Interim Results

Hamak Gold Limited

18 September 2024

 

 

18 September 2024

Hamak Gold Limited

("Hamak Gold" or the "Company")

Interim Results

Hamak Gold Limited (LSE: HAMA) is pleased to announce its results for the six-month period ending 30 June 2024 (the "period"). 

Highlights

·  An independent technical report was completed on all geological and drilling data at Nimba with recommendations for next phases of work to further define the high-grade gold discovery at the Ziatoyah prospect

·    Detailed geological and structural mapping, with complementary rock chip sampling, trenching and channel sampling, completed over a 17 square kilometre area defined by the strong gold in soil anomaly associated with the Ziatoyah gold discovery

·    Several priority drill targets are recommended from the recent exploration programme results with the objective of defining extensions of the high-grade Ziatoyah gold discovery

·    £200,000 raised (before costs) for continuation exploration at the Nimba licence and general working capital

Highlights Post Period

·    £300,000 Convertible Loan Note agreement entered into with Vela Technologies plc

·   Completion of an independent technical report on the detailed structural mapping and trenching exercise, with recommendations for priority drill targets at Ziatoyah

Karl Smithson, Executive Director of Hamak Gold, commented:

"Our exploration work continues to focus on the highly prospective Nimba licence and in particular the significant gold discovery we have made at the Ziatoyah prospect.  We have elected to follow a systematic exploration programme of detailed mapping and sampling to help guide the selection of priority drill targets to further define and delineate extensions to the high-grade surface and drill intersections we have made at Ziatoyah.  Capital markets remain very challenging for the junior mining sector and the Company therefore continues to evaluate opportunities that can generate shareholder value."

For further information you are invited to view the company's website at www.hamakgold.com or please contact:

Hamak Gold Limited Amara Kamara Karl Smithson	[phone] [phone]
Peterhouse Capital Limited (Corporate Broker) Yellow Jersey PR Annabelle Wills	[phone] [phone]

About Hamak Gold Limited

Hamak Gold Limited (LSE: HAMA) is a UK listed company focussed on gold exploration of a portfolio of licences in highly prospective areas of Liberia, where significant drilling results have identified a new high-grade gold discovery with the discovery hole returning 20m @ 7g/t Au near surface in its Nimba licence on the border with Ivory Coast which is located in proximity to the commercial Ity Gold Mine.

INTERIM MANAGEMENT REPORT

Operating Review

The Company's activities during the period continued to focus on its highly prospective Nimba Licence and in particular the high-grade Ziatoyah gold discovery. During the reporting period the Company undertook further detailed mapping together, trenching and rock chip sampling to better understand the geology of the prospect as well as the extent of the mineralisation indicated by the 5.7km x 1km NE trending gold-in-soil anomaly.

Licence Holdings

Hamak Gold holds two exploration licences, covering a combined area of 1,115.2 square kilometres ("km"), known as Nimba and Gozohn. Bedrock gold discoveries, associated with extensive gold in soil anomalies, have been made at both licences. Exploration efforts during the reporting period focussed on the Nimba licence Ziatoyah gold discovery.

Nimba Licence

The Nimba Licence (MEL7001518) covers an area of 985.60 square kilometres and is located approximately 120km to the north-east of the Gozohn licence and some 25km west of Endeavour Mining's 5-million-ounce ("Moz") Ity Gold Mine in neighbouring Cote D'Ivoire.

Since the Company's IPO in March 2022, detailed soil, trench/channel and rock chip sampling have been completed with positive results. In late 2022, this culminated in the discovery of an outcropping (at surface) gold mineralized metadolerite unit at a site called Ziatoyah, which was subsequently drilled and returned a best result of 20m at 7g/t Au near surface and under the mineralized outcrop. 

The associated gold in soil anomaly extends over a 5.7km by 1km northeast trending area, where outcrop is limited.  Streams that dissect the anomaly are exploited by artisanal gold miners, suggesting that the extent of the anomaly may be related to an extensive hard rock gold deposit. 

In 2023, an Induced Polarisation (IP) geophysical survey was completed over a restricted area of the Ziatoyah area in attempt to locate sub-surface sulphide mineralization that could be associated with gold. This was followed by a limited drill programme of 1,000m to test the geophysical anomalies generated, but with limited success. The IP tended not to efficiently penetrate the deep weathering profile and detect the sulphide mineralization at depth. 

