☐
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2020 | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer | ☐ |
Accelerated filer | ☐ |
Non-accelerated filer |
☒ |
Emerging growth company | ☐ |
U.S. GAAP | ☐ |
International Financial Reporting Standards as issued by the International Accounting Standards Board | ☒ |
Other | ☐ |
Table of Contents
| ||
GENERAL
| 1 | |
NOTE REGARDING REVERSE TAKE-OVER TRANSACTION |
1 | |
NOTE REGARDING FOREIGN PRIVATE ISSUER STATUS
| 1 | |
NOTE REGARDIGN THE PREPARATION OF THE COMPANY'S FINANCIAL STATEMENTS
| 2 | |
CAUTIONARY NOTE REGARDING ESTIMATES OF MINERAL RESOURCES
| 2 | |
NOTE REGARDING FORWARD LOOKING STATEMENTS
| 4 | |
Item 1.
| 5 | |
Item 2
| 5 | |
Item 3
| 5 | |
A.Selected Financial Data
| 5 | |
B.Capitalization and Indebtedness
| 5 | |
C.Reasons for the Offer and Use of Proceeds
| 5 | |
D.Risk Factors
| 5 | |
Item 4
| 20 | |
A.History and Development of the Company
| 20 | |
B.Business Overview
| 20 | |
C.Organization Structure
| 27 | |
D.Property, Plant, and Equipment
| 28 | |
Item 4A. Unresolved Staff Comments
| 52 | |
Item 5. Operation and Financial Review and Prospects
| 52 | |
A.Operating Results
| 52 | |
B.Liquidity and Capital Resources
| 60 | |
C.Research and Development, Patents and Licenses, etc.
| 61 | |
D.Trend Information
| 61 | |
E.Off Balance Sheet Arrangements
|
61 | |
F.Tabular Disclosure of Contractual Obligations
| 61 | |
G.Safe Harbor
| 62 | |
Item 6. Directors, Senior Management and Employees
| 62 | |
A.Directors and Senior Management
| 62 | |
B.Compensation
| 65 | |
C.Board practices
| 68 | |
D.Employees
| 70 | |
E.Share Ownership
| 70 | |
Item 7. Major Shareholders and Related Party Transactions
| 71 | |
A.Major Shareholders and Related Party Transactions
|
71 | |
B.Related Party Transactions
| 71 | |
C.Interest of Expert and Counsel
| 72 | |
Item 8. Financial Information
| 72 | |
A.Consolidated Statements and Other Financial Information
| 72 | |
B.Signification Change
| 73 |
Item 9. The Offer and Listing
| 73 | |
A.The Offer and Listing
|
73 | |
B.Plan of Distribution
| 73 | |
C.Markets
| 74 | |
D.Selling Shareholder
|
74 | |
E.Dilution
|
74 | |
F.Expenses of the Issue
|
74 | |
Item 10. Additional Information
|
74 | |
A.Share Capital
|
74 | |
B.Memorandum and Articles of Association
| 74 | |
C.Material Contracts
| 74 | |
D.Exchange Controls
| 74 | |
E.Taxation
| 75 | |
F.Dividends and Paying Agents
| 80 | |
G.Statement by Experts
| 80 | |
H.Documents on Display
| 80 | |
I.Subsidiary Information
| 80 | |
Item 11. Quantitative and Qualitative Disclosures About Market Risk
| 82 | |
Item 12. Description of Securities Other than Equity Securities
| 82 | |
Item 13. Defaults, Dividend Arrearages and Delinquencies
| 82 | |
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
| 82 | |
Item 15. Control and Procedures
| 82 | |
Item 16A. Audit Committee Financial Expert
| 83 | |
Item 16B. Code of Ethics
| 83 | |
Item 16C. Prinipal Accountant Fees and Services
| 84 | |
Item 16D. Exemptions from the Listing Standards for Audit Committees
| 84 | |
Item 16E. Purchases of Equitey Securities by the Issuer and Affiliated Purchasers
| 84 | |
Item 16F. Changes in Registrant's Certifying Accountant
| 85 | |
Item 16G. Corporate Governance
| 85 | |
Item 16H. Mine Safety Disclosure
| 85 | |
Item 17. Financial Statements
| 85 | |
Item 18. Financial Statements
| 85 | |
Item 19. Exhibits.
| 86 |
A.
|
Selected Financial Data
|
B.
|
Capitalization and Indebtedness
|
C.
|
Reasons for the Offer and Use of Proceeds
|
D.
|
Risk Factors
|
•
|
the timing and cost, which can be considerable, of the construction of mining and processing facilities;
|
•
|
the availability and costs of skilled labour and mining equipment;
|
•
|
the availability and cost of appropriate smelting and/or refining arrangements;
|
•
|
the need to obtain necessary environmental and other governmental approvals and permits, and the timing of those approvals and permits; and
|
•
|
the availability of funds to finance construction and development activities.
|
•
|
anticipated tonnage, grades and metallurgical characteristics of the ore to be mined and processed;
|
•
|
anticipated recovery rates of gold, copper and other metals from the ore;
|
•
|
cash operating costs of comparable facilities and equipment; and
|
•
|
anticipated climatic conditions.
