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Thor Explorations Ltd. — Interim / Quarterly Report 2024
Nov 24, 2024
46471_rns_2024-11-24_12addc1e-52c1-4ce6-85dd-95f52165a809.pdf
Interim / Quarterly Report
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Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2024, and 2023
(in United States Dollars)
1
THOR EXPLORATIONS LTD.
September 30, 2024 (Unaudited)
Table of contents
Condensed interim consolidated statement of financial position ................................................................ 4 Condensed interim consolidated statement of comprehensive income ...................................................... 5 Condensed interim consolidated statement of cash flows .......................................................................... 6 Condensed interim consolidated statements of changes in equity ............................................................. 7 Notes to the condensed interim consolidated financial statements ....................................................... 8-29
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NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of condensed interim consolidated financial statements by an entity’s auditor.
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THO R EXPLO RATIO NS LTD.
CO NDENSED INTERIM CO N SO LIDATED STATEM ENT O F FINANCIAL PO SITIO N
In United States dollars (unaudited)
Septem ber 30, Decem ber 31, Septem ber 30,
2024 2023 2023
Note $ $ $
(restated)
ASSETS
Current assets
Cash 5,189,260 7,839,757 8,264,796
Restricted cash 4 2,201,978
Inventory 5 43,369,284 41,770,046 47,576,396
Am ounts receivable 326,793 280,731 281,449
Pre p aid ex p enses, advances and de p osits 6 5 ,160,665 7,650 ,041 9 ,994 ,747
Total current assets 56,247,980 57,540,575 66,117,388
Non-current assets
Inventory 5 46,059,930 15,891,089 -
Deferred incom e tax assets - 90,277 86,750
Prepaid expenses, advances and deposits 6 222,474 221,266 222,234
Right-of-use assets 7 8,524,184 12,095,671 13,269,864
Property, plant and equipm ent 12 126,991,372 144,362,559 148,973,990
Intan g ible assets 13 35 ,426,241 28,912 ,732 24 ,892 ,388
Total non-current assets 217 ,224,201 201 ,573 ,594 187 ,445 ,226
T O TAL ASSET S 273,472,181 259,114,169 253,562,614
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 14 64,838,970 74,773,828 69,964,009
Deferred incom e 4,506,965 11,838,898 -
Lease liabilities 7 4,829,100 4,820,353 4,813,352
G old stream liability 8 13,161,137 12,343,232 10,686,862
Loans and borrowings 9 4,689,986 23,247,692 23,757,835
O ther financial liabilities 15 5 ,201,978 - -
Total current liabilities 97,228,136 127,024,003 109,222,058
Non-current liabilities
Accounts payable and accrued liabilities 14 - - 458,522
Lease liabilities 7 3,507,969 6,669,717 7,671,129
G old stream liability 8 - 7,699,765 9,833,586
Loans and borrowings 9 - 518,354 3,881,468
Provisions 11 5 ,044,084 5,007 ,560 4 ,994 ,983
Total non-current liabilities 8,552,053 19,895,396 26,839,688
SHAREH O LDERS' EQ UITY
Com m on shares 16 81,490,834 81,490,834 81,490,834
O ption reserve 16 1,968,134 1,968,134 1,968,134
Currency translation reserve 16 (3,550,251) (1,618,129) (3,817,211)
Retained earnin g s 16 87 ,783,275 30,353 ,931 37 ,859 ,111
T otal shareholders' e q uity 167 ,691,992 112 ,194 ,770 117 ,500 ,868
T O TAL LIABILITIES AND SHAREHO LD ERS' EQ UITY 273,472,181 259,114,169 253,562,614
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T hese condensed interim consolidated financial statem ents were approved for issue by the Board of Directors on Novem ber 10, 2024, and are signed on its behalf by:
(Signed) "Adrian C oates" (Signed) "O lusegun Lawson" Director Director
The accom panying notes are an integral part of these condensed interim consolidated financial statem ents.
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CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
In United States dollars (unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Note $ $ $ $
Continuing operations (restated) (restated)
Revenue 3 40,221,698 36,594,900 127,410,064 118,246,899
Cost of sales 3 (18,064,103) (30,166,452) (54,363,865) (79,941,856)
Loss on forward sale of commodity contracts - (205,323) - (1,156,339)
Gross profit from operations 22,157,595 6,223,125 73,046,199 37,148,704
Amortization and depreciation - owned assets 3 (127,529) (168,909) (910,850) (479,284)
Amortization and depreciation - right-of-use assets 3 (37,513) (36,502) (110,512) (107,655)
Other administration expenses 3 (2,142,160) (1,782,577) (6,969,403) (8,249,076)
Impairment of exploration & evaluation assets 13 - (2,622) - (9,083)
Profit from operations 19,850,393 4,232,515 65,055,434 28,303,606
Interest expense (2,350,263) (3,304,670) (7,626,090) (9,928,980)
Net profit before income taxes 17,500,130 927,845 57,429,344 18,374,626
Income Tax - - - -
Net profit for the period 17,500,130 927,845 57,429,344 18,374,626
Attributable to:
Equity shareholders of the Company 17,500,130 927,845 57,429,344 18,374,626
Net profit for the period 17,500,130 927,845 57,429,344 18,374,626
Other comprehensive profit
Foreign currency translation (loss)/profit attributed to
equity shareholders of the company 356,719 (1,411,198) (1,932,122) (1,304,300)
Total comprehensive (loss)/income for the period 17,856,849 (483,353) 55,497,222 17,070,326
Net earnings per share
Basic 17 $ 0.027 $ 0.001 $ 0.088 $ 0.028
Diluted 17 $ 0.027 $ 0.001 $ 0.087 $ 0.028
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The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Three Months Ended Nine Months Ended
September 30, September 30,
Note 2024 2023 2024 2023
(restated) (restated)
Cash flows from/(used in):
Operating
Net profit $ 17,500,130 927,845 $ 57,429,344 18,374,626
Adjustments for:
Impairment of unproven mineral interest 13 - 2,622 - 9,083
Amortization and depreciation 3 7,517,148 6,284,471 23,242,759 22,519,502
- -
Loss on forward sale commodity contracts 205,323 1,156,339
Unrealized foreign exchange (gains)/losses 3 (68,217) 3,870,841 885,807 (1,722,741)
Unrealized fair value movements on forward
gold sale contracts 3 2,160,798 - 5,201,978 -
Interest expense 2,350,263 3,304,670 7,626,090 9,928,980
29,460,122 14,595,772 94,385,978 50,265,789
Changes in non-cash working capital accounts
Inventories (9,656,147) (9,714,227) (31,768,079) (15,077,172)
Amounts receivable (65,910) (29,637) (46,062) (61,007)
Prepaid expenses, advances and deposits (106,957) (1,503,884) 2,488,168 542,767
Accounts payable and accrued liabilities (7,045,283) 5,901,412 (13,008,612) 23,842,583
Deferred income 1,129,000 (865,173) (7,331,933) (6,581,743)
Net cash flows from operating activities 13,714,825 8,384,263 44,719,460 52,931,217
Investing
Restricted Cash 4 (2,201,978) - (2,201,978) -
Purchase of intangible assets 13 - (63,586) (78,498) (140,966)
Assets under construction expenditures 12 - - (852,911) (128,843)
Property, Plant & Equipment 12 (485,609) (2,491,238) (1,363,745) (28,538,550)
Exploration & Evaluation assets expenditures 13 (1,891,543) (2,374,030) (6,463,094) (6,031,627)
Net cash flows used in investing activities (4,579,130) (4,928,854) (10,960,226) (34,839,986)
Financing
Share subscriptions received 16 - 40,056 - 1,051,141
Repayment of loans and borrowings 10 (9,853,597) (3,530,040) (30,985,369) (10,614,852)
- - -
Arrangement fees paid (126,874)
Interest paid 10 (420,721) (1,082,618) (1,818,993) (3,182,921)
Payment of lease liabilities 7 (1,258,684) (1,257,470) (3,773,619) (3,770,190)
Net cash flows used in financing activities (11,533,002) (5,830,072) (36,577,981) (16,643,696)
Effect of exchange rates on cash 53,478 (510,032) 168,250 129,224
Net change in cash $ (2,343,829) (2,884,695) $ (2,650,497) 1,576,759
Cash, beginning of the period $ 7,533,089 11,149,491 $ 7,839,757 6,688,037
Cash, end of the period $ 5,189,260 8,264,796 $ 5,189,260 8,264,796
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The accompanying notes are an integral part of these condensed interim consolidated financial
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6
THOR EXPLORATIONS LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY In United States dollars (unaudited)
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Currency Total
Option translation Retained shareholders'
Note Common shares reserve reserve earnings equity
Balance on December 31, 2022 $ 80,439,693 $ 3,351,133 $ (2,512,911) $ 18,101,486 $ 99,379,401
- - -
Net profit for the period 18,374,626 18,374,626
Other comprehensive loss - - (1,304,300) - (1,304,300)
Total comprehensive profit for the period - - (1,304,300) 18,374,626 17,070,326
Options exercised 16 1,051,141 (1,382,999) - 1,382,999 1,051,141
Balance on September 30, 2023 (restated) $ 81,490,834 $ 1,968,134 $ (3,817,211) $ 37,859,111 $ 117,500,868
Balance on December 31, 2023 $ 81,490,834 $ 1,968,134 $ (1,618,129) $ 30,353,931 $ 112,194,770
- - -
Net profit for the period 57,429,344 57,429,344
Other comprehensive income - - (1,932,122) - (1,932,122)
Total comprehensive profit for the period - - (1,932,122) 57,429,344 55,497,222
Balance on September 30, 2024 $ 81,490,834 $ 1,968,134 $ (3,550,251) $ 87,783,275 $ 167,691,992
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The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
1. CORPORATE INFORMATION
Thor Explorations Ltd. (the “Company”), together with its subsidiaries (collectively, “Thor” or the “Group”) is a West African focused gold producer and explorer, dually listed on the TSX-Venture Exchange (THX.V) and AIM Market of the London Stock Exchange (THX.L).