Therefore, the Company undertook a detailed mapping and structural analysis of the Ziatoyah areas that returned high values of gold in soil. Structural interpretation based on the detailed multi-element geochemical assays of the soil sampling, surface outcrop and drill core were also carried out.  Several drill targets have been selected with the objective of defining extensions of the high-grade Ziatoyah gold discovery based on the geophysical and geochemical results.

The Cestos shear zone, associated with the 5moz Ity Gold mine, is located along the southeast boundary of the Nimba licence and is defined by a major NE trending dislocation zone. Historical aeromagnetic data from the US Geological Survey implies a pattern of southwesterly to westerly trending secondary structures branching off this shear zone. Such secondary faults, or splays, may have created extensional zones for the focus of hydrothermal activity responsible for gold mineralisation.

Following a detailed review of all exploration data during late 2023 and early 2024, it is now believed that regional scale folds and probable associated parasitic folds should be considered the primary exploration targets across the Nimba Licence. There are clear signs that the area has undergone more than one deformational event judging by the structural trends discernible at map scale. During the reporting period the Company conducted additional detailed field mapping and has refined its model of the stratigraphic, lithological, alteration patterns and structural controls to the mineralisation at the Ziatoyah prospect.

An area of 17 km² has now been mapped and some 260 outcrops described with structural measurements having been recorded from 141 of these. In addition, further rock chip samples (showing mineralisation - mostly pyrite) were collected, which complement the three positive rock samples collected previously, which returned best grades of 6g/t Au, 38g/t Au and 45g/t Au.

It appears that there is a broad, widespread distribution of mineralised outcrops exposed within the prospect area. Nearly all the mineralised outcrops comprise meta-dolerite with one sample deriving from a quartzite (possibly meta-sediment). The structural orientation of the mineralised outcrops trends towards the north or north northeast.

Post period end, a number of trenches were excavated to reveal the exposure of more structures, which have been mapped and which enhance the preliminary structural interpretation, thereby strengthening the confidence level in planning the next phase of drill targets to intersect the significant gold mineralization identified at Ziatoyah. Some 42 channel samples have been collected from the trenches and prepped in advance of assay.

Gozohn Licence

The Gozohn licence (MEL 7002318) covers an area of 129.6 square km and is located some 30 km to the south of the high-grade Kokoya Gold mine operated by MNG Gold. The licence is host to a number of structurally controlled greenstone belts similar to those at Kokoya, with strongly deformed amphibolite, quartzite, schist and banded ironstone formations, which generally occur as pronounced topographic highs.

Previous soil, rock and trench sampling has identified a 1,500m long gold in soil anomaly with rock chip samples returning grades of 2.56g/t Au and 3.37 g/t Au, which are interpreted as being related to gold in quartz veins that permeate the greenstone belt geology.

No exploration was undertaken on Gozohn during the reporting period as resources were focussed on Nimba as a priority.

Outlook

Following the 2nd phase scout drilling programme, the Company has undertaken an in-depth technical review of all the exploration data captured to date, with emphasis on the structural interpretation from drill core and outcrop measurements.  Relogging of the drill core has led to a better understanding of the geology and the recognition of metasediments such that the packages fit well with an Archean Greenstone Terrain designation. There is sufficient evidence that the strong mineralisation seen in the drill hole that returned 7g/t Au over 20m could be stratigraphically, or at least, lithologically controlled rather than having a primary structural control.

Extensive detailed mapping during the reporting period has now revealed a large outcrop coverage area from which a significant number of structural readings have been captured. This extensive database has been reviewed and interpretated with recommendations provided for priority drill targets for a more extensive drilling programme to identify extensions of the high-grade intersection at Ziatoyah. 

The principal risks identified by the Company in the forthcoming reporting period include the renewal of the Nimba and Gozohn exploration licences for a further period of exploration. Applications for extensions have been made and are currently under review by the Ministry of Mines. The Company is confident that the licence renewals will be issued in due course.

Funding

The capital markets for junior exploration companies have proven extremely challenging for quite some time, irrespective of the buoyant gold price. In April 2024 the Company raised £200,000 at a price of 1.25p per share, to be allocated towards the continued exploration at the Nimba licence and for general working capital. 

