 1.65 3.26 9.37 30
===== ===== ======= ======= ====== ======= =======
Notes:
1. Effective date of the Mineral Reserves is 31 March 2022.
2. Only Measured and Indicated Mineral Resources were used to
report Probable Mineral Reserves.
3. Mineral Reserves reported above were not additive to the
Mineral Resource and are quoted on a 100% project basis.
4. The Mineral Reserve is based on the 18 March 2020 Mineral Resource.
5. Totals may not match due to rounding.
6. The statement uses the terminology, definitions and
guidelines given in the CIM Standards on Mineral Resources and
Mineral Reserves (May 2014) as required by NI 43-101.
7. The Mineral Reserve Estimate as of 31 March 2022 for Alpala
was independently verified by Aaron Spong FAusIMM CP (Min) who is a
full-time employee of Mining Plus. Mr Spong fulfils the
requirements to be a "Qualified Person" for the purposes of NI
43-101 and is the Qualified Person under NI 43-101 for the Mineral
Reserve.
Tandayama-Ameríca Mineral Resource Estimate
The TAM maiden MRE, released on 19 October 2021 comprised
17,535m of diamond drilling from holes 1-23, 458m of surface
rock-saw channel sampling from 72 outcrops, and 14,566m of final
assay results from holes 1-18. The TAM deposit lies approximately
3km north of the Alpala deposit.
The TAM porphyry copper-gold deposit contains a total Mineral
Resource of 233.0Mt @ 0.33% CuEq for 0.53Mt Cu, and 1.20Moz Au in
the Indicated category, plus 197.0Mt @ 0.39% CuEq for 0.52Mt Cu,
and 1.24Moz Au in the Inferred category.
Mining Method Resource Mt Grade Contained Metal
Category
Cut-off Grade Cu (%) Au (g/t) CuEq (%) Cu (Mt) Au (Moz) CuEq (Mt)
(CuEq %)
------- --------- --------- -------- --------- ----------
Open Pit 0.16 Indicated 201.0 0.22 0.16 0.33 0.45 1.06 0.66
-------------- ------------- ------ ------- --------- --------- -------- --------- ----------
Inferred 61.8 0.25 0.30 0.44 0.16 0.59 0.27
-------------- ------------- ------ ------- --------- --------- -------- --------- ----------
Underground 0.28 Indicated 32.0 0.26 0.14 0.35 0.08 0.14 0.11
-------------- ------------- ------ ------- --------- --------- -------- --------- ----------
Inferred 135.2 0.27 0.15 0.37 0.37 0.65 0.50
-------------- ------------- ------ ------- --------- --------- -------- --------- ----------
Total Indicated 233.0 0.23 0.16 0.33 0.53 1.20 0.77
------ ------- --------- --------- -------- --------- ----------
Total Inferred 197.0 0.27 0.20 0.39 0.52 1.24 0.77
------ ------- --------- --------- -------- --------- ----------
Notes:
1. Dr Andrew Fowler , MAusIMM CP(Geo), Principal Geology
Consultant of Mining Plus , is responsible for this Mineral
Resource statement and is an "independent Qualified Person" as such
term is defined in NI 43-101.
2. The Mineral Resource is reported using cut-off grades that
are applied according to the mining method where 0.16 % CuEq
applies to potentially open-pittable material and 0.28 % CuEq
applies to material potentially mineable by underground bulk mining
methods.
3. The Mineral Resource is considered to have reasonable
prospects for eventual economic extraction by open pit or
underground bulk mining such as block caving.
4. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
5. The statement uses the terminology, definitions and
guidelines given in the CIM Standards on Mineral Resources and
Mineral Reserves (May 2014) as required by NI 43-101.
6. The underground portion of the Mineral Resource is reported
on 100 percent basis within an optimised shape as described
below.
7. Figures may not compute due to rounding.
CARNEGIE RIDGE RESOURCES S.A.
Rio Amarillo
Location: Imbabura province, northern Ecuador
Ownership: 100%
Subsidiary: Carnegie Ridge Resources S.A.
Tenement Area: 3 concessions, 123 km(2)
Primary Targets: Copper porphyry
SolGold's 100%-owned Rio Amarillo project in northern Ecuador
lies approximately 30km southeast of the Company's flagship Alpala
porphyry copper-gold-silver deposit. The Rio Amarillo project
comprises three concessions, Rio Amarillo 1, 2 & 3.
Drilling continued at the Varela target with the second
drillhole completed at the end of December at a depth of 1,500m and
a third hole completed at 534m. No significant assay results have
been received to date. In late January, all drilling activities
were suspending pending a review of results and follow-up fieldwork
at both the Varela and Paloma targets.
Blanca
Location: Carchi province, northern Ecuador
Ownership: 100%
Subsidiary: Carnegie Ridge Resources S.A
Tenement area: 2 concessions, 74 km(2)
Primary Targets: Epithermal gold
No work was completed at the Blanca project during the reporting
period.
CRUZ DEL SOL S.A.
Helipuerto
Location: Morona Santiago province, south-eastern Ecuador
Ownership: 100%
Subsidiary: Cruz Del Sol S.A.
Tenement Area: 4 concessions, 184 km(2)
Primary Targets: Porphyry & epithermal copper-gold
The Tinkimints copper prospect and the Helipuerto project
concessions lie within one of the most prolific portions of the
Andean Jurassic Porphyry Belt, which hosts globally significant
copper and gold deposits in Ecuador, several of which have been
developed into mines, such as the nearby Fruta del Norte and
Mirador mines, the Santa Barbara, Panantza and Warintza deposits,
and SolGold's newly discovered Cacharposa deposit at Porvenir.
Extensive and systematic geological and geochemical field
programmes are continuing at Helipuerto with an initial focus on
the delineation of the size and tenor of the new Tinkimints copper
prospect including mapping and sampling of the area directly south
of Solaris's Warintza copper-gold porphyry discovery that abuts
SolGold's Helipuerto concessions.
La Hueca
Location: Zamora Chinchipe province, southern Ecuador
Ownership: 100%
Subsidiary: Cruz del Sol S.A.
Tenement area: 3 concessions, 94 km(2)
Primary Targets: Copper-gold porphyry
No work was completed at the La Hueca project during the
reporting period.
GREEN ROCK RESOURCES S.A.
Porvenir
Location: Zamora Chinchipe province, southern Ecuador
Ownership: 100%
Subsidiary: Green Rock Resources S.A.
