Results for the period ended 31 December 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES, ANY TERRITORY OR POSSESSION THEREOF OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
30 April 2024
Hamak Gold Limited
("Hamak Gold" the "Group" or the "Company")
Results for the period ended 31 December 2023
Availability of Annual Report
Hamak Gold Limited (LSE: HAMA) is pleased to announce its audited results for the period ended 31 December 2023.
Copies of the Company's full Annual Report and Financial Statements for the period ended 31 December 2023 will be made available on the Company's website at www.hamakgold.com.
Highlights
· In December 2022 the Company raised gross proceeds of £295,750 and in July 2023, a further £294,500 was raised to fund its ongoing working capital and exploration costs related to the high-grade Ziatoyah gold discovery which is located in the Nimba Licence in proximity to the Ity Gold Mine in neighbouring Ivory Coast
· Exploration work included:
o Some 21-line kilometres of Induced Polarisation geophysical survey completed over part of the extensive 3km gold in soil anomaly close to the Ziatoyah gold discovery
o Structural interpretation and evaluation of geology around the Ziatoyah prospect
o Several new priority drill targets selected based on geophysical anomalies and structural targets
o Drilling completed over 13 geophysical and structural targets (1,000m) with four holes showing mineralized gold intersections
o Independent detailed geological review on all exploration work and results yielded to date at Nimba undertaken to prioritise the new drill targets and define the next phases of exploration aimed at determining the extent of the gold mineralization discovered at Ziatoyah along the strong 3km gold anomaly
Highlights Post Period
· £200,000 raised (before expenses) to progress the exploration efforts at the Nimba Licence and for general working capital purposes
· A structured work programme, including surface mapping, pitting/trenching and channel sampling is being established to advance the next phase of work across several priority targets at Nimba, including drilling of certain priority targets
Karl Smithson, Executive Director of Hamak Gold commented:
"In 2023, Hamak's team concentrated its efforts and resources on the high-grade Ziatoyah gold discovery at our Nimba Licence. We have completed geophysical surveys, mapping, sampling and drilling and have evolved the geological model to target the continuation of the gold mineralization discovered at Ziatoyah which is defined by a broad gold in soil anomaly, extensive channel sampling mineralization and best drill intersections of 7g/t over 20m, including 22g/t over 5m near surface.
"The next phases of work will include detailed mapping and further trenching and channel sampling to help prioritise new drill targets aimed at intersecting gold mineralization that is clearly associated with the extensive 3km gold in soil anomaly and progress the Ziatoyah gold discovery towards the objective of resource status."
For further information you are invited to view the company's website at http://www.hamakgold.com/ or please contact:
|
Hamak Gold Limited Amara Kamara Nicholas Karl Smithson |
+231 (0) 77 005 0005 +44 (0) 77 837 07971 |
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Peterhouse Capital Limited (Broker) Lucy Williams Guy Miller Yellow Jersey PR Sarah Hollins Annabelle Wills |
+44 (0) 20 7469 0930
+44 (0) 777 5194 357
|
About Hamak Gold Limited
Hamak Gold Limited (LSE: HAMA) is a UK listed company focussed on gold exploration of a portfolio of licences in highly prospective areas of Liberia, where significant drilling results have identified a new high-grade gold discovery with the discovery hole returning 20m @ 7g/t Au near surface in its Nimba licence on the border with Ivory Coast which is located in proximity to the commercial Ity Gold Mine.
Chairman's Statement
Dear Shareholder,
I am pleased to present the annual report of Hamak Gold Limited (the "Company" or "Hamak") and its subsidiary (collectively referred as the 'Group' or 'Hamak Gold') for the period ended 31 December 2023. The Group undertakes gold exploration with a focus on highly prospective licences in Liberia, West Africa.
It is with great satisfaction that the 2023 general election in Liberia passed peacefully and transparently, and we welcome the new administration of President Joseph Boakai and look forward to working closely with the new team at the Ministry of Mines led by newly appointed Minster of Mines and Energy-Wilmot Paye.
As the President of the Liberian Chamber of Mines, I can attest to the fact that there is growing interest in the mineral sector in Liberia due to continued stability and improved governance and Hamak Gold has led the way being the first, majority Liberian owned listed Company on the London Stock Exchange.
Over the last year, we have continued our exploration focus on the Nimba licence in northern Liberia, which is located near the four million ounce Ity gold mine in neighbouring Ivory Coast. At Nimba, our geological teams have discovered what we consider to be a high-grade gold discovery, with both trenching and drill results showing wide intersections of gold with grades up to seven grams per tonne over 20 metres ("m") from initial drilling. Exploration work this year has included detailed geological mapping and structural interpretation, ground geophysical surveys and additional drilling.