Post period, the Company entered into an investment agreement with Vela Technologies plc ("Vela") whereby the Company received 2,424,242,424 ordinary shares in Vela in return for the issue of £300,000 of Hamak unsecured convertible loan notes of £1 each ("CLNs").  The notes are redeemable after 24 months with interest accruing at 10% per annum. Vela is subject to a six month lock in period during which no conversion of the loan notes is allowed. A conversion notice of the loan notes can be issued by Vela any time between 6 months and maturity, The conversion price will be the lower of £0.03 or a 25% discount to the five-day VWAP immediately prior to conversion. Any accrued interest will be payable in cash on the conversion date. Hamak Gold intends to, over time and in an orderly manner, transact the Vela shares to realise cash for ongoing exploration and working capital costs.

The Company will seek to raise further capital going forward to fund the continuation of its exploration programmes, though this will be contingent on the capability of further capital to be raised.

Responsibility Statement

The Directors confirm that to the best of their knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as contained in UK-adopted international accounting standards;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules (disclosure of related parties' transactions and changes therein).

Karl Smithson

Executive Director

18 September 2024

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2024

	Note	6 months ended 30 June 2024 Unaudited	6 months ended 30 June 2023 Unaudited
Continuing operations		$000	$000
General and administrative expenses		306	261
Operating Loss		306	261
Loss before taxation		306	261
Tax charge		-	-
Loss after taxation		306	261
Loss for the period		306	261
Loss per share from continuing operations in cents per share: Basic and diluted in USD	6	(0.004)	(0.006)

Condensed Consolidated Statement of Financial Position

For the six months ended 30 June 2024

	Note	6 months ended 30 June 2024 Unaudited	Year ended 31 December 2023 Audited
		$000	$000
Non-current assets
Property, plant and equipment	7	17	23
Intangible assets	8	2,046	1,481
Total non-current assets		2,063	1,978
Current assets
Trade and other receivables		49	25
Cash and cash equivalents	9	64	2
Total current assets		113	27
Total assets		2,176	2,005
Equity and Liabilities
Equity attributable to owners of the parent
Share capital	10	4,261	3,805
Share based payment reserve		21	16
Accumulated deficit		(2,578)	(2,272)
Total equity		1,704	1,549
Current liabilities
Trade and other payables		472	456
Total current liabilities		-	456
Total equity and liabilities		2,176	2,005

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2024

	Share capital	Share based payment	Accumulated deficit	Total equity
	$000	$000	$000	$000
Balance at 1 January 2023	2,758	80	(1,697)	1,141
Loss for the period	-	-	(261)	(261)
Issue of share capital	563	-	-	563
Issue costs	(19)	-	-	(19)
Share-based awards exercised or lapsed	-	(110)	110	-
Share-based payment - vesting	-	40	-	40
Balance at 30 June 2023 - Unaudited	3,302	10	(1,848)	1,464
Loss for the period	-	-	(423)	(423)
Issue of share capital	513	-	-	513
Issue costs	(10)	-	-	(10)
Share-based payment - vesting	-	5	-	5
Share-based payment - awards exercised or lapsed	-	1	(1)	1
Balance at 31 December 2023 - Audited	3,805	16	(2,272)	1,549
Loss for the period	-	-	(306)	(306)
Issue of share capital	475	-	-	475
Issue costs	(19)	-	-	(19)
Share based awards charge	-	5	-	5
Balance at 30 June 2024 - Unaudited	4,261	21	(2,578)	1,704

Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2024

	6 months ended 30 June 2024 Unaudited	6 months ended 30 June 2023 Unaudited
	$000	$000
Cash flows from operating activities
Operating loss	(306)	(261)
Adjusted for:
Share based payment charge	5	40
Directors' fees paid in shares	122	111
Depreciation and amortisation	6	5
Unrealised foreign exchange change	(1)	2
Net cash flow before changes in working capital	(174)	(103)
Adjusted for:
Movement in payables	102	(225)
Movement in receivables	(23)	8
Net cash flow from operating activities	(95)	(320)
Investing activities
Exploration expenditure	(91)	(21)
Net cash flow from investing activities	(91)	(21)
Cash flow from financing activities
Issue of share capital (net of costs)	248	341
Net cash flow from financing activities	248	341
Net change in cash and cash equivalents during the year/period	62	-
Cash and cash equivalents at beginning of the period	2	12
Cash and cash equivalents at end of the period	64	12

Notes to the condensed consolidated interim financial information

1.   GENERAL INFORMATION

Hamak Gold Ltd ("Company") was incorporated on 6 May 2021 and was incorporated under the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands with Company number 2062435. The Company is limited by shares. The Company's registered office is Pasea Estate, P.O. Box 958, Road Town, Tortola, VG1110, BVI.

