GOVIEX URANIUM INC. Condensed Interim Consolidated Financial Statements of
GoviEx Uranium Inc.
For the three and nine months ended September 30, 2023
(Restated - in thousands of U.S. Dollars except for shares and per share amounts)
GoviEx Uranium Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - Stated in thousands of U.S. dollars)
September 30, | December 31, | |||
Notes | 2023 | 2022 | ||
As restated | ||||
Assets | (note 4 (c)) | |||
Current assets | ||||
Cash | $ | 4,634 | $ | 3,289 |
Amounts receivable | 31 | 24 | ||
Marketable securities | 3 | 358 | 831 | |
Prepaid expenses and deposit | 18 | 18 | ||
5,041 | 4,162 | |||
Non-current assets | ||||
Long-term deposit | 9(b) | 173 | 173 | |
Plant and equipment | 244 | 271 | ||
Mineral properties | 4 | 68,142 | 69,591 | |
68,559 | 70,035 | |||
Total assets | $ | 73,600 | $ | 74,197 |
Liabilities | ||||
Current liabilities | ||||
Accounts payable and accrued liabilities | $ | 1,001 | $ | 1,186 |
Equity | ||||
Share capital | 5 | 286,650 | 277,221 | |
Contributed surplus | 23,298 | 21,652 | ||
Deficit | (247,421) | (236,150) | ||
Equity attributable to GoviEx Uranium Inc. | 62,527 | 62,723 | ||
Non-controlling interest | 4(a) | 10,072 | 10,288 | |
72,599 | 73,011 | |||
Total liabilities and equity | $ | 73,600 | $ | 74,197 |
The accompanying notes are an integral part of the Condensed Interim Consolidated Financial Statements.
Nature of Operations and Going Concern (note 1)
Subsequent Event (note 11)
Approved and authorized for issue on behalf of the Board of Directors on December 18, 2023.
/s/ "Christopher Wallace" | /s/ "Benoit La Salle" | |
Director | Director |
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GoviEx Uranium Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Unaudited - Stated in thousands of U.S. dollars, except for shares and per share amounts)
Three months ended September 30, | Nine months ended September 30, | ||||||||
Notes | 2023 | 2022 | 2023 | 2022 | |||||
As restated | As restated | ||||||||
Expenses | (note 4 (c)) | (note 4 (c)) | |||||||
Area tax | 4(a) | - | - | $ | (1,017) | $ | (2,130) | ||
Exploration and evaluation | 7 | (2,961) | (1,971) | (5,774) | (6,566) | ||||
General and administration | 8 | (400) | (448) | (2,033) | (1,862) | ||||
Share-based compensation | (426) | (491) | (874) | (840) | |||||
(3,787) | (2,910) | (9,698) | (11,398) | ||||||
Other income (expenses) | |||||||||
Change in fair value of marketable securities | 3 | (321) | (96) | (473) | (115) | ||||
Depreciation | (16) | (18) | (49) | (53) | |||||
Foreign exchange (loss) gain | (121) | 118 | 19 | 413 | |||||
Impairment | 4(c) | (1,449) | - | (1,449) | - | ||||
Recovery of loan receivable | - | 824 | - | 1,323 | |||||
Interest and other | 82 | 10 | 163 | 26 | |||||
Loss and comprehensive loss for the period | (5,612) | (2,072) | (11,487) | (9,804) | |||||
Loss and comprehensive loss attributable to: | |||||||||
GoviEx Uranium Inc. | (5,612) | (2,030) | (11,271) | (9,108) | |||||
Non-controlling interest | - | (42) | (216) | (696) | |||||
Net loss and comprehensive loss for the period | (5,612) | (2,072) | (11,487) | (9,804) | |||||
Net loss per share, basic and diluted | $ | (0.01) | $ | (0.00) | $ | (0.02) | $ | (0.01) | |
Weighted average number of common shares | |||||||||
outstanding | 726,391,484 | 592,675,126 | 685,575,198 | 587,062,512 |
The accompanying notes are an integral part of the Condensed Interim Consolidated Financial Statements.