|
•
|
costs;
|
•
|
actual mineralization;
|
•
|
consistency and reliability of ore grades; and
|
•
|
commodity prices.
|
•
|
the accuracy of mineral resource estimates;
|
•
|
the accuracy of assumptions regarding ore grades and recovery rates;
|
•
|
ground conditions;
|
•
|
physical characteristics of ores;
|
•
|
the presence or absence of particular metallurgical characteristics; and
|
•
|
the accuracy of estimated rates and costs of mining, ore haulage and processing.
|
•
|
fluctuations in operating results;
|
•
|
changes in governmental regulation;
|
•
|
litigation;
|
•
|
general stock market and economic conditions;
|
•
|
number of shares available for trading (float); and
|
•
|
inclusion in or dropping from stock indexes.
|
•
|
it would no longer be exempt from certain of the provisions of U.S. securities laws, such as Regulation FD and the Section 16 short swing profit rules;
|
•
|
it would be required to commence reporting on forms required of U.S. companies, such as Forms l0-K, 10-Q and 8-K, rather than the forms currently available to it, such as Forms 20-F and 6-K;
|
•
|
it would be subject to additional restrictions on offers and sales of securities outside the United States, including in Canada; and
|
•
|
if it engages in capital raising activities after losing its foreign private issuer status, there is a higher likelihood that investors may require the Company to file resale registration statements with the SEC as a condition to any such financing.
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
•
|
an initial work program over six years of $2,550,000 in exploration expenditures, including 2,500 meters of drilling, on the Homenaje Project;
|
•
|
expenditures on exploration activities with respect to the Homenaje Project (the 'Exploration Expenditures') of a minimum of $400,000 over the first 18-months;
|
•
|
following completion of the initial Exploration Expenditures and drilling obligations due within the first 30 months, Patagonia must complete a minimum of $400,000 of Exploration Expenditures in any 12-month period, and a minimum of $200,000 of Exploration Expenditures in any six-month period; and
|
•
|
a pre-feasibility study, prepared in accordance with NI 43-101, for a mineral resource of not less than 300,000 ounces of gold equivalent.
|
C. |
Organizational Structure
|
Corporation
|
Incorporation
|
Percentage
ownership
|
Functional currency
|
Business purpose
|
Patagonia Gold S.A. (PGSA)
|
Argentina
|
95.3
|
US$
|
Production and Exploration Stage
|
Minera Minamalu S.A.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Huemules S.A.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Leleque Exploración S.A.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Patagonia Gold Limited (formerly Patagonia Gold PLC)
|
UK
|
100
|
GBP$
|
Holding
|
Minera Aquiline S.A.U.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Patagonia Gold Canada Inc.
|
Canada
|
100
|
CAD$
|
Holding
|
Patagonia Gold Chile S.C.M.
|
Chile
|
100
|
CH$
|
Exploration Stage
|
Ganadera Patagonia S.R.L.
|
Argentina
|
100
|
US$
|
Land Holding
|
1272680 B.C. Ltd (formerly 1494716 Alberta Ltd.)
|
Canada
|
100
|
CAD$
|
Nominee Shareholder
|
D. |
Property, Plant, and Equipment
|
•
|
Cateo: A Cateo is an exploration permit for a parcel of land measure in units of 500 ha and can vary in size from a single unit to a maximum of 20 units (10,000 ha). The holding of a Cateo is associated with relinquishing ground based on a formula varying from 300 to 700 days and reduction in ground held to 50% of that originally claimed;
|
•
|
Manifestación de Descubrimiento ('MD'): A Cateo can be converted into an MD after discovering a mineral occurrence of interest within a Cateo. The owner can apply for an MD around his discovery at any time within the period of the corresponding Cateo. The maximum area of an MD is 3,000 ha and remains in force until such time as the property is legally surveyed, an essential prior step to the longer term granting of a 'Mina'; and
|
•
|
Minas: Minas are mining concessions or leases which permit mining on a commercial basis. The area of a mina is measured in 'pertenencias' and will vary in size according to the distinction between vein and disseminated targets believed to occur on the property. Individual mining authorities (the provinces) may determine the number of pertenencias required to cover the geologic extent of the mineral deposit in question. Once granted, minas have an indefinite term assuming exploration, development or mining is in progress.
