AEX Gold Inc. Reports Second Quarter Financial Results
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AEX Gold Inc. Reports Second Quarter Financial Results

Thursday, August 27, 2020 2:00 AM
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Topic:
Earnings
AEX Gold Inc.

TORONTO, ON / ACCESSWIRE / August 27, 2020 / AEX Gold Inc. (AIM:AEXG)(TSXV:AEX), an independent gold company with a portfolio of gold licences in Greenland, announces its unaudited condensed interim consolidated financial statements ("Financial Statements") for the quarter ended June 30, 2020. 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.com and will be filed under the Corporation's SEDAR profile at www.sedar.com later today.

Financial Highlights

  • The Corporation reported a net loss of $3.4 million in H1 2020 (H1 2019: $1.1 million), driven by increased exploration and evaluation activities and corporate activity during the period, as well as non-cash stock based compensation.
  • Exploration and evaluation expenses during the period were $1.5 million (H1 2019: $0.6 million), driven by increased activity on the Nalunaq Property and its regional exploration portfolio.
  • General and administrative expenses during the period were $0.9 million (H1 2020: $0.5 million), with the increase a result of higher management, consulting and professional fees as the Corporation moves towards development at Nalunaq and ahead of its AIM listing.
  • During the period, 11,387,626 warrants were exercised, each entitling the holder to receive one common share of the Corporation, at an exercise price per warrant between $0.45 and $0.50, with the Corporation receiving gross proceeds of $5.1 million.
  • The Corporation granted 2,195,000 options to its directors, officers and consultants, based on an estimated fair value of $0.47 per option, representing a total non-cash cost of $1.0 million in the period.
  • The Corporation had a cash balance of $4.4 million at June 30, 2020 ($1.5 million at December 31, 2019), with no debt, and total working capital of $3.0 million ($1.2 million at December 31, 2019).
  • Post-period end, the Corporation completed an equity placing raising gross proceeds of $72.7 million (£42.5 million).

Selected Financial Information

The following selected financial data is extracted from the Financial Statements for the six months ended June 30, 2020.

Financial Results

 
 
Three months
ended June 30,
   
Six months
ended June 30,
 
 
  2020     2019     2020     2019  
 
    $       $       $       $  
Exploration and evaluation expenses
    912,676       397,220       1,524,451       565,822  
General and administrative
    498,639       277,335       881,550       493,796  
Net loss and comprehensive loss
    (2,442,132 )     (673,725 )     (3,408,569 )     (1,075,130 )
Basic and diluted loss per common share
    (0.03 )     (0.01 )     (0.04 )     (0.02 )

Financial Position

 
  As at June 30, 2020     As at December 31, 2019  
 
    $       $  
Cash on hand
    4,441,089       1,515,406  
Total assets
    6,547,834       2,720,473  
Total current liabilities
    1,682,113       645,933  
Shareholders' equity
    4,865,721       2,074,540  
Working capital
    2,978,497       1,157,012  

Corporate and Operational Highlights

  • A business readiness program was initiated internally during the period as the Corporation increases its overall readiness for transitioning towards project execution, including human resources, recruiting, environmental and social impact assessment scoping, organizational structuring, project and cost control, and accounting.
  • In June 2020, the Greenlandic COVID Commission approved AEX's mobilization plan and on August 15, 2020 the Corporation successfully and safely mobilized its expatriate and local Greenlandic workforce on site at the Nalunaq Property ahead of the commencement of the 2020 summer work program.
  • During the period, the Corporation was granted two new Mineral Exploration Licences in South Greenland, namely Saarloq and Anoritooq, covering an area totalling 2,528km2, taking the Corporations full license area to 3,356km2. The Corporation intends to conduct exploration activities over these new licence areas, as well as it's wider regional portfolio, as part of the 2020 summer work program announced on August 24, 2020.

Post Period-End

  • On July 27, 2020, the Corporation appointed Sigurbjorn ("Siggi") Thorkelsson as an independent non-executive director of the Corporation and Chair of the Audit and Risk Committee. Mr. Thorkelsson brings a wealth of experience in the financial markets, having worked at major financial institutions throughout his career.
  • On July 31, 2020, the Corporation completed its AIM Admission in addition to its existing TSX-V listing, with the issue of 94,444,445 common shares at a price of GBP 0.45 (C$0.77) per share.
  • The Corporation has progressed a number of discussions with non-equity financing providers, as detailed at the time of the fundraise in July 2020. The Board believes a modest non-equity facility offers an attractive opportunity to access additional capital to expand value creation activities across its portfolio without the dilution or costs of further equity. The Corporation is committed to securing the most attractive source of funding, and will provide an update on these discussions once a committed facility is secured.