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GoviEx Uranium Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited - Stated in thousands of U.S. dollars except for shares)
Equity | Non- | ||||||||||||
Number of | Share | Contributed | Attributable | Controlling | |||||||||
Shares | Capital | Surplus | Deficit | to GoviEx | Interest | Total Equity | |||||||
Balance, December 31, 2021 | 576,136,015 | $ | 265,399 | $ | 20,890 | $ | (224,377) | $ | 61,912 | $ | 11,076 | $ | 72,988 |
Shares issued for warrants exercised | 13,991,269 | 3,932 | 3,932 | 3,932 | |||||||||
Shares issued for options exercised | 2,792,000 | 960 | (325) | 635 | 635 | ||||||||
Share-based compensation | 840 | 840 | 840 | ||||||||||
Net loss and comprehensive loss for the period | (9,108) | (9,108) | (696) | (9,804) | |||||||||
Balance, September 30, 2022 | 592,919,284 | 270,291 | 21,405 | (233,485) | 58,211 | 10,380 | 68,591 | ||||||
Balance, December 31, 2022 | 640,677,284 | $ | 277,221 | $ | 21,652 | $ | (236,150) | $ | 62,723 | $ | 10,288 | $ | 73,011 |
Shares issued for cash, net of share issue costs | 85,714,200 | 9,429 | 772 | 10,201 | 10,201 | ||||||||
Share-based compensation | 874 | 874 | 874 | ||||||||||
Net loss and comprehensive loss for the period | (11,271) | (11,271) | (216) | (11,487) | |||||||||
Balance, September 30, 2023, | |||||||||||||
As restated (note 4(c)) | 726,391,484 | $ | 286,650 | $ | 23,298 | $ | (247,421) | $ | 62,527 | $ | 10,072 | $ | 72,599 |
The accompanying notes are an integral part of the Condensed Interim Consolidated Financial Statements.
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GoviEx Uranium Inc.
Condensed Interim Consolidated Statements of Cash Flow
(Unaudited - Stated in thousands of U.S. dollars)
Nine months ended September 30, | ||||
Note | 2023 | 2022 | ||
As restated | ||||
Operating activities | (note 4 (c)) | |||
Loss for the period | $ | (11,487) | $ | (9,804) |
Adjustments for non-cash items | ||||
Change in fair value of marketable securities | 473 | 115 | ||
Depreciation | 49 | 53 | ||
Recovery of loan receivable | - | (824) | ||
Impairment | 1,449 | - | ||
Share-based compensation | 874 | 840 | ||
Unrealized foreign exchange gain | (25) | (829) | ||
Changes in non-cash operating working capital items | ||||
Amounts receivable | (7) | 11 | ||
Prepaid expenses and deposit | - | 1 | ||
Accounts payable and accrued liabilities | (185) | 409 | ||
Area tax | - | (2,783) | ||
Cash used in operating activities | (8,859) | (12,811) | ||
Investing activities | ||||
Receipts of loan receivable | - | 1,049 | ||
Plant and equipment | 7 | (231) | ||
Cash provided by investing activities | 7 | 818 | ||
Financing activities | ||||
Proceeds from private placements | 11,128 | - | ||
Share issue costs | (927) | - | ||
Proceeds from warrants exercised | - | 3,932 | ||
Proceeds from stock options exercised | - | 635 | ||
Cash provided by financing activities | 10,201 | 4,567 | ||
Effect of foreign exchange on cash | (4) | (498) | ||
Increase (decrease) in cash | 1,345 | (7,924) | ||
Cash, beginning of period | 3,289 | 9,588 | ||
Cash, end of period | $ | 4,634 | $ | 1,664 |
The accompanying notes are an integral part of the Condensed Interim Consolidated Financial Statements.
