AEX Gold well-capitalised as it advances development

Greenland-focussed gold exploration company AEX reported a “strong” cash balance of CAD 49.6m (£28.57m) at the end of its second quarter on Friday, down from CAD 61.9m at the end of the 2020 financial year, with no debt, and total working capital of CAD 48.5m, falling from CAD 61.4m on 31 December.

The AIM-traded firm said capital asset purchase commitments, net of deposits on order, was CAD 6m at period end on 30 June.

Those commitments, as it had previously reported, related primarily to the purchase of components of the process plant and surface mobile vehicles.

Available liquidity, net of commitments as at 30 June, totalled CAD 43.6m.

Construction in progress increased by CAD 2.1m in the first half, from a figure of zero on 31 December, as a result of capitalised engineering costs on the Nalunaq Project prior to suspension on 10 February.

Exploration and evaluation expenses during the quarter totalled CAD 2m, up from CAD 0.9m year-on-year, primarily on the Nalunaq Property.

General and administrative expenses during the period came in at CAD 2.1m, compared to CAD 0.5m a year earlier, as a result of increased headcount, consulting, and professional fees associated with right-sizing its organisational structure to develop Nalunaq.

For the first half as a whole, AEX reported a net and comprehensive loss of CAD 7.87m, widening from CAD 3.41m in the first six months of 2020, while basic and diluted losses per share remained stable at four Canadian cents per share.

“I am pleased to report a strong set of results, with the company currently well-capitalised and advancing on all our key workstreams,” said chief executive officer Eldur Olafsson.

“In addition to the considerable progress made in the de-risking and development of the Nalunaq project, we are very excited to report on the wider scale exploration efforts that are ongoing alongside the work on our gold targets, targeting green and strategic minerals.

“We believe that the current efforts to expand the Nalunaq resource, in addition to the focus on our exploration portfolio presents a unique opportunity to investors and we look forward to updating the market in due course.”

At 0800 BST, shares in AEX Gold were up 1.75% at 29p.