TRX Gold Corporation press release

AEX Gold Inc. Reports Third Quarter Financial Results and Operational Update

2021-11-24

TSX - Toronto Stock Exchange · Gold · Canada · Corporate Finance

TORONTO, ON / ACCESSWIRE / November 24, 2021 /AEX Gold Inc. (AIM:AEXG)(TSXV:AEX), an independent gold company with a portfolio of exploration licences in Greenland, announces its unaudited condensed interim consolidated financial statements ("Financial Statements") for the quarter ended September 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. As per the April 2021 announcement, the Corporation has been 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 to 30,000 metres exploration program to build upon 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

Halyard Inc. ("Halyard") is on track to complete the engineering study focused on the process plant and surface infrastructure by end of Q4 2021. The engineering study is focused on de-risking the Nalunaq Project cost and schedule through additional and improved trade-off studies and advancing engineering to feasibility level Over 9,000 metres of diamond drilling have been completed so far in the Valley Block, with 90% of drill holes reaching target depth and intersecting the main vein. The drilling target for the full year has been reduced to 10,000 to 15,000 metres, and four winterised drilling rigs continue to operate on site until mid-December. The new 50 person winterised exploration camp has been completed and will give the Corporation the ability to restart site activities in early 2022. In addition to this, the bridge over the Kirkespir River, which connects the camp to the Nalunaq site, has been expanded and improved to provide reliable access between the exploration camp and the historical mine site all year round. A condition assessment of the bulkhead was conducted in early November 2021 to confirm the design parameters and the quality of construction after which a remediation plan will be developed. The assessment included non-destructive pile integrity and ultrasound tests to determine the bulkhead thickness as well as an unconfined compressive strength test of cored concrete samples. The final report will be issued in December 2021. Procurement completed prior to the February 2021 delay announcement has been reconciled to the overall project cost estimate and all major process plant components were taken delivery of in October and moved to storage locations in Montreal and Denmark. Critical fleet such as the fuel truck, multi-purpose truck, industrial snow blower, personnel bus, ambulance and crane have been delivered to site for usage during this and future field seasons. The Environmental Impact Assessment ("EIA") and Social Impact Assessment ("SIA") are being advanced with no material update at this phase. Further exploration activities, mine planning, mine infrastructure and mine development will be evaluated based on the outcomes of the 2021 drilling campaign. In preparation for this evaluation, representatives from mining contractors and an underground geotechnical engineering team have conducted technical visits to the former mine. One key observation has been that the ground conditions are considered as high quality. Exploration activities across the license portfolio continue with assistance from Goldspot and SRK. This has been targeting both additional gold resource potential as well as base, critical and strategic metals. Field activities have seen further gold exploration including targeted airborne geophysics on Vagar, Nanoq, Tartoq and on targets north east of Nalunaq in order to progress these to a drill ready status. AEX geologists have completed further assessment of the graphite hosting potential of the licence portfolio and have collected representative bulk samples from the Nørream target. The Saaqqa Platinum Element Group (PGE) hosting dyke system close to Nalunaq has also been revisited in 2021 with additional confirmation samples taken as well as ground geophysics for future drill sighting. Activities have also focused on the Corporation's Sava Iron-Oxide-Copper-Gold (IOCG) target with airborne geophysics, advanced geochemistry and alteration mapping having been completed. This target holds the potential to host copper, gold, and Rare Earth Element (REE) mineralisation. On 6 October 2021, the Corporation received approval for a new mineral exploration licence in the Kobberminebugt region of South Greenland covering an area of approximately 266 km2. This licence area hosts the former producing Josva copper mine which will be the focus for AEX's further exploration due diligence. AEX consider this to be an extension of the IOCG belt that also hosts the Sava target and is believed to be similar to belts in Northern Sweden.

Management Update

James Gilbertson was appointed as Vice President - Exploration on September 13, 2021 and will oversee all of the Corporation's exploration activities. James has been working with AEX as a consultant for the past six years and will now join the Corporation on a full-time basis. James has over 20 years of experience in mineral exploration and resource development with 17 years as a Principal Exploration Geologist, and until recently, as Managing Director of SRK Exploration.