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GoviEx Uranium Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2023
(Unaudited - Stated in thousands of U.S. dollars except for shares and per share amounts)
-
Nature of Operations and Going Concern
GoviEx Uranium Inc. and its subsidiaries, "GoviEx" or the "Company," is a Canadian mineral resources company focused on the exploration and future development of uranium properties in Africa. The Company was incorporated in the British Virgin Islands on June 16, 2006, and continued under the Business Corporation Act (British Columbia) in Canada on March 1, 2011. The head office, principal address, registered and records office is located at 999 Canada Place, Suite 606, Vancouver, British Columbia, Canada, V6C 3E1.
The Company has one business segment, exploring mineral properties, with its primary projects in Niger and Zambia. The Company capitalizes acquisition costs only and expenses exploration and evaluation costs related to its mineral properties. The underlying value and the recoverability of the amounts recorded as mineral properties do not reflect current or future values. The Company's continued existence depends on the economic recoverability of mineral reserves and its ability to obtain funding to advance its uranium properties.
The Condensed Interim Consolidated Financial Statements ("Financial Statements") are prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for at least twelve months from the reporting period end. During the nine months ended September 30, 2023, the Company incurred a net loss of $11,487 and used cash in operating activities of $8,859 compared to a $9,804 net loss and $12,811 cash usage in the same period of 2022. As of September 30, 2023, the Company had accumulated a deficit of $247,421 (December 31, 2022 - $236,150) and working capital of $4,040 (December 31, 2022 - $2,976).
The Company has no source of revenue and has significant cash requirements, including area tax payments, to maintain its mineral property interests and meet its administrative overhead needs. Although the Company has successfully raised funds in the past, there can be no assurance that it will be able to do so in the future. These factors represent material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern.
Should the Company be unable to continue as a going concern, the net realizable value of its assets may be materially less than the amounts on the condensed interim consolidated statements of financial position. These Financial Statements do not reflect adjustments to the carrying value and classification of assets and liabilities that might be necessary in the event of going concern. Such adjustments could be material. - Significant Accounting Policies
-
Statement of compliance
These Financial Statements have been prepared under International Accounting Standard 34, Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards ("IFRS"). The Company's significant accounting policies applied in these Financial Statements are consistent with those described in note 2 of the Company's audited consolidated financial statements for the year ended December 31, 2022. - Accounting policy judgement and estimation uncertainty
Preparing these Financial Statements requires management to make judgments, estimates and assumptions that affect the applicable policies, reported amounts and disclosure. Estimates and assumptions are continuously evaluated based on management's experience and other factors, including expectations of future events considered reasonable in the circumstances.
Uncertainty about these judgements, estimates and assumptions could result in a material adjustment to the asset's carrying amount or liability in future periods.
On July 26, 2023, Niger's incumbent president was detained by members of the presidential guard. The Economic Community of West African States ("ECOWAS") has responded by imposing stringent sanctions against Niger on July 30, 2023, including closing borders and imposing certain banking restrictions until a democratically elected government is assembled.
-
Statement of compliance
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GoviEx Uranium Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2023
(Unaudited - Stated in thousands of U.S. dollars except for shares and per share amounts)
The ongoing political uncertainty in Niger has increased perceived risk and posed challenges for international investments in the country. GoviEx continues to work on its ongoing debt financing efforts for the construction of a mine in Niger as well as continuing to seek off-take agreements during this more challenging environment. The continuation of the coup has and will continue to impose delays on these fronts.
As of the refiling date of the Financial Statements, GoviEx's Niger office continues its business activities related to maintaining the Madaouela I mining permit in good standing, and the Company is committed to fulfilling its financial obligations on time and in full, including payroll and mining permit area taxes.
Management of the Company has and will continue to exercise significant judgment in assessing the existence of impairment indicators during this period of increased political instability. Management has concluded that except for the Falea project in Mali (note 4 (c)), there was no indication of impairment for its exploration and evaluation assets during the three and nine months ended September 30, 2023.