The Company was formed in 1968 and is organized under the Business Corporations Act (British Columbia) (BCBCA) with its registered office at 550 Burrard St, Suite 2900 Vancouver, BC, Canada, V6C 0A3. The Company evolved into its current form in August 2011 following a reverse takeover and completed the transformational acquisition of its flagship Segilola Gold Project in Nigeria in August 2016.
2. BASIS OF PREPARATION
a) Statement of compliance
These condensed interim consolidated financial statements ("interim financial statements") have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board ("IASB").
These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, which have been prepared in accordance with IFRS.
These interim financial statements were authorized for issue by the Board of Directors on November 10, 2024.
b) Basis of measurement
These interim financial statements are presented in United States dollars (“US$”).
These interim financial statements have been prepared on a historical cost basis, except for certain financial instruments that are measured at fair value at the end of each reporting period.
The Group’s accounting policies have been applied consistently to all periods in the preparation of these interim financial statements. In preparing the Group 's interim financial statements for the three and Nine months ended September 30, 2024, the Group applied the critical judgments and estimates as disclosed in note 3 of its annual financial statements for the year ended December 31, 2023.
These interim financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company, which is defined as having the power over the entity, rights to variable returns from its involvement with the entity, and the ability to use its power to affect the amount of returns. All intercompany transactions and balances are eliminated on consolidation. The Company's subsidiaries at September 30, 2024 are consistent with the subsidiaries as at December 31, 2023 as disclosed in note 3 to the annual financial statements.
None of the new standards or amendments to standards and interpretations applicable during the period has had a material impact on the financial position or performance of the Group. The Group has not early adopted any standard, interpretation or amendment that was issued but is not yet effective.
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THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
2. BASIS OF PREPARATION (continued)
c) Nature of operations and going concern
The Board of Directors have performed an assessment of whether the Company and Group would be able to continue as a going concern until at least November 2025. In their assessment, the Group has taken into account its financial position, expected future trading performance, its debt and other available credit facilities, future debt servicing requirements, its working capital and capital expenditure commitments and forecasts.
At September 30, 2024, the Group had a cash position of $5.2 million and a net cash position of $2.7 million, calculated as total debt adjusted for unamortized deferred financing charges less cash and cash equivalents and short-term investments. Cash flows from operating activities for the three and Nine months ended September 30, 2024 were inflows of $13.7 million and $44.7 million respectively.
The Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for at least the next twelve months and that, as at the date of this report, there are no material uncertainties regarding going concern.
The Board of Directors is satisfied that the going concern basis of accounting is an appropriate assumption to adopt in the preparation of the interim financial statements as at, and for the period ended September 30, 2024.
3. PROFIT FROM OPERATIONS
3a. REVENUE
| 3a. REVENUE | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three months | ended | Nine months ended | ||||||
| September | 30, | September 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Gold revenue | 42,300,514 | 36,538,656 | 132,172,585 | 118,078,295 | ||||
| Silver revenue | 81,982 | 56,244 | 439,457 | 168,604 | ||||
| Unrealized fair value movements on forward gold sale contracts |
(2,160,798) | - | (5,201,978) | - | ||||
| $ | 40,221,698 | $ | 36,594,900 | $ | 127,410,064 | $ | 118,246,899 |
Gold revenue
The Groups revenue is generated in Nigeria. All sales are made to the Groups two customers, one of these customers representing approximately 70% of sales. However, because gold can be sold through numerous gold market traders worldwide (including a large number of financial institutions), the Group is not economically dependent on a limited number of customers for the sale of its product.
Forward contracts
As at 30 September, 2024, the Group held outstanding gold forward contracts for 12,450 ounces at an average gold price of $2,222 per ounce with settlement weighted at 2,000 ounces a month until the position is closed. The Group may choose to settle the position at an accelerated rate. These contracts were entered in order to protect the Group`s revenue against gold price variability.
None of the forwards were designated as a hedge by the Group and are recorded at its fair value at the end of each reporting period. The contracts are classified as derivative contracts within Other financial liabilities in Note 15.
The liability is designated as fair value though profit and loss in accordance with IFRS 9 – Financial instruments with the fair value measurement considered to be a level 2 under the hierarchy established by IFRS 13 – Fair value measurement as detailed in Note 19
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THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
3b. COST OF SALES
| Three months | Three months | ended | Nine months ended | Nine months ended | Nine months ended | ||||
|---|---|---|---|---|---|---|---|---|---|
| September | 30, | September | 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | ||||||
| (restated)1 | (restated)1 | ||||||||
| Mining | 5,817,987 | 13,302,891 | 13,961,246 | 49,973,264 | |||||
| Processing | 2,697,594 | 5,213,335 | 13,443,912 | 13,634,767 | |||||
| Support services and others | 1,773,028 | 2,428,789 | 3,331,734 | 5,707,850 | |||||
| Foreign exchange (gains)/losses on production costs2 |
(419,949) | 2,430,118 | (1,147,484) | (15,041,807) | |||||
| Production costs | $ | 9,868,660 | $ | 23,375,133 | $ | 29,589,408 | $ | 54,274,074 |
|
| Transportation and refining | 596,136 | 712,258 | 1,621,713 | 1,864,629 | |||||
| Royalties | 247,201 | - | 931,347 | 1,870,590 | |||||
| Amortization and depreciation - operational assets - owned assets |
6,192,411 | 4,918,626 | 18,739,917 | 18,453,482 | |||||
| Amortization and depreciation - operational assets-right-of-use assets |
1,159,695 | 1,160,434 | 3,481,480 | 3,479,081 | |||||
| Cost of sales | 18,064,103 | 30,166,451 | 54,363,865 | 79,941,856 | |||||
| 1 | Refer to note 23 for details on the prior period restatement |
2 The total foreign exchange movements for the Nine months ended September 30, 2024, were $1,147,484 gains (2023: gains of $15,041,807). These comprise of realized foreign exchange gains of $2,033,291 (2023: gains of $1,440,723), as well as, unrealized foreign exchange losses of $885,807 (2023: gains of $13,319,066). During the period, SROL entered into spot currency trades to support funding of its operations in Nigeria. The foreign exchange gains and losses from these trades are generated from the differences between the local currency values achieved on the trades versus the currency translation rate as at the time of the trade. All local currency obtained from these spot currency trades are utilized wholly and exclusively for the purchase of raw materials, spare parts and other operational inputs required to support and maintain local operations.