Eldur Olafsson, CEO of AEX, commented:

"I'm pleased to announce our H1 2020 financial results, which demonstrate the significant increase in activity across our portfolio as our business transitions towards development.

"Following the successful $72.7 million fundraise and AIM listing in July 2020, the Company is in a very strong position and we are now funded for our planned work program at Nalunaq, where we are progressing well with the exploration and pre-development work on the asset. In addition to this, we are undergoing additional exploration work across our wider portfolio in Southern Greenland where we believe there is significant upside for investors in what is a materially undeveloped region.

"We look forward to providing updates to the market on these exciting workstreams in due course."

"As stated at the time of the fundraise, we are looking to secure additional non-equity funding in the form of a modest working capital facility, vendor financing or similar, to accelerate exploration activities across our material portfolio of gold assets in South Greenland. Whilst we will look to execute on this facility as soon as possible, we are in a very strong position post-fundraise and will take time to ensure that any facility we enter into offers the best terms to our company and shareholders, and look forward to updating the market at the appropriate time."

Enquiries:

AEX Gold Inc.

George Fowlie, Director and CFO
1-416-587-9801
[email protected]

Eldur Olafsson, Director and CEO
+354 665 2003
[email protected]

Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)

Callum Stewart
Simon Mensley
Ashton Clanfield
+44 (0) 20 7710 7600

Camarco (Financial PR)

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

AEX Gold Inc:
Unaudited Condensed Interim Consolidated Financial Statements for the Six Months Ended June 30, 2020
Consolidated Statements of Financial Position
(Unaudited, in Canadian Dollars)

 
       
As at
June 30,
    As at December 31,  
 
  Notes     2020     2019  
 
        $     $  
ASSETS
                 
Current assets
                 
Cash
          4,441,089       1,515,406  
Escrow account for environmental monitoring
          186,282       174,864  
Sales tax receivable
          31,859       17,792  
Prepaid expenses and others
          1,380       94,883  
Total current assets
          4,660,610       1,802,945  
                       
Non-current assets
                     
Deferred share issuance costs
    9       1,221,138       166,348  
Escrow account for environmental monitoring
            357,618       342,132  
Mineral properties
    3       55,682       41,945  
Property and equipment
    4       252,786       367,103  
Total non-current assets
            1,887,224       917,528  
TOTAL ASSETS
            6,547,834       2,720,473  
                         
LIABILITIES AND EQUITY
                       
Current liabilities
                       
Trade and other payables
            1,495,831       471,069  
Environmental monitoring provision
            186,282       174,864  
 
                       
Total liabilities
            1,682,113       645,933  
 
                       
Equity
                       
Capital stock
            20,084,129       13,883,611  
Warrants
    5       238,749       1,459,604  
Contributed surplus
            2,755,487       1,535,400  
Accumulated other comprehensive loss
            (36.772 )     (36,772 )
Deficit
            (18,175,872 )     (14,767,303 )
Total equity
            4,865,721       2,074,540  
TOTAL LIABILITIES AND EQUITY
            6,547,834       2,720,473  
 
                       
Going concern
    1                  
Subsequent events
    9                  

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

Consolidated Statements of Comprehensive Loss

(Unaudited, in Canadian Dollars)

 
       
Three months
ended June 30,
   
Six months
ended June 30,
 
 
  Notes     2020     2019     2020     2019  
 
        $     $     $     $  
                                 
Expenses
                               
Exploration and evaluation expenses
    7       912,676       397,220       1,524,451       565,822  
General and administrative
    8       498,639       277,335       881,550       493,796  
Stock-based compensation
    6       1,031,650       -       1,031,650       -  
Foreign exchange loss (gain)
            3,830       1,773       (21,567 )     17,935  
Operating loss
            2,446,795       676,328       3,416,084       1,077,553  
Other expenses (income)
                                       
Interest income
            (4,873 )     (4,765 )     (9,915 )     (7,065 )
Finance costs
            210       2,162       2,400       4,642  
 
                                       
Net loss and comprehensive loss
            (2,442,132)       (673,725)       (3,408,569)       (1,075,130)  
 
                                       
 