Tenement area: 7 concessions, 244km(2)
Primary Targets: Copper-gold porphyry
The Porvenir project is located approximately 100km north of the
Peruvian border, in Southern Ecuador. The Cacharposa porphyry
copper-gold target is part of a 1,700m long northerly-trending
mineralised corridor, up to 1,000m wide.
Two holes were completed in early January at the Mula Muerta
prospect totalling 2,118m.
Extensive and systematic geological and geochemical field
programmes are continuing at numerous satellite targets within the
Porvenir project. Priority drill targets are expected to be ranked
and drill-ready by Q4 CY22.
Porvenir Mineral Resource Estimate
The Cacharposa maiden MRE, released on 15 December 2021 and
Technical Report on 31 January 2022 comprised 18,635.7m of diamond
drilling from holes 1-23, 439.6m of surface rock-saw channel
sampling from 23 outcrops, and 16,982.4m of final assay results
from holes 1-20.
The Cacharposa porphyry copper-gold deposit contains a total
Mineral Resource of 396.8Mt @ 0.44% CuEq ([1]) for 1.40 Mt Cu, and
1.80 Moz Au in the Indicated category, plus 96.9 Mt @ 0.37% CuEq
for 0.28 Mt Cu, and 0.38 Moz Au in the Inferred category, using a
cut-off grade of 0.16% CuEq.
The NI 43-101 technical report on the Mineral Resource Estimate
for the Cacharposa deposit can be found at the following link:
https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00043090
Mineral Resource Statement (effective date 26 October 2021)
Potential Mining Method Cut-off Resource Mt Grade Contained Metal
Grade Category
(CuEq
%)
-------- -----------------------
Cu Au CuEq Cu Au CuEq
(%) (g/t) (%) (Mt) (Moz) (Mt)
-------- ----- ------- ----- ------ ------- ------
Open Pit 0.16 Indicated 396.8 0.35 0.14 0.44 1.40 1.80 1.75
------------------------- -------- ---------- ------ ----- ------- ----- ------ ------- ------
Inferred 96.9 0.29 0.12 0.37 0.28 0.38 0.36
------------------------- -------- ---------- ------ ----- ------- ----- ------ ------- ------
Notes:
1. Dr Andrew Fowler , MAusIMM CP(Geo), Principal Geology
Consultant of Mining Plus , is responsible for this Mineral
Resource statement and is an "independent Qualified Person" as such
term is defined in NI 43-101.
2. The Mineral Resource is reported using a cut-off grade
calculated for the open pit mining method.
3. Copper equivalency factor of 0.632 (whereby CuEq = Cu + Au x
0.632) is based on third party metal price research, forecasting of
Cu and Au prices, and a cost structure from mining study data
available from a similar deposit. Costs include mining, processing
and general and administration (G&A). Net Smelter Return (NSR)
includes off-site realisation (TC/RC) including royalties,
metallurgical recoveries (84% for Cu and 65% for Au) and metal
prices of Cu at US$3.30/lb and Au at US$1,700/oz. The Mineral
Resource is considered to have reasonable prospects for eventual
economic extraction by open pit mining methods.
4. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
5. The statement uses the terminology, definitions and
guidelines given in the CIM Standards on Mineral Resources and
Mineral Reserves (May 2014) as required by NI 43-101.
7. Figures may not compute due to rounding.
Sharug
Location: Azuay province, southwest Ecuador
Ownership: 100%
Subsidiary: Green Rock Resources S.A.
Tenement Area: 2 concessions, 58 km(2)
Primary Targets: Copper-gold porphyry
Santa Martha Target
No work has been completed at the Sharug project during the
reporting period.
Drilling concluded in December 2021 at the Santa Martha and
Quillosisa copper-gold porphyry targets completing an initial
six-hole programme testing extensive coincident surface geochemical
and geophysical anomalies. Results have been returned from all six
holes with no significant results.
Cisne Loja
Location: Loja province, southern Ecuador
Ownership: 100%
Subsidiary: Green Rock Resources S.A.
Tenement area: 3 concessions, 147 km(2)
Primary Targets: Epithermal gold and silver, porphyry copper-gold
Extensive and systematic geological and geochemical field
programmes are continuing at the Celen target. Priority drill
targets are expected to be ranked and drill-ready by Q4 CY22.
Qualified Person
Information in this report relating to the exploration results
is based on data reviewed by Mr Jason Ward ((CP) B.Sc. Geol.), Head
of Exploration of the Group. Mr Ward is a Fellow of the
Australasian Institute of Mining and Metallurgy, holds the
designation FAusIMM (CP), and has in excess of 20 years' experience
in mineral exploration and is a Qualified Person for the purposes
of the relevant LSE and TSX Rules. Mr Ward consents to the
inclusion of the information in the form and context in which it
appears.
Additional Disclosure for Issuers without Significant
Revenue
The following table sets out a breakdown of all material
components of certain costs to the Group for the quarters ended 31
March 2022 and 2021.
Mineral Properties - Exploration and Evaluation
The following table sets out the total deferred exploration
costs recorded by the Group for the Cascabel concession, the
Ecuador regional exploration projects, Australian projects and the
Solomon Islands projects for the quarters ended 31 March 2022 and
2021.
Cascabel project Ecuador regional Australian projects Solomon Islands Total
exploration projects projects
Mar 21 Mar 21 Mar 21 Mar 21 Mar 21
Mar 22 (US$'000) Mar 22 (US$'000) Mar 22 (US$'000) Mar 22 (US$'000) Mar 22 (US$'000)
Exploration expenditures (US$'000) restated (US$'000) restated (US$'000) restated (US$'000) restated (US$'000) restated
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Balance, beginning of
period
Restated 247,307 200,406 83,379 52,174 10,215 10,619 540 329 341,441 263,528
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Licence fee 206 194 3,153 2,967 11 4 - 5 3,370 3,170
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Assays and geochemistry 99 99 164 115 - - - - 263 214
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Camp costs 325 942 704 626 - - - - 1,029 1,568
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Drilling 655 6,632 1,113 2,594 - - - - 1,768 9,226
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Geophysics - 5 - - - - - - - 5
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Community 1,648 1,556 706 657 - - - - 2,354 2,213
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Salaries and labour 2,552 1,880 2,400 1,818 - 6 39 47 4,991 3,751
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Environment 192 241 140 79 - - - - 332 320
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
PEA - - - - - - - - - -
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
PFS 1,075 158 - - - - - - 1,075 158
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
DFS 188 363 - - - - - - 188 363
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Other 902 1,266 971 903 - - 2 5 1,875 2,174
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Total exploration
expenditures 255,149 213,742 93,773 61,933 10,226 10,629 581 386 358,686 286,690
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Mineral properties
abandoned - - (399) (2) - - - - (399) (2)
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Foreign exchange
adjustment - - - - 243 (128) 18 (5) 261 (133)
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Balance at end of period 255,149 213,742 92,331 61,931 10,469 10,501 599 381 358,548 286,555
========== ========== ========== =========== ========== ========== ========== ========== ========== ==========
Exploration Outlook
The focus of the Group during the financial year ending 30 June
2022 will be to advance the Cascabel project in Ecuador through the
ongoing PFS (including the additional determination of resources
and reserves at the Alpala and Tandayama-Ameríca deposits), leading
into the works for advancement of the DFS. Planned milestones at
the Cascabel Project are:
-- Completion of an updated Mineral Resource Estimate at the Tandayama-America deposit
-- Completion of an updated Mineral Resource Estimate at the
Alpala deposit to encompass potentially open pittable Mineral
Resources
-- Completion of optimisation studies related to the Cascabel
PFS and subsequent release of the PFS NI 43-101 Technical
Report
-- Ongoing land acquisitions and preliminary works relating to DFS
The regional exploration programme in Ecuador will continue
reconnaissance and follow-up field programmes at key target areas,
as well as advancing scoping studies for the Cacharposa deposit at
the Porvenir project
The Australian and Solomon Islands exploration programmes are
reduced to a minimum in order to focus on Ecuador based
opportunities.