3c. AMORTIZATION AND DEPRECIATION
| Three months | Three months | ended | Nine months | ended | ended | |||
|---|---|---|---|---|---|---|---|---|
| September | 30, | September 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Amortization and depreciation - operational assets - owned assets |
6,192,411 | 4,918,626 | 18,739,917 | 18,453,482 | ||||
| Amortization and depreciation - operational assets – right-of-use assets |
1,159,695 | 1,160,434 | 3,481,480 | 3,479,081 | ||||
| Amortization and depreciation – owned assets | 127,529 | 168,909 | 910,850 | 479,284 | ||||
| Amortization and depreciation–right-of-use assets | 37,513 | 36,502 | 110,512 | 107,655 | ||||
| $ | 7,517,148 | $ | 6,284,471 | $ | 23,242,759 | $ | 22,519,502 |
3d. OTHER ADMINISTRATION EXPENSES
| Three months | Three months | ended | Nine months ended | Nine months ended | Nine months ended | |||
|---|---|---|---|---|---|---|---|---|
| September | 30, | September 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Employee compensation | 665,197 | 799,245 | 2,829,731 | 2,907,100 | ||||
| Professional services | 410,439 | 617,806 | 1,203,713 | 1,886,116 | ||||
| Other corporate expenses | 1,066,524 | 365,526 | 2,935,959 | 3,455,860 | ||||
| $ | 2,142,160 | $ | 1,782,577 | $ | 6,969,403 | $ | 8,249,076 |
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THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
4. RESTRICTED CASH
The restricted cash balance represents margin call deposits held with financial institutions in relation to gold forward contracts (See note 3a). This cash is not available for general use by the Group and therefore has been classified as restricted cash. The Group expects this cash to be returned to its treasury in Q4 2024.
5. INVENTORIES
| September 30, | September 30, | December 31, | September | ||||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 30, 2023 | |||||
| (restated)1 | |||||||
| Current: | |||||||
| Plant spares and consumables | $ | 10,271,596 | $ | 8,681,433 | $ | 8,185,909 | |
| Gold ore in stockpile | 21,347,776 | 20,768,112 | 30,218,334 | ||||
| Gold in CIL | 6,364,573 | 8,405,429 | 9,025,408 | ||||
| Gold doré | 5,207,618 | 3,915,072 | 146,745 | ||||
| Gold bullion | 177,721 | - | - | ||||
| $ | 43,369,284 | $ | 41,770,046 | $ | 47,576,396 | ||
| Non-current: | |||||||
| Gold ore in stockpile | $ | 46,059,930 | $ | 15,891,089 | $ | - | |
| $ | 46,059,930 | $ | 15,891,089 | $ | - |
1 Refer to note 23 for details on the prior period restatement
There were no write downs to reduce the carrying value of inventories to net realizable value during the periods ended September 30, 2024 and 2023.
6. PREPAID EXPENSES, ADVANCES AND DEPOSITS
| September 30, | December 31, | ||
|---|---|---|---|
| 2024 | 2023 | ||
| Current: | |||
| Advance deposits to vendors | 3,136,906 | 5,770,097 | |
| Otherprepayments | 2,023,759 | 1,879,944 | |
| $ | 5,160,665 | 7,650,041 | |
| Non-current: | |||
| Otherprepayments | 222,474 | 221,266 | |
| $ | 222,474 | 221,266 |
Included in Advance deposits to vendors, are payment deposits towards key equipment, materials and spare parts, with longer lead times to delivery, which are of critical importance to maintain efficient operations of the mine and process plant. These were made to mitigate against price volatility and inflation currently affecting the sector.
11
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
7. LEASES
The Group accounts for leases in accordance with IFRS 16. The definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after January 1, 2019. The Group has elected not to recognize right-of-use assets and lease liabilities for leases which have low value, or short-term leases with a duration of 12 months or less. The payments associated with such leases are charged directly to the income statement on a straight-line basis over the lease term. There were no such leases for the periods ended September 30, 2024 and 2023.
Leases relate principally to corporate offices and the mining fleet at the Segilola mine. Corporate offices are depreciated over 5 years and mining fleet over the life of mine of Segilola.
The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position for the period ended September 30, 2024, were as follows:
| Right-of-use | Lease liability | Income | ||||
|---|---|---|---|---|---|---|
| asset | statement | |||||
| Carrying value at December 31, 2023 | $ | 12,095,671 | $ | (11,490,070) | $ | - |
| New leases entered in to during the period | - | - | - | |||
| Depreciation | (3,591,992) | - | (3,591,992) | |||
| Interest | - | (577,232) | (577,232) | |||
| Lease payments | - | 3,773,619 | - | |||
| Foreign exchange movement | 20,505 | (43,386) | (43,386) | |||
| Carrying value at September 30, 2024 | $ | 8,524,184 | $ | (8,337,069) | $ | (4,212,610) |
| Current liability | (4,829,100) | |||||
| Non-current liability | (3,507,969) |
The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position for the year ended December 31, 2023, were as follows:
| Right-of-use | Lease liability | Income | ||||
|---|---|---|---|---|---|---|
| asset | statement | |||||
| Carrying value at December 31, 2022 | $ | 16,849,402 | $ | (15,409,285) | $ | |
| New leases entered in to during the period | - | - | - | |||
| Depreciation | (4,782,253) | - | (4,782,253) | |||
| Interest | - | (1,078,217) | (1,078,217) | |||
| Lease payments | - | 5,026,847 | - | |||
| Foreign exchange movement | 28,522 | (29,415) | (29,415) | |||
| Carrying value at December 31, 2023 | $ | 12,095,671 | $ | (11,490,070) | $ | (5,889,885) |
| Current liability | (4,820,353) | |||||
| Non-current liability | (6,669,717) |
12
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
8. GOLD STREAM LIABILITY
| Gold stream liability September 30, 2024 December 31, 2023 |
|
|---|---|
| Balance at beginning of period $ 20,042,997 $ 25,039,765 Repayments (9,932,383) (10,241,299) Interest at the effective interest rate 3,050,523 5,244,531 |
|
| Balance at end ofperiod $ 13,161,137 $ 20,042,997 |
|
| Current liability 13,161,137 12,343,232 |
|
| Non-current liability - 7,699,765 |
On April 29, 2020, the Group announced the closing of project financing for its flagship Segilola Gold Project (“Segilola”) in Osun State, Nigeria. The financing included a $21 million gold stream upfront deposit (“the Prepayment") over future gold production at Segilola under the terms of a Gold Purchase and Sale Agreement (“GSA”) entered into between the Group’s wholly owned subsidiary SROL and the Africa Finance Corporation (“AFC”). The Prepayment is secured over the shares in SROL as well as over SROL’s assets and is not subject to interest.
The initial term of the GSA is for ten years with an automatic extension of a further ten years. The AFC will receive 10.27% of gold production from the Segilola ML41 mining license until the $21 million Prepayment has been repaid in full. Thereafter, the AFC will continue to receive 10.27% of gold production from material mined within the ML41 mining license until a further $26.25 million is received, representing a total money multiple of 2.25 times the value of the Prepayment, at which point the GSA will terminate. The AFC are not entitled to receive an allocation of gold production from material mined from any of the Group’s other gold tenements under the terms of the GSA.