                                       
 
                                       
 
                                       
Weighted average number of common shares outstanding - basic and diluted
            81,176,725       58,222,276       77,307,646       58,006,586  
Basic and diluted loss per common share
            (0.03 )     (0.01 )     (0.04 )     (0.02 )
 
                                       

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

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, 2019
          57,788,499       10,058,355       321,788       956,800       (36,772)       (9,665,197)       1,634,974  
Net loss and comprehensive loss
          -       -       -       -       -       (1,075,130 )     (1,075,130 )
                                                               
Shares and warrants issuance under private placements
          13,157,895       3,853,718       1,146,282       -       -       -       5,000,000  
Share issuance costs
          -       (28,462 )     (8,466 )     -       -       -       (36,928 )
Balance at June 30, 2019
          70,946,394       13,883,611       1,459,604       956,800       (36,772)       (10,740,327)       5,522,916  
                                                               
                                                               
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
    5       11,387,626       6,140,518       (1,010,418 )     -       -       -       5,130,100  
Warrants expired
    5       -       -       (210,437 )     210,437       -       -       -  
Options exercised
    6       100,000       60,000       -       (22,000 )     -       -       38,000  
Stock-based compensation
    6       -       -       -       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  

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

Consolidated Statements of Cash Flows
(Unaudited, in Canadian Dollars)

 
  Notes    
Six months
ended June 30,
 
 
        2020     2019  
 
        $     $  
 
                 
Operating activities
                 
Net loss for the period
          (3,408,569 )     (1,075,130 )
Adjustments for:
                     
Depreciation
    4       114,317       82,863  
Stock-based compensation
    6       1,031,650       -  
Finance costs
            2,400       4,642  
Payment from cash held in escrow account for environmental monitoring
            -       (28,846 )
Escrow account for environmental monitoring
            -       28,846  
Foreign exchange loss (gain)
            (19,112 )     19,380  
 
            (2,279,314 )     (968,245 )
Changes in non-cash working capital items:
                       
Sales tax receivable
            (14,067 )     (13,215 )
Prepaid expenses and others
            93,561       1,467  
Trade and other payables
            293,916       271,621  
Payables to shareholders
            -       4,762  
 
            373,410       264,635  
Cash flow used in operating activities
            (1,905,904)       (703,610)  
 
                       
Investing activities
                       
Acquisition of mineral properties
    3       (13,737 )     -  
Acquisition of property and equipment
            -       (10,514 )
Cash flow used in investing activities
            (13,737)       (10,514)  
 
                       
Financing activities
                       
Shares and warrants issuance
            -       5,000,000  
Share issuance costs
            -       (750 )
Exercise of warrants
    5       5,130,100       -  
Exercise of stock options
    6       38,000       -  
Deferred share issuance costs
    9       (324,293 )     -  
Cash flow from financing activities
            4,843,807       4,999,250  
 
                       
Net change in cash before effects of exchange rate changes on cash during the period
            2,924,166       4,285,126  
Effects of exchange rate changes on cash
            1,517       (3,447 )
Net change in cash during the period
            2,925,683       4,281,679  
Cash, beginning of period
            1,515,406       963,788  
Cash, end of period
            4,441,089       5,245,467  
 
                       
Supplemental cash flow information
                       
Interest received
            9,915       7,065  
Share issuance costs included in trade and other payables
            -       36,178  
Acquisition of mineral properties included in trade and other payables
            -       -  
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.

Condensed Notes to the interim Consolidated Financial Statements
Six months ended June 30, 2020 and 2019
(Unaudited, in Canadian Dollars)

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND GOING CONCERN

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 (note 9).

These unaudited condensed interim consolidated financial statements for the six months ended June 30, 2020 ("Financial Statements") were approved by the Board of Directors on August 26, 2020.

1.1 Basis of presentation

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

The Financial Statements should be read in conjunction with the annual financial statements for the year ended December 31, 2019 which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in these Financial Statements are consistent with those of the previous financial year ended December 31, 2019.

1.2 Going concern

The Financial Statements were prepared using IFRS applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due. In assessing whether the going concern assumption is appropriate, senior management of the Corporation ("Management") takes into account all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. Management is aware in making its assessment of material uncertainties related to events and conditions that lend a significant doubt upon the Corporation' ability to continue as a going concern and accordingly, the appropriateness of the use of IFRS applicable to a going concern, as described in the following paragraph. The Financial Statements do not reflect the adjustment to the carrying values of assets and liabilities, expenses and financial position classifications that would be necessary if the going concern assumption would not be appropriate. These adjustments could be material.