3. Marketable Securities
The Company holds 34 million ordinary shares of Tesoro Gold Inc., a publicly traded company listed on the Australian Securities Exchange, resulting from a historical loan receivable settled in September 2022. These shares are recorded at fair value and revalued at each reporting date based on closing share prices. Any fair value gain or loss is recognized in the loss for the period.
Kincora Copper Limited | Tesoro Gold Ltd. | |||||
Number of Shares | Fair Value | Number of Shares | Fair Value | |||
Balance, December 31, 2021 | 403,658 | $ | 35 | - | $ | - |
Received for loan settlement | 34,000,000 | 824 | ||||
Disposal | (403,658) | (16) | ||||
Change in fair value | (19) | 7 | ||||
Balance, December 31, 2022 | - | - | 34,000,000 | 831 | ||
Change in fair value | (473) | |||||
Balance, September 30, 2023 | - | $ | - | 34,000,000 | $ | 358 |
4. Mineral Properties
The Company's mineral properties are listed below; carrying value represents the initial acquisition of the properties:
Mineral Properties | September 30, 2023 | December 31, 2022 | ||
Madaouela, Niger, 80% | $ | 65,234 | $ | 65,234 |
Muntanga, Zambia, 100% | 2,908 | 2,908 | ||
Falea, Mali, 100% | - | 1,449 | ||
$ | 68,142 | $ | 69,591 |
- Madaouela Project, Niger
The Madaouela Project, located in north-central Niger, consists of one mining permit, Madaouela I, and six exploration licenses under application to be renewed and granted.
The Madaouela I mining permit was granted on January 26, 2016, which is valid for ten years and renewable until the resource is fully depleted. According to the mining convention in May 2007 and definitive agreements with the Niger government in July 2019, Compagnie Miniere Madaouela SA ("COMIMA"), a Nigerien mining company, was incorporated, owned 80% by GoviEx and 20% by the Niger government, of which 10% is a statutory free-carry.
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GoviEx Uranium Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2023
(Unaudited - Stated in thousands of U.S. dollars except for shares and per share amounts)
Under the Nigerien mining code, a mining permit is subject to an annual area tax based on size at a prescribed rate due and payable annually in West African CFA Franc ("XOF").
In February 2022, the Niger government approved the Company's application to reduce the size of the Madaouela 1 mining permit by 50%, removing the previously unexplored section. The Company has also applied for an exploration license covering the area dropped. As a result, the 2023 area tax of $1,017 (XOF 608 million) is reduced by 50% from the previous years and was paid in May 2023.
Non-controlling interest ("NCI")
Non-controlling interest represents the 20% Niger government ownership in COMIMA. It was initially recognized and measured based on net assets of $65,234 upon the share issuance of 20% Niger government ownership.
As of September 30, 2023, the NCI totalled $10,072 (December 31, 2022 - $10,288), and the net loss attributable to the NCI for the nine months ended September 30, 2023 was $216 (September 30, 2022 - $696). The net loss includes area tax, technical consulting, and relevant administration expenses.
- Muntanga Project, Zambia
The Muntanga project consists of three contiguous mining permits: Muntanga and Dibbwi were granted on March 26, 2010, and Chirundu on October 9, 2009; these permits are valid for 25 years.
On June 25, 2020, the Mining Cadastre Department of Zambia issued a letter to the Company revoking the Chirundu mining permit due to the breach of the Mines and Minerals Development Act, 2015 provisions. On May 5, 2021, the Chirundu mining permit was reinstated, subject to commencing a feasibility study in 2023 and mine development by the end of 2024. The Company started the feasibility study in early 2023.
- Falea Project, Mali and Restatement of Financial Statements
The Falea project is a multi-element project containing the initial three exploration licenses, Falea, Bala and Madini, held by the Company's wholly-owned subsidiary in Mali. On August 25, 2023, the Falea license expired; the Bala and Madini licenses are in good standing.
