Commodore Metals Corp. press release

AEX Gold Inc. Reports Second Quarter Financial Results, Operational Update and Board Changes

2021-08-27

CSE - Canadian National Stock Exchange · Gold · Arsenic · Copper · Nickel · Cobalt · Platinum · Palladium · Canada · Corporate Finance

TORONTO, ON / ACCESSWIRE / August 27, 2021 / AEX Gold Inc. (AIM:AEXG)(TSXV:AEX), an independent gold Corporation with a portfolio of exploration licences in Greenland, announces its unaudited condensed interim consolidated financial statements ("Financial Statements") for the quarter ended June 30, 2021. All figures are in Canadian dollars unless otherwise noted.

The Financial Statements and the accompanying Management Discussion and Analysis are available on the Corporation's website at www.aexgold.comand will be filed under the Corporation's SEDAR profile at www.sedar.comlater today.

As previously communicated, the Nalunaq Project was put on hold in February 2021 due to unforeseen cost increases associated with the impacts of the COVID-19 global pandemic and as per the April 2021 announcement, the Corporation was focussing on four elements to continue advancing and de-risking the Nalunaq Project:

Conducting a third-party engineering study to optimize the Project costs and de-risk the Project schedule that will enable AEX to re-assess the execution methodology (self-execution vs. EPC) post completion; Conducting fully funded ‘early works' infrastructure and a 20,000-30,000m exploration program to expand the Nalunaq Resource; Continue to advance the EIA and SIA to obtain all permits; Regional exploration targeting both gold and Green/Strategic minerals through technical research, sampling and geophysical surveys.

Corporate and Operational Update

The Corporation completed a tender process for the third-party engineering study and have appointed Halyard Inc. (‘Halyard') a boutique engineering consulting firm based out of Toronto, Canada. Halyard was involved in the engineering and design of most of the components in the Nalunaq processing plant and comes with Greenlandic, project execution experience. The engineering study on the process plant and associated infrastructure are progressing according to plan and we still expect completion by Q4 2021. The study will advance engineering and significantly de-risk project cost and schedule. Legacy procurement and contracting commitments have been reviewed and orders that were placed for the Process Plant and Site Mobile fleet prior to the February 2021 announcement are ready for delivery, and a strategy for logistics/storage is being considered. The third-party review of the Nalunaq Resource Model by InnovExplo, a specialist in a wide range of exploration and technical services in the metals and mining industry, has been completed and has concluded that the existing resource model contains no fatal flaws. The results of the review and recommendations formed the framework of the 2021 exploration program at Nalunaq. The drilling program will also leverage the latest findings from the drilling campaigns of 2019 and 2020 to test the down-dip extension of Main Vein in the Kirkspir Valley, nearby the South and Valley Blocks. The drilling campaign has got off to a slow start given the influence of COVID-19 and the high demand placed on drilling contractors which has been caused by high Commodity prices. Negotiations are currently underway with additional international drilling companies to support our exploration efforts this year, which will extend to our 2022 campaign. A condition assessment of the Bulkhead will be conducted in October 2021 to confirm the design parameters and the quality of construction after which a remediation plan will be developed. The assessment will include non-destructive pile integrity and ultrasound tests to determine the Bulkhead thickness as well as an unconfined compressive strength test of cored concrete samples. In June 2021, site preparation for the 50-person exploration camp commenced. Construction of the camp is progressing according to plan with estimated completion by September 2021. The camp will support continuing exploration activities at Nalunaq as the weather conditions turn towards winter in the coming months. Following the camp construction, the bridge crossing the Kirkespir River will be upgraded to provide reliable access between the exploration camp and historical mine site. The Environmental Impact Assessment ("EIA") and Social Impact Assessment ("SIA") are being advanced with no material update at this stage. In parallel to the exploration being conducted at Nalunaq, regional exploration is predominately focused on the Vagar and Nanoq gold targets as well as other evolving targets in licences around Nalunaq. Furthermore, we are exploring for copper/base metals and rare earth elements ("REE") in the Sava licence, platinum group elements ("PGEs") in the Sagga dyke, graphite at Norrearm and base metals across the Tartoq licences.