|
Owner
|
Name
|
Property File #
|
Area (ha)
|
Type
|
Env. Permit Resolution #
|
Next Env. Expiration
|
Minera Aquiline, Arg.SAU
|
Aguadita
|
28.127-M-03
|
1,500.00
|
Mina
|
2005/19
|
Approved to 02/12/21
|
Minera Aquiline, Arg.SAU
|
Carnerito
|
28.137-M-03
|
1,678.93
|
Mina
|
2004/19
|
Approved to 02/12/21
|
Minera Aquiline, Arg.SAU
|
Cerro Mojón
|
26.055-M-01
|
400
|
Mina
|
104/20
|
Approved to 28/02/22
|
Minera Aquiline, Arg.SAU
|
Chivito
|
28.128-M-03
|
500
|
MD
|
2057/19
|
Approved to 6/12/21
|
Minera Aquiline, Arg.SAU
|
Co. Mojon
Gde- S1
|
43.070-M-18
|
655.39
|
MD
|
N/A
|
MD not yet registered. Environmental permit not yet required by the mining authority. |
Minera Aquiline, Arg.SAU
|
Co. Mojon
Gde- S2
|
43.071-M-18
|
1,007.87
|
MD
|
N/A
|
N/A
|
Minera Aquiline, Arg.SAU
|
Co. Mojon Grande I
|
44.006-M-19
|
1,704.74
|
MD
|
152/20
|
Approved to 25/11/22
|
Minera Aquiline, Arg.SAU
|
Co. Mojon Grande II
|
37.131-M-12
|
2,039.82
|
Cateo
|
2010/20
|
Approved to 15/07/22
|
Minera Aquiline, Arg.SAU
|
Doradito 2
|
28.135-M-03
|
2,000.00
|
Mina
|
2043/19
|
Approved to 6/12/21
|
Minera Aquiline, Arg.SAU
|
El Centinela
|
43.017-M-18
|
4,999.92
|
MD
|
N/A
|
N/A
|
Minera Aquiline, Arg.SAU
|
Enlace Co. Mojon Grande
|
43.072-M-18
|
3,623.93
|
Cateo
|
155/20
|
Approved to 25/11/22
|
Minera Aquiline, Arg.SAU
|
La Incognita
|
27.032-M-02
|
2,200.00
|
Mina
|
2065/19
|
Approved to 6/12/21
|
Minera Aquiline, Arg.SAU
|
Nabel
|
22119-M-97
|
300
|
Minas
|
1391/18
|
Environmental update report in progress
|
Minera Aquiline, Arg.SAU
|
Nabel 1 bis
|
27.072-M-02
|
400
|
MD
|
2058/19
|
Approved to 06/12/21
|
Minera Aquiline, Arg.SAU
|
Nabel 2
|
28.071-M-03
|
1,400.00
|
MD
|
2059/19
|
Approved to 02/12/21
|
Minera Aquiline, Arg.SAU
|
Nabel 4
|
23.017-M-98
|
250
|
Minas
|
208/20
|
Approved to 15/12/22
|
Minera Aquiline, Arg.SAU
|
Pampita
|
28.131-M-03
|
1,807.66
|
Mina
|
2002/19
|
Approved to 02/12/21
|
Minera Aquiline, Arg.SAU
|
Rebeca
|
23.019-M-98
|
500
|
Mina
|
207/20
|
Approved to 15/12/22
|
Minera Aquiline, Arg.SAU
|
Rebequita
|
28.130-M-03
|
3,439.31
|
Mina
|
022/21
|
Approved to 12/01/23
|
Minera Aquiline, Arg.SAU
|
Trinity
|
28.132-M-03
|
400
|
MD
|
2003/19
|
Approved to 2/12/21
|
Minera Aquiline, Arg.SAU
|
Viuda de Castro
|
33.063-M-08
|
1,265.49
|
MD
|
1779/18
|
Environmental update report in progress
|
1.
|
Nelson-Vein 49 Corridor which currently extends 2.5 km long x 0.5 km wide toward the north-east; and
|
2.
|
Castro Sur Corridor which currently has a known extent of 1.8 km long x 50 m wide towards the north-east.
|
•
|
Environmental permits have been approved for all properties where drilling and exploration work has been carried out or is to be planned in 2020-2021; and
|
•
|
Water permits were approved for 2019 drilling program
|
1.
|
Nelson-Vein 49 Corridor which currently extends 2.5 km long x 0.5 km wide toward the north-east; and
|
2.
|
Castro Sur Corridor which currently has a known extent of 1.8 km long x 50 m wide towards the north-east.
|
Zone
|
INDICATED RESOURCES
| ||||||
kTonnes
|
Grade (g/t)
|
Contained Metal (kOz)
| |||||
Au
|
Ag
|
Au_equ
|
Au
|
Ag
|
Au_equ
| ||
Vein 49
|
6,447
|
2.45
|
21.01
|
2.71
|
512
|
4,568
|
568
|
Nelson
|
1,383
|
1.51
|
16.94
|
1.72
|
67
|
753
|
76
|
Belen
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Castro Sur
|
2,010
|
1.40
|
14.77
|
1.58
|
90
|
954
|
102
|
TOTAL-Indicated
|
9,841
|
2.11
|
19.83
|
2.36
|
669
|
6,275
|
746
|
Zone
|
INFERRED RESOURCES
| ||||||
kTonnes
|
Grade (g/t)
|
Contained Metal (kOz)
| |||||
Au
|
Ag
|
Au_equ
|
Au
|
Ag
|
Au_equ
| ||
Vein 49
|
2,863
|
1.48
|
13.38
|
1.64
|
136
|
1,231
|
151
|
Nelson
|
1,448
|
1.42
|
14.66
|
1.60
|
66
|
682
|
74
|
Belen
|
681
|
1.61
|
23.32
|
1.90
|
35
|
511
|
42
|
Castro Sur
|
3,086
|
1.12
|
9.81
|
1.24
|
111
|
974
|
123
|
TOTAL-Inferred
|
8,078
|
1.34
|
13.09
|
1.50
|
348
|
3,399
|
390
|
Notes:
(1)Effective date of 31 December 2018;
(2)Mineral resources are estimated at a block cut-off grade of 0.5 g/t Au_equ;
(3)Figures may not add up due to rounding;
(4)Gold equivalent ('Au_equ') values are calculated at a ratio of 81.25.5:1 Ag/Au;
(5)Mineral resources are estimated using a long-term metal prices of USD$1,300 per ounce (gold); and, USD$16 per ounce (silver);
(6)A minimum mining width of two metres was used when modelling the resources;
(7)Bulk densities for the mineralised zones are 2.44 t/m3 (oxide), 2.54 t/m3 (fresh);
(8)Mineral resources that are not mineral reserves do not have demonstrated economic viability;
(9)The quantity and grade of reported inferred mineral resources in this estimate are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as measured or indicated mineral resources.