On January 17, 2023, the Company entered into a Share Purchase Agreement ("SPA") with African Energy Metals Inc. ("AEM") to sell the Falea project for a total value of CAD 5.5 million along with a 3% net smelter royalty. However, the SPA was terminated on June 3, 2023 due to AEM's failure to meet certain closing conditions outlined in the agreement.
Restatement
Management of the Company has assessed available information and concluded that the carrying value of the Falea project should have been impaired in the Financial Statements previously issued on November 24, 2023.
As a result, the Company recognized a $1,449 impairment loss, resulting in a decrease of mineral properties and an increase in the losses for the three and nine months ended September 30, 2023.
5. Share Capital
On May 11, 2023, the Company closed a bought-deal private placement, led by Eight Capital and Sprott Capital Partners, of 85,714,20 units at Canadian dollars ("CAD") 0.175 per unit for gross proceeds of $11,128 (CAD 15,000).
Each unit consists of one common share and one common share purchase warrant exercisable at $0.19 until May 11, 2025.
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GoviEx Uranium Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2023
(Unaudited - Stated in thousands of U.S. dollars except for shares and per share amounts)
The Company incurred $927 share issuance costs, including $746 underwriter commission and reimbursement and $181 legal and regulatory expenses. In addition, the Company issued 2,566,426 underwriter compensation warrants exercisable at CAD 0.175 until May 11, 2025.
The agent warrants issued are considered equity-settledshare-based payments for the services related to the share issuance. Thus, these warrants were valued at $136 using the Black-Scholesoption-pricing model and recorded in equity with the assumptions: 80% volatility, two years expected life, 3.65% risk-free interest rate and nil dividend rate.
6. Share-based Compensation
-
Stock options
The Company has a stock option plan, which authorizes the Company to issue options up to 10% of the issued and outstanding common shares. Share options are granted at an exercise price equal to the value of the Company's common shares on the grant's date.
Options are forfeited if optionees leave before the options vest, and options vested shall expire 30 days after the employee leaves unless otherwise determined by the Board of Directors.
A summary of the Company's stock option movements as of September 30, 2023 is as follows:
Number | Weighted average | |
of options | exercise price (CAD) | |
Outstanding, beginning of period | 47,362,500 | 0.21 |
Granted | 13,380,000 | 0.115 |
Expired | (8,408,750) | (0.22) |
Forfeited | (48,750) | (0.225) |
Outstanding, ending of period | 52,285,000 | 0.18 |
Exercisable, ending of period | 32,795,000 | 0.18 |
The following table lists the stock options outstanding and exercisable as of September 30, 2023:
Price (CAD) | Expiry date | Outstanding | Exercisable |
0.135 | August 26, 2024 | 7,420,000 | 7,420,000 |
0.14 | August 27, 2025 | 7,425,000 | 7,425,000 |
0.31 | March 18, 2026 | 1,000,000 | 750,000 |
0.273 | June 29, 2026 | 500,000 | 375,000 |
0.245 | August 27, 2026 | 8,800,000 | 6,600,000 |
0.39 | December 1, 2026 | 500,000 | 250,000 |
0.225 | September 27, 2027 | 13,260,000 | 6,630,000 |
0.115 | August 15, 2028 | 13,380,000 | 3,345,000 |
52,285,000 | 32,795,000 |
The Company applies the fair value method of accounting for stock options. The weighted average fair value of options granted during the nine months ended September 30, 2023 was $0.05 (2022 - $0.10) based on the following assumptions: 74% volatility, 5-year expected life, 3.5% risk-free interest rate and nil dividend rate.