In December 2021, the Group entered into a cash settlement agreement with the AFC where the gold sold to the AFC is settled in a net-cash sum payable to the AFC instead of delivery of bullion in repayment of the gold stream arrangement.
The liability is designated as fair value though profit and loss in accordance with IFRS 9 – Financial instruments with the fair value measurement considered to be a level 3 under the hierarchy established by IFRS 13 – Fair value measurement as detailed in Note 19. The principal input variables used in calculating the fair value and repayment profile are forecasts for gold production and gold price.
Refer to Note 3d of the audited consolidated financial statements for the year ended December 31, 2023 for further information on the accounting treatment of the gold stream liability.
9. LOANS AND BORROWINGS
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Current liabilities: | ||||
| Loans payable to the Africa Finance Corporation less than 1 year | $ | 3,383,864 | $ | 20,360,657 |
| Deferred element of EPC contract | 1,306,122 | 2,887,035 | ||
| $ | 4,689,986 | 23,247,692 | ||
| Non-current liabilities: | ||||
| Loans payable to the Africa Finance Corporation more than 1 year | $ | - | $ | - |
| Deferred element of EPC contract | - | 518,354 | ||
| $ | - | $ | 518,354 |
13
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
9. LOANS AND BORROWINGS (continued)
Loans from the Africa Finance Corporation
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Balance at beginning of period | $ | 20,360,657 | $ | 24,459,939 |
| Principal repayments | (18,692,111) | (5,776,084) | ||
| Interest paid | (1,699,287) | (3,931,575) | ||
| Arrangement fees | - | (126,874) | ||
| Unwinding of interest in the period | 3,414,605 | 5,735,251 | ||
| Balance at end ofperiod | $ | 3,383,864 | $ | 20,360,657 |
| Current liability | 3,383,864 | 20,360,657 | ||
| Non-current liability | - | - |
On December 1, 2020, the Group announced that its subsidiary Segilola Resources Operating Limited (“SROL”) had completed the financial closing of a $54 million project finance senior debt facility (“the Facility”) from the Africa Finance Corporation (“AFC”) for the construction of the Segilola Gold Project in Nigeria. The Facility is secured over the share capital of SROL and its assets, with repayments commencing in March 2022 and to conclude in March 2025.
Repayment of the aggregate Facility will be made in instalments over a 36-month period by repaying an amount on a series of repayment dates, as set out in the Facility Agreement, which reduces the amount of the outstanding aggregate Facility by the amount equal to the relevant percentage of Loans borrowed as at the close of business in London on the date of Financial Close. Interest accrues at SOFR plus 9% and is payable on a quarterly basis in arrears.
In conjunction with the granting of the Facility, Thor issued 33,329,480 bonus shares to the AFC. Thor also incurred transaction costs of $4,663,652 in relation to the loan facility. The fair value of the liability at inception was determined at $45,822,943 taking into account the transaction costs and equity component and recognized at amortized cost using an effective rate of interest, with the fair value of the shares issued in April 2020 of $5,666,011 recognized within equity.
On 31 January 2023, the Group entered into an agreement with the AFC amending the terms of its senior debt facility. The amended facility removes the project finance cash sweep requirement and allows for free distributions from SROL (subject to a 20% distribution sweep to the senior debt facility), as well as releasing the Group from restrictions regarding acquisitions, distribution of dividends and certain indebtedness covenants. The payment timetable was also re-scheduled to reallocate a higher percentage of the repayments to a later period in the Facility’s term. The amendment was considered a non-substantial modification per “IFRS 9 – Financial Instruments”.
Deferred payment facility on EPC contract for the construction of the Segilola Gold Mine
The Group has constructed its Segilola Gold Mine through an engineering, procurement, and construction contract (“EPC Contract”). The EPC Contract has been agreed on a lump sum turnkey basis which provides Thor with a fixed price of $67.5 million for the full delivery of design, engineering, procurement, construction, and commissioning of the proposed 715,000 ton per annum gold ore processing plant.
The EPC Contract includes a deferred element (“the Deferred Payment Facility”) of 10% of the fixed price. The 10% deferred element is repayable in instalments over a 36-month period by repaying an amount on a series of repayment dates, as set out in the Deferred Payment Facility. Repayments commenced in March 2022 and
14
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
will conclude in 2025. Interest on this element of the EPC deferred facility accrues at 8% per annum from the time the Facility taking-over Certificate was issued.
9. LOANS AND BORROWINGS (continued)
| . LOANS AND BORROWINGS (continued) | ||||
|---|---|---|---|---|
| September 30, | December 31, | |||
| 2024 | 2023 | |||
| Balance at beginning of period | $ | 3,405,389 | $ | 3,682,715 |
| Offset against EPC payment | - | - | ||
| Principal repayments | (2,360,875) | (731,539) | ||
| Interest paid | (119,706) | (283,970) | ||
| Unwinding of interest in the period | 381,314 | 738,183 | ||
| Balance at end of period | $ | 1,306,122 | $ | 3,405,389 |
| Current liability | 1,306,122 | 2,887,035 | ||
| Non-current liability | - | 518,354 |
10. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
| September 30, 2024 | Gold Stream | AFC loan | EPC | Total | |||
|---|---|---|---|---|---|---|---|
| liability | deferred | ||||||
| facility | |||||||
| January 1, 2024 | $ | 20,042,997 | 20,360,657 | 3,405,389 | 43,809,043 | ||
| Cash flows: | - | ||||||
| Repayment of borrowings |
loans | and | (9,932,383) | (18,692,111) | (2,360,875) | (30,985,369) | |
| Arrangement fees | - | - | - | - | |||
| Interest paid | - | (1,699,287) | (119,706) | (1,818,993) | |||
| Non-cash changes: | - | ||||||
| Unwinding of interest in the year | - | 3,414,605 | 381,314 | 3,795,919 | |||
| Fair valuemovementsinthe year | 3,050,523 | - | - | 3,050,523 | |||
| September30,2024 | $ | 13,161,137 | 3,383,864 | 1,306,122 | 17,851,123 | ||
| December 31, 2023 | Gold stream | AFC loan | EPC | Total | |||
| liability | deferred | ||||||
| facility | |||||||
| January 1, 2023 | $ | 25,039,765 | 24,459,939 | 3,682,715 | 53,182,419 | ||
| Cash flows: | |||||||
| Repayment of borrowings |
loans | and | (10,241,299) | (5,776,084) | (731,539) | (16,748,922) | |
| Arrangement fees | - | (126,874) | - | (126,874) |
|||
| Interest paid | - | (3,931,575) | (283,970) | (4,215,545) | |||
| Non-cash changes: | |||||||
| Unwinding of interest in the year | - | 5,735,251 | 738,183 | 11,717,965 | |||
| Fair valuemovementsinthe year | 5,244,531 | - | - | - | |||
| December 31,2023 | $ | 20,042,997 | 20,360,657 | 3,405,389 | 43,809,043 |
15
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
11. PROVISIONS
| September 30, 2024 | Fleet | |||||||
|---|---|---|---|---|---|---|---|---|
| demobilization | Restoration | |||||||
| Other | costs | costs | Total | |||||
| Balance at beginning of period | $ | 19,099 | $ | 173,442 | $ | 4,815,019 | $ | 5,007,560 |
| Initial recognition of provision | - | - | - | - | ||||
| Changes in estimates | - | - | ||||||
| Unwinding of discountof | - | - | 35,540 | 35,540 | ||||
| Foreign exchange movementse | 984 | - | - | 984 | ||||
| Balance at end of theperiod | $ | 20,083 | $ | 173,442 | $ | 4,850,559 | $ | 5,044,084 |
| Current liability | - | - | - | - | ||||
| Non-current liability | 20,083 | 173,442 | 4,850,559 | 5,044,084 | ||||
| December 31, 2023 | Fleet | |||||||
| demobilization | Restoration | |||||||
| Other | costs | costs | Total | |||||
| Balance at beginning of period | $ | 18,157 | $ | 173,442 | $ | 4,768,039 | $ | 4,959,638 |
| Unwinding of discountof | - | - | 46,981 | 46,981 | ||||
| Foreign exchange movementse | 941 | - | - | 941 | ||||
| Balance atperiod end | $ | 19,098 | $ | 173,442 | $ | 4,815,020 | $ | 5,007,560 |
| Current liability | - | - | - | - | ||||
| Non-current liability | 19,098 | 173,442 | 4,815,020 | 5,007,560 |
The restoration costs provision is for the site restoration at Segilola Gold Project in Osun State Nigeria. The value of the above provision is measured by unwinding the discount on expected future cash flows using a discount factor that reflects the credit-adjusted risk-free rate of interest. It is expected that the restoration costs will be paid in US dollars, and as such US forecast inflation rates of 2.9% and the interest rate of 4% on 5-year US bonds were used to calculate the expected future cash flows, which are in line with the life of mine. The provision represents the net present value of the best estimate of the expenditure required to settle the obligation to rehabilitate environmental disturbances caused by mining operations at mine closure.
