Results for the period from 6 May to 31 Dec 2021
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.
10 June 2022
Hamak Gold Limited
("Hamak Gold" or the "Company")
Results for the period from 6 May to 31 December 2021
Availability of Annual Report
Hamak Gold Limited (LSE: HAMA) is pleased to announce its audited results for the period from 6 May to 31 December 2021. This period was before the Company listed its shares on the Main Market of the London Stock Exchange on 1 March 2022.
Copies of the Company's full Annual Report and Financial Statements for the period from 5 May to 31 December 2021 will be made available on the Company's website at www.hamakgold.com and have been posted to shareholders along with a Notice of Annual General Meeting, to be held on 30 June 2022 at 11:30am (UK time) at Peterhouse Capital Limited, 80 Cheapside London, EC2V 6DZ.
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 and its growth strategy considers other exploration and development opportunities in the wider West Africa region.
For further information you are invited to view the company's website at www.hamakgold,com or please contact:
|
Hamak Gold Limited Amara Kamara Nicholas Karl Smithson |
+231 (0) 77 005 0005 +44 (0) 77 837 07971 |
|
Peterhouse Capital Limited (Broker) Lucy Williams Guy Miller Yellow Jersey PR Tom Randell Annabelle Wills |
+44 (0) 20 7469 0930
+44 (0) 20 3004 9512 + 44 (0) 7775 194357
|
Chairman 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'). The Group undertakes gold exploration with a focus on highly prospective licenses in Liberia, West Africa, for the period ended 31 December 2021
On 1 March 2022, Hamak was admitted to trading on the main market of the London Stock Exchange in its initial public offering ("IPO"), simultaneously raising gross proceeds of £955,000 in new capital from institutional and private investors as well as the Board of Directors.
The Group acquired on 15 February 2022 two mineral exploration licences, Nimba and Gozohn in Liberia, covering 1,752 square kilometres and also has an option over a further five exploration licences covering an area of 3,213 square kilometres. Exploration has initially focused on detailed geochemical soil sampling in the Gozohn and Nimba licences and further details are provided in the Directors Report.
Strategy
The Group's main mineral exploration focus is on the discovery of orogenic gold, Archaean and Paleoproterozoic greenstone hosted gold and shear zone hosted gold type mineralization in underexplored, yet highly prospective, areas of Liberia. The Group is also applying exploration techniques for the discovery of base metals within its exploration licences. The Group's strategy is built on three main pillars:
· Identify highly prospective exploration ground and brownfield projects in known mineral districts with demonstrated historical exploration results and limited application of modern exploration techniques.
· Develop proven and out-of-the-box concepts for potential mineral targets and efficiently conduct exploration by application of state-of-the-art methods and equipment.
· Partner with other companies via joint ventures or farm-in agreements.
Liberia
There has been a long history of artisanal gold mining in Liberia from alluvial deposits. Following the end of hostilities (2003) and democratic national elections (2005), a number of private and public junior companies have undertaken systematic gold exploration in Liberia and within the last decade, the gold sector of Liberia has seen considerable expansion.
Liberia is an emerging gold producing country having attracted significant exploration interest and expenditure over the last decade. This transformation of the country's gold sector is evidenced by annual production increasing significantly since 2007 from a little over 300 kg (10,500 oz) to 7,096 kg (250,300 oz) in 2018.
Liberia did not experience the gold exploration boom during the 1980s and 1990s that took place in neighboring West African countries mostly due to political instability and therefore has remained relatively under-explored and therefore can be considered highly prospective for gold and base metals.
Summary
The Board believes that the Group has acquired excellent prospective licences that have proven occurrences of gold supported by excellent geological formations and is encouraged by the initial geological work and sampling results achieved in the Gozohn and Nimba licences. We expect that during the coming year our dedicated exploration teams will identify key areas within these two licences which can be drilled to intersect the bedrock source(s) of the gold anomalies generated.
Hamak was admitted to the London Stock Exchange and should our exploration and drilling lead to positive gold discoveries we believe that significant value can be created for all shareholders.
I would like to thank all our employees, advisors, my fellow Board members and our shareholders for their continued support to the Group as we transformed from a private to a public Group and now as we look to grow our Group through successful exploration of our own licences, as well as considering other value accretive opportunities in the wider West African region.