|
Owner
|
Name
|
Property File No.
|
Area (ha)
|
Property Type
|
Comment
|
Minera Minamalu SA
|
Don Francisco I
|
427.420/MM/13
|
1,822
|
MD
| |
Minera Minamalu SA
|
El Aljibe
|
424.916/PG/09
|
6,705
|
Cateo
| |
Minera Minamalu SA
|
El Mangrullo
|
424.915/PG/09
|
4,289
|
Cateo
| |
Minera Minamalu SA
|
La Cañada III
|
421.630/PG/10
|
2,760
|
MD
| |
Minera Minamalu SA
|
Las Casuarinas
|
424.914/PG/09
|
3,638
|
Cateo
| |
Minera Minamalu SA
|
Nueva España I
|
422.217/PG/10
|
9,988
|
Cateo
| |
Minera Minamalu SA
|
Nueva España II
|
422.216/PG/10
|
4,462
|
Cateo
| |
Minera Minamalu SA
|
Nuevo
|
423.670/PG/10
|
3,484
|
Cateo
| |
Patagonia Gold SA
|
El Tranquilo I
|
403094/07
|
3,736
|
MD
|
Contains Cap-Oeste
|
Patagonia Gold SA
|
Venus
|
402092/05
|
2,743
|
MD
| |
Patagonia Gold SA
|
La Apaciguada
|
405473/05
|
3,500
|
MD
| |
Patagonia Gold SA
|
Cerro León I
|
423845/09
|
3,969
|
MD
| |
Patagonia Gold SA
|
Monte Leon
|
415664/07
|
1,981
|
MD
| |
Patagonia Gold SA
|
Monte Tigre
|
406882/06
|
2,000
|
MD
| |
Patagonia Gold SA
|
Monte Puma
|
406881/06
|
2,000
|
MD
| |
Patagonia Gold SA
|
La Marcelina
|
412792/04
|
6,500
|
Cateo
| |
Patagonia Gold SA
|
La Cañada I
|
403985/07
|
2,795
|
MD
| |
Patagonia Gold SA
|
La Cañada II
|
427259/09
|
1,944
|
MD
| |
Patagonia Gold SA
|
Marte
|
409148/06
|
1,500
|
MD
| |
Patagonia Gold SA
|
Maria
|
412520/06
|
2,501
|
MD
| |
Patagonia Gold SA
|
Enriqueta
|
412519/06
|
743
|
MD
| |
Patagonia Gold SA
|
La Mansa
|
413543/06
|
1,736
|
MD
| |
Patagonia Gold SA
|
La Bajada
|
404562/05
|
2,800
|
MD
| |
Patagonia Gold SA
|
La Bajada I
|
425611/10
|
1,800
|
MD
| |
TOTAL
|
79,514
|
•
|
Target generation incorporating information from the Homestake geochemical database, supplemented by ASTER and Landsat Band Ratio image analyses;
|
•
|
Regional scale geological and structural mapping (1:25,000 to 1:100,000) and Landsat Thematic Mapper based alteration mapping at 1:50,000;
|
•
|
Geochemical sampling including 334 lag samples, 569 regional rock chip samples and 469 sawn channel samples taken from 11 trenches (1,694 m);
|
•
|
PDP-IP chargeability and resistivity surveying along 8 lines spaced 150 m to 300 m apart, for a total of 27-line km; and
|
•
|
Regional spaced ground magnetic surveying along 16 lines spaced 100 m apart, for a total of 35.2- line km; and
|
•
|
Petrographic Studies
|
Period
|
Tonnes Mined (t)
|
Grade
|
Metal
| ||||
Au g/t
|
Ag g/t
|
Au_equ g/t
|
Au oz
|
Ag oz
|
Au_equ oz
| ||
2016
|
336,685
|
1.03
|
17
|
1.25
|
11,149
|
184,020
|
13,531
|
2017
|
750,097
|
2.15
|
74
|
3.01
|
51,850
|
1,784,598
|
72,590
|
2018
|
364,618
|
4.17
|
153
|
6.32
|
48,884
|
1,793,580
|
74,088
|
TOTAL
|
1,451,400
|
2.40
|
80.6
|
3.43
|
111,883
|
3,762,197
|
160,208
|
•
|
Production at the Cap-Oeste Project for 2016 was reported to be 3,064 oz Au_equ (Patagonia, 2017). Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market price for the commodities each period; the ratio for year ended December 31, 2016 was 69.99:1;
|
•
|
Production at the Cap-Oeste Project for 2017 was reported to be 20,088 oz Au_equ (Patagonia, 2018). The ratio for year ended December 31, 2017 was 73.87:1;
|
•
|
Production at the Cap-Oeste Project for 2018 was reported to be 42,906 oz Au_equ (Patagonia, 2019). The ratio for year ended December 31, 2018 was 80.97:1;
|
•
|
Production at the Cap-Oeste Project for 2019 was reported to be 10,585 oz Au_equ (Patagonia 2019). The ratio for year ended December 31, 2019 was 85.29:1; and
|
•
|
Production at the Cap-Oeste Project for 2020 was reported to be 6,965 oz Au_equ (Patagonia 2020). The ratio for year ended December 31, 2020 was 85.99:1.