The fleet demobilization costs provision is the value of the cost to demobilize the mining fleet upon closure of the mine.
16
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
12. PROPERTY, PLANT AND EQUIPMENT
| Motor | Plant and | Office | Decommissioning | Processing | Processing | Assets under | Assets under | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| vehicles | machinery | furniture | Land | Asset | Plant | Segilola Mine | construction | Total | ||||||||||
| Costs | ||||||||||||||||||
| Balance, December 31, 2022 | $ | 2,168,840 |
$ | 6,126,624 |
$ | 1,834,887 |
$ | 16,808 |
$ | 4,660,076 |
$ | 68,147,118 |
$ | 92,836,315 |
$ | 1,884,352 |
177,675,020 | |
| Transfers | - | 237,121 | - | - | - | 1,000,143 | 647,088 | (1,884,352) | - | |||||||||
| Additions | 625,549 | 1,058,365 | 696,094 | - | - | 5,368,352 | 10,343,882 | - | 18,092,242 | |||||||||
| Disposals | - | - | - | - | - | - | - | - | - | |||||||||
| Foreign exchange movement | (111,481) | 7,958 | 3,332 | - | - | - | - | - | (100,191) | |||||||||
| Balance, December 31, 2023 | $ | 2,682,908 |
$ | 7,430,068 |
$ | 2,534,313 |
$ | 16,808 |
$ | 4,660,076 |
$ | 74,515,613 |
$ | 103,827,285 |
$ | - |
$ | 195,667,071 |
| Transfers | $ | - |
$ | (2,858,975) |
$ | - |
$ | - |
$ | - |
$ | 74,230 |
$ | 2,784,745 |
$ | - |
- | |
| Additions | 420,656 | 440,001 | 120,138 | - | - | 252,339 | 130,611 | 852,911 | 2,216,656 | |||||||||
| Disposals | (65,207) | - | - | - | - | - | - | - | (65,207) | |||||||||
| Foreign exchange movement | (51,836) | 3,261 | (5,941) | - | - | - | - | - | (54,516) | |||||||||
| Balance, September 30, 2024 | $ | 2,986,521 |
$ | 5,014,355 |
$ | 2,648,510 |
$ | 16,808 |
$ | 4,660,076 |
$ | 74,842,182 |
$ | 106,742,641 |
$ | 852,911 |
$ | 197,764,004 |
| Accumulated depreciation and impairment | ||||||||||||||||||
| losses | ||||||||||||||||||
| Balance, December 31, 2022 | $ | 1,196,809 |
$ | 606,142 |
$ | 554,953 |
$ | - |
$ | 952,322 |
$ | 10,247,764 |
$ | 14,603,113 |
$ | - |
28,161,103 | |
| Depreciation | 504,520 | 423,149 | 566,193 | - | 662,480 | 8,543,169 | 12,488,148 | - | 23,187,659 | |||||||||
| Disposals | - | - | - | - | - | - | - | - | - | |||||||||
| Foreign exchange movement | (55,546) | 6,074 | 5,222 | - | - | - | - | - | (44,250) | |||||||||
| Balance, December 31, 2023 | $ | 1,645,783 |
$ | 1,035,365 |
$ | 1,126,368 |
$ | - |
$ | 1,614,802 |
$ | 18,790,933 |
$ | 27,091,261 |
$ | - |
$ | 51,304,512 |
| Transfers | $ | - |
$ | (269,006) |
$ | - |
$ | - |
$ | - |
$ | - |
$ | 269,006 |
$ | - |
- | |
| Depreciation | 324,379 | 732,525 | 826,175 | - | 498,295 | 7,022,315 | 10,174,172 | - | 19,577,861 | |||||||||
| Disposals | (65,207) | - | - | - | - | - | - | - | (65,207) | |||||||||
| Foreign exchange movement | (36,589) | 2,309 | (10,254) | - | - | - | - | - | (44,534) | |||||||||
| Balance, September 30, 2024 | $ | 1,868,366 |
$ | 1,501,193 |
$ | 1,942,289 |
$ | - |
$ | 2,113,097 |
$ | 25,813,248 |
$ | 37,534,439 |
$ | - |
$ | 70,772,632 |
| Carrying amounts | ||||||||||||||||||
| Balance, December 31, 2023 | $ | 1,037,125 |
$ | 6,394,703 |
$ | 1,407,945 |
$ | 16,808 |
$ | 3,045,274 |
$ | 55,724,680 |
$ | 76,736,024 |
$ | - |
$ | 144,362,559 |
| Balance, September 30, 2024 | $ | 1,118,155 |
$ | 3,513,162 |
$ | 706,221 |
$ | 16,808 |
$ | 2,546,979 |
$ | 49,028,934 |
$ | 69,208,202 |
$ | 852,911 |
$ | 126,991,372 |
a) Segilola Project, Osun Nigeria:
Decommissioning Asset
The decommissioning asset relates to estimated restoration costs at the Group’s Segilola Gold Mine as at March 31, 2024. Refer to Note 11 for further detail.
13. INTANGIBLE ASSETS
The Group’s exploration and evaluation assets costs are as follows:
| Douta Gold Project, Senegal Lithium exploration licenses Gold exploration licenses Software Total |
Douta Gold Project, Senegal Lithium exploration licenses Gold exploration licenses Software Total |
|---|---|
| Balance, December 31, 2022 16,537,873 $ - $ 2,542,588 $ 150,747 $ 19,231,208 $ |
|
| Exploration costs 5,283,114 1,981,083 2,112,733 - 9,388,601 Additions - - - 140,966 140,966 Amortisation - - - (128,481) (128,481) Impairment - - - - (11,671) Foreign exchange movement 898,344 - (606,235) - 292,109 |
|
| Balance, December 31, 2023 22,719,331 $ 1,981,083 $ 4,049,086 $ 163,232 $ 28,912,732 $ |
|
| Exploration costs 1,891,305 509,959 4,019,413 - 6,420,677 Additions - - - 78,498 78,498 Amortisation - - - (86,962) (86,962) Impairment - - - - - Foreign exchange movement 849,845 - (748,549) - 101,296 |
|
| Balance, September 30, 2024 25,460,481 $ 2,491,042 $ 7,319,950 $ 154,768 $ |
35,426,241 $ |
17
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
13. INTANGIBLE ASSETS (continued)
a) Douta Gold Project, Senegal:
The Douta Gold Project consists of an early-stage gold exploration license located in southeastern Senegal, approximately 700 km east of the capital city Dakar.