Property Summary of completed Expenditures Plans for the property((1) Planned
activities (1 January (Quarter ) expenditures
2022 - 31 March ended 31 for the
2022) March 2022) three-month
US$ period: 1
April 2022
to 30 June
2022((1) )
US$
Cascabel US$7.84 Financial year ending US$6.91
concession * PFS study work million 30 June 2022 million
* Drilling and assaying
* Large scale diamond core drilling campaign
* Mineral Reserve Estimate and Mineral Resource updates
* Geotechnical, metallurgical, hydrogeological
and * PFS work
hydrological programmes
* Metallurgical testwork
* 3D modelling
* Geochemical characterisation testwork
* Community initiatives
* Surface geotechnical investigations
* Land acquisitions
* Commencement of DFS
* Land acquisitions
* Community Projects
* Commencement of Environmental and Social Impact
Assessment
=================================================== ============ =========================================================== ============
Ecuador US$9.35 Financial year ending US$2.26
regional * Drilling (Porvenir, Rio Amarillo) million 30 June 2022: million
exploration * Mineral Resource Estimates
projects
* Development of priority targets
* Continued exploration reconnaissance
* Exploration reconnaissance including mapping,
soils * Further target generation
and rock chips
* Community engagement
* Geophysics interpretation
* Camp construction
* Community engagement
=================================================== ============ =========================================================== ============
Australia US$11k Financial year ending US$nil
projects * 2D & 3D geochemical and geophysical data 30 June 2022:
interpretation and modelling * Desktop studies
* EM data reprocessing and modelling
* Integrated modelling of 3D IP, VTEM and Magne
tic
* Inversion model data review
* Plate modelling of VTEM data
* Project assessment
=================================================== ============ =========================================================== ============
Solomon US$41k Financial year ending US$nil
Island * Community consultation 30 June 2022:
projects * Land access and negotiations
* Community projects
=================================================== ============ =========================================================== ============
Notes: (1) This information is considered forward-looking
information. See "Forward-Looking Statements".
Liquidity and Capital Resources
At 31 March 2022 the Group had cash and cash deposits of
US$38,107,804, a decrease of US$71,454,299 from US$109,562,103 at
30 June 2021.
Cash expenditure (before financing activities) for the nine
months ended 31 March 2022 was US$71,152,537 (2021: US$69,687,082).
Accordingly, the net cash outflow of the Group for the nine months
ended 31 March 2022 was US$71,508,629 (2021: inflow of
US$16,712,621).
Cash of US$58,095,0939 (2021: US$55,387,361) was invested by the
Group on exploration expenditure during the nine months ended 31
March 2022.
Liquidity Outlook
For the period ended
31 March 2022 30 June 2021
US$ US$
Cash and cash equivalents 38,107,804 109,562,103
Other receivables and prepayments 6,153,018 8,458,494
Loans receivable and other current
assets(1) 4,939,604 6,495,930
Trade and other payables (6,470,701) (7,847,650)
Net working capital 42,729,725 116,668,877
(1) Represent the CFLP with repayment by Employees due 30 June
2022.
SolGold funds its current exploration and corporate costs
through existing cash and cash equivalents. The Company has no
capital commitments but has certain obligations to spend minimum
amounts on exploration in tenement areas. As outlined in the
Company's latest audited consolidated annual financial statements,
such commitments (tenement fees) at 30 June 2021 amounted to
US$6,366,389 and US$6,249,223 over the next 12 months and 13-month
to 5-year period, respectively.
GOING CONCERN
As at 31 March 2022 the Company had cash on hand of US$38.11
million and net current assets of US$42.29 million. The financial
statements have been prepared on a going concern basis which
contemplates the continuity of normal business activities and the
realisation of assets and discharge of liabilities in the ordinary
course of business. The Company has not generated revenues from
operations in its history and, in common with many exploration
companies, the Company raises finance for its exploration and
appraisal activities in discrete tranches. As such, the ability of
the Group to continue as a going concern depends on its ability to
secure this additional financing.
Together with its brokers and financial advisors, the Company
continuously monitors the conditions in the relevant capital
markets and the board regularly considers various forms of
financing available to SolGold. The Company is in regular touch
with equity investors and actively participates in investor
conferences and other forms of investor engagements as the Company
will need to secure further funding to meet its 12-month
exploration and working capital commitments. As has been the case
previously, the Directors expect that future funding will likely be
provided by equity investors or via alternative or debt funding
arrangements.
The Company has proven its ability to execute equity financings
successfully, like the cashbox placing in April 2021, in a
cost-effective manner and with a short turn-around time. In the
event that the Company is unable to secure sufficient funding, it
may not be able to fully develop its projects, and this may have a
consequential impact on the carrying value of the related
exploration assets and the investment of the parent company in its
subsidiaries as well as the going concern status of the Company.
Given the nature of the Company's current activities, it will
remain dependent on equity and/or mezzanine or debt funding until
such time as the Company becomes self- financing from the
commercial production of its mineral resources. Should raising
additional finance prove challenging, the Company has alternative
options such as the acceleration of the cost reductions, farm-outs
or the relinquishment of licences across Ecuador, Australia and the
Solomon Islands.