Financial Overview
Funding
The Group is funded through investment from its shareholders. In the pre-IPO period funding of £50,000 was secured through a zero-coupon convertible loan note, which converted into ordinary shares at the admission ("Admission") to the London Stock Exchange trading at a 25% discount to the IPO price. The Group also raised gross proceeds of £955,000 as part of the initial listing on the London Stock Exchange ("LSE") on 1 March 2022, subsequent to the period end.
Revenue
Being an early-stage exploration Group, the Group generated no revenue during the period, but is focusing on its exploration licences in Liberia with a strategy of making significant gold discoveries in the shortest possible time frame.
Expenditure
During the period, the Group progressed all legal, accounting and due diligence work related to IPO which was achieved on the 1 March 2022 (post period). Expenditure during the period was focused on the Admission process and, following Admission, the Group has focused its efforts and expenditure on progressing its exploration programmes in line with our stated strategy.
Liquidity, cash and cash equivalents
On 31 December 2021, the Group held $501 in funds and a receivable of $1,400 from the balance of the pre-IPO funding of £50,000, and added gross proceeds of £955,000, subsequent to the period end following its successful listing on the London Stock Exchange.
Dividend
The Directors do not intend to declare a dividend in respect of the period under review.
Amara Kamara
Executive Chairman
8 June 2022
Strategic Report
Fair Business Review
The Company was incorporated on 6 May 2021 under the BVI Business Companies Act. As at the date of this report, the Group comprises the Company and its sole wholly owned subsidiary, Hamak Gold Limited Liberia, which was incorporated in Liberia on 27 May 2021.
To enable to Group to pursue its principal activities, it sought an IPO of the Company's securities on the London Stock Exchange through a Standard Listing to raise the necessary funds required for the execution of its business strategy. The IPO was successfully completed after the period end, and the Company's shares were admitted for trading on 1 March 2022.
The Group's main mineral exploration focus is the discovery of orogenic gold, Archaean and Paleoproterozoic greenstone hosted gold, and shear zone hosted gold type mineralization in underexplored yet highly prospective areas of Liberia. The Group is also applying modern exploration techniques for the discovery of base metals within its exploration licences. Being an exploration business without producing mines, the Group will have no revenue and will have to rely on debt and/or 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.
The Group acquired on 15 February 2022 two mineral exploration licences in Liberia, Nimba and Gozohn, covering 1,752 square kilometres and also has an option over a further five exploration licences covering an area of 3,213 square kilometres. Exploration has initially focused on detailed geochemical soil sampling in the Gozohn and Nimba licences, with further details provided in the Directors Report.
In the Group's Prospectus dated 24 February 2022, the Competent Person ranked the seven mineral exploration licences (MELs) individually and in accordance with their geological and spatial relationship with specific geological structures as well as on the scale of gold mining activity in or near those licences. Often licences can be grouped according to their prospectivity and relative proximity to each other. Thus, the following ranking of the licences is advised by the Competent Person:
Rank No. 1: Cestos shear zone and greenstone belts
· Nimba Licence
· Gozohn Licence
Rank No. 2: Dube shear zone and Birimian greenstones
· River Gee Licence
Rank No. 3: Lofa and Yambesei shear zones and greenstones
· Fasama
· Lofa
Rank No. 4: Juazohn shear zone and amphibolites
· Cestos Licence
· Sinoe Licence
Initially two MELs, Nimba and Gozohn, have been transferred on 15 February 2022 to the Group following approval of such licence transfer from the Minister of Mines and Energy of Liberia on 3 August 2021.. The Group retains an option with respect to the other five MELs, which if exercised will result in the transfer of these licences into its portfolio.
Business plan and strategic objectives
The Group's long-term strategic objectives are to be a best-in-class, regionally competitive gold exploration and mining business and an industry leader in terms of health and safety, Environmental, Social, and Governance ("ESG"), operational efficiency and asset quality. The Group will seek to achieve these aims through managing its operations safely and sustainably, with a view to ensuring that, subject to successfully discovering commercially viable and extractable mineral 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 newly listed entities in the natural resources sector, especially in West Africa. The Board regularly reviews the risks to which the Group is exposed and also endeavors 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:
Geopolitical
The Group will be subject to risks associated with operating in Liberia which include economic, social or political instability. The legal system is less developed than in more established countries and there is a risk of crime and corruption from operating in Liberia
No operating history
The Group is a newly formed entity with no operating history other than the successful Admission which was completed after the period on 1 March 2022. 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.