Strengthening of the Board

The Corporation is pleased to announce the further strengthening of its Board of Directors with the appointment of two additional Non-Executive Directors, Liane Kelly and Warwick Morley-Jepson.

Liane brings a wealth of ESG experience to the Board having enjoyed a successful career focused on advising companies on sustainability and CSR initiatives. She currently sits on the Board of B2Gold Corporation and acts as a CSR Advisor to Middle Ground Consulting. Liane specialises in advising companies on community engagement and social impact, both of which will be vital for AEX as the Corporation continues to build on its strong engagement with its Greenlandic stakeholders. Liane replaces George Fowlie, who steps down from the Board, but will continue to provide his invaluable expertise in corporate and business development to the Corporation as well as supporting our Investor Relations in Canada.

Warwick has significant experience in mining having spent just under 40 years' in the industry, holding various managerial and executive positions including his current roles as Chairman and Independent Director of Wesdome Gold Mines and Karora Minerals respectively. Warwick was previously the Executive Vice President and Chief Operating Officer at Ivanhoe Mines and before that held the same positions at Kinross Gold Corporation. His experience in mine development and operations at global mining firms is highly relevant to AEX as the Corporation continues to progress both the Nalunaq mine and its various exploration targets.

Q2 2021 Financial Highlights

The Corporation had a strong cash balance of $49.6 million at June 30, 2021 ($61.9 million at December 31, 2020), with no debt, and total working capital of $48.5 million ($61.4 million at December 31, 2020). Capital asset purchase commitments, net of deposits on order as at June 30, 2021 was $6.0 million. These commitments, as previously reported, relate predominantly to the purchase of components of the process plant and surface mobile vehicles. Available liquidity, net of commitments as at June 30, 2021 was $43.6 million. Construction in progress increased by $2.1 million in H1 2021 (zero at December 31, 2020), as a result of capitalized engineering costs on the Nalunaq Project prior to suspension on February 10, 2021. Exploration and evaluation expenses during the quarter was $2.0 million (Q2 2020: $0.9 million), predominantly on the Nalunaq Property. General and administrative expenses during the period were $2.1 million (Q2 2020: $0.5 million), the result of increased headcount, consulting and professional fees associated with right-sizing the organizational structure to develop Nalunaq.

Selected Financial Information

The following selected financial data is extracted from the Financial Statements for the three and six months ended June 30, 2021.

Financial Results

| | Three months ended June 30, | | | Six months ended June 30, | | | | | | | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | $ | | | $ | | | $ | | | $ | | Exploration and evaluation expenses | 1,998,049 | | | 912,676 | | | 3,245,196 | | | 1,524,451 | | General and administrative | 2,093,578 | | | 498,639 | | | 3,678,649 | | | 881,550 | | Net loss and comprehensive loss | (4,576,963) | | | (2,442,132) | | | (7,866,015) | | | (3,408,569) | | Basic and diluted loss per common share | (0.03) | | | (0.03) | | | (0.04) | | | (0.04) |

Financial Position

| | As at June 30, 2021 | | | As at December 31, 2020 | | | $ | | | $ | | Cash on hand | 49,593,636 | | | 61,874,999 | | Total assets | 58,772,695 | | | 65,944,682 | | Total current liabilities | 1,248,048 | | | 897,799 | | Shareholders' equity | 56,776,955 | | | 64,282,970 | | Working capital | 48,500,792 | | | 61,411,208 | | | | | | |

Eldur Olafsson, CEO of AEX, commented:

"I am pleased to report a strong set of results, with the Company currently well capitalised and advancing on all our key workstreams. In addition to the considerable progress made in the de-risking and development of the Nalunaq project, we are very excited to report on the wider scale exploration efforts that are ongoing alongside the work on our gold targets, targeting green and strategic minerals.