The Group is party to an option agreement (the “Option Agreement”) with International Mining Company (“IMC”), by which the Group has acquired a 70% interest in the Douta Gold Project located in southeast Senegal held through African Star SARL.
Pursuant to the terms of the Option Agreement, IMC’s 30% interest will be a “free carry” interest until such time as the Group announces probable reserves on the Douta Gold Project (the “Free Carry Period”). Following the Free Carry Period, IMC must either elect to sell its 30% interest to African Star at a purchase price determined by an independent valuer commissioned by African Star or fund its 30% share of the exploration and operating expenses.
On April 3, 2024, the Group completed the acquisition of two additional licenses in southeast Senegal to further advance the Douta Gold Project. These include an up to 85% interest in the Douta-West Licence, located contiguous to the Douta Gold Project, for $120,000, and an up to 80% interest in the Sofita Licence, approximately 20 kilometers south of Douta, for $20,000. These strategic acquisitions are intended to enhance and expand the Group’s ongoing exploration efforts in Douta Gold Project.
b) Lithium exploration Licenses, Nigeria
As at September 30, 2024, the Group has over 600 km² of granted tenure in south-west Nigeria that covers both known lithium bearing pegmatite deposits and a large unexplored prospective pegmatite-rich belt. These are divided into the Oyo State, Kwara State and Ekiti State Lithium Project Areas and the Group is currently carrying out lithium exploration activities in these areas.
c) Gold exploration Licenses
As at September 30, 2024, the Group’s gold exploration tenure in Nigeria currently primarily comprises 16 wholly owned exploration licenses and 13 partnership exploration licenses. Together with the mining lease over the Segilola Gold Deposit, Thor’s total gold exploration tenure amounts to 1,697 km².
In addition, during the Nine months ended in September 30, 2024 the Group expanded its operations into Cote d’Ivoire by acquiring a 100% interest in the Guitry Gold Project for US$250,000 in cash and a 1% Net Smelter Royalty, as well as, entering into an option agreement to acquire an 80% interest in the Boundiali Exploration permit
14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Trade payables | $ | 56,362,089 | $ | 58,713,313 |
| Accrued liabilities | 8,242,467 | 14,116,212 | ||
| Otherpayables | 234,414 | 1,944,303 | ||
| $ | 64,838,970 | $ | 74,773,828 |
Accounts payable and accrued liabilities are classified as financial liabilities and approximate their fair values.
18
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
15. OTHER FINANCIAL LIABILITIES
| THER FINANCIAL LIABILITIES | ||||||
|---|---|---|---|---|---|---|
| Note | September 30, | December 31, | ||||
| 2024 | 2023 | |||||
| Derivative contracts | 3a | $ | 5,201,978 | $ | - | |
| $ | 5,201,978 | $ | - |
Forward contracts
As at 30 September, 2024, the Group held outstanding gold forward contracts for 12,450 ounces at an average gold price of $2,222 per ounce with settlement weighted at 2,000 ounces a month until the position is closed. The Group may choose to settle the position at an accelerated rate. These contracts were entered in order to protect the Group`s revenue against gold price variability. Refer to note 3a for more information.
16. CAPITAL AND RESERVES
a) Authorized
Unlimited common shares without par value.
b) Issued
| b) Issued | ||||||||
|---|---|---|---|---|---|---|---|---|
| September | 30, | September | 30, | December 31, | December 31, | |||
| 2024 | 2024 | 2023 | 2023 | |||||
| Number | Number | |||||||
| As at start of the year | 656,064,724 | $ | 81,490,834 | 644,696,185 | $ | 80,439,693 | ||
| Issue of new shares: | ||||||||
| -Share options exercisedi | - | - | 11,368,539 | 1,051,141 | ||||
| 656,064,724 | $ | 81,490,834 | 656,064,724 | $ | 81,490,834 |
i. Value of:
1,500,000 options exercised at a price of CAD$0.145 per share on September 5, 2023;
9,118,539 options exercised at a price of CAD$0.145 per share on September 14, 2023; and,
750,000 options exercised at a price of CAD$0.14 per share on September 28, 2023
c) Share-based compensation
Stock option plan
The Group has granted directors, officers and consultants share purchase options. These options were granted pursuant to the Group’s stock option plan. Under the current Share Option Plan, 44,900,000 common shares of the Group are reserved for issuance upon exercise of options.
All of the stock options were vested as at the balance sheet date. These options did not contain any market conditions and the fair value of the options were charged to the statement of comprehensive
income or capitalized as to assets under construction in the period where granted to personnel’s whose cost is capitalized on the same basis
==> picture [462 x 74] intentionally omitted <==
----- Start of picture text -----
Contractual January 1, September 30,
Lives 2024 During the year 2024 Number of Options
Grant Expiry Exercise Remaining Opening Expired / Closing Vested and
Date Date Price (Years) Balance Granted Exercised Forfeited Balance Exercisable
January 16, 2020 January 16, 2025 $0.20 0.30 14,040,000 - - - 14,040,000 14,040,000
Totals 0.30 14,040,000 - - - 14,040,000 14,040,000
Weighted Average Exercise Price $0.200 - - - $0.200 $0.200
In Canadian Dollars
----- End of picture text -----
19
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
16. CAPITAL AND RESERVES (continued)
The following is a summary of changes in options from January 1, 2022, to December 31, 2023, and the outstanding and exercisable options at December 31, 2023:
| Grant Date Expiry Date Exercise Price Remaining (Years) |
Opening Balance Granted Exercised Expired / Forfeited Closing Balance Vested and Exercisable |
|---|---|
| March 12, 2018 June 15, 2023 $0.145 - October 5, 2018 October 5, 2023 $0.14 - January 16, 2020 January 16, 2025 $0.20 1.05 |
12,111,000 - (12,111,000) - - - 750,000 - (750,000) - - - 14,040,000 - - - 14,040,000 14,040,000 |
| Totals 1.05 Weighted Average Exercise Price |
26,901,000 - (12,861,000) - 14,040,000 14,040,000 $0.174 - - - $0.200 $0.200 |
| In Canadian Dollars |
d) Nature and purpose of equity and reserves
The reserves recorded in equity on the Group’s statement of financial position include ‘Option reserve,’ ‘Currency translation reserve,’ ‘Retained earnings’ and ‘Deficit.’
‘Option reserve’ is used to recognize the value of stock option grants prior to exercise or forfeiture.
‘Currency translation reserve’ is used to recognize the exchange differences arising on translation of the assets and liabilities of foreign branches and subsidiaries with functional currencies other than US dollars.
‘(Deficit)/Retained earnings’ is used to record the Group’s accumulated earnings.
17. EARNINGS PER SHARE
Diluted earnings per share was calculated based on the following:
| Three months | ended September | Nine months | ended September | |
|---|---|---|---|---|
| 30, | 30, | |||
| 2024 | 2023 | 2024 | 2023 | |
| Basic weighted average number of shares outstanding |
656,064,724 | 655,314,814 |
656,064,724 | 647,842,219 |
| Stock options | 3,829,581 | 4,944,480 |
3,829,581 | 4,944,480 |
| Diluted weighted average number of shares outstanding |
659,894,305 | 660,259,294 | 659,894,305 | 652,786,699 |
| Total common shares outstanding | 656,064,724 | 656,064,724 | 656,064,724 | 656,064,724 |
| Totalpotentialdiluted commonshares | 670,104,724 | 670,104,724 | 670,104,724 | 670,104,724 |
18. RELATED PARTY DISCLOSURES
A number of key management personnel, or their related parties, hold or held positions in other entities that result in them having control or significant influence over the financial or operating policies of the entities outlined below.
a) Trading transactions
The Africa Finance Corporation (“AFC”) is deemed to be a related party given the size of its shareholding in the Company. There have been no other transactions with the AFC other than the Gold Stream liability as disclosed in Note 8, and the secured loan as disclosed in Note 9.