The gold discovery at Nimba lies on the edge of an extensive three kilometre ("km") x one km gold in soil anomaly. Further mapping, structural interpretation, trenching and drilling is required to delineate the sub-surface extent of this discovery and our teams will be undertaking focused exploration work during 2024 to hopefully trace the extent of gold mineralization across a wider area which ultimately can be drilled into a maiden resource.
Capital markets for the junior exploration sector have remained challenging for some time. Despite this, in the past 12 months, the Company has completed two equity placings to fund our ongoing exploration programme in Liberia. This funding has come with significant support from Directors and Management, as well as contributions from existing and new shareholders. In late December 2022, a total gross proceeds of £295,750 was raised at a price of 8.75p per share and the shares were issued in January 2023. This was followed in July 2023 with a placing at the same 8.75p per share raising gross proceeds of £294,500. Since the year end, in April 2024, in a very weak market, the Company raised gross proceeds of £200,000 (before expenses) from the issue of 16,000,000 new ordinary shares of no par value ("Ordinary Shares") but at a price of £0.0125 each. In addition, the Company settled certain director, management and advisory fees via the issue of 14,512,381 shares at the same placing price. I am grateful for the support shown in taking shares and conserving cash in the Company. We continue to evaluate and pursue alternative funding arrangements with which to progress our exciting exploration portfolio.
At Hamak Gold we believe that there are interesting opportunities to acquire or partner in new ventures in the wider African region and our technical team has been assessing a number of interesting opportunities in gold and base metals. We believe that a diversified portfolio may increase investor interest and access to capital with which to progress our growth strategy.
Finally, I would like to thank our shareholders for their continued support and the Board and Management for their excellent contribution to the advancement of the strategy and objectives to make significant mineral discoveries that can lead to the growth of our Company.
Amara Kamara
Executive Chairman
30 April 2024
Operations Report
The Group continues to focus its mineral exploration efforts on the discovery of orogenic gold, Archaean and Paleoproterozoic greenstone hosted gold, and shear zone hosted gold type mineralization in under-explored yet highly prospective areas of Liberia.
Being an exploration business without producing mines, the Group has no revenue and relies on equity as its major source of funding. If the Group is successful in its exploration activities, it will seek to transition into an exploration and development business.
After acquiring two mineral exploration licences (MEL) in Liberia in February 2022 and listing the Company on the London Stock Exchange (LSE) on the 1st March 2022, the Group rapidly deployed field teams led by experienced geologists. In both the Nimba and Gozohn licences, exploration initially focused on detailed geochemical soil sampling in areas already associated with artisanal digging; in the case of Nimba since the 1930's. In Gozohn, extensive parts per billion ("ppb") gold-in-soil anomalies were discovered while at Nimba considerably more significant soil anomalies in the parts per million ("ppm") range were revealed which prioritised this licence in the deployment of more detailed sophisticated exploration techniques and methods, including geophysics and drilling, during 2023. Based on the field work and exploration results at Gozohn a relinquishment of part of the licence was made in 2022. The Company retains a 129.6 square km licence area which remains the focus of further exploration.
The relative location of the Nimba and Gozohn licences are shown in Figure 1 and currently cover a combined area of 1,116 km².
Figure 1: Location of Nimba and Gozohn mineral exploration licences and neighbouring gold mines
Nimba Licence
The Nimba licence (MEL 7001518) covers an area of 985.6 square km and is located approximately 120 km to the north-east of the Gozohn licence and some 40 km south-west of Endeavour's four-million-ounce Ity Gold Mine in neighbouring Côte D'Ivoire (Figure 1).
Geochemical Soil Sampling and Results
Based on observations made during the pre-IPO Competent Person Report site visit, three soil sampling blocks, totalling some 3,622 soil samples, were sited over areas with either former or active artisanal digging activity. The location of these blocks and their priority based on field evidence is shown in Figure 2.
Figure 2: Location of prioritised soil sampling blocks in the Nimba licence
At Soil Sampling Block No. 1, a total of 1,124 samples were collected within a 3.7km x 3.4km grid with line and sample spacing of 250m and 50m respectively. Samples were prepared in Monrovia and analysed by internationally renowned ALS Global using the standard 51-element methodology on 25 gram aliquots with a detection limit of 0.02 ppb Au. Standard QA/QC procedures were strictly adhered to and no issues pertaining to QA and QC were encountered.
The Nimba Block 1 soil sampling results are presented in Figure3 and show significant anomalous gold values in excess of 1 ppm (1 gram per tonne "g/t") at two key locations, surrounded by additional anomalous values generating coherent anomalies. Anomaly 1 (approximately 700m by 450m) attains a peak of 1.54ppm gold-in-soil whilst Anomaly 2 (approximately 900m by 500m) attains a peak of 1.20ppm gold-in-soil.