|
•
|
Precious metals-poor, paleosurface, sinter (Hg-As-Sb);
|
•
|
Au-Ag-rich, base metal-poor 'bonanza zone' (Au-Ag-As-Sb-Hg); and
|
•
|
Ag-rich, base metal zone (Ag-Pb-Zn-Cu).
|
•
|
The drilling orientation is predominantly targeting the BZ mineralization which dips opposite to the EZ mineralization, therefore most of the drilling is intersecting sub-parallel to the EZ domains; and
|
•
|
Selective sampling is common within the multiple vein hosted zones of mineralization above the Bonanza Fault breccia zone. Several of the EZ mineralized domains contain un-sampled intervals in-between mineralized high-grade intersections.
|
Res Cat
|
Material Type
|
Tonnes (kT)
|
Grade (g/t)
|
Metal (kOz)
| ||||
Au
|
Ag
|
Au_equ
|
Au
|
Ag
|
Au_equ
| |||
Measured
|
Oxide
|
0.4
|
2.73
|
25.2
|
3.09
|
0.03
|
0.3
|
0.04
|
COSE
|
-
|
-
|
-
|
-
|
-
|
-
|
-
| |
Fresh
|
3
|
2.94
|
49.4
|
3.65
|
0.3
|
5
|
0.3
| |
Sub-Total
|
3
|
2.92
|
46.7
|
3.59
|
0.3
|
5
|
0.4
| |
Indicated
|
Oxide
|
1,963
|
1.06
|
32.7
|
1.53
|
67
|
2,063
|
97
|
COSE
|
478
|
12.62
|
472.4
|
19.42
|
194
|
7,257
|
298
| |
Fresh
|
8,114
|
1.70
|
46.5
|
2.37
|
443
|
12,128
|
618
| |
Sub-Total
|
10,554
|
2.07
|
63.2
|
2.99
|
704
|
21,448
|
1,013
| |
Measured
+ Indicated
|
Oxide
|
1,963
|
1.06
|
32.7
|
1.53
|
67
|
2,064
|
97
|
COSE
|
478
|
12.62
|
472.4
|
19.42
|
194
|
7,257
|
298
| |
Fresh
|
8,117
|
1.70
|
46.5
|
2.37
|
444
|
12,132
|
618
| |
Sub-Total
|
10,558
|
2.07
|
63.2
|
2.99
|
704
|
21,453
|
1,013
| |
Inferred
|
Oxide
|
528
|
0.68
|
23.1
|
1.01
|
11
|
393
|
17
|
COSE
|
-
|
-
|
-
|
-
|
-
|
-
|
-
| |
Fresh
|
4,367
|
1.45
|
36.1
|
1.97
|
204
|
5,074
|
277
| |
Sub-Total
|
4,895
|
1.37
|
34.7
|
1.87
|
215
|
5,467
|
294
|
(1)
|
Effective date of December 31,2018.
|
(2)
|
Figures may not add up due to rounding;
|
(3)
|
Gold equivalent ('Au_equ') values are calculated at a ratio of 69.4:1 Ag/Au.
|
(4)
|
Mineral resources are estimated at a block cut-off grade of 0.5 g/t Au_equ.
|
(5)
|
Mineral resources are estimated using a long-term metal prices of USD$1,100 per ounce (gold); and USD$16 per ounce (silver).
|
(6)
|
A minimum mining width of two m was used when modelling the resources.
|
(7)
|
Bulk densities for the mineralized zones are 2.36 t/m3 (oxide), 2.47 t/m3 , hypogene (COSE-style) zone, 2.52 t/m3 (fresh).
|
(8)
|
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
|
(9)
|
The quantity and grade of reported inferred mineral resources in this estimate are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as measured or indicated mineral resources.