20
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
18. RELATED PARTY DISCLOSURES (continued)
b) Compensation of key management personnel
The remuneration of directors and other members of key management during the three and Nine months ended September 30, 2024, and 2023 were as follows:
| Three months | Three months | ended | Nine months ended | Nine months ended | Nine months ended | ||||
|---|---|---|---|---|---|---|---|---|---|
| September | 30, | September 30, | |||||||
| 2024 | 2023 | 2024 | 2023 | ||||||
| Salaries and bonuses | |||||||||
| Current directors and officers | (i) (ii) | $ | 272,121 | $ | 257,414 |
$ | 1,217,350 | $ | 1,230,512 |
| Directors’ fees | |||||||||
| Current directors and officers | (i) (ii) | $ | 121,464 | $ | 113,021 |
$ | 362,560 | $ | 335,199 |
| $ | 393,585 | $ | 370,435 | $ | 1,579,910 | $ | 1,565,711 |
(i) Key management personnel were not paid post-employment benefits, termination benefits, or other long-term benefits during the three and Nine months ended September 30, 2024, and 2023.
(ii) The Group paid consulting and director fees to both individuals and private companies controlled by directors and officers of the Group for services. Accounts payable and accrued liabilities at September 30, 2024, include $85,163 (December 31, 2023 - $81,730) due to directors or private companies controlled by an officer and director of the Group. Amounts due to or from related parties are unsecured, non-interest bearing and due on demand.
19. FINANCIAL INSTRUMENTS
The Group’s financial instruments are classified as follows:
| September 30, 2024 | Measured at Measured at fair |
Measured at Measured at fair |
Total | |
|---|---|---|---|---|
| amortized cost | value through | |||
| profit andloss | ||||
| Assets | ||||
| Cash and cash equivalents | $ | 5,189,260 | - | 5,189,260 |
| Restricted Cash | 2,201,978 | |||
| Amountsreceivable | 326,793 | - | 326,793 | |
| Total assets | $ | 8,120,488 | - | 8,120,488 |
| Liabilities | ||||
| Accounts payable and accrued liabilities |
$ | 64,838,970 | - | 64,838,970 |
| Loans and borrowings | 4,689,986 | - | 4,689,986 | |
| Gold stream liability | - | 13,161,137 | 13,161,137 | |
| Lease liabilities | 8,337,069 | - | 8,337,069 | |
| Other financial liabilities | 5,201,978 | 5,201,978 | ||
| Total liabilities | $ | 77,866,025 | 18,363,115 | 96,229,140 |
21
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
19. FINANCIAL INSTRUMENTS (continued)
| December 31, 2023 | Measured at | Measured at fair | Total | |
|---|---|---|---|---|
| amortized cost | value through | |||
| profit andloss | ||||
| Assets | ||||
| Cash and cash equivalents | $ | 7,839,757 | - | 7,839,757 |
| Amountsreceivable | 280,731 | - | 280,731 | |
| Total assets | $ | 8,120,488 | - | 8,120,488 |
| Liabilities | ||||
| Accounts payable and accrued liabilities |
$ | 74,773,828 | - | 74,773,828 |
| Loans and borrowings | 23,766,046 | - | 23,766,046 | |
| Gold stream liability | - | 20,042,997 | 20,042,997 | |
| Leaseliabilities | 11,490,070 | - | 11,490,070 | |
| Total liabilities | $ | 110,029,944 | 20,042,997 | 130,072,941 |
The fair value of these financial instruments approximates their carrying value.
As noted above, the Group has certain financial liabilities that are held at fair value. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques to measure fair value:
Classification of financial assets and liabilities
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and Level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
20. CAPITAL MANAGEMENT
The Group manages, as capital, the components of shareholders’ equity. The Group’s objectives, when managing capital, are to safeguard its ability to continue as a going concern in order to develop and its mineral interests through the use of capital received via the issue of common shares and via debt instruments where the Board determines that the risk is acceptable and, in the shareholders’ best interest to do so.
The Group manages its capital structure, and makes adjustments to it, in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Group may attempt to issue common shares, borrow, acquire or dispose of assets or adjust the amount of cash.
21. CONTRACTUAL COMMITMENTS AND CONTINGENT LIABILITIES
Contractual Commitments
The Group has no contractual obligations that are not disclosed on the Condensed Interim Consolidated Statement of Financial Position.
Contingent liabilities
The Group is involved in various legal proceedings arising in the ordinary course of business. Management has assessed these contingencies and determined that, in accordance with International Financial Reporting Standards, all cases are considered as remote. As a result, no provision has been made in the interim financial statements for any potential liabilities that may arise from these legal proceedings.
22
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
21. CONTRACTUAL COMMITMENTS AND CONTINGENT LIABILITIES (continued)
Although the Group believes that it has valid defenses in these matters, the outcome of these proceedings is uncertain, and there can be no assurance that the Group will prevail in these matters. The Group will continue to assess the likelihood of any loss, the range of potential outcomes, and whether or not a provision is necessary in the future, as new information becomes available.
Based on the information available, the Group does not believe that the outcome of these legal proceedings will have a material adverse effect on the financial position or results of operations of the Group. However, there can be no assurance that future developments will not materially affect the Group's financial position or results of operations.
22. SEGMENTED DISCLOSURES
Segment Information
The Group’s operations comprise three reportable segments, the Segilola Mine Project, Exploration Projects, and Corporate.
| Nine months ended September 30, 2024 Segilola Mine Project Exploration Projects Corporate Total |
|
|---|---|
| Profit (loss) for the period $ 56,263,282 $ (5,499) $ 1,171,561 $ 57,429,344 - revenue 127,410,064 - - 127,410,064 - production costs (29,589,408) - - (29,589,408) - royalties (931,347) - - (931,347) - amortization and depreciation (24,950,076) - 1,707,317 (23,242,759) - other administration expenses (6,428,148) (5,499) (535,756) (6,969,403) - interest expense - - - - |
|
| September 30, 2024 Segilola Mine Project Exploration Projects Corporate Total |
|
| Current assets $ 55,334,592 $ 150,180 $ 763,208 $ 56,247,980 Non-current assets Inventories 46,059,930 - - 46,059,930 Deferred income tax assets - - - - Prepaid expenses and deposit - - 222,474 222,474 Right-of-use assets 8,112,099 - 412,085 8,524,184 Property, plant and equipment 126,452,178 447,247 91,947 126,991,372 Intangible assets 6,143,501 29,282,740 - 35,426,241 Total assets $ 242,102,300 $ 29,880,167 $ 1,489,714 $ 273,472,181 Non-current asset additions $ 2,295,154 $ 6,420,677 $ - $ 8,715,831 |
|
| Liabilities $ (116,778,842) $ (247,542) $ (1,232,227) $ (118,258,611) |
23
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
22. SEGMENTED DISCLOSURES (continued)
Non-current assets by geographical location:
| Côte | United | |||||
|---|---|---|---|---|---|---|
| September 30, 2024 | Senegal | d'Ivoire | Nigeria | Kingdom | Canada | Total |
| Inventories | - | - | 46,059,930 | - |
- | 46,059,930 |
| Prepaid expenses and deposit |
- | - | - | 222,474 |
- | 222,474 |
| Right-of-use assets | - | - | 8,112,099 | 412,085 | - | 8,524,184 |
| Property, plant and equipment |
447,247 | - | 126,452,178 | 91,947 |
- | 126,991,372 |
| Intangible | 25,460,481 | 409,675 | 9,556,085 | - | - | 35,426,241 |
| Total non-current assets | $25,907,728 | $409,675 | $190,180,292 | $726,506 | $7,837 | $217,224,201 |