Q3 2021 Financial Highlights

The Corporation had a strong cash balance of $37.9 million as at September 30, 2021 ($61.9 million at December 31, 2020), with no debt, and total net working capital of $34.5 million ($61.4 million at December 31, 2020). Capital asset purchase commitments, net of deposits on order as at September 30, 2021 was $0.9 million. These decrease from the prior quarter relates predominantly to the receipt of major process plant components and surface mobile vehicles. Available liquidity, net of commitments as at September 30, 2021 was $37.0 million. Construction in progress increased by $6.0 million for the nine months ended September 30, 2021 (zero at December 31, 2020), primarily resulting from the purchase of major process plant equipment and mobile surface vehicles, deposits on orders, and preliminary surface infrastructure in advance of future project development activities. Exploration and evaluation expenses during the quarter was $4.2 million (Q3 2020: $2.9 million), predominantly on the Nalunaq Property. General and administrative expenses during the period were $3.0 million (Q3 2020: $1.1 million), the result of increased headcount that was relative to Q3 2020 and severance costs associated with the departure of Martin Menard.

Selected Financial Information

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

Financial Results

| | | Three months

ended September 30, | | | Nine months

ended September 30, | | | | | | | | | | | | | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | | Exploration and evaluation expenses | | | 4,196,019 | | | | 2,908,340 | | | | 7,441,215 | | | | 4,432,791 | | | General and administrative | | | 3,022,738 | | | | 1,104,822 | | | | 6,701,387 | | | | 1,986,372 | | | Net loss and comprehensive loss | | | (7,008,968 | ) | | | (4,609,492 | ) | | | (14,874,983 | ) | | | (8,018,061 | ) | | Basic and diluted loss per common share | | | (0.04 | ) | | | (0.03 | ) | | | (0.08 | ) | | | (0.08 | ) |

Financial Position

| | | As at September 30, 2021 | | | As at December 31, 2020 | | | | | | | $ | | | | $ | | | | Cash on hand | | | 37,852,228 | | | | 61,874,999 | | | Total assets | | | 54,307,568 | | | | 65,944,682 | | | Total current liabilities | | | 3,809,088 | | | | 897,799 | | | Shareholders' equity | | | 49,767,987 | | | | 64,282,970 | | | Working capital | | | 34,500,785 | | | | 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.

We have made significant progress during the quarter across our entire licence area, both in terms of development at Nalunaq and our wider exploration opportunities.

Despite taking a cost conscious and disciplined strategic approach, we continue to be extremely excited by the wider exploration potential of our assets. The Board looks forward to being able to demonstrate the potential value of its non-gold, strategic mineral assets in due course."

Enquiries:

AEX Gold Inc.

Eldur Olafsson, 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 Emily Hall +44 (0) 20 3757 4980

For Company updates:

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

AEX Gold Inc. Consolidated Statements of Financial Position (Unaudited, in Canadian Dollars)

| | | | | | As at

September 30, | | | As at December 31, | | | | | | | | Notes | | | 2021 | | | 2020 | | | | | | | | | | | | $ | | | | $ | | | | ASSETS | | | | | | | | | | | | | | Current assets | | | | | | | | | | | | | | Cash | | | | | | 37,852,228 | | | | 61,874,999 | | | | Sales tax receivable | | | | | | 55,412 | | | | 62,750 | | | | Prepaid expenses and others | | | | | | 402,233 | | | | 371,258 | | | | Total current assets | | | | | | 38,309,873 | | | | 62,309,007 | | | | | | | | | | | | | | | | | | Non-current assets | | | | | | | | | | | | | | Deposit on order | | | 4 | | | | 8,322,838 | | | | 1,711,970 | | | Escrow account for environmental monitoring | | | | | | | 434,341 | | | | 460,447 | | | Mineral properties | | | 3 | | | | 62,244 | | | | 62,244 | | | Capital assets | | | 4 | | | | 7,178,272 | | | | 1,401,014 | | | Total non-current assets | | | | | | | 15,997,695 | | | | 3,635,675 | | | TOTAL ASSETS | | | | | | | 54,307,568 | | | | 65,944,682 | | | | | | | | | | | | | | | | | LIABILITIES AND EQUITY | | | | | | | | | | | | | | Current liabilities | | | | | | | | | | | | | | Trade and other payables | | | | | | | 3,758,883 | | | | 831,899 | | | Lease liabilities - current portion | | | 5 | | | | 50,205 | | | | 65,900 | | | Total current liabilities | | | | | | | 3,809,088 | | | | 897,799 | | | | | | | | | | | | | | | | | Non-current liabilities | | | | | | | | | | | | | | Lease liabilities | | | 5 | | | | 730,493 | | | | 763,913 | | | Total non-current liabilities | | | | | | | 730,493 | | | | 763,913 | | | Total liabilities | | | | | | | 4,539,581 | | | | 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 | | | | | | | (41,981,398 | ) | | | (27,106,415 | ) | | Total equity | | | | | | | 49,767,987 | | | | 64,282,970 | | | TOTAL LIABILITIES AND EQUITY | | | | | | | 54,307,568 | | | | 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 September 30, | | | Nine months