During the soil sampling, the geological teams identified an exposed geological unit, described as a metadolerite with visible sulphide mineralisation (mainly pyrite) at Ziatoyah on the southern edge of the northern soil anomaly, where there is active artisanal gold mining. Rock chip sampling of this unit returned gold values of 37.3g/t Au and 45.5g/t Au, proving the presence of bedrock gold associated with the soil sampling anomaly (Figure 3).
Figure 3: Nimba Block 1 gold-in-soil anomalous results
Stream Sediment Sampling and Results
A soil sampling block (Block 3), shown in Figure 2, yielded disappointing results in an area containing artisanal workings. To further test the potential, some 29 stream sediment samples were collected over an area located 15km to the NNW of the Ziatoyah prospect. Sampling focused around a quartzite ridge known as Mount Blah covering a drainage area of approximately 31.5km2. The samples were analysed by ALS Global using two detection methods Au-AA24 & AuME-TL43. The results complemented each other and are shown in Figure 4.
Figure 4: Positive stream sample results (in ppm) from Mt Blah - Nimba licence
Peak values of 2.23 ppm Au and 2.52 ppm Au (using the two different analytical methods) were recorded along the western flank of Mt Blah within an area of previous digging. Three other samples returned anomalous values of 0.512, 0.437 and 0.168 ppm Au suggesting a possible source towards the summit of the quartzite ridge. Further prospecting is recommended in and around Mt Blah to determine the geological characteristics of this positive isolated source.
Trenching and Channel Sampling at Nimba Block 1
Two 280m long trenches (excavated to a depth of 3m) were situated over single or multipoint soil anomalies with values in excess of 1,000 ppb (1.0 g/t Au) within the broad anomalous zone of Block 1. A total of 552 trench channel samples (1 metre interval) were collected and analysed for Au only. While neither trench intersected values equivalent to the soil values, there is a general correlation between trench assay populations and soil values. Trench sample values up to 250 ppb (0.25 g/t Au), within a zone of broad trace gold values, are considered significant and merit further work for bulk tonnage type targets.
At the Ziatoyah discovery outcrop some 43 channel samples were collected along two faces across the outcrop area which has been exposed by artisanal mining. Gold mineralization over a 66m wide zone has been proven at an average grade of 0.8 g/t Au, which remains open ended, and includes grades of 0.98 g/t Au over 11m (including 3.14 g/t Au over 3m) in the North face and 0.63 g/t Au over 55m (including 1.94 g/t Au over 14m) in the southern face. The North face results are shown in Figure 5. Visible gold was observed in hand specimen collected at the outcrop. Two rock chip samples returned exceptionally high values of 45.5 g/t Au and 37.3 g/t Au (Figure 5). This site is considered a discovery outcrop and is named after the nearby stream, i.e. Ziatoyah (see Figure 3).
Figure 5: North face channel & rock chip sample results at the Ziatoyah discovery outcrop
Phase-1 Drilling Programme
Building on the positive results from the channel and rock chip sampling at Ziatoyah, the Company decided to undertake a limited scout drilling programme of 450m (over three holes) in Q3 2022 to test the potential down-dip extension of the bedrock mineralization seen at the Ziatoyah artisanal workings.
The first hole (NZ22_001), after 26m, encountered a zone of strongly foliated dark grey metadolerite with weak to moderate levels of dissemination and smeared pyrite mineralisation of between 1 and 5% over the overall rock mass. From 27.26m and 52.00m (down the hole), significant gold mineralisation was returned between 28.0m and 48.0m (20.0m @ 7 g/t Au) with a high-grade zone returning 5.0m @ 22 g/t as shown in Figure 6.
The second hole (NZ22_002) returned low-grade gold values (2.0m @ 0.28 g/t Au between 55.0 and 57.0m) which seemed difficult to explain considering that this hole was only 20m from the high-grade intercept in NZ22_001 and may have drilled parallel to the dip of the main mineralisation and hence failed to cut the mineralised zone.
Figure 6: Section through two drill holes (NZ22_001 & 002) at Ziatoyah showing Au intercepts
Geophysical Survey
Given the presence of metallic sulphides at Ziatoyah in the Phase-1 drilling, in early 2023 the Group conducted a geophysical survey using the electrical induced polarization (IP) method, as well as a resistivity survey, over the Ziatoyah prospect. An initial gradient array survey followed by 4.4 km of 25m spaced dipole-dipole survey was carried out over a pilot block which was then followed up by a 14-line km 50m dipole-dipole survey along 800m to 1,200m lines long spaced between 100m and 200m apart.