|
Res Cat
|
Material Type
|
Tonnes (kT)
|
Grade (g/t)
|
Metal (kOz)
| ||||
Au
|
Ag
|
Au_equ
|
Au
|
Ag
|
Au_equ
| |||
Measured
|
Oxide
|
0.2
|
3.31
|
21.1
|
3.62
|
0.02
|
0.1
|
0.03
|
COSE
|
-
|
-
|
-
|
-
|
-
|
-
|
-
| |
Fresh
|
1
|
4.15
|
71.6
|
5.18
|
0.2
|
3
|
0.2
| |
Sub-Total
|
2
|
4.04
|
65.1
|
4.98
|
0.2
|
4
|
0.3
| |
Indicated
|
Oxide
|
180
|
3.45
|
101.0
|
4.90
|
20
|
585
|
28
|
COSE
|
445
|
13.45
|
503.5
|
20.70
|
192
|
7,198
|
296
| |
Fresh
|
1,869
|
3.89
|
119.0
|
5.61
|
234
|
7,150
|
337
| |
Sub-Total
|
2,493
|
5.57
|
186.3
|
8.25
|
446
|
14,934
|
661
| |
Measured
+ Indicated
|
Oxide
|
180
|
3.45
|
100.9
|
4.90
|
20
|
585
|
28
|
COSE
|
445
|
13.45
|
503.5
|
20.70
|
192
|
7,198
|
296
| |
Fresh
|
1,870
|
3.89
|
119.0
|
5.61
|
234
|
7,153
|
337
| |
Sub-Total
|
2,495
|
5.56
|
186.2
|
8.25
|
446
|
14,937
|
661
| |
Inferred
|
Oxide
|
7
|
2.20
|
108.7
|
3.76
|
1
|
26
|
1
|
COSE
|
-
|
-
|
-
|
-
|
-
|
-
|
-
| |
Fresh
|
759
|
4.05
|
95.7
|
5.43
|
99
|
2,336
|
133
| |
Sub-Total
|
767
|
4.03
|
95.8
|
5.41
|
99
|
2,362
|
133
|
(1)
|
Effective date of December 31,2018.
|
(2)
|
Figures may not add up due to rounding;
|
(3)
|
Gold equivalent ('Au_equ') values are calculated at a ratio of 69.4:1 Ag/Au.
|
(4)
|
Mineral resources are estimated at a block cut-off grade of 3.0 g/t Au_equ.
|
(5)
|
Mineral resources are estimated using a long-term metal prices of USD$1,100 per ounce (gold); and USD$16 per ounce (silver).
|
(6)
|
A minimum mining width of two m was used when modelling the resources.
|
(7)
|
Bulk densities for the mineralized zones are 2.36 t/m3 (oxide), 2.47 t/m3, hypogene (COSE-style) zone, 2.52 t/m3 (fresh).
|
(8)
|
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
|
(9)
|
The quantity and grade of reported inferred mineral resources in this estimate are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as measured or indicated mineral resources.
|
Several projects with exploration potential were analyzed in the province of San Juan.
A.
|
Operating Results
|
Year ended December 31,
| |||||||
(in $000's, except ounces and per share amounts)
|
2020
|
2019
|
Change
|
%Change
| |||
Operational results
| |||||||
Total gold equivalent ounces - produced (1) |
10,233
|
15,562
|
(5,329)
|
(34%)
| |||
Total gold equivalent ounces - sold (1) |
11,174
|
15,463
|
(4,289)
|
(28%)
| |||
Financial results
| |||||||
Revenue
|
$
|
19,849
|
$
|
21,938
|
$
|
(2,089)
|
(10%)
|
Cost of sales
|
$
|
13,247
|
$
|
17,138
|
$
|
(3,891)
|
(23%)
|
Exploration expenses
|
$
|
2,303
|
$
|
2,608
|
$
|
(305)
|
(12%)
|
Administrative expenses
|
$
|
5,611
|
$
|
11,044
|
$
|
(5,433)
|
(49%)
|
Interest expense
|
$
|
2,100
|
$
|
2,131
|
$
|
(31)
|
(1%)
|
Net income (loss)
|
$
|
(4,381)
|
$
|
(12,354)
|
$
|
7,973
|
65%
|
Net income (loss) per share - basic and diluted
|
$
|
(0.013)
|
$
|
(0.044)
|
$
|
0.031
|
70%
|
(1)Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market price for the commodities each period. The ratio for year ended December 31, 2020 was 85.99:1 (2019 - 85.29:1).
|
Year ended December 31,
| |||||||
(in $000's, except ounces and per share amounts)
|
2019
|
2018
|
Change
|
%Change
| |||
Operational results
| |||||||
Total gold equivalent ounces - produced (1) |
15,562
|
43,392
|
(27,830)
|
(64%)
| |||
Total gold equivalent ounces - sold (1) |
15,463
|
43,599
|
(28,136)
|
(65%)
| |||
Financial results
| |||||||
Revenue
|
$
|
21,938
|
$
|
48,089
|
$
|
(26,151)
|
(54%)
|
Cost of sales
|
$
|
17,138
|
$
|
44,662
|
$
|
(27,524)
|
(62%)
|
Exploration expenses
|
$
|
2,608
|
$
|
2,744
|
$
|
(136)
|
(5%)
|
Administrative expenses
|
$
|
11,044
|
$
|
10,951
|
$
|
93
|
1%
|
Interest expense
|
$
|
2,131
|
$
|
1,367
|
$
|
764
|
56%
|
Net income (loss)
|
$
|
(12,354)
|
$
|
(17,590)
|
$
|
5,236
|
30%
|
Net income (loss) per share - basic and diluted
|
$
|
(0.044)
|
$
|
(0.069)
|
$
|
0.025
|
36%
|
(1)Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market price for the commodities each period. The ratio for year ended December 31, 2019 was 85.29:1 (2018 - 80.77:1).