Given that the company will need to raise funds within 12
months, from the date of approval of these interim financial
statements, the situation gives rise to a material uncertainty as
there can be no assurance the Company will be able to raise
required financing in the future . Notwithstanding this material
uncertainty, the Directors consider it appropriate to prepare the
financial statements on a going concern basis given the Group's
proven ability to raise necessary funding. The financial statements
do not include the adjustments that would result if the Group was
unable to continue as a going concern.
Outstanding Share Data
At 31 March 2022 and at the date of this report the Company had
on issue 2,293,816,433 ordinary shares with the authority to allot
new shares up to a maximum of two-thirds of its issued share
capital (GBP13,814,756), subject to certain restrictions and
conditions primarily associated with the pro-rated nature of any
such allotment. At 31 March 2022 and at the date of this report the
Company had outstanding options to purchase an aggregate of
32,250,000 ordinary shares with exercise prices ranging from
GBP0.25 to GBP0.37 per share and expiry dates ranging from 26 April
2023 and 2 December 2024.
Contingencies
A 2% Net Smelter Royalty is payable to Santa Barbara Resources
Limited, who were the previous owners of the Cascabel concession.
These royalties can be bought out by paying a total of US$4
million. Fifty percent (50%) of the royalty can be purchased for
US$1 million 90 days following the completion of a Feasibility
Study and the remaining 50% of the royalty can be purchased for
US$3 million, 90 days following a production decision. The smelter
royalty is considered to be a contingent liability as the Group has
not yet completed a Feasibility Study at 31 March 2022 and as such
there is significant uncertainty over the timing of any payments
that may fall due.
Under the terms of the Term Sheet (Term Sheet) signed between
SolGold plc, Cornerstone Capital Resources Inc. (CGP), CGP's
subsidiary Cornerstone Ecuador S.A. (CESA), and Exploraciones
Novomining S.A. (ENSA), and the SolGold Group holds an aggregate
registered and beneficial equity position in ENSA of 85%. The
parties agreed SolGold will solely fund all operations and
activities of ENSA until the completion of a Feasibility Study,
including CESA's contribution as the registered and beneficial
holder of an aggregate equity position in ENSA of 15%. After
completion and delivery of the Feasibility Study, SolGold and CESA
shall jointly fund the operations and activities of ENSA based on
their respective equity positions in ENSA. Furthermore, the Term
Sheet allows for SolGold to be fully repaid for the financing
provided, including interest at LIBOR plus 2% for the expenditures
incurred by SolGold from the time CGP and CESA elected to take the
Financing Option and the completion of the First Phase Drill
Programme (FPDP). SolGold is to be repaid out of 90% of CESA's
distribution of earnings or dividends from ENSA or the Cascabel
Tenement to which CESA would otherwise be entitled. If CESA does
not elect to contribute, and its equity stake in ENSA is diluted to
below 10%, its equity stake in ENSA will be converted to a 0.5%
interest in the Net Smelter Return and SolGold may acquire this
interest for US$3.5 million at any time.
The amount of financing provided to CESA at 31 March 2022 was
US$46,498,025 (2021: US$37,340,126). This will be paid out of
CESA's distribution of earnings or dividends from ENSA or the
Cascabel tenement if and when the mine goes into production.
There were no other contingent assets or liabilities at 31 March
2022 (2021 nil).
Transactions with Related parties and director related
entities
Transactions with related parties are disclosed in Note 13 to
the 31 March 2022 unaudited interim condensed consolidated
financial statements. Transactions between related parties are on
normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
The figures noted below are for the nine-month period ended 31
March 2022 with comparative figures for the nine months ended 31
March 2021.
The Company had a commercial agreement with Samuel Capital Ltd
("Samuel") for the engagement of Nicholas Mather as Non-Executive
Director of the Company. For the nine months ended 31 March 2022
US$54,326 was paid or payable to Samuel (2021: US$330,291). The
total amount outstanding at 31 March 2022 was US$6,862 (31 March
2021: US$nil, 30 June 2021: US$nil).
Mr Brian Moller (a Director until 15(th) December 2021) is a
partner in the Australian firm HopgoodGanim Lawyers. For the nine
months ended 31 March 2022, US$4,117 was paid or payable to
HopgoodGanim (2021: US$67,933) for the provision of legal services
to the Company. These services were based on normal commercial
terms and conditions. The total amount outstanding at 31 March 2022
is US$2,985 (31 March 2021: US$2,520, 30 June 2021 US$nil).
Mr James Clare (a Director) is a partner in the Canadian firm
Bennett Jones Lawyers. For the nine months ended 31 March 2022,
US$222,324 was paid or payable to Bennett Jones (2021: US$470,993)
for the provision of legal services to the Company. The services
were based on normal commercial terms and conditions. The total
amount outstanding at 31 March 2022 is US$nil (31 March 2021:
US$225,929, 30 June 2021 US$nil).
The Company had a commercial agreement with Bayview PMF Pty Ltd
("Bayview") for the engagement of Jason Ward and his wife (until
January 2022) for managerial and administrative services. For the
nine months ended 31 March 2022 US$324,806 was paid or payable to
Bayview. The total amount outstanding at 31 March 2022 was
US$29,818.
The key management personnel of the Company are the Directors
and officers of the Company. Compensation awarded to key management
relating to consulting fees and share-based payments for the
quarters ended 31 March 2022 and 2021 are listed below.
During the quarter, US$26,783 employer's social security costs
(2021: US$26,243) were paid in respect of remuneration for key
management personnel.
Basic salary Bonus US$ Other benefits1 Pensions US$ Total
US$ US$ remuneration
US$
March quarter 2022
Directors
Darryl Cuzzubbo 151,568 - - 2,690 154,258
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Keith Marshall 139,800 - - - 139,800
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Nicholas Mather 18,111 - - - 18,111
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
James Clare 18,182 - - - 18,182
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Jason Ward(2) 107,244 - - - 107,244
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Liam Twigger 27,310 - - 2,731 27,310
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Elodie Grant Goodey 19,569 - - - 19,569
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Kevin O'Kane 19,807 - - - 19,807
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Maria Amparo Alban 18,238 - - - 18,238
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Other Key Management
Personnel(3) 371,475 - - 21,362 392,837
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
Total paid to Key
Management Personnel 891,304 - - 26,783 918,087
---------------------- --------------- ------------ --------------------- ---------------- ----------------------
(1) Other benefits represents the fair value of the share
options granted during the year based on the Black-Scholes model
considering the effects of the vesting conditions.
(2) Jason Ward's basic annual salary consists of annual
consultancy fees paid for the period.