The data quality of the IP and resistivity surveys was good and interpreted by the geophysical consultants (GeoFocus) to detect the Ziatoyah mineralisation in general. Suspected poor depth penetration of the 25m dipole data from the pilot survey ensured that a 50m dipole-dipole array was chosen for the follow up area. The resulting geophysical data was processed and interpreted by GeoFocus who identified a strong, arcuate chargeability anomaly at depth, trending north and NW away from the Ziatoyah outcrop, as well as other targets recommended for drill testing (Figure 7).
Figure 7: IP chargeability plot with 2023 drill collars and topography
2023 Phase-2 Drilling Programme
A short Phase-2 drilling programme took place between July and August 2023 for a total meterage of 1,000m across 13 holes.
The initial concept for this drilling programme was to drill test the chargeability anomalies identified by GeoFocus, but also to drill test certain secondary geological structures (faults and fractures) suspected to be associated with the nearby Cestos shear zone. Furthermore, the Group was determined to further define the mineralisation detected in the initial 2022 drill hole (NZ22_001).
Assays from 232 selected drill core samples (including QA/QC samples) were analysed by ALS Ghana. The drill holes that tested the IP targets were broadly negative and did not intersect meaningful gold mineralization. Unfortunately, despite being aware of the possible impact of stream alluvium and sediments as being the possible cause of the chargeability anomaly, the interpretation focused on anomalous pseudosection values derived from the 50m dipole-dipole survey without taking into consideration the effect of topography. It is interpreted that the IP survey only managed to produce plots of the depth of the overburden and distribution of conductive alluvial clays. The surficial sediments, comprising wet conductive clays, likely masked the electrical response of the underlying bedrock and mineralization.
However, drilling of certain structural targets proved more successful with four holes returning intersections of low-tenor gold mineralization. Drilling to date, over a limited area in the vicinity of the Ziatoyah discovery, has produced the following significant intervals of gold mineralization (Table 1).
Table 1: Significant downhole drill intercepts at Nimba Block 1
Geology, Structural interpretation, and Mineralisation
The Cestos shear zone, located along the Nimba southeast licence boundary is defined by a major NE trending dislocation zone. United States Geological Survey (USGS) data implies a pattern of SW to westerly trending secondary structures branching off this shear zone. Such secondary faults, or splays, as shown in Figure 9, may have created extensional zones for the focus of hydrothermal activity responsible for gold mineralisation.
Figure 9: The Cestos Shear Zone and branching secondary splay structures at Ziatoyah
A detailed 3D structural interpretation was undertaken of the 2023 orientated drill core, as well as surface outcrop mapping, around the localised Ziatoyah discovery area by independent consultant Dr Colin Andrew. The current interpretation is that gold mineralization is preferentially hosted within mafic metasediments, such as those intersected in the discovery hole at Ziatoyah (20m @ 7g/t Au). Similar lithologies are seen in other drill holes and are associated with above background gold values, supported by the presence of marmorized carbonates within the metasediment packages intersected. It is considered that these assemblages pre-date the principal Northeast faulting seen in the area and are folded in between the fault zones.
From the 3D structural interpretation (based on Finite Element Analysis ('FEA')) faulting is inferred in the vicinity of the Ziatoyah prospect. Plots of foliation measurements from orientated core, including fractures and faults, have revealed trends subparallel to the regional structural trend. Combined with the gold assay results, the morphology of the Ziatoyah mineralised body has been modelled. A steeply dipping mineralised zone has been derived which appears to be dislocated by at least three inferred faults, labelled as B, A & G in Figure 10, which is open at depth.
Figure 10: Modelled mineralised zone at Ziatoyah - based on FEA structural analysis
The mineralization at the Ziatoyah prospect shows the classic signs of sulphidation, with iron sulphides (mainly pyrite) forming between 1 and 5% of the mineralised zone. The exploration work conducted to date highlights the significant potential of the Ziatoyah prospect and further afield within the Nimba licence which has significant upside and value.
A number of priority drill targets have been recommended for follow-up by Dr. Colin Andrew. These targets are associated with known gold in soil anomalies as well as possible extensions of structures and metasediments associated with the high-grade Ziatoyah drill intersection and positive channel sampling results.
The next phase of exploration work will include detailed surface mapping, pitting/trenching and channel sampling. A low-cost handheld ground magnetic survey over the broader gold-in-soil anomalous area is also recommended. This work will preceed further drilling of positive anomalous values and structural targets to test the extent of the Ziatoyah mineralization.