|
Year ended December 31, 2020 (in $'000, except ounces and per unit amounts)
| ||||||
Martha and La Josefina
|
Cap-Oeste
|
Lomada de Leiva
| ||||
Cost of sales
|
$
|
2,267
|
$
|
6,589
|
$
|
4,391
|
Less: Depreciation
|
(346)
|
(1,106)
|
(1,143)
| |||
Add/(Less): Other charges and timing differences (1) |
(1,415)
|
(1,067)
|
(1,169)
| |||
Cash costs
|
$
|
506
|
$
|
4,416
|
$
|
2,079
|
Add: Depreciation (2) |
64
|
369
|
317
| |||
Cash costs and depreciation
|
$
|
570
|
$
|
4,785
|
$
|
2,396
|
Ounces produced
|
356
|
6,965
|
2,912
| |||
Cash costs per ounce
|
$
|
1,421
|
$
|
634
|
$
|
714
|
Cash costs and depreciation per ounce
|
$
|
1,601
|
$
|
687
|
$
|
823
|
Year ended December 31, 2019 (in $'000, except ounces and per unit amounts)
| ||||||
Martha and La Josefina
|
Cap-Oeste
|
Lomada de Leiva
| ||||
Cost of sales
|
$
|
1,545
|
$
|
11,828
|
$
|
3,765
|
Less: Depreciation
|
(115)
|
(1,366)
|
(1,340)
| |||
Less: Inventory impairment
|
-
|
(2,368)
|
-
| |||
Add/(Less): Other charges and timing differences (1) |
(711)
|
(2,029)
|
(691)
| |||
Cash costs
|
$
|
719
|
$
|
6,065
|
$
|
1,734
|
Add: Depreciation (2) |
92
|
826
|
568
| |||
Cash costs and depreciation
|
$
|
811
|
$
|
6,891
|
$
|
2,302
|
Ounces produced
|
1,008
|
10,585
|
3,969
| |||
Cash costs per ounce
|
$
|
714
|
$
|
573
|
$
|
437
|
Cash costs and depreciation per ounce
|
$
|
805
|
$
|
651
|
$
|
580
|
Year ended December 31, 2020 (in $'000, except ounces and per unit amounts)
| ||||
Cap Oeste
|
Lomada de Leiva
| |||
Revenue
|
$
|
12,417
|
$
|
6,482
|
Ounces sold
|
7,036
|
3,773
| ||
Average gross price per ounce sold
|
$
|
1,765
|
$
|
1,718
|
Year ended December 31, 2019 (in $'000, except ounces and per unit amounts)
| ||||
Cap Oeste
|
Lomada de Leiva
| |||
Revenue
|
$
|
14,903
|
$
|
4,750
|
Ounces sold
|
10,985
|
3,461
| ||
Average gross price per ounce sold
|
$
|
1,357
|
$
|
1,372
|
B.
|
Liquidity and Capital Resources
|
•
|
to ensure the Company's ability to continue as a going concern;
|
•
|
to fund projects from raising capital from equity placements rather than long-term borrowings;
|
•
|
to increase the value of the assets of the business; and
|
•
|
to provide an adequate return to shareholders in the future when new or existing exploration assets are taken into production.
|
C.
|
Research and Development, Patents and Licenses, etc.
|
D.
|
Trend Information
|
E.
|
Off-Balance Sheet Arrangements
|
F.
|
Tabular Disclosure of Contractual Obligations
|
As of December 31, 2020
|
Payments Due by Period (in $'000)
| ||||
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
| |
Bank indebtedness
|
9,636
|
9,636
|
-
|
-
|
-
|
Accounts payable and accrued liabilities
|
4,384
|
4,384
|
-
|
-
|
-
|
Accounts payable with related parties
|
144
|
144
|
-
|
-
|
-
|
Loan payable and current portion of long-term debt
|
363
|
363
|
-
|
-
|
-
|
Long-term debt
|
109
|
-
|
109
|
-
|
-
|
Long-term debt with related parties
|
14,808
|
-
|
14,808
|
-
|
-
|
Reclamation and remediation obligations
|
5,139
|
-
|
-
|
-
|
5,139
|
Other long-term payables
|
57
|
-
|
57
|
-
|
-
|
Total
|
34,640
|
14,527
|
14,974
|
-
|
5,139
|
G.
|
Safe Harbor
|
A.
|
Directors and Senior Management
|
Name
|
Age
|
Position
|
Position Held Since
|
Carlos J. Miguens
|
72
|
Director (Chair)
|
July 2019
|
Tim Hunt |
68
|
Director
|
April 2010
|
Christopher van Tienhoven
|
53
|
Chief Executive Officer and Director
|
July 2019
|
Cristian Lopez Saubidet
|
46
|
Chief Financial Officer and Director
|
July 2019
|
Alexander Harper
|
73
|
Director
|
July 2019
|
David Jarvis
|
67
|
Director
|
July 2019
|
Leon Hardy
|
68
|
Director
|
February 2020
|
Jorge Sanguin
|
59
|
Chief Operating Officer
|
January 2020
|
B.