| Nine months ended September 30, 2023 Segilola Mine Project Exploration Projects Corporate Total |
|
|---|---|
| Profit (loss) for the period $ 21,100,844 $ (493,223) $ (2,232,995) $ 18,374,626 - revenue 118,246,899 - - 118,246,899 - production costs (54,274,074) - - (54,274,074) - royalties (1,870,590) - - (1,870,590) - amortization and depreciation (22,375,929) (2,396) (141,177) (22,519,502) - other administration expenses (5,675,514) (481,744) (2,091,818) (8,249,076) - impairments - (9,083) - (9,083) - interest expense (9,928,980) - - (9,928,980) |
|
| December 31, 2023 Segilola Mine Project Exploration Projects Corporate Total |
|
| Current assets $ 56,790,700 $ 148,675 $ 601,200 $ 57,540,575 Non-current assets Inventory 15,891,089 - - 15,891,089 Deferred income tax assets - 90,277 - 90,277 Prepaid expenses and deposit 9,702 - 211,564 221,266 Right-of-use assets 11,593,579 - 502,092 12,095,671 Property, plant and equipment 143,790,133 454,677 117,749 144,362,559 Intangible assets 3,050,307 25,862,425 - 28,912,732 Total assets $ 231,125,510 $ 26,556,054 $ 1,432,605 $ 259,114,169 Non-current asset additions $ 33,345,114 $ 7,598,627 $ 51,564 $ 40,995,305 |
|
| Liabilities $ (145,298,974) $ (148,630) $ (1,471,795) $ (146,919,399) |
24
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
22. SEGMENTED DISCLOSURES (continued)
Non-current assets by geographical location:
| British | ||||||
|---|---|---|---|---|---|---|
| Virgin | United | |||||
| December 31, 2023 | Senegal | Islands | Nigeria | Kingdom | Canada | Total |
| Inventory | - | - | 15,891,089 | - | - | 15,891,089 |
| Prepaid expenses, advances and deposits |
- | 1,405 | 8,297 | 211,564 | - | 221,266 |
| Right-of-use assets | - | - | 11,593,579 | 502,092 | - | 12,095,671 |
| Property, plant and equipment | 408,518 | - | 143,836,292 | 114,735 | 3,014 | 144,362,559 |
| Intangible assets | 22,719,331 | - | 6,193,401 | - | - | 28,912,732 |
| Total non-current assets | $23,127,849 | $1,405 | $177,522,658 | $828,391 | $3,014 | $201,483,317 |
23. PRIOR PERIOD RESTATEMENT
During the preparation of the audited consolidated financial statements for the year ended December 31, 2023 the Group has refined its methodology and estimates for the valuation of Inventory stockpiles. The change in estimates apply to better management information being available to the Group such as improved density calculations for the determination of the mass of the stockpiles. These revisions have increased the amount of ore in the stockpiles by approximately 66,000 tonnes and 2,100 contained ounces as at September 30, 2023. Such changes in estimates have been applied prospectively in accordance with accounting guidance.
As part of this assessment, the Group has also identified an error in the methodology used to calculate the cost of its stockpile in previous periods. The error relates to calculating costs based on tonnes of ore mined as opposed to ounces. Considering this revision, the balance of Inventory as at September 30, 2023 increased by $16,470,925 and the cost of sales for the three and Nine month periods ended September 30, 2023 decreased by $1,330,283 and $3,872,963, respectively.
Therefore, in accordance with “IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors”, the Condensed interim consolidated statements of financial position, Condensed interim consolidated statements of comprehensive income and Condensed interim consolidated statements of cash flows for the three month period ended September 30, 2023, have been restated. The impact of the restatement on these statements is demonstrated below:
25
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
23. PRIOR PERIOD RESTATEMENT (continued)
Condensed interim consolidated statements of financial position
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September 30, September 30,
2023 Restatements 2023
$ $
(reported) (restated)
ASSETS
Inventory 31,105,471 16,470,925 47,576,396
Other current assets 18,540,992 - 18,540,992
Total current assets 49,646,463 16,470,925 66,117,388
Total non-current assets 187,445,226 - 187,445,226
TOTAL ASSETS 237,091,689 16,470,925 253,562,614
LIABILITIES
Total current liabilities 109,222,058 - 109,222,058
Total non-current liabilities 26,839,688 - 26,839,688
SHAREHOLDERS' EQUITY
Retained earnings 21,388,186 16,470,925 37,859,111
Other equity 79,641,757 - 79,641,757
Total shareholders' equity 101,029,943 16,470,925 117,500,868
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 237,091,689 16,470,925 253,562,614
----- End of picture text -----
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Condensed interim consolidated statements of comprehensive income
Three months Three months Nine months
Nine months ended
ended ended ended September
September 30,
September 30, September 30, 30,
2023 2023 2023 2023
Restatements Restatements
$ $ $ $
(reported) (restated) (reported) (restated)
Revenue 36,594,900 - 36,594,900 118,246,899 - 118,246,899
Cost of sales (28,836,168) (1,330,283) (30,166,451) (83,814,819) 3,872,963 (79,941,856)
$ - $ - $ - $ -
Loss on forward sale of commodity contracts (205,323) - (205,323) (1,156,339) - (1,156,339)
Gross profit from operations 7,553,409 (1,330,283) 6,223,126 33,275,741 3,872,963 37,148,704
Amortisation and depreciation - owned assets (168,909) - (168,909) (479,284) - (479,284)
Amortisation and depreciation - right-of-use assets (36,502) - (36,502) (107,655) - (107,655)
Other administration expenses (1,782,577) - (1,782,577) (8,249,076) - (8,249,076)
Impairment of Exploration & Evaluation assets (2,622) - (2,622) (9,083) - (9,083)
Profit from operations 5,562,799 (1,330,283) 4,232,516 24,430,643 3,872,963 28,303,606
Interest expense (3,304,670) - (3,304,670) (9,928,980) - (9,928,980)
Other - - - - - -
Net profit/(loss) before taxes 2,258,129 (1,330,283) 927,846 14,501,663 3,872,963 18,374,626
Tax expense - - - - - -
Net profit/(loss) before income taxes 2,258,129 (1,330,283) 927,846 14,501,663 3,872,963 18,374,626
Income Tax - - - - - -
Net profit/(loss) for the year 2,258,129 (1,330,283) 927,846 14,501,663 3,872,963 18,374,626
Net profit per share
Basic 0.003 (0.002) 0.00142 0.022 0.006 0.02836
Diluted 0.003 (0.002) 0.00141 0.022 0.006 0.02815
----- End of picture text -----
26
THOR EXPLORATIONS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023 In United States dollars, except where noted (unaudited)
23. PRIOR PERIOD RESTATEMENT (continued)
Condensed interim consolidated statements of cash flows
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----- Start of picture text -----
Three months Three months
Nine months ended Nine months ended
ended ended
September 30, September 30,
September 30, September 30,
2023 2023 2023 2023
Restatements Restatements
$ $ $ $
(reported) (restated) (reported) (restated)
Cash flows from/(used in):
Operating
Net profit 2,258,129 (1,330,283) 927,846 14,501,663 3,872,963 18,374,626
Inventory (11,044,511) 1,330,283 (9,714,228) (11,204,209) (3,872,963) (15,077,172)
Other operating cash flows 17,170,645 - 17,170,645 49,633,763 - 49,633,763
Net cash flows from operating activities 8,384,263 - 8,384,263 52,931,217 - 52,931,217
Investing
Net cash flows used in investing activities (4,928,854) - (4,928,854) (34,839,986) - (34,839,986)
Financing
Net cash flows used in financing activities (5,830,072) - (5,830,072) (16,643,696) - (16,643,696)
Effect of exchange rates on cash (510,032) - (510,032) 129,224 - 129,224
Net change in cash (2,884,695) - (2,884,695) 1,576,759 - 1,576,759
Cash, beginning of the period 11,149,491 - 11,149,491 6,688,037 - 6,688,037
Cash, end of the period 8,264,796 - 8,264,796 8,264,796 - 8,264,796
----- End of picture text -----
24. SUBSEQUENT EVENTS
There are no subsequent events to report.
27