We believe that the current efforts to expand the Nalunaq resource, in addition to the focus on our exploration portfolio presents a unique opportunity to investors and we look forward to updating the market in due course.

I would also like to welcome Liane and Warwick onto the AEX Board. On behalf of the Corporation, we look forward to leveraging their experience as we continue to execute our development strategy.

Warwick's experience across the mining value chain will be essential as the Corporation advances the engineering study and evaluates the Nalunaq Project execution methodology in the near future.

Liane's appointment together with the promotion of Joan Plant to Vice President - Environmental, Social & Governance is a strong recognition of AEX's commitment to being a responsible corporate citizen of Greenland. I would also like to thank George for the incredible work he has done throughout the years as a Board member and I look forward to continuing working with him as AEX develops"

AIM Rule Disclosures

In relation to the appointment to the board, there is no further information required to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM Rules for Companies save what is disclosed below.

Liane Catherine Kelly, aged 57, has held the following directorships and/or partnerships in the past five years:

| | | | Current Directorships/Partnerships | Previous Directorships/Partnerships | | | | | B2Gold Corporation

Cheetah Conservation Fund | Geosoft Inc now Seequent Ltd |

Warwick Peter Morley-Jepson, aged 63, has held the following directorships and/or partnerships in the past five years:

| | | | Current Directorships/Partnerships

Wesdome Gold Mines Limited

Karora Resources Inc (formally RNC Minerals) | Previous Directorships/Partnerships |

Enquiries:

AEX Gold Inc. Eldur Olafsson, Executive Director and CEO +354 665 2003 eo@aexgold.com

Eddie Wyvill, Investor Relations +44 (0)7713 126727 ew@aexgold.com

Stifel Nicolaus Europe Limited (Nominated Adviser and Broker) Callum Stewart Simon Mensley Ashton Clanfield +44 (0) 20 7710 7600

Panmure Gordon (UK) Limited (Joint Broker) John Prior Hugh Rich Dougie Mcleod +44 (0) 20 7886 2500

Camarco (Financial PR) Gordon Poole Nick Hennis +44 (0) 20 3757 4980

AEX Gold Inc: Unaudited Condensed Interim Consolidated Financial Statements for the three and six Months Ended June 30, 2021

AEX Gold Inc.

Consolidated Statements of Financial Position

(Unaudited, in Canadian Dollars)

| | | | | | | | | | | Notes | | | As at June 30, 2021 | | | As at December 31, 2020 | | | | | | $ | | | $ | | ASSETS | | | | | | | | | Current assets | | | | | | | | | Cash | | | | 49,593,636 | | | 61,874,999 | | Sales tax receivable | | | | 64,482 | | | 62,750 | | Prepaid expenses and others | | | | 90,722 | | | 371,258 | | Total current assets | | | | 49,748,840 | | | 62,309,007 | | | | | | | | | | | Non-current assets | | | | | | | | | Deposit on order | 4 | | | 5,186,000 | | | 1,711,970 | | Escrow account for environmental monitoring | | | | 434,159 | | | 460,447 | | Mineral properties | 3 | | | 62,244 | | | 62,244 | | Capital assets | 4 | | | 3,341,452 | | | 1,401,014 | | Total non-current assets | | | | 9,023,855 | | | 3,635,675 | | TOTAL ASSETS | | | | 58,772,695 | | | 65,944,682 | | | | | | | | | | | LIABILITIES AND EQUITY | | | | | | | | | Current liabilities | | | | | | | | | Trade and other payables | | | | 1,198,466 | | | 831,899 | | Lease liabilities - current portion | 5 | | | 49,582 | | | 65,900 | | Total current liabilities | | | | 1,248,048 | | | 897,799 | | | | | | | | | | | Non-current liabilities | | | | | | | | | Lease liabilities | 5 | | | 747,692 | | | 763,913 | | Total non-current liabilities | | | | 747,692 | | | 763,913 | | Total liabilities | | | | 1,995,740 | | | 1,661,712 | | | | | | | | | | | Equity | | | | | | | | | Capital stock | | | | 88,500,205 | | | 88,500,205 | | Contributed surplus | | | | 3,285,952 | | | 2,925,952 | | Accumulated other comprehensive loss | | | | (36,772) | | | (36,772) | | Deficit | | | | (34,972,430) | | | (27,106,415) | | Total equity | | | | 56,776,955 | | | 64,282,970 | | TOTAL LIABILITIES AND EQUITY | | | | 58,772,695 | | | 65,944,682 |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited, in Canadian Dollars)