- Common share purchase warrants
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GoviEx Uranium Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2023
(Unaudited - Stated in thousands of U.S. dollars except for shares and per share amounts)
Number | Weighted average | ||
of warrants | exercise price | ||
Outstanding, beginning of period | 103,750,428 | $ | 0.22 |
Warrants issued | 85,714,200 | 0.19 | |
Agent warrants granted | 2,566,426 | 0.13 | |
Warrants expired | (32,000,000) | (0.30) | |
Outstanding, end of period | 160,031,054 | $ | 0.18 |
The share purchase warrants issued and outstanding are as follows:
Exercise | Acceleration | |||
price ($) | Expiry date | September 30, 2023 | December 31, 2022 | Price (CAD) |
0.30 | January 21, 2023 | - | 32,000,000 | |
0.15 | February 13, 2025 | 12,000,000 | 12,000,000 | ≥0.40 |
0.15 | August 6, 2025 | 34,264,286 | 34,264,286 | |
CAD 0.14 | August 6, 2025 | 1,607,142 | 1,607,142 | |
0.24 | October 25, 2025 | 23,106,500 | 23,106,500 | |
0.24 | October 27, 2025 | 772,500 | 772,500 | |
0.19 | May 11, 2025 | 85,714,200 | - | |
CAD 0.175 | May 11, 2025 | 2,566,426 | - | |
160,031,054 | 103,750,428 |
7. Exploration and Evaluation
Three months ended September 30, 2023 | Three months ended September 30, 2022 | ||||||||||||||||
Madaouela | Muntanga | Falea | Madaouela | Muntanga | Falea | ||||||||||||
(Niger) | (Zam bia) | (Mali) | Total | (Niger) | (Zam bia) | (Mali) | Total | ||||||||||
Drilling and Assay | $ | 20 | $ | 1,270 | $ | - | $ | 1,290 | 19 | 636 | 54 | $ | 709 | ||||
Consulting* | 238 | 610 | - | 848 | 469 | 253 | - | 722 | |||||||||
Personnel costs | 117 | 140 | 81 | 338 | 77 | 76 | 48 | 201 | |||||||||
Professional fees | 82 | 9 | 17 | 108 | 86 | - | 3 | 89 | |||||||||
License and taxes | 187 | 2 | - | 189 | 6 | - | - | 6 | |||||||||
Office expenses | 40 | 22 | 11 | 73 | 7 | 87 | - | 13 | 81 | ||||||||
Camp | 11 | 42 | 5 | 58 | 73 | - | 9 | 30 | 94 | ||||||||
Community and other | 17 | 40 | - | 57 | 50 | 21 | - | 2 | 69 | ||||||||
$ | 712 | $ | 2,135 | $ | 114 | $ | 2,961 | $ | 787 | $ | 1,064 | $ | 120 | $ | 1,971 | ||
Nine months ended September 30, 2023 | Nine months ended September 30, 2022 | ||||||||||||||||
Madaouela | Muntanga | Falea | Madaouela | Muntanga | Falea | ||||||||||||
(Niger) | (Zambia) | (Mali) | Total | (Niger) | (Zambia) | (Mali) | Total | ||||||||||
Drilling and Assay | $ | 63 | $ | 2,073 | $ | - | $ | 2,136 | $ | 53 | $ | 1,531 | $ | 717 | $ | 2,301 | |
Consulting* | 360 | 1,345 | - | 1,705 | 2,096 | 491 | - | 2,587 | |||||||||
Personnel costs | 268 | 327 | 159 | 754 | 276 | 212 | 182 | 670 | |||||||||
Professional fees | 289 | 46 | 50 | 385 | 151 | 4 | 10 | 165 | |||||||||
License and taxes | 215 | 42 | 5 | 262 | 28 | 52 | - | 80 | |||||||||
Office expenses | 112 | 95 | 37 | 244 | 105 | 155 | 29 | 289 | |||||||||
Camp | 24 | 134 | 17 | 175 | 87 | 119 | 110 | 316 | |||||||||
Community and other | 63 | 50 | - | 113 | 78 | 42 | 38 | 158 | |||||||||
$ | 1,394 | $ | 4,112 | $ | 268 | $ | 5,774 | $ | 2,874 | $ | 2,606 | $ | 1,086 | $ | 6,566 | ||
* Consulting in Zambia 2023 and Niger 2022 were mainly related to the ESIA and feasibility study. |
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GoviEx Uranium Inc. published this content on 18 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 December 2023 03:57:37 UTC.