ended September 30, | | | | | | | | | | | | | | | | Notes | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | | | | | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | | | | | | | | | Expenses | | | | | | | | | | | | | | | | | | | | | | Exploration and evaluation expenses | | | 7 | | | | 4,196,019 | | | | 2,908,340 | | | | 7,441,215 | | | | 4,432,791 | | | General and administrative | | | 8 | | | | 3,022,738 | | | | 1,104,822 | | | | 6,701,387 | | | | 1,986,372 | | | Stock-based compensation | | | 6 | | | | - | | | | - | | | | 360,000 | | | | 1,031,650 | | | Foreign exchange loss (gain) | | | | | | | (185,986 | ) | | | 717,577 | | | | 461,705 | | | | 696,010 | | | Operating loss | | | | | | | 7,032,771 | | | | 4,730,739 | | | | 14,964,307 | | | | 8,146,823 | | | Other expenses (income) | | | | | | | | | | | | | | | | | | | | | | Interest income | | | | | | | (33,700 | ) | | | (25,960 | ) | | | (119,629 | ) | | | (35,875 | ) | | Finance costs (income) | | | | | | | 9,897 | | | | (95,287 | ) | | | 30,305 | | | | (92,887 | ) | | | | | | | | | | | | | | | | | | | | | | | | Net loss and comprehensive loss | | | | | | | (7,008,968 | ) | | | (4,609,492 | ) | | | (14,874,983 | ) | | | (8,018,061 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted average number of common shares outstanding - basic and diluted | | | | | | | 177,098,737 | | | | 146,280,087 | | | | 177,098,737 | | | | 100,466,279 | | | Basic and diluted loss per common share | | | | | | | (0.04 | ) | | | (0.03 | ) | | | (0.08 | ) | | | (0.08 | ) | | | | | | | | | | | | | | | | | | | | | | |

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 | | | - | | | | - | | | | - | | | | - | | | | - | | | | (8,018,061 | ) | | | (8,018,061 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Share issuance under a fundraising | | | 94,444,445 | | | | 74,550,202 | | | | - | | | | - | | | | - | | | | - | | | | 74,550,202 | | | Share issuance costs | | | | | | | (6,312,546 | ) | | | - | | | | - | | | | - | | | | - | | | | (6,312,546 | ) | | Warrants exercised | | | 11,607,898 | | | | 6,318,938 | | | | (1,078,702 | ) | | | - | | | | - | | | | - | | | | 5,240,236 | | | Warrants expired | | | - | | | | - | | | | (380,902 | ) | | | 380,902 | | | | - | | | | - | | | | - | | | Options exercised | | | 100,000 | | | | 60,000 | | | | - | | | | (22,000 | ) | | | - | | | | - | | | | 38,000 | | | Stock-based compensation | | | - | | | | - | | | | - | | | | 1,031,650 | | | | - | | | | - | | | | 1,031,650 | | | Balance at September 30, 2020 | | | 177,098,737 | | | | 88,500,205 | | | | - | | | | 2,925,952 | | | | (36,772 | ) | | | (22,785,364 | ) | | | 68,604,021 | |

| | | | | | | | | | | 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 | | - | - | - | - | - | (14,874,983) | (14,874,983) | | | | | | | | | | | | Stock-based compensation | 6 | - | - | - | 360,000 | - | - | 360,000 | | Balance at September 30, 2021 | | 177,098,737 | 88,500,205 | - | 3,285,952 | (36,772) | (41,981,398) | 49,767,987 |

