AEX Gold reports high level of support for Nalunaq deferment

AEX Gold updated the market on its development plan review and shareholder consultation on Friday, reporting a “high level” of support from the latter.

The AIM-traded firm said the Greenland government’s decision to extend its temporary travel ban to run through to the end of April that led it to defer development and gold production from Nalunaq, until the effects of the Covid-19 pandemic subsided.

It said on Friday that it had consulted with the holders of the vast majority of its shares, and was “greatly encouraged” by the level of support expressed.

The company said it believed there was widespread acceptance among shareholders that its decision to defer the development plan, and avoid committing the bulk of its available liquidity during a period of such uncertainty, was correct.

Looking at its review of the Nalunaq development plan, AEX said it had engaged the global mining consulting firm Ausenco to conduct an independent review of all technical aspects of the mine development.

The third-party review would assist the company in determining what, if any, amendments were needed to the plan and schedule, the board said, and allow it to present a revised plan to shareholders.

It said the revised plan would also address costs and any potential further capital requirements, with an assessment of how the firm intended to meet them.

The review was currently ongoing, and AEX said it would report its revised plan to shareholders as soon it could.

In addition to restarting the development plan for Nalunaq, the company said it was also focused on the continued exploration of its extensive, high-grade licence area.

Continued geophysical work and geological mapping over the wider exploration portfolio was currently being undertaken to ensure drill-readiness.

“I am very conscious that our shareholders are keen for an update on our Nalunaq development plan, and especially our capital position, in light of our last announcement on 10 February,” said chief executive officer Eldur Olafsson.

“I am pleased to be able to report that significant progress is underway, with multiple work streams involving the board, the executive team, third party providers and our external advisors.”

Olafsson said the company was continuing to focus all its efforts on the “very tangible and valuable prize” of its wider portfolio in Greenland, and of Nalunaq in particular.

“I am extremely grateful for the support shown recently by so many of our significant shareholders, and on behalf of the board would like to strongly reiterate our determination to realise the maximum possible value from our significant portfolio of assets.”

AEX Gold said that in line with its review and consultation, its 2020 results would now be deferred until 29 April.

The board said it expected the results to be in line with management expectations.

At 1100 GMT, shares in AEX Gold were flat at 30p.