The Corporation recorded a loss of $3,408,569 for the six months ended June 30, 2020 and has an accumulated deficit of $18,175,872 as at June 30, 2020. In addition to ongoing working capital requirements, the Corporation must secure sufficient funding to meet its other obligations, existing commitments for the exploration and evaluation programs and pay general and administration costs. As at June 30, 2020, the Corporation had working capital of $2,978,497. These conditions indicate the existence of material uncertainties that may cast a significant doubt regarding the Corporation' ability to continue as a going concern.

The Corporation' ability to continue as a going concern is dependent upon its ability to raise additional financing to further explore its mineral properties. The completion of the fundraising in July 2020 discussed in subsequent events (note 9), contributed to such financing. While Management has secured financing in the past, there can be no assurance it will be able to do so in the future or that these sources of funding or initiatives will be available for the Corporation or that they will be available on terms which are acceptable to the Corporation. If Management is unable to obtain new funding, the Corporation may be unable to continue its operations, and amounts realized for assets might be less than amounts reflected in these Financial Statements and this could have a significant impact on the financial position of the Corporation, its financial performance and its cash flows.

The measurement of certain assets and liabilities is dependent on future events; therefore the preparation of these Financial Statements requires the use of estimates, which may vary from actual results. The success of the Corporation' exploration and evaluation activities is influenced by significant financial risks, legal and political risks, commodity prices, and the ability of the Corporation to discover economically recoverable reserves.

During the first half of 2020, an outbreak of a new strain of coronavirus (COVID-19) resulted in a major global health crisis which continues to have impacts on the global economy and the financial markets at the date of completion of the Financial Statements. These events may cause significant changes on the Corporation's ability to complete planned exploration and evaluation activities in the future, meet its other obligations and existing commitments for the exploration and evaluation programs or our ability to obtain debt and equity financing. Following these events, the Corporation has taken and will continue to take action to minimize the impact of the COVID-19 pandemic. However, it is impossible to ultimately determine the financial implications of these events.

2. CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS

The preparation of the Financial Statements requires Management to make judgments and form assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. On an ongoing basis, Management evaluates its judgments in relation to assets, liabilities and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments. Actual outcomes may differ from these estimates under different assumptions and conditions.

In preparing the Financial Statements, the significant judgements made by Management in applying the Corporation accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Corporation's audited annual financial statements for the year ended December 31, 2019. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

3. MINERAL PROPERTIES

 
  As at
December 31,
2019
    Additions    
As at
June 30,
2020
 
 
  $     $     $  
Nalunaq
    1       -       1  
Tartoq
    18,431       -       18,431  
Vagar
    11,103       -       11,103  
Naalagaaffiup Portornga
    6,334       -       6,334  
Nuna Nutaaq
    6,076       -       6,076  
Saarloq
    -       7,348       7,348  
Anoritooq
    -       6,389       6,389  
Total mineral properties
    41,945       13,737       55,682  
                         
 
  As at December 31, 2018     Additions    
As at December 31,
2019
 
 
  $     $     $  
Nalunaq
    1       -       1  
Tartoq
    18,431       -       18,431  
Vagar
    11,103       -       11,103  
Naalagaaffiup Portornga
    6,334       -       6,334  
Nuna Nutaaq
    -       6,076       6,076  
Total mineral properties
    35,869       6,076       41,945  
                         

4. PROPERTY AND EQUIPMENT

 
  Exploration and evaluation        
 
  Field equipment and infrastructure     Vehicles and rolling stock     Equipment     Total  
 
  $     $     $     $  
 
                       
Six months ended June 30, 2020
                       
Opening net book value
    271,977       86,656       8,470       367,103  
Additions
    -       -       -       -  
Depreciation
    (64,554 )     (48,011 )     (1,752 )     (114,317 )
Closing net book value
    207,423       38,645       6,718       252,786  
 
                               
As at June 30, 2020
                               
Cost
    387,323       288,066       10,514       685,903  
Accumulated depreciation
    (179,900)       (249,421)       (3,796)       (433,117)  
Closing net book value
    207,423       38,645       6,718       252,786  

Depreciation of property and equipment related to exploration and evaluation properties is being recorded in exploration and evaluation expenses in the consolidated statement of comprehensive loss, under depreciation. Depreciation of $114,317 was expensed as exploration and evaluation expenses during the six months ended June 30, 2020.