(3) Other Key Management Personnel consist of the aggregated
remuneration of Dennis Wilkins (Company Secretary), Benn Whistler
(Technical Services Manager), Chris Connell (Regional Exploration
Manager, resigned January 2022), Peter Holmes (Director of
Studies), Ingo Hofmaier (Interim Chief Financial Officer), Lisa
Park (Metallurgy Manager), and Tania Cashman (Chief People
Officer).
Basic salary Bonus Other benefits1 US$ Pensions US$ Total
US$ US$ remuneration
US$
March quarter 2021
Directors
Nicholas Mather 114,977 - - - 114,977
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Brian Moller 17,176 - - - 17,176
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
James Clare 17,176 - - - 17,176
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Jason Ward(2) 100,987 - - - 100,987
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Liam Twigger 29,361 - - 2,789 32,150
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Elodie Grant Goodey 23,157 - - - 23,157
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Keith Marshall (3) 84,139 - - - 84,139
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Kevin O'Kane 20,940 - - - 20,940
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Maria Amparo Alban 19,388 - - - 19,388
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Other Key Management
Personnel (4) 328,976 - 268,059 23,454 620,489
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
Total paid to Key
Management Personnel 756,275 - 268,059 26,243 1,050,577
----------------------- --------------- -------- ---------------------- ---------------- ----------------------
(1) Other benefits represents the fair value of the share
options granted during the year based on the Black-Scholes model
considering the effects of the vesting conditions.
(2) Mr Jason Ward's basic annual salary consists of annual
consultancy fees paid for the year including payments prior to
Director appointment.
(3) Mr Keith Marshall director fees also included pro rata
increase for transition to interim CEO.
(4) Other Key Management Personnel consist of the aggregated
remuneration of Karl Schlobohm (Company Secretary), Benn Whistler
(Technical Services Manager), Chris Connell (Regional Exploration
Manager), Peter Holmes (Director of Studies), Ingo Hofmaier
(Interim CFO) and Nadine Dennison (Chief Human Resources
Officer).
FINANCIAL INSTRUMENTS AND RELATED RISKS
The Group's financial assets and financial liabilities are
exposed to various risk factors that may affect the fair value
presentation or the amount ultimately received or paid on
settlement of its assets and liabilities. A summary of the major
financial instrument risks and the Group's approach to management
of these risks are highlighted below.
Credit Risk
The Group is exposed to credit risk primarily from the financial
institutions with which it holds cash and cash deposits. The
Group's cash and cash deposits are held with Australian,
Ecuadorean, UK and Swiss financial institutions. Management
believes that the credit risk concentration with respect to
financial instruments included in other receivables and prepayments
is manageable.
Foreign Currency Risk
The Group's operations have limited exposure to currency
movements. 93% of the Group's funds are held in US Dollars,
reflective of the expense profile of the Group. Ecuador has the US
Dollar as its official currency, minimising foreign exchange risk
materially.
Liquidity Risk
The Group has no source of operating cash flow to fund its
exploration projects and is dependent on raising funds in capital
markets from a variety of eligible private, corporate and financial
investors, or from interested third parties (including other
exploration and mining companies) which may be interested in
earning an interest in the projects of the Group. The success of
such capital raisings is dependent upon a variety of factors
including general equities and metals market sentiment,
macro-economic outlook, project prospectivity, operational risks
and other factors from time to time. Should the Group be unable to
continue to raise funds from time to time, it may be required to
realise its assets and liabilities other than in the ordinary
course of business, and at amounts that differ from those stated in
the financial statements.
commodity Price Risk
The Company is exposed to price risk with respect to commodity
prices, even as a pre-production company. Commodity price risk is
defined as the potential adverse impact on future earnings and
economic value due to commodity price movements and volatilities.
The Company believes that commodity price movements can have a
substantial effect on the market value of the Company.
Off-Balance Sheet Arrangements
At 31 March 2022, the Group had no off-balance sheet
arrangements such as guarantee contracts, contingent interest in
assets transferred to an entity, derivative instruments obligations
or any obligations that trigger financing, liquidity, market or
credit risk to the Group, other than those disclosed as contingent
liabilities.
Critical Accounting Estimates and Judgements
The preparation of financial statements in accordance with IFRS
requires management to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities, disclosure of
commitments and contingent liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. The determination of estimates requires the
exercise of judgement based on various assumptions and other
factors such as historical experience, current and expected
economic conditions. Actual results could differ from these
estimates. The Directors have made the following judgments and
estimates which may have a significant effect on the amounts
recognised in the Group Financial Information:
Exploration and evaluation expenditure
The Group capitalises expenditure relating to exploration and
evaluation where it is considered likely to be recoverable or where
the activities have not reached a stage that permits a reasonable
assessment of the existence of reserves.
The carrying values of exploration and evaluation expenditure
were assessed for indicators of impairment based on an estimation
of the recoverability from expected future development and
production. In forming this assessment, the Group considered the
external Mineral Resources Estimate, the status of its permits and
internal economic models and financing which supports the carrying
value of the project. An impairment charge of US$3,965,871 (March
2021: US$682,919 restated) was recognised for exploration
expenditure capitalised to date on 10 of the 72 concessions held
within the Company's four 100% owned subsidiaries in Ecuador that
the Board decided to relinquish on 7 September 2021 and US$227,847
in relation to the misappropriation case.
Net ROYALTY INTEREST
The NSR royalty has been valued using the amortised cost basis.
IFRS 9 requires that amortised cost is calculated using the
effective interest method, which allocates interest expense at a
constant rate over the term of the instrument. The effective
interest rate of a financial liability is calculated at initial
recognition and is the rate that exactly discounts the estimated
future cash flows through the expected life of the financial
liability, based on the then current mine plan and project
development study assumptions.
In the case of the Franco-Nevada NSR royalty, the Company
arrived at an effective interest rate ("EIR") of 11.84%. Total
interest for the nine months estimated at US$9,846,022, see Note 6.
Should there be a 2% increase in the EIR this would increase the
Finance Expenses by US$1,740,701.
Changes in IFRS Accounting Policies and Future Accounting
Pronouncements
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2021 annual financial statements, except for those that
relate to new standards and interpretations effective for the first
time for periods on (or after) 1 July 2021 that will be applied in
the 2022 annual financial statements.
New standards and interpretations
The Group has adopted the following revised and amended
standards. The list below includes only standards and
interpretations that could have an impact on the Consolidated
Financial Statements of the Group.