Gozohn Licence
The original Gozohn licence (MEL 7002318) covered an area of 766 square km and is located some 30km south of the high-grade Kokoya Gold mine operated by MNG Gold (Figure 1). After collecting some 2,628 soil samples from two grid blocks during 2022, it was decided to relinquish 83% of the licence in favour of the north and northeastern part which has been retained covering an area of 129.6 square km. Significant gold anomalies were returned over two areas of Block 1 located on the western slope of a prominent ridge (Mt Koklun) in an active area of artisanal gold digging.
Surrounded by quartz feldspar Gneiss, Mt Koklun forms one of two areas comprised of USGS defined, Composite "z" units, commonly associated with greenstone lithologies. These units comprise an assemblage of interlayered strongly deformed amphibolite, quartzite, schist and iron-formation (BIF) which have been assigned a metasedimentary and metavolcanic origin. Such units tend to form discontinuous elongate resistant ridges which stand notably above the rolling Gneissic terrain. These supracrustal rocks can be found as fold keels or in shear zones. At Gozohn, they form a fold with most of the positive soil geochemistry being concentrated on the western limb of the antiform or fold.
The extent of the gold anomaly, within the Composite "z" zone, is shown in Figure 11.
Figure 11: Gozohn Block 1 soil geochemistry results.
Initially, soil sampling was conducted on a grid with lines spaced 250m and 500m apart with a sampling interval of 50m. A soil sampling infill programme better defined the coherent anomalous area.
During the soil sampling, a number of rock chip samples were collected and assayed. One sample of quartz-rich migmatite returned a value of 2.56 g/t Au while a second rock chip sample from a nearby location returned 3.5 g/t Au. These samples coincide with a strong gold in soil anomaly and are proximal to artisanal diggings.
Geochemistry analysis and Mineralisation
The soil geochemistry results suggest that auriferous quartz stringers, seen in artisanal diggings, have a primary mineralogy dominated by iron sulphides and native gold associated with minor Au-tellurides and selenides. The lack of typical Birimian-type geochemical halo, for example arsenic, suggests that this mineralisation is more likely to be orogenic gold rather than BIF associated Greenstone hosted type gold occurrences.
Channel sampling across an exposed face in the Morris camp diggings enabled the collection of 46 channel samples (1m interval). The best results returned of 507 ppb and 283 ppb Au which support the existence of narrow quartz veins however additional exploration is required to determine the extent and grade of the mineralization.
Option Licences
At the time of the IPO the Company held the option to acquire from Hamak Mining Company five exploration licences, being Lofa, Fassama, Cestos, Sinoe and River Gee. The Company previously announced that Cestos and River Gee options were relinquished. Since the focus of exploration is primarily on Nimba and Gozohn, the Company has elected not to exercise the options on the remaining five licences.
Business plan and strategic objectives
The Group's strategic objectives are to be a successful mineral exploration company that through deploying systematic exploration techniques can lead to the discovery of a significant gold and base metal resources in the short to medium term (two to five years) on its mineral exploration properties in Liberia and other potential jurisdictions. The Group will seek to achieve these aims by managing its operations safely and sustainably, with a view to ensuring that, subject to successfully discovering commercially viable and extractable gold deposits, the Group will be in an optimal position to create value and generate returns for Shareholders and significant benefits for all stakeholders including local communities.
There are a number of risks associated with junior resource companies at the early exploration stage in the natural resources sector, especially in West Africa. The Board regularly reviews the risks to which the Group is exposed and endeavours to mitigate them as far as possible.
The following summary, which is not exhaustive, outlines some of the risks and uncertainties the Group may be exposed to:
Political conditions, government regulations, macroeconomic volatility and regulatory risks
The Company's performance and growth may be constrained by delays or shutdowns due to political, commercial or legal instability in Liberia. The ability of the Company to generate long-term value for shareholders could be impacted by these risks.
Changes may occur in local political, fiscal and legal systems, which might adversely affect the ownership or operation of the Group's interests including, inter alia, changes in exchange rates, currency, exchange control regulations changes in government and in legislative, fiscal and regulatory regimes. The Group's strategy has been formulated in light of the regulatory environment as at the latest practicable date prior to the publication of this Document and what are deemed to be probable future changes (though due regard should be given to the uncertainty in making predictions involving political governance risks).
Regional instability due to corruption, bribery and generally underdeveloped corporate governance policies have the potential to impact the Group's performance in Liberia and, as a result, the Company's share value. These risks could have a materially adverse effect on the future profitability, the ability to finance or, in extreme cases, the viability of the Group.
Within Liberia, a number of economic and political factors have contributed to a lack of infrastructure investment. As such, the country lacks well-developed infrastructure connections, which could impact the profitability of the Group.
Economic challenges in Liberia, including high rates of unemployment, may lead to a reduction in local, skilled workforce such that geologists, mining engineers and other technically qualified and skilled individuals have gone abroad for work. In the past international investors were reluctant to deploy capital to Liberia, leading to significant underinvestment within its exploration and mining sector. Although improving, these factors may create operational challenges for the Group.