5. WARRANTS

5.1 Warrants

Changes in the Corporation's warrants are as follow:

 
  Six months ended June 30, 2020     2019  
 
  Number of warrants     Carrying Value     Weighted average exercise price     Number of warrants     Carrying Value     Weighted average exercise price  
 
        $     $           $     $  
Balance, beginning
    13,157,895       1,137,816       0.45       -       -       -  
Issued
    -       -       -       13,157,895       1,137,816       0.45  
Exercised
    (11,272,271 )     (974,758 )     0.45       -       -       -  
Expired
    (1,885,624 )     (163,058 )     0.45       -       -       -  
Balance, end
    -       -       -       13,157,895       1,137,816       0.45  

The Corporation has accelerated the expiry of certain common share purchase warrants ("Warrants"), bearing an expiration date of June 28, 2022. The certificate evidencing the Warrants ("Warrant Certificate") provided for acceleration in certain circumstances, which were met during the period. From the period February 6, 2020 to March 5, 2020, the daily volume weighted average price of the Corporation's common shares on the TSX-V was equal to or greater than $0.50, thus satisfying the acceleration requirements under the Warrants. Accordingly, Warrant holders were provided with notification that any Warrants that were not exercised before April 20, 2020, being the 30th trading day following the occurrence of the acceleration event, would expire and be cancelled. Certain Warrant holders exercised 11,272,271 Warrants, each entitling the holder to receive one common share of the Corporation, at an exercise price per warrant of $0.45, representing gross proceeds of $5,072,522.

5.2 Agent warrants

Changes in the Corporation's agent and finders warrants are as follow:

 
  Six months ended June 30, 2020     2019  
 
  Number of warrants     Carrying Value     Weighted average exercise price     Number of warrants     Carrying Value     Weighted average exercise price  
 
        $     $     $     $     $  
Balance, beginning
    1,067,739       321,788       0.49       1,067,739       321,788       0.49  
Exercised
    (115,355 )     (35,660 )     0.50       -       -       -  
Expired
    (182,227 )     (47,379 )     0.45       -       -       -  
Balance, end
    770,157       238,749       0.50       1,067,739       321,788       0.49  

Agent and finders warrants outstanding and exercisable as at June 30, 2020 are as follows:

  Number of warrants outstanding and exercisable     Exercise price     Expiry date  
        $        
    770,157       0.50       July 13, 2020  

6. STOCK OPTIONS

An incentive stock option plan (the "Plan") was approved initially in 2017 and renewed by shareholders on June 17, 2020. The Plan is a "rolling" plan whereby a maximum of 10% of the issued shares at the time of the grant are reserved for issue under the Plan to executive officers and directors, employees and consultants. The Board of directors attributes the stock options and the exercise price of the options shall not be less than the closing price on the last trading day preceding the grant date. The options have a maximum term of ten years. Options granted pursuant to the Plan shall vest and become exercisable at such time or times as may be determined by the Board, except options granted to consultants providing investor relations activities shall vest in stages over a 12 month period with a maximum of one-quarter of the options vesting in any three-month period. The Corporation has no legal or constructive obligation to repurchase or settle the options in cash.

On June 17, 2020, the Corporation granted to its directors, officers and consultants 2,195,000 stock options exercisable at an exercise price of $0.70, with an expiry date of December 31, 2026. The stock options vested 100% at the grant date. Those options were granted at an exercise price equal the closing market value of the shares the previous day of the grant. Total stock-based compensation costs amount to $1,031,650 for an estimated fair value of $0.47 per option. The fair value of the options granted was estimated using the Black-Scholes model with no expected dividend yield, 76.41% expected volatility, 0.41% risk-free interest rate and 6.5 years options expected life. The expected life and expected volatility were estimated by benchmarking comparable companies to the Corporation.