Effective period commencing on or after
IFRS 9, IAS Interest Rate Benchmark Reform Phase 1 Jan 2021
39, IFRS7, 2
IFRS4 & IFRS
16
------------------------------------- -----------
IFRS 9, IAS 39, IFRS 7, IFRS 4 & IFRS 16: Interest Rate
Benchmark Reform Phase 2
In September 2020, the International Accounting Standards Board
("IASB") published Interest Rate Benchmark Reform Phase 2
(amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
finalising its response to the ongoing reform of interest rate
benchmarks around the world. The amendments aim to assist reporting
entities to provide investors with useful information about the
effects of the reform on their financial statements.
Many Interbank Offered Rates ("IBOR") are expected to be
replaced by new benchmark Risk-Free-Rates in future reporting
periods. This second set of amendments focus on issues arising post
replacement, i.e., when the exiting interest rate benchmark is
actually replaced with alternative benchmark rates. The main
amendments in this second stage are as follows:
o Highly probable requirement and prospective assessments of
hedge effectiveness
o Designating a component of an item as the hedged item
The amendment is effective for periods beginning on or after 1
January 2021 with early application permitted. Management has
assessed the effects of applying the amendment on the Group's
financial statements and has determined that there is no material
impact.
As at 31 March 2022, the following amendment to the standard
that could be applicable to the Group, had been issued but was not
mandatory for the reporting period ended 31 March 2022:
IAS 16: Property, Plant and Equipment - proceeds before intended
use
The proposed amends the standard to prohibit deducting from the
cost of an item of property, plant and equipment any proceeds from
selling items produced while bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by management. Instead, an entity recognises the proceeds
from selling such items, and the cost of producing those items, in
profit or loss.
The amendment is effective for periods beginning on or after 1
January 2022 with early application permitted. Management has made
a preliminary assessment to not apply this change early.
Risks and Uncertainties
Resource exploration, evaluation and development is a high-risk
business. There is no certainty that the investments made by the
Company in the exploration of properties will result in discoveries
of commercial quantities of minerals. Exploration for mineral
deposits involves risks which even a combination of professional
evaluation and management experience may not eliminate. Significant
expenditures are required to locate and estimate ore reserves, and
further the development of a property with commercial potential.
There is no assurance the Group has, or will have, commercially
viable ore bodies. Capital expenditures to bring a property to a
commercial production stage are significant and require special
skills and long-term planning. There is no assurance that the
Company will be able to arrange sufficient financing to bring ore
bodies into production. The following are some of the additional
risks to the Company and Group, that they may be exposed to from
time to time:
Funding Risks
The exploration, evaluation and development of the Group's
projects will require substantial additional financing above and
beyond the Group's current liquid funds. Current global capital
market conditions have been subject to significant volatility, and
access to equity and debt financing, particularly for resource
companies, has been negatively impacted in recent years. The war in
the Ukraine, the increasingly hawkish tilt of Western central banks
and the fight of inflation more generally have injected additional
risk into the global capital markets, with most indices lower for
the year. These factors may impact the Group's ability to obtain
equity or debt financing in the future. Additional financing may
not be available, or if available, the terms of such financing may
be unfavourable compared to earlier capital raises. Failure to
obtain sufficient financing may result in the delay or indefinite
postponement of exploration activities and the development of the
Group's projects.
Health & Safety
Safety risks are inherent in exploration and mining activities
and include both internal and external factors requiring
consideration to reduce the likelihood of negative impacts. The
current highest risk, due to the geographical spread of exploration
activities, is associated with transportation of people to and from
the project areas. This includes transit vehicle accidents with a
potential for fatalities due to vehicle impacts or rollovers. In
addition, the remote locations of drilling activities increase the
risk of delays in gaining access to effective emergency medical
assistance resulting in delayed treatment in the event of incident
or accident. Health and safety reviews, inspections, audits and
hazard assessments are completed on a regular basis to ensure
effective, procedures and controls are in place. Any incident
resulting in serious injury or death may result in litigation
and/or regulatory action (including, but not limited to suspension
of development activities and/or fines and penalties), or otherwise
adversely affect the Group's reputation and ability to meet its
objectives.
The Group's exploration and business activities continue to be
at risk from the COVID-19 pandemic currently affecting businesses
globally. The Group has adapted the way it conducts its business in
response to the pandemic and follows mandates of various and
relevant Governments as well as concerns of local communities in
Ecuador.
Social Licence to Operate
Strong community relations are fundamental to creating safe,
sustainable and successful operations. Losing the support from any
individual community would be a risk for activities in that area.
The Group's concessions are in close proximity to and, in limited
areas, overlap with local communities, and local approvals are
often needed in order to access and operate in these areas. The
Group often enters into agreements with local communities, groups
or individuals that address surface access, road or trail usage,
local employment, social investment and other key issues. Every
local stakeholder relationship, however, requires ongoing dialogue
and relationship management. Events do not always unfold as
intended or according to plan, however, and the status of relations
can deteriorate for any number of reasons, including, but not
limited to: influences of local or external political or social
actors or organisations, shifts in the agendas or interests of
individuals or the community as a whole, the Group's inability to
deliver on community expectations or its commitments, or concerns
stemming from communities' historic or recent experiences with
legal and/or illegal miners. However, if under extreme
circumstances the Group were to lose its social licence with one or
more communities and be unable to regain it, this could impact the
viability of the project. By the same token, if the Group is unable
to obtain social licences from some communities, initial
exploration could be prevented.
People and leadership
Establishing an effective composition of the Board, succession
processes and evaluation methods is critical to the success of the
Group. The Group is dependent on recruiting and retaining high
performing leaders focussed on managing the Group's interests,
requiring a large number of persons skilled in the project
development, engineering, financing, operations and management of
mining properties. Competition for such persons is high in the
current commodity price environment. The inability of the Group to
successfully attract and retain highly skilled and experienced
executives and personnel could have a material adverse effect on
SolGold's business, its ability to attract financing and results of
operations. In-country industrial relations risk, and the potential
increase in politicisation of the country, places a risk on the
Group and the country's focus on the development of a mining
industry.
General Exploration and Extraction Risks
Exploration activities are speculative, time-consuming and can
be unproductive. In addition, these activities often require
substantial expenditure to establish Reserves and Resources through
drilling and metallurgical and other testing, determine appropriate
recovery processes to extract copper and gold from the ore and
construct mining and processing facilities. Once deposits are
discovered it can take several years to determine whether Reserves
and Resources exist. During this time, the economic viability of
production may change. As a result of these uncertainties, the
exploration programmes in which the Group is engaged may not result
in new Reserves.