Exploration and development risks
Following the Group's acquisition of its target licences in the natural resources sector subsequent to period end, they are likely to be subject to a high degree of risk as mineral exploration and development can be highly speculative. The economics of developing mineral properties are 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.
Liquidity risk
Whilst the directors are confident that the Group will be able to raise additional funds as and when required and will have 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.
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 |
|
2 |
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.
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 has in place all necessary environmental permissions for the Nimba and Gozohn licences which are the focus of our exploration activity. These permits are issued by the Environmental Protection Agency (EPA) of Liberia according to the prevailing laws of the country.
Social
The Group is performing regional exploration work so is not yet focused on any defined areas within its licences. However, 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. In addition, the Mineral Law of Liberia requires that 2% of exploration expenditure be invested in education or health facilities in the exploration licences where the work is conducted. The Group will adhere to this requirement and make such provision at the end of each financial year once the expenditure has been calculated for the period.
Corporate Governance
Being a public Group listed on the LSE Standard Exchange, the Group will adopt all required Governance rules and 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
We strive to create a safe and healthy working environment for the wellbeing of our staff 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. We aim 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 communications, members of staff are encouraged to realize the objectives of the Group and their own potential.
Amara Kamara
Executive Chairman
8 June 2022
CONSOLIDATED STATEMENT OF INCOME FOR THE PERIOD ENDED 31 DECEMBER 2021
|
|
Notes |
Period Ending |
|
|
|
31 December 2021 |
|
|
||
|
$ |
|
|
||
|
|
|
|
|
|
|
Administrative expenses |
4 |
355,378 |
|
|
|
Operating loss |
|
355,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxation |
|
355,378 |
|
|
|
|
|
|
|
|
|
Income Tax |
|
- |
|
|
|
Loss after taxation |
|
355,378 |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
355,378 |
|
|
|
Total loss for the period |
|
|
Total comprehensive loss for the year attributable to (355,378)
shareholders from continuing operations
Basic & dilutive earnings per share - USD 7 (7.11)
The consolidated statement of income has been prepared on the basis that all operations are continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021
|
|
Notes |
As at |
|
31 December 2021 |
||
|
$ |
||
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
8 |
500 |
|
Trade and other receivables |
9 |
1,400 |
|
Total current assets |
|
1,900 |
|
|
|
|
|
Total assets |
1,900 |
|
|
|
|
|
|
|
|
|
|
Equity and liabilities |
||
|
Equity Share capital |
|
- |
|
Retained earnings |
|
(355,378) |
|
Total equity |
|
(355,378) |
|
|
|
|
|
Liabilities |
||
|
Current liabilities Trade and other payables |
11 |
285,207 |
|
Unsecured convertible loan |
10 |
70,000 |
|
Overdraft |
13 |
2,071 |
|
Total current liabilities |
|
357,278 |
|
|
|
|
|
Total Equity & Liabilities |
1,900 |
The Financial statements were approved by the Board on 8 June by:
Nicholas Karl Smithson
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY PERIOD ENDED 31 DECEMBER 2021
|
|
Share |
|
Retained |
Total |
|
Capital $ |
|
Earnings $ |
Equity $ |
|
|
(Loss) for the period |
- |
|
(355,378) |
(355,378) |
|
Total comprehensive (loss) for year |
- |
|
(355,378) |
(355,378) |
|
Balance at 31 December 2021 |
- |
|
(355,378) |
(355,378) |
|
CONSOLIDATED STATEMENT OF CASHFLOW |
|
Period ended |
|
|
|
31 December 2021 |
|
|
|
$ |
|
Cash flows from operating activities |
|
|
|
Net Loss |
|
(355,378) |
|
Adjusted for: |
|
|
|
Trade and other payables |
|
285,207 |
|
Trade and other receivables |
|
(1,400) |
|
Net Cash flow (used in) operating activities |
|
(71,570) |
|
Cash flow from financing activities |
|
|
|
Cash flows from Unsecured convertible loans |
|
70,000 |
|
Net Cash flow from financing activities |
|
70,000 |
|
|
|
|
|
Net (decrease) in cash and cash equivalent |
|
(1,570) |
|
Cash and cash equivalents at beginning of period |
|
- |
|
Cash and cash equivalents at end of period |
|
(1,570) |
Cash and cash equivalents in the cashflow statement includes overdraft and cash at bank.
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