Changes in stock options are as follow:

 
 
Six months ended
June 30, 2020
    2019  
 
  Number of options     Weighted average exercise price     Number of options     Weighted average exercise price  
 
        $           $  
Balance, beginning
    5,650,000       0.43       3,020,000       0.47  
Granted
    2,195,000       0.70       2,630,000       0.38  
Exercised
    (100,000 )     0.38       -       -  
Balance, end
    7,745,000       0.51       5,650,000       0.43  

Stock options outstanding and exercisable as at June 30, 2020 are as follows:

  Number of options outstanding and exercisable    
Exercise
price
    Expiry date  
        $        
                 
    1,360,000       0.50       July 13, 2022  
    1,660,000       0.45       August 22, 2023  
    2,530,000       0.38       December 31, 2025  
    2,195,000       0.70       December 31, 2026  
    7,745,000                  

7. EXPLORATION AND EVALUATION EXPENSES

 
 
Three months
ended June 30,
   
Six months
ended June 30,
 
 
  2020     2019     2020     2019  
 
  $     $     $     $  
Geology
    524,863       262,113       795,423       361,727  
Lodging and on-site support
    3,663       -       3,663       -  
Underground works
    23,040       -       45,847       -  
Drilling
    33,950       -       33,315       -  
Safety and environment
    6,568       -       6,568       -  
Analysis
    43,205       12,088       67,068       14,580  
Transport
    9,923       5,725       70,656       5,725  
Logistic support
    84,223       60,939       162,710       79,889  
Insurance
    3,287       -       4,513       -  
Maintenance infrastructure
    102,442       -       187,297       -  
Government fees
    20,353       14,778       33,074       21,038  
Depreciation
    57,159       41,577       114,317       82,863  
Exploration and evaluation expenses
    912,676       397,220       1,524,451       565,822  

8. GENERAL AND ADMINISTRATION

 
 
Three months
ended June 30,
   
Six months
ended June 30,
 
 
  2020     2019     2020     2019  
 
  $     $     $     $  
Management and consulting fees
    166,369       70,427       282,441       139,800  
Director's fees
    25,000       18,750       50,000       18,750  
Professional fees
    194,349       104,405       318,104       186,705  
Marketing and industry involvement
    60,606       33,503       146,981       61,821  
Insurance
    10,561       10,088       21,122       20,180  
Travel and other expenses
    16,606       30,840       31,180       48,265  
Regulatory fees
    25,148       9,322       31,722       18,275  
General and administration
    498,639       277,335       881,550       493,796  

9. SUBSEQUENT EVENTS

AIM listing

As of June 30, 2020, the Corporation was considering an additional listing on the AIM market of the London Stock Exchange, alongside its current listing on the TSX-V. As at June 30, 2020, the Corporation had incurred deferred share issuance costs of $1,221,138 as part of this process.

The admission of its entire issued share capital to trading on the AIM market occurred and dealings commenced on AIM on July 31, 2020 ("Admission") under the ticker AEXG.

Completion of the fundraising

On July 31, 2020, the Corporation completed the fundraising by issuing 94,444,445 common shares at a price of $0.77 (GBP 0.45) per share, for gross proceeds to the Corporation of $72,722,223 (GBP 42,500,000) ("Fundraising").

Stifel Nicolaus Europe Limited ("Stifel") acted as nominated adviser, broker and bookrunner to the Corporation in connection with the Fundraising and Admission. Cormark Securities Inc. and Paradigm Capital Inc. acted as co-managers in connection with the Fundraising (the "Agents").

Further Information:

About AEX

AEX's principal business objectives are the identification, acquisition, exploration and development of gold properties in Greenland. The Corporation's principal asset is a 100% interest in the Nalunaq Project, an advanced exploration stage property with an exploitation license including the previously operating Nalunaq gold mine. The Corporation has a portfolio of gold assets covering 3,356km2, the largest portfolio of gold assets in Southern Greenland covering the two known gold belts in the region. AEX is incorporated under the Canada Business Corporations Act and wholly owns Nalunaq A/S, incorporated under the Greenland Public Companies Act.

Forward-Looking Information

This press release contains forward-looking information within the meaning of applicable securities legislation, which reflects the Corporation's current expectations regarding future events and the future growth of the Corporation's business. In this press release there is forward-looking information based on a number of assumptions and subject to a number of risks and uncertainties, many of which are beyond the Corporation's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to the factors discussed under "Risk Factors" in the Final Prospectus available under the Corporation's profile on SEDAR at www.sedar.com. Any forward-looking information included in this press release is based only on information currently available to the Corporation and speaks only as of the date on which it is made. Except as required by applicable securities laws, the Corporation assumes no obligation to update or revise any forward-looking information to reflect new circumstances or events. No securities regulatory authority has either approved or disapproved of the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Inside Information

This announcement contains inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR").

SOURCE: AEX Gold Inc.

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