TORONTO - AEX Gold Inc. ('AEX' or the 'Company' or the 'Corporation') (AIM: AEXG; TSXV: AEX), the independent mining company with an unrivalled land package of gold and strategic mineral assets covering an area of 4,090 km2 in Southern Greenland, is pleased to present a Corporate Update and its 2021 Full Year Financial Results.
Highlights
Nalunaq
The new all-weather 50-person exploration camp was completed within budget and has been winterized and is fully operational.
The 2021 exploration program was completed with 11,044m of core drilling over the South and Valley Blocks at Nalunaq. Drilling commenced in Q2 2021 and was finalised in Q4 2021. The program objectives were met by confirming Valley Block as a new, previously unrecognised, resource area within the Nalunaq project with surface drill results similar in grade to those historically recorded at Mountain, Target and South Blocks.
Results also supported Nalunaq's geological model - the Dolerite Dyke Model - as an indicator of high grade mineralization. This model now predicts a total of five resource growth target areas.
In collaboration with SRK Consulting, the Company is constantly assessing and updating the Resource estimate procedures to incorporate the Dolerite Dyke Model and the surface drilling Nugget Effect historically recorded. This work will allow AEX to incorporate the geological results into the outcomes of the Halyard Inc. ('Halyard') 3rd party engineering study completed in 2021 with an intention to move the project towards a Prefeasibility Study (PFS) to support development.
The 2022 exploration program intends to provide further resource development through both infill and strike extension drilling across the Valley Block, informed by the Dolerite Dyke Model. To facilitate this program the Company will develop a number of drill access roads from the existing mountain surface infrastructure.
AEX is also assessing the option to install a dedicated on-site sample preparation laboratory which would allow for more rapid turn-around time for drill results at Nalunaq and samples from our other exploration work.
Subject to drill results, the 2022 exploration program will provide AEX with the optionality of investigating an underground bulk sample with an option for toll treatment off-site. This would be used as a development step to increase resource confidence towards mine construction.
The Company is in the process of updating its Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA), which it expects to complete over the course of the next year.
Eldur Olafsson, CEO of AEX Gold, commented: 'Having set out our revised forward plan, following the necessary pause in February 2021 in the Nalunaq development, as a consequence of COVID-related cost increases, I am pleased to report that the Company has successfully achieved all of the revised goals that we set out to achieve in 2021. Notably we have made considerable progress at Nalunaq and across the portfolio. Halyard completed a 3rd Party Engineering study, which is a major part of the technical study that will underpin the development of the Nalunaq project. The last aspect of this study, which is in progress, is the proving up of a M&I Resource and underground mine planning which would enable the Company to move into a Prefeasibility Study (PFS) stage. The 11,044m drilling program that AEX conducted last year has been central in helping us further understand the gold mineralization at Nalunaq. As recently announced, this has provided verification of the 'Dolerite Dyke' model's ability to predict the high-grade areas in the Nalunaq Mountain which previous operators had not recognized but directly correlate with the High Grade zones which they mined. Our drill results not only identified a new discovery at 'Valley Block', which returned particularly high grades similar to that encountered in historical mined areas, but also the potential for a further zone along strike of this, named 'Welcome Block'. The Dolerite Dyke Model also predicts further extensions which have not been identified by previous operators of the asset. On the wider exploration front, we acquired more land in 2021 which has increased our total land package to 4,090 km2, mostly focusing on land that has potential for Strategic Minerals.
Strategic minerals are essential for electrification as the world transitions from hydrocarbon energy sources. The results of our exploration program conducted in 2021 have exceeded expectation and lead us to believe that we hold potential resources [of a scale] that could be of global significance. As we further our understanding of the geology of Southern Greenland, in a safe OECD mining jurisdiction, through our exploration work, it is proving that this is the new frontier, with genuine indications of World Class deposits of Gold and Strategic Minerals. I look forward to bringing regular updates to the market on the progress of our portfolio. We completed construction of our 50 personnel all weather camp at Nalunaq which now gives us an operating base to realize the vast potential our continuing exploration activity has begun to reveal.
To put this in context, ours is the only mining exploration camp of such a standard and scale currently in Greenland and gives AEX the advantage of being able to advance its projects all year round. Finally, I would like to thank the Greenlandic Government for its efficiency and cooperation. It is based upon these foundations that I believe we will not only be able to deliver a truly transformational future for AEX and its shareholders but more importantly, for the people of Greenland.'
2021 was a year of consolidation, adjustment and refocus for AEX Gold, as the COVID-19 pandemic continued to wreak havoc globally, and on our business. Significantly, and as previously communicated, the Nalunaq Project was put on hold in February 2021 due to material unforeseen cost increases associated with the impacts of COVID, and as per the April 2021 announcement, the Corporation redirected its focus on four key elements to continue advancing the Company and de-risking the Nalunaq Project ahead of development: conducting a third-party engineering study to optimize the Project costs and derisk the Project schedule to enable AEX to re-assess the execution methodology post completion; conducting fully funded 'early works' infrastructure and a significant exploration program to expand the Nalunaq Resource; continue to advance the EIA and SIA to obtain all permits and regional exploration targeting both gold and strategic minerals through technical research, sampling and geophysical surveys. Despite the challenging start to the year 2021 was a successful year for the Company, delivering considerable progress in line with our revised goals. Exploration results received so far from the period have delivered ahead of our expectations, with further results expected to be announced shortly. In addition, the macro environment has moved in our direction as the global energy transition gathers pace and recent geo-political events have shone a spotlight on the importance and value of large mineral resources located in safe, OECD jurisdictions, with Greenland probably being the final frontier.