The licences held are subject to various laws and regulations relating to the protection of the environment and the Group is also required to comply with applicable health and safety and other regulatory standards. Environmental legislation in particular can comprise numerous regulations which might conflict with one another, and which cannot be consistently interpreted. Such regulations typically cover a wide variety of matters including, without limitation, prevention of waste pollution and protection of the environment, labour regulations and worker safety. The Group may also be subject under such regulations to clean-up costs and liability for toxic or hazardous substances which may exist on or under any of its properties or which may be produced as a result of its operations. The Group intends to operate in accordance with high standards of environmental practice and comply in all material respects and currently is not subject to any fines or liability or clean up cost in relation to environmental rehabilitation.
Any failure to comply with relevant environmental, health and safety and other regulatory standards may subject the Group to liability, fines and/or penalties and have an adverse effect on the business and operations, financial results or financial position of the Group. Furthermore, the future introduction or enactment of new laws, guidelines and regulations could serve to limit or curtail the growth and development of the Group's business or have an otherwise negative impact on its operations. Any changes to, and increases in, current regulation or legal requirements, with the enforcement thereof, may have a material adverse effect upon the Group in terms of additional compliance costs.
Renewal of licences as allowed for in the Mines Act is dependent on the Company maintaining them in good standing on an annual basis. The Nimba and Gozohn licences are both confirmed as valid and in good standing by the Ministry of Mines at the time of this report.
Climate Related Financial Disclosures
The Company provides disclosures under the framework recommended by the Task Force on Climate Related Disclosures (TCFD). These are designed to help investors and wider stakeholders understand how Companies are managing climate related financial risks.
Gold mining plays a vital part in the economic and social development of many emerging or developing economies and the West African Republic of Liberia is no exception in this regard as it is likely to be vulnerable to the disruptive and potentially destructive impacts from climate change and extreme weather events. Liberia has currently two operating gold mines and a number of small explorers actively engaged in mineral exploration. There is therefore a likelihood, even expectation, of new discoveries and hence additional mines coming into production in Liberia in the near future. The Group, which currently is in the exploration phase, is improving its awareness of climate related risks and physical impacts and implementing better plans to prepare for and adapt to these risks.
Climate change risks and impacts on gold exploration in Liberia
There is a wide range of factors that influence the adaption and resilience to climate change in gold mining. However, at the prospecting or exploration level, the main risks to our operations are physical factors manifested in acute impacts (severe and short-term) and chronic impacts (long-term, gradual change). Acute physical risk can be in the form of extreme weather and weather-related events such as excessive rainfall (during the wet season) or wildfires (during the dry season) while chronic impacts refer to enduring changes and shifts in, for example, air and land temperatures. Since our gold exploration activities are focused on the interior of Liberia, coastal and sea level impacts are negligible. However extreme weather conditions may pose challenges to access to site and lead to delays in exploration activities.
Gold exploration activities
The nature of our work involves the collection and analysis of samples of various materials, ranging from rocks and earth (soils) to stream sediments in our search for anomalous quantities of gold or gold-related minerals in the natural geological environment. These samples are small amounting to a few kilograms of material and are collected by teams of geologists (comprising 2 to 3 individuals). Remote sensing exploration techniques, including geophysics, are practised occasionally while drilling of small diameter holes (to ~ 100 - 150m) into the bedrock is also carried out - once anomalies have been identified from the sampling programmes. Trenches and pits may be periodically excavated and material samples. These mobile exploration activities are conducted from temporary, often tented, camps and bases with special attention to the maintaining of cordial and sound relations with our host communities in the various villages impacted by our presence.
For the purposes of financial reporting requirements and disclosure, at our current level of operations, climate-related risks are negligible. Should exploration activities lead to a discovery and hence more permanent, year-round, activities, the Company will reassess its position with regard to climate-related management.
Limited operating history
The Group was formed and listed on the LSE two years ago so is relatively early stage in its development. However, the Board and Management of the Group have considerable exploration, development and mining experience in the West Africa region, in particular in Liberia, Sierra Leone and Guinea. This experience has helped lead the Group to making a significant new gold discovery in the Nimba exploration licence, within nine months of the Company's IPO.
Exploration and development risks
Following the Group's early exploration success in the Nimba licence, there still remains a high degree of risk as mineral exploration and development can be highly speculative and as of yet no mineral resource has been defined. The economics of developing mineral properties are also affected by many factors including the cost of operations, variations of the grade of ore mined, fluctuations in the price of the minerals being mined, fluctuations in exchange rates, costs of development, infrastructure and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.