Geopolitical, Regulatory and Sovereign Risk
SolGold's exploration tenements are located in Ecuador,
Australia and the Solomon Islands and are subject to the risks
associated with operating both in domestic and foreign
jurisdictions. Operating in any country involves some risk of
political and regulatory instability, which may include changes in
government, negative policy shifts, changes to the tax and royalty
regime and civil unrest. In addition, there is a risk that due to
the deterioration of the macroeconomic situation, governments may
consider imposing currency controls and limitations on capital
flows. Specifically, under Ecuadorean law, citizens have a
constitutional right pursuant to a judicial process, to apply to
the Constitutional Court for approval for a public referendum on
any subject matter. In 2019, an application was made to the
Ecuadorean Constitutional Court to request to have a referendum
held, the effect of which was to seek to stop mining activities at
the Cascabel concession. The Constitutional Court unanimously
rejected the application. However, despite the Constitutional Court
ruling on that particular occasion, no assurance can be given that
at some future time a similar application designed to seek to stop
mining at Cascabel or in any other location of interest to the
Group, will not be made. Anti-mining activism involving protests or
blockage of access is a risk for operational areas. The
availability and rights to explore and mine, as well as industry
profitability generally, can be affected by changes in government
policy that are beyond the control of SolGold. These factors may
have a negative impact on the ability of the Group to secure
external financing and an adverse effect on the Group's market
value and the going concern of the business as whole.
Title Risk
SolGold's tenements and interest in tenements are subject to the
various conditions, obligations and regulations which apply in the
relevant jurisdictions including Ecuador, Australia (Queensland)
and the Solomon Islands. If applications for title or renewal are
required, this can be at the discretion of the relevant government
minister or officials. If approval is refused, SolGold will suffer
a loss of the opportunity to undertake further exploration, or
development, of the tenement. Some of the properties may be subject
to prior unregistered agreements or transfers of native or
indigenous peoples' land claims and title may be affected by
undetected defects or governmental actions. No assurance can be
given that title defects do not exist. If a title defect does
exist, it is possible that SolGold may lose all or a portion of the
property to which the title defects relate.
Environmental
The Group's exploration activities are required to adhere to
both international best practice and local environmental laws and
regulations. Any failure to adhere to globally recognised
environmental regulations could adversely affect the Group's
ability to explore under its exploration rights. Significant
liability could be imposed on SolGold for damages, clean-up costs,
or penalties in the event of certain discharges into the
environment, environmental damage caused by previous owners of
property acquired by SolGold or its subsidiaries, or non-compliance
with environmental laws or regulations. SolGold proposes to
minimise these risks by conducting its activities in an
environmentally responsible manner, in accordance with applicable
laws and regulations. Nevertheless, residual risks inherent in
SolGold's activities could lead to financial liabilities.
Permitting
The Group is required to obtain governmental permits to conduct
different phases of exploration and evaluation on its concessions.
Obtaining the necessary permits can be a complex and time-consuming
process, which at times may involve several different government
agencies. The duration and success of the Group's efforts to obtain
permits are contingent upon many variables not within its control,
including the interpretation of applicable requirements implemented
by permitting authorities, the expertise and diligence of civil
servants, and the timeframes for agency decisions. The Group may
not be able to obtain permits in a timeframe that might be
reasonably expected. Any unexpected delays associated with the
permitting processes could slow exploration and could adversely
impact the Group's operations. There is a risk of permits that are
needed for ongoing operations being denied regarding tenure and
other development related infrastructure.
Land Access and Surface Rights
Land access is critical for exploration and evaluation to
succeed. In all cases the acquisition of prospective tenements is a
competitive business, in which proprietary knowledge or information
is critical and the ability to negotiate satisfactory commercial
arrangements with other parties is often essential. Access to land
for exploration purposes can be affected by land ownership,
including private (freehold) land, pastoral lease and native title
land or indigenous claims. Immediate access to land in the areas of
activities cannot in all cases be guaranteed. SolGold may be
required to seek consent of land holders or other persons or groups
with an interest in real property encompassed by, or adjacent to,
SolGold's tenements. Compensation may be required to be paid by
SolGold to land holders so that SolGold may carry out exploration
and/or mining activities. Where applicable, agreements with
indigenous groups have to be in place before a mineral tenement can
be granted. In the long run SolGold will be required to acquire
large areas of land for its surface operations, posing a risk of
delays and increasing prices the longer the process takes.
Mineral Reserve and Resource Estimates
Mineral Reserve and Mineral Resource figures are estimates, and
there is a risk that the estimated Mineral Resources and Mineral
Reserves will not be realised. The quantity of Mineral Resources
and Mineral Reserves may vary depending on, among other things,
metal prices. Any material changes in the quantity of Mineral
Resources, Mineral Reserves or the amount of the Mineral Reserves
that are mined, and metal recoveries achieved in production may
affect the economic viability of any project. Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability, and there is a risk that they will never be mined or
processed profitably. Further, there is a risk that Inferred
Mineral Resources will not be upgraded to proven and probable
Mineral Reserves as a result of continued exploration. Fluctuations
in gold prices, results of drilling, metallurgical testing and
preparation and the evaluation of studies, reports and plans
subsequent to the date of any estimate may require revision of such
estimate. Any material reductions in estimates of Mineral Reserves
could have a material adverse effect on SolGold's results of
operations and financial condition.
Project Development Risks
Where the Group discovers a potentially economic resource or
reserve, there is no assurance that the Group will be able to
develop a mine thereon, or otherwise commercially exploit such
resource or reserve. Any failure of management to manage
effectively the Group's growth and development could have a
material adverse effect on the Group's business, financial
condition and results of operations. There is no certainty that all
or, indeed, any of the elements of the Group's current strategy
will develop as anticipated.
Management's Responsibility For Financial Statements
The Board of Directors carries out its responsibility for the
consolidated financial statements primarily through the Audit and
Risk Committee, which is comprised of independent, non-executive
directors who meet periodically with management and the auditors to
review financial reporting and internal control matters.