The Company is a public limited company, which is listed on the Standard Listing of the London Stock Exchange. The principal activity of the Company is mineral exploration.

The Company together with its wholly owned subsidiary Hamak Gold Limited (Liberia) is referred to as the Group.

2.   BASIS OF PREPARATION

The consolidated interim financial statements for the six months ended 30 June 2024 have been prepared in accordance with the requirements of IAS 34 "Interim Financial Statements". The interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have been prepared in accordance with the UK-adopted International Accounting Standards and as applied in accordance with the provisions of the applicable law. The report of the auditors on those financial statements was unqualified.

The interim financial statements of the Group are unaudited financial statements for the six months ended 30 June 2024 have not been audited or reviewed by the Group's auditors. The financial statements have been prepared under the historical cost convention. The consolidated financial statements are presented in United States Dollars ($), which is the Group's functional and presentation currency.

Comparatives

The comparatives presented are for the unaudited 6 months period ended 30 June 2023 for the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Statement of Cash Flows and for the audited year ended 31 December 2023 for the Condensed Consolidated Statement of financial Position and Condensed Consolidated Statement of Changes in Equity.

Going concern

The Company is at an early stage in progressing its exploration assets and has limited overhead costs. Funds raised from the IPO and subsequent share placements have been used primarily to fund exploration work on its licences in Liberia. In April 2024 the Company raised £200,000 before expenses by the placement of new shares. Following the period end the Company entered into an investment agreement with Vela Technologies plc ("Vela") whereby the Company received 2,424,242,424 ordinary shares in Vela in return for the issue of £300,000 of Hamak unsecured convertible loan notes of £1 each ("CLNs").  The notes are redeemable after 24 months with interest accruing at 10% per annum.  Vela is subject to a 6-month lock in period during which no conversion of the loan notes is allowed. A conversion notice of the loan notes can be issued by Vela any time between 6 months and maturity, The conversion price will be the lower of £0.03 or a 25% discount to the five-day VWAP immediately prior to conversion. Any accrued interest will be payable in cash on the conversion date. At the date of this report the Company had sold 221.6 million Vela shares and raised £17,361 before costs and intends to sell down its holding in Vela over time and in an orderly manner to realise further cash for ongoing exploration costs and general working capital.

The Directors have a reasonable expectation that the Company will be able to raise sufficient funds in order to meet planned expenditure for at least 12 months from the date of approval of these interim consolidated financial statements and therefore the interim consolidated financial statement have been prepared on a going concern basis.

3.   SIGNIFICANT ACCOUNTING POLICIES

In preparing these condensed consolidated financial statements, the Group's accounting policies were consistent with those applied to the Group's consolidated financial statements for the year ended 31 December 2023.

4.   CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The judgements, estimates and assumptions applied in the condensed interim financial statements, including the key sources of estimation uncertainty, were the same as those applied in the Group's last annual financial statements for the year ended 31 December 2023.

5.   BUSINESS AND GEOGRAPHICAL REPORTING

The Group's chief operating decision maker is considered to be the executive directors (the 'Executive Board').  The Executive Board evaluates the financial performance of the Group. During the period the Group had one activity only. The whole of the value of the Group's net assets was attributable to mineral exploration.

6.   LOSS PER SHARE

Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

		6 months ended 30 June 2024	6 months ended 30 June 2023
		$000	$000
Loss from continuing operations attributable to equity holders of the company		(306)	(261)
Weighted average number of ordinary shares in issue		77,441,274	44,964,228
Basic and fully diluted loss per share from continuing operations in USD		(0.004)	(0.006)