In addition, the grade of mineralisation ultimately mined may differ from that indicated by drilling results and such differences could be material. As a result of these uncertainties, there can be no guarantee that mineral exploration and development of any of the Group's investments will result in profitable commercial operations.
Financing risk
Whilst the Directors are confident that the Group will be able to raise additional funds as and when required and is expected to raise sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the consolidated financial statements there can be no assurance that such funds as may be required will be raised. However since the listing, the Company has successfully concluded a number of placings with the support of Directors, Management and shareholders and therefore the directors are confident of successful future fund raises.
Industry-specific risks
The natural resources sector is inherently tied to the performance of the global economy and fluctuations in the price of global commodities. As a result, segments of the natural resources sectors (or even the sector as a whole) could be affected by changes in general economic activity levels and other changes which are beyond the Group's control. The revenues and earnings from developing its assets will rely on commodity prices, and the Group will be unable to control the prices for commodities which may adversely affect the Group's business, results of operations, financial condition or prospects.
Key performance indicators
Appropriate key performance indicators will be identified in due course as the business strategy is implemented.
Gender analysis
A split of directors by gender during the year is shown below:
|
Male |
Female |
|
5 |
Nil |
Directors and employees
The Group currently has only male Directors and is committed to promoting gender equality based on relevant skills and experience as it progresses through its life cycle. At the current stage of exploration, the Group sourced individuals with experience not only in the sector but also in the wider West African and African settings. The Group seeks to bring in experienced female board member when available as finding the right fit is difficult at the current stage of operations. The Board, however, is diversified from an ethnicity perspective, having two Directors of African heritage which is appropriate given the Company is a Liberian majority-owned, and Liberian focussed, entity. The information provided is based on the updated personnel records maintained by the Group.
Environment, Social and Corporate Governance (ESG)
As a new Group focused on early-stage exploration, we aim to conduct our business with honesty, integrity and openness, respecting human rights and the interests of our shareholders, employees and local community stakeholders. We aim to provide timely, regular and reliable information on the business to all our shareholders and conduct our operations to the highest standards.
Environment
The Group submitted environmental licence reports and applications to allow for exploration to continue in the Nimba and Gozohn licences. These permits are issued by the Environmental Protection Agency (EPA) of Liberia according to the prevailing laws of the country. Since the exploration is very early stage there is no significant rehabilitation required. All sampling holes are back filled at the end of the sampling process. Trenches are ring fenced during excavation and back filled after completion. Drill pads are cleaned and levelled after each hole. In the tropical environment of Liberia vegetation rehabilitation is natural and rapid.
Social
The Group has conducted extensive exploration work at the Nimba licence and limited work at the Gozohn licence during 2023. The Group adheres to the social requirements within the country of working with local communities at all times, engaging with them so they are aware of our activities and where possible recruiting labour from nearby communities.
The Mineral Law of Liberia requires that 2% of exploration expenditure be invested in education or health facilities in the exploration licence areas where the work is conducted. In February 2023, the Group completed the handover of this 2% ($6,548) for the Nimba licence ($6,548) to the local communities.
Corporate Governance
Being a public Group listed on the LSE Standard Exchange, the Group adheres to all required governance rules as stated in the Corporate Governance Statementand has in place the necessary structure of Board committees to oversee the business of the Group to ensure adherence to best practice procedures.
Health and Safety
Although Hamak Gold has a relatively small permanent staff contingent in Liberia, the Company strives to create a safe and healthy working environment for the well-being of its staff and contractors and create a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the reputation and performance of the Group. As the Company grows, it aims to establish a diverse and dynamic workforce with team players who have the experience and knowledge of the business operations and markets in which we operate. Through maintaining good communication, members of staff are encouraged to realize the objectives of the Group and their own potential.