Disclosure Controls and Procedures & Internal Controls over
Financial Reporting
Disclosure controls and procedures have been designed to ensure
that information required to be disclosed by the Group is
accumulated and communicated to management of the Group as
appropriate to allow timely decisions regarding required
disclosure. The Chief Executive Officer and Chief Financial Officer
of the Group are responsible for establishing and maintaining
disclosure controls and procedures ("DC&P") and internal
control over financial reporting ("ICFR"), as those terms are
defined in National Instrument 52-109 - Certification of Disclosure
in Issuers' Annual and Interim Filings ("NI 52-109"). The Chief
Executive Officer and Chief Financial Officer of the Group have
concluded that, as at December 31, 2021, the Group's DC&P have
been designed and operate effectively to provide reasonable
assurance that: (i) material information relating to the Group is
made known to them by others, particularly during the period in
which the annual filings are being prepared; and (ii) information
required to be disclosed by the Group in its annual filings,
interim filings or other reports filed or submitted by the Group
under securities legislation is recorded, processed, summarized and
reported within the time periods specified in securities
legislation. They have also concluded that the Group's ICFR have
been designed effectively to provide reasonable assurance regarding
the reliability of the preparation and presentation of the
financial statements for external purposes in accordance with IFRS,
and were effective at March 31, 2022. It should be noted that,
while the Chief Executive Officer and Chief Financial Officer of
the Group believe that the Group's DC&P provide a reasonable
level of assurance that they are effective, they do not expect that
the disclosure controls will prevent all errors and fraud. A
control system, no matter how well conceived or operated, can only
provide reasonable, not absolute, assurance that the objectives of
the control system are met. ICFR are designed to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of the financial statements for external reporting
purposes in line with IFRS. Management is responsible for
establishing and maintaining appropriate ICFR in relation to the
nature and size of the Group. However, any system of ICFR has
inherent limitations and can only provide reasonable assurance with
respect to financial statement preparation and presentation. The
Group's ICFR has been designed based on the control framework
established in Internal Control - Integrated Framework published in
2013 by The Committee of Sponsoring Organizations of the Treadway
Commission. There were no changes to the Group's ICFR that occurred
during the half year ended 31 March 2022 that materially affected,
or are reasonably likely to affect, the Group's ICFR.
Additional Information
Additional information relating to the Company is available on
the SEDAR under the Company's issuer profile at www.sedar.com and
can be found on the Company's website at www.solgold.com.au.
Forward-Looking Statements
Certain statements contained in this MD&A may be deemed
"forward-looking statements" within the meaning of applicable
Canadian and U.S. securities laws. All statements in this MD&A,
other than statements of historical fact, that address future
events, developments or performance that SolGold expects to occur
including management's expectations regarding SolGold's growth,
results of operations, estimated future revenues, requirements for
additional capital, mineral reserve and mineral resource estimates,
production estimates, production costs and revenue estimates,
future demand for and prices of commodities, business prospects and
opportunities and outlook on gold and currency markets are
forward-looking statements. In addition, statements (including data
in tables) relating to reserves and resources and gold equivalent
ounces are forward-looking statements, as they involve implied
assessment, based on certain estimates and assumptions, and no
assurance can be given that the estimates will be realized.
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
"expects", "plans", "anticipates", "believes", "intends",
"estimates", "projects", "potential", "scheduled" and similar
expressions or variations (including negative variations), or that
events or conditions "will", "would", "may", "could" or "should"
occur including, without limitation, the performance of the assets
of SolGold, the realisation of the anticipated benefits deriving
from SolGold's investments and transactions and the estimate of
gold equivalent ounces to be received. Although SolGold believes
the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements involve known and
unknown risks, uncertainties and other factors, most of which are
beyond the control of SolGold, and are not guarantees of future
performance and actual results may accordingly differ materially
from those in forward-looking statements. Factors that could cause
the actual results to differ materially from those in
forward-looking statements include, without limitation:
fluctuations in the prices of the commodities; fluctuations in the
value of currency of the United States, Canada, Australia,
Switzerland and the United Kingdom; regulatory changes by national
and local governments, including permitting and licensing regimes
and taxation policies; regulations and political or economic
developments in any of the countries where properties in which
SolGold holds interest are located; risks related to the operators
of the properties in which SolGold holds interests; business
opportunities that become available to, or are pursued by SolGold;
continued availability of capital and financing and general
economic, market or business conditions; litigation; title, permit
or license disputes related to interests on any of the properties
in which SolGold holds interest; development, permitting,
infrastructure, operating or technical difficulties on any of the
properties in which SolGold holds interest; risks and hazards
associated with the business of exploring, development and mining
on any of the properties in which SolGold holds interest,
including, but not limited to unusual or unexpected geological and
metallurgical conditions, slope failures or cave-ins, flooding and
other natural disasters or civil unrest or other uninsured risks.
The forward-looking statements contained in this MD&A are based
upon assumptions management believes to be reasonable, including,
without limitation: the ongoing operation of the properties in
which SolGold holds
interest by the owners or operators of such properties in a
manner consistent with past practice; no material adverse change in
the market price of the commodities that underlie the asset
portfolio; no adverse development in respect of any significant
property in which SolGold holds interest; the accuracy of publicly
disclosed expectations for the development of underlying properties
that are not yet in production; and the absence of any other
factors that could cause actions, events or results to differ from
those anticipated, estimated or intended. For additional
information on risks, uncertainties and assumptions, please refer
to the AIF of SolGold filed on SEDAR at
https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00043090.
which also provides additional general assumptions in connection
with these statements. SolGold cautions that the foregoing list of
risk and uncertainties is not exhaustive. Investors and others
should carefully consider the above factors as well as the
uncertainties they represent and the risk they entail. SolGold
believes that the assumptions reflected in those forward- looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this MD&A should not be unduly relied
upon. These statements speak only as of the date of this MD&A.
SolGold undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, other than as required by applicable
law.
CORPORATE INFORMATION
Board of Directors
Liam Twigger
Chair
Darryl Cuzzubbo
Managing Director & Chief Executive Officer
Nicholas Mather
Non-Executive Director
Keith Marshall
Non-Executive Director
James Clare
Non-Executive Director
Elodie Grant Goodey
Non-Executive Director
Kevin O'Kane
Non-Executive Director
Maria Amparo Alban
Non-Executive Director
Head Office:
Level 27, 111 Eagle Street
Brisbane, Queensland, 4000
Australia
+61 7 3303 0660
London Office and registered office:
1 King Street
London, EC2V 8AU
United Kingdom
+44 20 3823 2130
Quito Office:
Avenida Coruña E25-58
y San Ignacio, Edif. Altana Plaza, Quito
Ecuador
+593 2601 1021 / 298 6606
Auditors:
PricewaterhouseCoopers LLP
1 Embankment Place
London, WC2N 6RH
United Kingdom
Listings:
London Stock Exchange (SOLG)
Toronto Stock Exchange (SOLG)
Contact Information:
Website: solgold.com.au
Email: info@solgold.com.au
Twitter: @solgold_plc
LinkedIn: linkedin.com/company/solgold-plc
UK Company Number:
5449516
ARBN:
117 169 856
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
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