Nalunaq
51 drillholes for 11,044m were completed during the 2021 field season. This drilling was designed to assess the along strike and down dip extensions of the mineralized Main Vein structure away from the previously explored South, Target and Mountain Blocks mined between 2004 to 2013. The program was also designed to assess AEX's geological and structural models and to test new target areas of the project. The results announced on April 4 2022 provided further evidence that the Valley Block is a new high-grade zone, unrecognized or developed by previous operators and corroborating the Dolerite Dyke Model. The Valley Block is now a key target for initial resource growth at Nalunaq. The 2021 program also targeted a downdip extension of the South Block and identified a potential further high-grade zone, the 'Welcome Block' (which would take the total high-grade zones to five), which was predicted by the Dolerite Dyke Model. In parallel to the exploration program, Halyard completed its 3rd party engineering study, focusing on the Nalunaq development cost including the process plant, mobile equipment, surface infrastructure, permanent camp and associated logistics and engineering. The study concluded that the advanced engineering of the overall project is now to Feasibility Study level based on the Canadian Standards of Disclosure for Mineral Project NI43-101 requirements.
AEX continues to work with SRK Consulting to develop the most robust Mineral Resource estimation technique for Nalunaq possible, incorporating the Dolerite Dyke Model as well as the high-grade variability from core sampling (the 'nugget effect') to better reflect the full resource potential at the Valley Block and the rest of the Nalunaq project. This work will allow AEX to incorporate the geological results into the outcomes of the Halyard 3rd party engineering study completed in 2021 with a plan to move the project towards a Preliminary Economic Assessment (PEA) or Pre-Feasibility Study to support further development. Alongside the exploration and technical studies, AEX has continued its ESG mandate on the project, with the Company working to update its Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) over the course of 2022 in line with the terms of its exploitation licence. AEX, in conjunction with its technical advisors, has developed a further exploration plan for Nalunaq for 2022. This will involve both the infill drilling of the Valley Block as well as the drilling of the up dip extension of this Block from the Dolerite Dyke Model. This program aims to allow for the continual resource development from the Valley Block. In order to access this up dip portion, AEX will first construct two new drilling access roads from the existing mountain surface infrastructure. AEX is also assessing the option to commission a dedicated on-site sample preparation facility to allow the Company to better manage its sample steam and ensure a timely return of assay results to facilitate rapid action following exploration results.
Vagar Ridge, Nanoq and Tartoq
A significant exploration program was also conducted across AEX's gold portfolio in 2021, chiefly at our highly prospective Vagar Ridge asset but also at the Nanoq gold/copper licence and our other exciting regional gold targets. This program included airborne geophysics, surface hyperspectral imagery, structural mapping and surface rock chip sampling. The results for the 84km2 airborne magnetics and radiometrics survey over Tartoq were announced on November 23, 2021 and successfully identified and refined prospective structures for hosting of economic mineralization. AEX continues to await results and interpretations from the rest of its gold portfolio and it is the Company's intension to announce these results to the market as soon as they are available. Dependent upon these results, AEX intends to implement a new core drilling program at Vagar Ridge to test and demonstrate the full potential in terms of scale and depth potential of both Orogenic and Intrusion Related Gold mineralization across the target.
Further, and again dependent upon results, AEX intends to target prospective targets and increase its geological knowledge across the mineral system at Nanoq through implementing a high resolution geophysical survey across the license. The Company will provide further detail on its 2022 exploration plans in due course.
Financial results
The Corporation had a cash balance of C$27.3 million at December 31, 2021 (C$61.9 million at December 31, 2020), with no debt, and total working capital of C$25.5 million ($61.4 million at December 31, 2020). Exploration and evaluation expenses during the year were C$14.3 million (2020: C$7.0 million), representing costs of geological work, project engineering and drilling at Nalunaq Project. Capital assets increased by C$13.6 million as we took delivery of 60% of the process plant equipment and surface mobile equipment. The Corporation reported a net loss of C$24.8 million in 2021 (2020: C$12.3 million), driven by exploration and evaluation activities and corporate activity during the period, as well as non-cash foreign exchange loss. General and administrative expenses during the year were C$9.3 million (2020: C$3.3 million), reflecting higher salaries and benefits of a fully on-boarded organization post-AIM listing, travel expenses related to the 2021 Nalunaq Project work program, as well as the establishment of a larger investor relations function and the retention of communications services.
Contact:
Eldur Olafsson
Tel: +354 665 2003
Email: eo@aexgold.com
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 4,090 km2, 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.
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