Amara Kamara
Executive Chairman
29 April 2024
|
Consolidated Statement of Comprehensive Income For the year ended 31 December 2023 |
|
||
|
Continuing operations |
Notes |
Year ended 31 December 2023 $'000 |
Year ended 31 December 2022 $'000 |
|
|
|
|
|
|
General and administrative expenses |
7 |
660 |
3,215 |
|
Impairment of exploration cost |
12 |
- |
516 |
|
Operating loss |
|
660 |
3,731 |
|
|
|
|
|
|
Net foreign exchange losses |
|
24 |
- |
|
Loss before taxation |
|
684 |
3,731 |
|
Income tax |
9 |
- |
- |
|
Total loss for the year |
|
684 |
3,731 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year attributable to shareholders from continuing operations |
|
684 |
3,731 |
|
|
|
|
|
|
Earning per share: |
|
|
|
|
Basic and diluted earnings per share (USD) |
10 |
(0.01) |
(0.17) |
|
Consolidated Statement of Financial Position |
||||
|
As at 31 December 2023 |
||||
|
|
|
Note |
2023 |
As restated 2022 |
|
|
|
|
$'000 |
$'000 |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
11 |
23 |
33 |
|
Intangible assets |
|
12 |
1,955 |
1,481 |
|
Total non-current assets |
|
|
1,978 |
1,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
|
13 |
25 |
26 |
|
Cash and cash equivalents |
|
|
2 |
12 |
|
Total current assets |
|
|
27 |
38 |
|
|
|
|
|
|
|
Total assets |
|
|
2,005 |
1,552 |
|
|
|
|
|
|
|
Equity and Liabilities
|
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
|
Share capital and share premium |
|
15 |
3,805 |
2,758 |
|
Share-based payment reserve |
|
16 |
16 |
80 |
|
Retained earnings |
|
|
(2,272) |
(1,697) |
|
Total equity |
|
|
1,549 |
1,141 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
14 |
456 |
411 |
|
Total current liabilities |
|
|
456 |
411 |
|
|
|
|
|
|
|
Total equity and liabilities |
|
|
2,005 |
1,552 |
These financial statements were approved and authorised for issue by the Board of Directors on 30 April 2024 and were signed on its behalf by:
Nicholas Karl Smithson
Executive Director
30 April 2024
|
Consolidated Statement of Changes in Equity For the year ended 31 December 2023
|
||||
|
|
Share capital and share premium |
Share based payment reserve |
Retained earnings |
Total Equity |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Balance at 1 January 2022 |
- |
- |
(355) |
(355) |
|
Loss for the period |
- |
- |
(3,731) |
(3,731) |
|
Total comprehensive income for the period |
- |
- |
(3,731) |
(3,731) |
|
|
|
|
|
|
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
Issue of share capital |
2,973 |
- |
- |
2,973 |
|
Share issue costs |
(215) |
- |
- |
(215) |
|
Grant of share-based awards |
- |
2,469 |
- |
2,469 |
|
Exercise of share-based awards |
2,389 |
(2,389) |
- |
- |
|
Total |
5,147 |
80 |
- |
5,227 |
|
Balance at 31 December 2022 (as previously stated)
|
5,147 |
80 |
(4,086) |
1,141 |
|
Prior year adjustment (note 20) |
(2,389) |
- |
2,389 |
- |
|
Balance at 31 December 2022 (as restated) |
2,758 |
80 |
(1,697) |
1,141 |
|
Loss for the period |
- |
- |
(684) |
(684) |
|
Total comprehensive income for the period |
- |
- |
(684) |
(684) |
|
|
|
|
|
|
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
Issue of share capital |
1,076 |
- |
- |
1,076 |
|
Share issue costs |
(29) |
- |
- |
(29) |
|
Share based payment - vesting |
- |
45 |
- |
45 |
|
Share based payment - exercised/lapsed |
- |
(109) |
109 |
- |
|
Total |
1,047 |
(64) |
- |
1,019 |
|
Balance at 31 December 2023 |
3,805 |
16 |
(2,272) |
1,549 |
|
Consolidated Statement of Cash Flows For the year ended 31 December 2023
|
|
|
|
|
|
|
|
|
|
|
Notes |
Year ended 31 December 2023 $'000 |
Year ended 31 December 2022 $'000 |
|
Cash flows from operating activities |
|
|
|
|
Loss before taxation |
|
(684) |
(3,731) |
|
Adjustments for: |
|
|
|
|
Depreciation |
11 |
10 |
8 |
|
Impairment of exploration costs |
12 |
- |
516 |
|
Share-based payment charge |
16 |
45 |
2,469 |
|
Directors' fees paid in shares |
8 |
160 |
204 |
|
Rent paid in shares |
|
9 |
- |
|
Unrealised foreign exchange charge |
|
- |
(3) |
|
Net cashflow before changes in working capital |
|
(460) |
(537) |
|
|
|
|
|
|
Increase/(decrease) in payables |
|
157 |
(21) |
|
Decrease/(increase) in receivables |
|
1 |
(9) |
|
Net cash used in operating activities |
|
(302) |
(567) |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchase of property, plant and equipment |
|
- |
(41) |
|
Exploration expenditure |
|
(413) |
(549) |
|
Net cash used in investing activities |
|
(413) |
(590) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Issue of share capital (net of costs) |
15 |
705 |
1,170 |
|
Net cash generated from financing activities |
|
705 |
1,170 |
|
|
|
|
|
|
Net change in cash and cash equivalents during the year/period |
|
(10) |
13 |
|
Cash at the beginning of year/period |
|
12 |
(1) |
|
Cash and cash equivalents at the end of the year/period |
|
2 |
12 |
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