7.   PROPERTY, PLANT AND EQUIPMENT

	Plant and Equipment	Total
	$000	$000
Cost
At 1 January 2024	41	41
Additions	-	-
At 30 June 2024	41	41
Cost
At 1 January 2023	41	41
Additions	-	-
At 31 December 2023	41	41
Accumulated Depreciation
At 1 January 2024	18	18
Depreciation charge	6	6
At 30 June 2024	24	24
Accumulated Depreciation
At 1 January 2023	8	8
Depreciation charge	10	10
At 31 December 2023	18	18
Net book value
At 30 June 2024	17	17
At 31 December 2023	23	23

8.   INTANGIBLE ASSETS

	Mineral Properties	Licences	Total
	$000	$000	$000
Cost
At 1 January 2024	1,092	863	1,955
Additions	91	-	91
At 30 June 2024	1,183	863	2,046
Cost
At 1 January 2023	618	863	1,481
Additions	474	-	474
At 31 December 2023	1,092	863	1,955
Accumulated Amortisation
At 1 January 2024	-	-	-
Amortisation charge	-	-	-
At 30 June 2024	-	-	-
Accumulated Amortisation
At 1 January 2023	-	-	-
Amortisation charge	-	-	-
At 31 December 2023	-	-	-
Net book value
At 30 June 2024	1,183	863	2,046
At 31 December 2023	1,092	863	1,955

9.   CASH AND CASH EQUIVALENT

		6 months ended 30 June 2024 Unaudited	Year ended 31 December 2023 Audited
		$000	$000
Cash at bank		64	2
		64	2

10. SHARE CAPITAL

	Number of ordinary shares of nil par value	Share capital $000	Share premium  $000
Total as at 1 January 2023	39,703,944	-	2,758
Share issue - placing	6,750,078	-	125
Share issue - directors fees	1,745,221	-	187
Share issue - settlement of contracts	269,967	-	30
Share issue - performance shares exercised	953,107	-	-
Share issue - costs	-	-	(29)
At 31 December 2023	50,563,522	-	3,805
Share issue - placing	16,000,000	-	249
Share issue - directors & management fee shares	11,392,381	-	177
Share issue - in lieu of services provided	3,120,000	-	49
Share issue - costs	-	-	(19)
Total as at 30 June 2024	81,075,903	-	4,261

For a more detailed description of the share capital movements for 2023 refer to the audited financial statements for the year ended 31 December 2023

Placing

In April 2024 the Company raised gross proceeds of £200,000 ($249,080) issuing 16,000,000 new ordinary shares at £0.0125 per share.

Directors and management fees

During the period 11,392,381 new ordinary shares were issued to directors and management of the Company at £0.0125 per share in lieu of fees.

Peterhouse fees

During the period 3,120,000 new ordinary shares were issued to Peterhouse Capital Limited at £0.0125 per share in lieu of fees services and for commissions on the April 2024 placing.

Reconciliation of movement of share capital to the movements in the cashflow statement

	Share capital $000	Share premium  $000
At 31 December 2023	-	3,805
Share capital issued for cash net of issue costs	-	248
Share capital issued in settlement of contractual obligations	-	208
Total as at 30 June 2024	-	4,261

11. SHARE BASED PAYMENTS

Performance Rights

At 30 June 2024, the Company had outstanding performance rights to subscribe for ordinary shares as follows:

Weight average exercise price	Expiry date	At 01/01/24	Issued	expired or lapsed	At 30/06/2024
Nil	07/07/2032	953,107	-	-	953,107
		953,107	-	-	953,107

Information on the inputs and fair value calculations relating to the performance rights are shown in the audited financial statements for the year ended 31 December 2023.

12. RELATED PARTY TRANSACTIONS

During the period certain directors were awarded Ordinary Shares in the Company. Further details can be found in note 10, Share Capital.

13. EVENTS AFTER THE REPORTING DATE

On 16 July 2024, the Company entered into an investment agreement with Vela whereby the Company received 2,424,242,424 ordinary shares in Vela in return for the issue of £300,000 of Hamak unsecured convertible loan notes of £1 each ("CLNs").  The notes are redeemable after 24 months with interest accruing at 10% per annum.  Vela is subject to a 6-month lock in period during which no conversion of the loan notes is allowed. A conversion notice of the loan notes can be issued by Vela any time between 6 months and maturity, The conversion price will be the lower of £0.03 or a 25% discount to the five-day VWAP immediately prior to conversion. Any accrued interest will be payable in cash on the conversion date. At the date of this report the Company had sold 221.6 million Vela shares and raised £17,361 before costs.

 

END