| | | | Three months ended June 30, | | Six months ended June 30, | | | | | | | Notes | | 2021 | | 2020 | | 2021 | | 2020 | | | | | $ | | $ | | $ | | $ | | | | | | | | | | | | | Expenses | | | | | | | | | | | Exploration and evaluation expenses | 7 | | 1,998,049 | | 912,676 | | 3,245,196 | | 1,524,451 | | General and administrative | 8 | | 2,093,578 | | 498,639 | | 3,678,649 | | 881,550 | | Stock-based compensation | 6 | | 360,000 | | 1,031,650 | | 360,000 | | 1,031,650 | | Foreign exchange loss (gain) | | | 157,092 | | 3,830 | | 647,691 | | (21,567) | | Operating loss | | | 4,608,719 | | 2,446,795 | | 7,931,536 | | 3,416,084 | | Other expenses (income) | | | | | | | | | | | Interest income | | | (41,859) | | (4,873) | | (85,929) | | (9,915) | | Finance costs | | | 10,103 | | 210 | | 20,408 | | 2,400 | | | | | | | | | | | | | Net loss and comprehensive loss | | | (4,576,963) | | (2,442,132) | | (7,866,015) | | (3,408,569) | | | | | | | | | | | | | | | | | | | | | | | | Weighted average number of common shares outstanding - basic and diluted | | | 177,098,737 | | 81,176,725 | | 177,098,737 | | 77,307,646 | | Basic and diluted loss per common share | | | (0.03) | | (0.03) | | (0.04) | | (0.04) |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Consolidated Statements of Changes in Equity

(Unaudited, in Canadian Dollars)

| | Notes | | Number of common shares

outstanding | | Capital

Stock | | Warrants | | Contributed surplus | | Accumulated other comprehensive loss | | Deficit | | Total

Equity | | | | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | | | | | | | | | | | | | | | | | | Balance at January 1, 2020 | | | 70,946,394 | | 13,883,611 | | 1,459,604 | | 1,535,400 | | (36,772) | | (14,767,303) | | 2,074,540 | | Net loss and comprehensive loss | | | - | | - | | - | | - | | - | | (3,408,569) | | (3,408,569) | | | | | | | | | | | | | | | | | | | Warrants exercised | | | 11,387,626 | | 6,140,518 | | (1,010,418) | | - | | - | | - | | 5,130,100 | | Warrants expired | | | - | | - | | (210,437) | | 210,437 | | - | | - | | - | | Options exercised | | | 100,000 | | 60,000 | | - | | (22,000) | | - | | - | | 38,000 | | Stock-based compensation | | | - | | - | | - | | 1,031,650 | | - | | - | | 1,031,650 | | Balance at June 30, 2020 | | | 82,434,020 | | 20,084,129 | | 238,749 | | 2,755,487 | | (36,772) | | (18,175,872) | | 4,865,721 | | | | | | | | | | | | | | | | | | | Balance at January 1, 2021 | | | 177,098,737 | | 88,500,205 | | - | | 2,925,952 | | (36,772) | | (27,106,415) | | 64,282,970 | | Net loss and comprehensive loss | | | - | | - | | - | | - | | - | | (7,866,015) | | (7,866,015) | | | | | | | | | | | | | | | | | | | Stock-based compensation | 6 | | - | | - | | | | 360,000 | | - | | - | | 360,000 | | Balance at June 30, 2021 | | | 177,098,737 | | 88,500,205 | | - | | 3,285,952 | | (36,772) | | (34,972,430) | | 56,776,955 |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Consolidated Statements of Cash Flows