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 | | | Nine months

ended September 30, | | | | | | | | | | | | | | 2021 | | | 2020 | | | | | | | | | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | Operating activities | | | | | | | | | | | | | | Net loss for the period | | | | | | (14,874,983 | ) | | | (8,018,061 | ) | | | Adjustments for: | | | | | | | | | | | | | | Depreciation | | | 4 | | | | 190,309 | | | | 157,513 | | | Stock-based compensation | | | 6 | | | | 360,000 | | | | 1,031,650 | | | Finance costs (income) | | | | | | | - | | | | (92,887 | ) | | Payment from cash held in escrow account for environmental monitoring | | | | | | | - | | | | (95,102 | ) | | Escrow account for environmental monitoring | | | | | | | - | | | | 95,102 | | | Foreign exchange loss | | | | | | | 403,826 | | | | 685,401 | | | | | | | | | | (13,920,848 | ) | | | (6,236,384 | ) | | Changes in non-cash working capital items: | | | | | | | | | | | | | | Sales tax receivable | | | | | | | 7,338 | | | | (80,557 | ) | | Prepaid expenses and others | | | | | | | (30,975 | ) | | | (380,430 | ) | | Deposit | | | | | | | - | | | | (27,944 | ) | | Trade and other payables | | | | | | | 2,273,639 | | | | 1,377,889 | | | | | | | | | | 2,250,002 | | | | 888,958 | | | Cash flow used in operating activities | | | | | | | (11,670,846 | ) | | | (5,347,426 | ) | | | | | | | | | | | | | | | | Investing activities | | | | | | | | | | | | | | Acquisition of mineral properties | | | 3 | | | | - | | | | (13,737 | ) | | Acquisition of capital assets | | | 4 | | | | (5,415,805 | ) | | | (373,540 | ) | | Deposit on order | | | 4 | | | | (6,610,868 | ) | | | - | | | Cash flow used in investing activities | | | | | | | (12,026,673 | ) | | | (387,277 | ) | | | | | | | | | | | | | | | | Financing activities | | | | | | | | | | | | | | Shares and warrants issuance | | | | | | | - | | | | 74,550,202 | | | Share issuance costs | | | | | | | - | | | | (6,140,329 | ) | | Principal repayment - lease liabilities | | | 5 | | | | (49,115 | ) | | | - | | | Exercise of warrants | | | | | | | - | | | | 5,240,236 | | | Exercise of stock options | | | | | | | - | | | | 38,000 | | | Cash flow from (used in) financing activities | | | | | | | (49,115 | ) | | | 73,688,109 | | | | | | | | | | | | | | | | | Net change in cash before effects of exchange rate changes on cash during the period | | | | | | | (23,746,634 | ) | | | 67,953,406 | | | Effects of exchange rate changes on cash | | | | | | | (276,137 | ) | | | (726,428 | ) | | Net change in cash during the period | | | | | | | (24,022,771 | ) | | | 67,226,978 | | | Cash, beginning of period | | | | | | | 61,874,999 | | | | 1,515,406 | | | Cash, end of period | | | | | | | 37,852,228 | | | | 68,742,384 | | | | | | | | | | | | | | | | | Supplemental cash flow information | | | | | | | | | | | | | | Interest received | | | | | | | 119,629 | | | | 35,875 | | | Additions in capital assets included in trade and other payables | | | | | | | 551,762 | | | | - | | | Share issuance costs included in trade and other payables | | | | | | | - | | | | 126,600 | | | Exercise of warrants credited to capital stock | | | | | | | - | | | | 1,078,702 | | | Exercise of stock options credited to capital stock | | | | | | | - | | | | 22,000 | | | | | | | | | | | | | | | |

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 nine months ended September 30, 2021 and 2020 (Unaudited, in Canadian Dollars)

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION