TIDMAEXG

RNS Number : 3422T

AEX Gold Inc

24 November 2021

("AEX" or the "Corporation")

AEX Gold Inc. Reports Third Quarter Financial Results and Operational Update

TORONTO, ONTARIO - November 24, 2021 - AEX Gold Inc. (AIM: AEXG; TSXV: AEX), an independent gold company with a portfolio of exploration licences in Greenland, announces its unaudited condensed interim consolidated financial statements ("Financial Statements") for the quarter ended September 30, 2021. All figures are in Canadian dollars unless otherwise noted.

The Financial Statements and the accompanying Management Discussion and Analysis are available on the Corporation's website at www.aexgold.com and will be filed under the Corporation's SEDAR profile at

www.sedar.com    later today. 

As previously communicated, the Nalunaq Project was put on hold in February 2021 due to unforeseen cost increases associated with the impacts of the COVID-19 global pandemic. As per the April 2021 announcement, the Corporation has been focussing on four elements to continue advancing and de-risking the Nalunaq Project:

-- Conducting a third-party engineering study to optimize the Project costs and de-risk the Project schedule that will enable AEX to re-assess the execution methodology (self-execution vs. EPC) post completion;

-- Conducting fully funded 'early works' infrastructure and a 20,000 to 30,000 metres exploration program to build upon the Nalunaq Resource;

   --    Continue to advance the EIA and SIA to obtain all permits; 

-- Regional exploration targeting both gold and Green/Strategic minerals through technical research, sampling and geophysical surveys.

Corporate and Operational Update

-- Halyard Inc. ("Halyard") is on track to complete the engineering study focused on the process plant and surface infrastructure by end of Q4 2021. The engineering study is focused on de-risking the Nalunaq Project cost and schedule through additional and improved trade-off studies and advancing engineering to feasibility level

-- Over 9,000 metres of diamond drilling have been completed so far in the Valley Block, with 90% of drill holes reaching target depth and intersecting the main vein. The drilling target for the full year has been reduced to 10,000 to 15,000 metres, and four winterised drilling rigs continue to operate on site until mid-December.

-- The new 50 person winterised exploration camp has been completed and will give the Corporation the ability to restart site activities in early 2022.

-- In addition to this, the bridge over the Kirkespir River, which connects the camp to the Nalunaq site, has been expanded and improved to provide reliable access between the exploration camp and the historical mine site all year round.

-- A condition assessment of the bulkhead was conducted in early November 2021 to confirm the design parameters and the quality of construction after which a remediation plan will be developed. The assessment included non-destructive pile integrity and ultrasound tests to determine the bulkhead thickness as well as an unconfined compressive strength test of cored concrete samples. The final report will be issued in December 2021.

-- Procurement completed prior to the February 2021 delay announcement has been reconciled to the overall project cost estimate and all major process plant components were taken delivery of in October and moved to storage locations in Montreal and Denmark. Critical fleet such as the fuel truck, multi-purpose truck, industrial snow blower, personnel bus, ambulance and crane have been delivered to site for usage during this and future field seasons.

-- The Environmental Impact Assessment ("EIA") and Social Impact Assessment ("SIA") are being advanced with no material update at this phase.

-- Further exploration activities, mine planning, mine infrastructure and mine development will be evaluated based on the outcomes of the 2021 drilling campaign. In preparation for this evaluation, representatives from mining contractors and an underground geotechnical engineering team have conducted technical visits to the former mine. One key observation has been that the ground conditions are considered as high quality.

-- Exploration activities across the license portfolio continue with assistance from Goldspot and SRK. This has been targeting both additional gold resource potential as well as base, critical and strategic metals.

-- Field activities have seen further gold exploration including targeted airborne geophysics on Vagar, Nanoq, Tartoq and on targets north east of Nalunaq in order to progress these to a drill ready status.

-- AEX geologists have completed further assessment of the graphite hosting potential of the licence portfolio and have collected representative bulk samples from the Nørream target.

-- The Saaqqa Platinum Element Group (PGE) hosting dyke system close to Nalunaq has also been revisited in 2021 with additional confirmation samples taken as well as ground geophysics for future drill sighting.

-- Activities have also focused on the Corporation's Sava Iron-Oxide-Copper-Gold (IOCG) target with airborne geophysics, advanced geochemistry and alteration mapping having been completed. This target holds the potential to host copper, gold, and Rare Earth Element (REE) mineralisation.

-- On 6 October 2021, the Corporation received approval for a new mineral exploration licence in the Kobberminebugt region of South Greenland covering an area of approximately 266 km(2) . This licence area hosts the former producing Josva copper mine which will be the focus for AEX's further exploration due diligence. AEX consider this to be an extension of the IOCG belt that also hosts the Sava target and is believed to be similar to belts in Northern Sweden.

Management Update

James Gilbertson was appointed as Vice President - Exploration on September 13, 2021 and will oversee all of the Corporation's exploration activities. James has been working with AEX as a consultant for the past six years and will now join the Corporation on a full-time basis. James has over 20 years of experience in mineral exploration and resource development with 17 years as a Principal Exploration Geologist, and until recently, as Managing Director of SRK Exploration.

Q3 2021 Financial Highlights

-- The Corporation had a strong cash balance of $37.9 million as at September 30, 2021 ($61.9 million at December 31, 2020), with no debt, and total net working capital of $34.5 million ($61.4 million at December 31, 2020).

-- Capital asset purchase commitments, net of deposits on order as at September 30, 2021 was $0.9 million. These decrease from the prior quarter relates predominantly to the receipt of major process plant components and surface mobile vehicles. Available liquidity, net of commitments as at September 30, 2021 was $37.0 million.

-- Construction in progress increased by $6.0 million for the nine months ended September 30, 2021 (zero at December 31, 2020), primarily resulting from the purchase of major process plant equipment and mobile surface vehicles, deposits on orders, and preliminary surface infrastructure in advance of future project development activities.

-- Exploration and evaluation expenses during the quarter was $4.2 million (Q3 2020: $2.9 million), predominantly on the Nalunaq Property.

-- General and administrative expenses during the period were $3.0 million (Q3 2020: $1.1 million), the result of increased headcount that was relative to Q3 2020 and severance costs associated with the departure of Martin Menard.

Selected Financial Information

The following selected financial data is extracted from the Financial Statements for the three and nine months ended September 30, 2021.

Financial Results

 
                                   Three months               Nine months 
                                ended September 30,       ended September 30, 
                                    2021         2020          2021         2020 
                                       $            $             $            $ 
                             -----------  -----------  ------------  ----------- 
Exploration and evaluation 
 expenses                      4,196,019    2,908,340     7,441,215    4,432,791 
General and administrative     3,022,738    1,104,822     6,701,387    1,986,372 
Net loss and comprehensive 
 loss                        (7,008,968)  (4,609,492)  (14,874,983)  (8,018,061) 
Basic and diluted loss per 
 common share                     (0.04)       (0.03)        (0.08)       (0.08) 
                             -----------  -----------  ------------  ----------- 
 

Financial Position

 
                            As at September 30,  As at December 31, 
                                           2021                2020 
                                              $                   $ 
                            -------------------  ------------------ 
Cash on hand                         37,852,228          61,874,999 
Total assets                         54,307,568          65,944,682 
Total current liabilities             3,809,088             897,799 
Shareholders' equity                 49,767,987          64,282,970 
Working capital                      34,500,785          61,411,208 
                            -------------------  ------------------ 
 

Eldur Olafsson, CEO of AEX, commented:

"I am pleased to report a strong set of results, with the Company currently well capitalised and advancing on all our key workstreams.

We have made significant progress during the quarter across our entire licence area, both in terms of development at Nalunaq and our wider exploration opportunities.

Despite taking a cost conscious and disciplined strategic approach, we continue to be extremely excited by the wider exploration potential of our assets. The Board looks forward to being able to demonstrate the potential value of its non-gold, strategic mineral assets in due course."

Enquiries:

AEX Gold Inc.

Eldur Olafsson, Director and CEO

+354 665 2003

eo@aexgold.com

Eddie Wyvill, Investor Relations

+44 (0) 7713 126727

ew@aexgold.com

Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)

Callum Stewart

Simon Mensley

Ashton Clanfield

+44 (0) 20 7710 7600

Panmure Gordon (UK) Limited (Joint Broker)

John Prior

Hugh Rich

Dougie Mcleod

+44 (0) 20 7886 2500

Camarco (Financial PR)

Gordon Poole

Emily Hall

+44 (0) 20 3757 4980

For Company updates:

Follow @AexGold on Twitter

Follow AEX Gold Inc. on LinkedI

AEX Gold Inc: Unaudited Condensed Interim Consolidated Financial Statements for the three and nine Months Ended September 30, 2021

AEX Gold Inc.

Consolidated Statements of Financial Position

( Unaudited, i n Canadian Dollars)

 
                                                          As at        As at December 
                                                       September 30,         31, 
                                              Notes        2021             2020 
--------------------------------------------  -----  ---------------  --------------- 
                                                            $                $ 
ASSETS 
Current assets 
Cash                                                      37,852,228       61,874,999 
Sales tax receivable                                          55,412           62,750 
Prepaid expenses and others                                  402,233          371,258 
Total current assets                                      38,309,873       62,309,007 
 
Non-current assets 
Deposit on order                                4          8,322,838        1,711,970 
Escrow account for environmental monitoring                  434,341          460,447 
Mineral properties                              3             62,244           62,244 
Capital assets                                  4          7,178,272        1,401,014 
Total non-current assets                                  15,997,695        3,635,675 
--------------------------------------------  -----  ---------------  --------------- 
TOTAL ASSETS                                              54,307,568       65,944,682 
--------------------------------------------  -----  ---------------  --------------- 
 
LIABILITIES AND EQUITY 
Current liabilities 
Trade and other payables                                   3,758,883          831,899 
Lease liabilities - current portion             5             50,205           65,900 
--------------------------------------------  -----  ---------------  --------------- 
Total current liabilities                                  3,809,088          897,799 
 
Non-current liabilities 
Lease liabilities                               5            730,493          763,913 
Total non-current liabilities                                730,493          763,913 
Total liabilities                                          4,539,581        1,661,712 
 
Equity 
Capital stock                                             88,500,205       88,500,205 
Contributed surplus                                        3,285,952        2,925,952 
Accumulated other comprehensive loss                        (36,772)         (36,772) 
Deficit                                                 (41,981,398)     (27,106,415) 
--------------------------------------------  -----  ---------------  --------------- 
Total equity                                              49,767,987       64,282,970 
--------------------------------------------  -----  ---------------  --------------- 
TOTAL LIABILITIES AND EQUITY                              54,307,568       65,944,682 
--------------------------------------------  -----  ---------------  --------------- 
 
 
 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Consolidated Statements of Comprehensive Loss

( Unaudited, i n Canadian Dollars)

 
                                             Three months                Nine months 
                                          ended September 30,         ended September 30, 
------------------------------  -----  ------------------------  ------------------------- 
                                Notes     2021         2020           2021         2020 
------------------------------  -----  -----------  -----------  ------------  ----------- 
                                            $            $             $             $ 
 
Expenses 
Exploration and evaluation 
 expenses                         7      4,196,019    2,908,340     7,441,215    4,432,791 
General and administrative        8      3,022,738    1,104,822     6,701,387    1,986,372 
Stock-based compensation          6              -            -       360,000    1,031,650 
Foreign exchange loss (gain)             (185,986)      717,577       461,705      696,010 
Operating loss                           7,032,771    4,730,739    14,964,307    8,146,823 
 
  Other expenses (income) 
Interest income                           (33,700)     (25,960)     (119,629)     (35,875) 
Finance costs (income)                       9,897     (95,287)        30,305     (92,887) 
------------------------------  -----  -----------  -----------  ------------  ----------- 
 
Net loss and comprehensive 
 loss                                  (7,008,968)  (4,609,492)  (14,874,983)  (8,018,061) 
------------------------------  -----  -----------  -----------  ------------  ----------- 
 
 
 
 
Weighted average number 
 of common shares outstanding 
 - basic and diluted                   177,098,737  146,280,087   177,098,737  100,466,279 
Basic and diluted loss per 
 common share                               (0.04)       (0.03)        (0.08)       (0.08) 
------------------------------  -----  -----------  -----------  ------------  ----------- 
 
 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Consolidated Statements of Changes in Equity

( Unaudited, i n Canadian Dollars)

 
                           Number of                                           Accumulated 
                            common                                                other 
                            shares       Capital                 Contributed  comprehensive                   Total 
                  Notes   outstanding     Stock      Warrants      surplus        loss         Deficit        Equity 
--------------  --------  -----------  -----------  -----------  -----------  -------------  ------------  ----------- 
                                            $            $            $             $             $             $ 
 
Balance at January 1, 
 2020                      70,946,394   13,883,611    1,459,604    1,535,400       (36,772)  (14,767,303)    2,074,540 
Net loss and 
 comprehensive 
 loss                               -            -            -            -              -   (8,018,061)  (8,018,061) 
 
Share issuance under a 
 fundraising               94,444,445   74,550,202            -            -              -             -   74,550,202 
Share issuance costs                   (6,312,546)            -            -              -             -  (6,312,546) 
Warrants exercised         11,607,898    6,318,938  (1,078,702)            -              -             -    5,240,236 
Warrants expired                    -            -    (380,902)      380,902              -             -            - 
Options exercised             100,000       60,000            -     (22,000)              -             -       38,000 
Stock-based compensation            -            -            -    1,031,650              -             -    1,031,650 
------------------------  -----------  -----------  -----------  -----------  -------------  ------------  ----------- 
Balance at September 30, 
 2020                     177,098,737   88,500,205            -    2,925,952       (36,772)  (22,785,364)   68,604,021 
------------------------  -----------  -----------  -----------  -----------  -------------  ------------  ----------- 
 
 
 
Balance at January 1, 2021    177,098,737  88,500,205  -2,925,952  (36,772)  (27,106,415)    64,282,970 
Net loss and comprehensive 
 loss                                   -           -  -        -         -  (14,874,983)  (14,874,983) 
 
Stock-based compensation     6          -           -  -  360,000         -             -       360,000 
---------------------------   -----------  ----------   ---------  --------  ------------  ------------ 
Balance at September 30, 
 2021                         177,098,737  88,500,205  -3,285,952  (36,772)  (41,981,398)    49,767,987 
---------------------------   -----------  ----------   ---------  --------  ------------  ------------ 
 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Consolidated Statements of Cash Flows

( Unaudited, i n Canadian Dollars)

 
                                                                Nine months 
                                                 Notes       ended September 30, 
-----------------------------------------------  -----  ------------------------- 
                                                             2021          2020 
-----------------------------------------------  -----  ------------  ----------- 
                                                               $            $ 
 
Operating activities 
Net loss for the period                                 (14,874,983)  (8,018,061) 
Adjustments for: 
   Depreciation                                    4         190,309      157,513 
   Stock-based compensation                        6         360,000    1,031,650 
   Finance costs (income)                                          -     (92,887) 
   Payment from cash held in escrow account 
    for environmental monitoring                                   -     (95,102) 
   Escrow account for environmental monitoring                     -       95,102 
   Foreign exchange loss                                     403,826      685,401 
-----------------------------------------------  -----  ------------  ----------- 
                                                        (13,920,848)  (6,236,384) 
Changes in non-cash working capital items: 
   Sales tax receivable                                        7,338     (80,557) 
   Prepaid expenses and others                              (30,975)    (380,430) 
   Deposit                                                         -     (27,944) 
   Trade and other payables                                2,273,639    1,377,889 
                                                           2,250,002      888,958 
-----------------------------------------------  -----  ------------  ----------- 
Cash flow used in operating activities                  (11,670,846)  (5,347,426) 
-----------------------------------------------  -----  ------------  ----------- 
 
Investing activities 
Acquisition of mineral properties                  3               -     (13,737) 
Acquisition of capital assets                      4     (5,415,805)    (373,540) 
Deposit on order                                   4     (6,610,868)            - 
Cash flow used in investing activities                  (12,026,673)    (387,277) 
-----------------------------------------------  -----  ------------  ----------- 
 
Financing activities 
Shares and warrants issuance                                       -   74,550,202 
Share issuance costs                                               -  (6,140,329) 
Principal repayment - lease liabilities            5        (49,115)            - 
Exercise of warrants                                               -    5,240,236 
Exercise of stock options                                          -       38,000 
Cash flow from (used in) financing activities               (49,115)   73,688,109 
-----------------------------------------------  -----  ------------  ----------- 
 
Net change in cash before effects of exchange 
 rate changes on cash during the period                 (23,746,634)   67,953,406 
Effects of exchange rate changes on cash                   (276,137)    (726,428) 
-----------------------------------------------  -----  ------------  ----------- 
Net change in cash during the period                    (24,022,771)   67,226,978 
Cash, beginning of period                                 61,874,999    1,515,406 
-----------------------------------------------  -----  ------------  ----------- 
Cash, end of period                                       37,852,228   68,742,384 
-----------------------------------------------  -----  ------------  ----------- 
 
Supplemental cash flow information 
Interest received                                            119,629       35,875 
Additions in capital assets included in 
 trade and other payables                                    551,762            - 
S hare issuance costs included in trade 
 and other payables                                                -      126,600 
Exercise of warrants credited to capital 
 stock                                                             -    1,078,702 
Exercise of stock options credited to 
 capital stock                                                     -       22,000 
 
 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AEX Gold Inc.

Condensed Notes to the interim Consolidated Financial Statements

Three and nine months ended September 30, 2021 and 2020

( Unaudited, i n Canadian Dollars)

   1.    NATURE OF OPERATIONS, BASIS OF PRESENTATION 

AEX Gold Inc. (the "Corporation") was incorporated on February 22, 2017, under the Canada Business Corporations Act. The Corporation's head office is situated at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada. The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. The Corporation's financial year ends on December 31. Since July 2017, the Corporation's shares are listed on the TSX Venture Exchange (the "TSX-V") under the AEX ticker and since July 2020, the Corporation's shares are also listed on the AIM market of the London Stock Exchange ("AIM") under the AEXG ticker.

These unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2021 ("Financial Statements") were approved by the Board of Directors on November 23, 2021.

   1.1   Basis of presentation 

The Financial Statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS") including International Accounting Standard ("IAS") 34, Interim Financial Reporting. The Financial Statements have been prepared under the historical cost convention.

The Financial Statements should be read in conjunction with the annual financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS. The accounting policies, methods of computation and presentation applied in these Financial Statements are consistent with those of the previous financial year ended December 31, 2020.

   2.    CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS 

The preparation of the Financial Statements requires Management to make judgments and form assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. On an ongoing basis, Management evaluates its judgments in relation to assets, liabilities and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments. Actual outcomes may differ from these estimates under different assumptions and conditions.

In preparing the Financial Statements, the significant judgements made by Management in applying the Corporation accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Corporation's audited annual financial statements for the year ended December 31, 2020. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

   3.    MINERAL PROPERTIES 
 
                                         As at December 
                                            31, 2020                    As at 
                                                                     September 30, 
                                                         Additions       2021 
---------------------------------------  --------------  ---------  -------------- 
                                               $             $            $ 
Nalunaq                                               1          -               1 
Tartoq                                           18,431          -          18,431 
Vagar                                            11,103          -          11,103 
Naalagaaffiup Portornga                           6,334          -           6,334 
Nuna Nutaaq                                       6,076          -           6,076 
Saarloq                                           7,348          -           7,348 
Anoritooq                                         6,389          -           6,389 
Sava (previously called Kangerluarsuk)            6,562          -           6,562 
Total mineral properties                         62,244          -          62,244 
---------------------------------------  --------------  ---------  -------------- 
 

.

 
                                         As at December 
                                            31, 2019                    As at 
                                                                     December 31, 
                                                         Additions       2020 
---------------------------------------  --------------  ---------  ------------- 
                                               $             $            $ 
Nalunaq                                               1          -              1 
Tartoq                                           18,431          -         18,431 
Vagar                                            11,103          -         11,103 
Naalagaaffiup Portornga                           6,334          -          6,334 
Nuna Nutaaq                                       6,076          -          6,076 
Saarloq                                               -      7,348          7,348 
Anoritooq                                             -      6,389          6,389 
Sava (previously called Kangerluarsuk)                -      6,562          6,562 
Total mineral properties                         41,945     20,299         62,244 
---------------------------------------  --------------  ---------  ------------- 
 
   4.    CAPITAL ASSETS 
 
                                  Field           Vehicles      Equipment     Construc-tion   Right-of-use     Total 
                                 equipment       and rolling    (including     In Progress       assets 
                              and infrastruc-       stock       intangible) 
                                   ture 
                                    $                $              $               $              $             $ 
--------------------------  -----------------  -------------  -------------  --------------  -------------  ---------- 
 
 Nine months ended 
  September 30, 
  2021 
 Opening net book 
  value                               146,203        256,865        177,052               -        820,894   1,401,014 
 Additions                                  -              -              -       5,967,567              -   5,967,567 
 Depreciation                        (76,217)       (37,753)       (15,781)               -       (60,558)   (190,309) 
--------------------------  -----------------  -------------  -------------  --------------  -------------  ---------- 
 Closing net book 
  value                                69,986        219,112        161,271       5,967,567        760,336   7,178,272 
 
 As at 
  September 30, 
  2021 
 Cost                                 387,323        533,800        185,878       5,967,567        841,080   7,915,648 
 Accumulated depreciation           (317,337)      (314,688)       (24,607)               -       (80,744)   (737,376) 
--------------------------  -----------------  -------------  -------------  --------------  -------------  ---------- 
 Closing net book 
  value                                69,986        219,112        161,271       5,967,567        760,336   7,178,272 
--------------------------  -----------------  -------------  -------------  --------------  -------------  ---------- 
 
   4.    CAPITAL ASSETS   (CONT'D) 

Depreciation of capital assets related to exploration and evaluation properties is being recorded in exploration and evaluation expenses in the consolidated statement of comprehensive loss, under depreciation. Depreciation of $122,672 ($157,513 for the nine months ended September 30, 2020) was expensed as exploration and evaluation expenses.

As at September 30, 2021, the Corporation had capital asset purchase commitments, net of deposit on order, of $939,016. These commitments relate to purchases of equipment, infrastructure and vehicles. The deposit on order mainly related to purchases of surface mobile equipment as well as components of the process plant that was taken delivery of in October 2021.

   5.    LEASE LIABILITIES 
 
                                                 As at 
                                              September 30, 
                                                  2021 
----------------------------------------  ----------------- 
                                                    $ 
Balance beginning                                   829,813 
Principal repayment                                (49,115) 
----------------------------------------  ----------------- 
Balance ending                                      780,698 
Non-current portion - lease liabilities           (730,493) 
Current portion - lease liabilities                  50,205 
----------------------------------------  ----------------- 
 
   6.    STOCK OPTIONS 

An incentive stock option plan (the "Plan") was approved initially in 2017 and renewed by shareholders on June 9, 2021. The Plan is a "rolling" plan whereby a maximum of 10% of the issued shares at the time of the grant are reserved for issue under the Plan to executive officers and directors, employees and consultants. The Board of directors attributes the stock options and the exercise price of the options shall not be less than the closing price on the last trading day preceding the grant date. The options have a maximum term of ten years. Options granted pursuant to the Plan shall vest and become exercisable at such time or times as may be determined by the Board, except options granted to consultants providing investor relations activities shall vest in stages over a 12 month period with a maximum of one-quarter of the options vesting in any three-month period. The Corporation has no legal or constructive obligation to repurchase or settle the options in cash.

On June 9, 2021, the Corporation granted the CFO with 900,000 stock options exercisable at an exercise price of $0.59, with an expiry date of December 31, 2027. The stock options vested 100% at the grant date. Those options were granted at an exercise price equal the closing market value of the shares the previous day of the grant. Total stock-based compensation costs amount to $360,000 for an estimated fair value of $0.40 per option. The fair value of the options granted was estimated using the Black-Scholes model with no expected dividend yield, 75.85% expected volatility, 1.07% risk-free interest rate and 6.6 years options expected life. The expected life and expected volatility were estimated by benchmarking comparable companies to the Corporation.

   6.    STOCK OPTIONS (CONT'D) 

Changes in stock options are as follows:

 
                           Nine months ended             Year ended December 
                           September 30, 2021                  31, 2020 
-------------------  ------------------------------  ---------------------------- 
                                      Weighted                      Weighted 
                      Number of    average exercise  Number of   average exercise 
                       options          price         options         price 
-------------------  -----------  -----------------  ---------  ----------------- 
                                          $                             $ 
Balance, beginning     7,745,000               0.51  5,650,000               0.43 
Granted                  900,000               0.59  2,195,000               0.70 
Exercised                      -                  -  (100,000)               0.38 
Expired              (1,910,000)               0.52          -                  - 
-------------------  -----------  -----------------  ---------  ----------------- 
Balance, end           6,735,000               0.51  7,745,000               0.51 
-------------------  -----------  -----------------  ---------  ----------------- 
 

Stock options outstanding and exercisable as at September 30, 2021 are as follows:

 
Number of options 
 outstanding and   Exercise 
   exercisable       price      Expiry date 
-----------------  --------  ----------------- 
                      $ 
        1,160,000    0.50      July 13, 2022 
        1,360,000    0.45     August 22, 2023 
        1,820,000    0.38    December 31, 2025 
        1,495,000    0.70    December 31, 2026 
          900,000    0.59    December 31, 2027 
-----------------  --------  ----------------- 
        6,735,000 
-----------------  --------  ----------------- 
 
   7.    EXPLORATION AND EVALUATION EXPENSES 
 
                                     Three months               Nine months 
                                  ended September 30,        ended September 30, 
---------------------------  -------------------------  ------------------------- 
                                 2021         2020          2021         2020 
---------------------------  ------------  -----------  ------------  ----------- 
                                  $             $            $             $ 
Geochemistry                      517,772            -       517,772            - 
Geology                         1,381,518      936,988     2,087,472    1,732,412 
Lodging and on-site 
 support                          167,332      182,783       231,855      186,446 
Underground work                   29,929       19,440        48,518       65,287 
Drilling                          870,296      134,913     1,158,056      168,227 
Safety and environment                  -       14,045             -       20,613 
Analysis                           21,365      132,211       105,946      199,280 
Transport                          12,863      330,084        35,276      400,740 
Supplies and equipment              1,997            -         1,997            - 
Helicopter charter                602,189       70,167       711,214       70,167 
Logistic support                  477,654      215,281       563,769      377,991 
Insurance                          32,490       29,260        41,197       33,773 
Project Engineering 
 costs                             56,573      790,631     1,792,705      977,928 
Government fees                         -        9,341        22,766       42,414 
Depreciation                       24,041       43,196       122,672      157,513 
---------------------------  ------------  -----------  ------------  ----------- 
Exploration and evaluation 
 expenses                       4,196,019    2,908,340     7,441,215    4,432,791 
---------------------------  ------------  -----------  ------------  ----------- 
 
   8.    GENERAL AND ADMINISTRATION 
 
                                     Three months               Nine months 
                                  ended September 30,        ended September 30, 
---------------------------  -------------------------  ------------------------- 
                                 2021         2020          2021         2020 
---------------------------  ------------  -----------  ------------  ----------- 
                                  $             $            $             $ 
Salaries and benefits             700,186       62,380     1,755,147       64,832 
Management and consulting 
 fees                                   -      353,231             -      633,220 
Director's fees                   235,273       85,833       471,652      135,833 
Professional fees                 731,888      318,897     1,978,837      637,001 
Marketing and Investor 
 Relations                        220,622      152,044       576,954      299,025 
Insurance                         169,437       51,402       435,779       72,524 
Travel and other expenses         847,998       30,306     1,150,363       61,486 
Regulatory fees                    94,788       50,729       265,018       82,451 
Depreciation                       22,546            -        67,637            - 
General and administration      3,022,738    1,104,822     6,701,387    1,986,372 
---------------------------  ------------  -----------  ------------  ----------- 
 

Further Information:

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 4,090km(2) , 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. Except as required by applicable securities laws, the Corporation assumes no obligation to update or revise any forward-looking information to reflect new circumstances or events. No securities regulatory authority has either approved or disapproved of the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Inside Information

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, and Regulation (EU) No. 596/2014 on Market Abuse ("EU MAR").

Qualified Person Statement

The technical information presented in this press release has been approved by James Gilbertson CGeol, VP Exploration for AEX Gold and a Chartered Geologist with the Geological Society of London, and as such a Qualified Person as defined by NI 43-101.

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November 24, 2021 02:00 ET (07:00 GMT)

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