(Unaudited, in Canadian Dollars)

| | Notes | | Six months

ended June 30, | | | | | | | 2021 | | 2020 | | | | | $ | | $ | | | | | | | | | Operating activities | | | | | | | Net loss for the period | | | (7,866,015) | | (3,408,569) | | Adjustments for: | | | | | | | Depreciation | 4 | | 143,723 | | 114,317 | | Stock-based compensation | 6 | | 360,000 | | 1,031,650 | | Finance costs | | | - | | 2,400 | | Foreign exchange loss (gain) | | | 644,430 | | (19,112) | | | | | (6,717,862) | | (2,279,314) | | Changes in non-cash working capital items: | | | | | | | Sales tax receivable | | | (1,732) | | (14,067) | | Prepaid expenses and others | | | 280,536 | | 93,561 | | Trade and other payables | | | 231,188 | | 293,916 | | | | | 509,992 | | 373,410 | | Cash flow used in operating activities | | | (6,207,870) | | (1,905,904) | | | | | | | | | Investing activities | | | | | | | Acquisition of mineral properties | 3 | | - | | (13,737) | | Acquisition of capital assets | 4 | | (2,084,161) | | - | | Deposit on order | 4 | | (3,474,030) | | - | | Cash flow used in investing activities | | | (5,558,191) | | (13,737) | | | | | | | | | Financing activities | | | | | | | Principal repayment - lease liabilities | 5 | | (32,539) | | - | | Exercise of warrants | | | - | | 5,130,100 | | Exercise of stock options | | | - | | 38,000 | | Deferred share issuance costs | | | - | | (324,293) | | Cash flow from (used in) financing activities | | | (32,539) | | 4,843,807 | | | | | | | | | Net change in cash before effects of exchange rate changes on cash during the period | | | (11,798,600) | | 2,924,166 | | Effects of exchange rate changes on cash | | | (482,763) | | 1,517 | | Net change in cash during the period | | | (12,281,363) | | 2,925,683 | | Cash, beginning of period | | | 61,874,999 | | 1,515,406 | | Cash, end of period | | | 49,593,636 | | 4,441,089 | | | | | | | | | Supplemental cash flow information | | | | | | | Interest received | | | 85,929 | | 9,915 | | Exercise of warrants credited to capital stock | | | - | | 1,010,418 | | Exercise of stock options credited to capital stock | | | - | | 22,000 | | Deferred share issuance costs included in trade and other payables | | | - | | 851,228 | | | | | | | |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Condensed Notes to the interim Consolidated Financial Statements

Three and six months ended June 30, 2021 and 2020

(Unaudited, in Canadian Dollars)

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION

AEX Gold Inc. (the "Corporation") was incorporated on February 22, 2017 under the Canada Business Corporations Act. The Corporation's head office is situated at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada. The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. The Corporation's financial year ends on December 31. Since July 2017, the Corporation's shares are listed on the TSX Venture Exchange (the "TSX-V") under the AEX ticker and since July 2020, the Corporation's shares are also listed on the AIM market of the London Stock Exchange ("AIM") under the AEXG ticker.

These unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2021 ("Financial Statements") were approved by the Board of Directors on August 26, 2021.

1.1 Basis of presentation

The Financial Statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS") including International Accounting Standard ("IAS") 34, Interim Financial Reporting. The Financial Statements have been prepared under the historical cost convention.