|
Compensation
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards (1) |
Non-Equity Incentive Plan Compensation
|
Non-qualified Deferred Compensation Earnings
|
All Other Compensation
|
Total
| |
Name and Principal Position
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
Jorge Sanguin, COO(2) |
410,000
|
35,000
|
-
|
40,000
|
-
|
-
|
-
|
485,000
|
Christopher van Tienhoven, CEO and Director (3) |
250,000
|
125,00
|
-
|
53,000
|
-
|
-
|
-
|
428,000
|
Cristian Lopez
Saubidet, CFO and Director (4) |
-
|
-
|
-
|
30,000
|
-
|
-
|
29,000 (5) |
59,000
|
(1)
|
On August 14, 2020, the Company granted stock options with an exercise price of CAD $0.16 and an expiry date of August 14, 2025. The stock options vest in three equal trances on the first, second and third anniversary of the grant date. The stock option compensation expense is recognized evenly during the vesting period. The fair value of the options was calculated on grant date using the Black-Scholes option pricing model and using the following assumptions:
| |||||||
Discount rate - 0.35%, Expected volatility - 172.95%, Expected life (years) - 5, Expected dividend yield - 0%, Forfeiture rate - 0%, Stock price - CAD$0.15 | ||||||||
Mr. Sanguin was granted 1,000,000 stock options in his capacity as the Chief Operating Officer.
Mr. van Tienhoven was granted 1,500,000 stock options in his capacity as the Chief Executive Officer.
Mr. Saubidet was granted 1,000,000 stock options in his capacity as the Chief Financial Officer.
| ||||||||
On September 25, 2019, the Company granted stock options with an exercise price of CAD $0.065 and maturity date of September 25, 2024. The stock options vest one year after the date of grant. The stock option compensation expense is recognized evenly during the vesting period. The fair value of the stock options was calculated on grant date using the Black-Scholes option pricing model using the following assumptions: | ||||||||
Discount rate - 1.46%, Expected volatility - 253.14%, Expected life (years) - 5, Expected dividend yield - 0%, Forfeiture rate - 0%, Stock price - CAD$0.06 | ||||||||
Mr. van Tienhoven was granted 1,000,000 stock options in his capacity as the Chief Executive Officer.
Mr. Saubidet was granted 500,000 stock options in his capacity as the Chief Financial Officer.
| ||||||||
(2)
|
Mr. Sanguin became the Chief Operating Officer effective January 1, 2020.
| |||||||
(3)
|
Mr. van Tienhoven was appointed as Chief Executive Officer of the Company on July 22, 2019.
| |||||||
(4)
|
Mr. Saubiet was appointed Chief Financial Officer and Director of the Company on July 22, 2019.
| |||||||
(5)
|
Mr. Saubiet was paid $12,000 in fees and granted 500,000 stock options in stock options on September 15, 2019 for serving in his capacity as a Director. The stock options have an exercise price of CAD $0.065 and a maturity date of September 25, 2024. The stock options vest one year after the date of grant. The value of the stock option compensation expense was estimated to be $17,000 during 2020.
|
Director's Compensation Table
|
Fees Earned or Paid in Cash
|
Stock Awards
|
Option Awards (1) |
Non-Equity Incentive Plan Compensation
|
Non-qualified Deferred Compensation Earnings
|
All Other Compensation
|
Total
|
Name
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
Carlos J. Miguens
|
12,000
|
-
|
23,000
|
-
|
-
|
-
|
35,000
|
Tim Hunt
|
12,000
|
-
|
23,000
|
-
|
-
|
-
|
35,000
|
Cristian Lopez Saubidet
|
12,000
|
-
|
17,000
|
-
|
-
|
-
|
29,000
|
Christopher van Tienhoven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Alexander Harper
|
12,000
|
-
|
23,000
|
-
|
-
|
-
|
35,000
|
David Jarvis
|
12,000
|
-
|
23,000
|
-
|
-
|
-
|
35,000
|
Leon Hardy
|
11,000
|
-
|
23,000
|
-
|
-
|
-
|
34,000
|
(1)
|
On August 14, 2020, the Company granted stock options with an exercise price of CAD $0.16 and an expiry date of August 14, 2025. The stock options vest in three equal trances on the first, second and third anniversary of the grant date. The fair value of the options was calculated using the Black-Scholes option pricing model and using the following assumptions:
| ||||||
Discount rate - 0.35%, Expected volatility - 172.95%, Expected life (years) - 5, Expected dividend yield - 0%, Forfeiture rate - 0%, Stock price - CAD$0.15 | |||||||
Mr. Miguens was granted 500,000 stock options in his capacity as a Director.
Mr. Hunt was granted 500,000 stock options in his capacity as a Director.
Mr. Harper was granted 500,000 stock options in his capacity as a Director.
Mr. Jarvis was granted 500,000 stock options in his capacity as a Director.
Mr. Hardy was granted 500,000 stock options in his capacity as a Director.
| |||||||
On September 25, 2019, the Company granted stock options with an exercise price of CAD $0.065 and a maturity date of September 25, 2024. The stock options vest one year after the date of grant. The stock option compensation expense is recognized evenly during the vesting period. The fair value of the stock options was calculated on grant date using the Black-Scholes option pricing model using the following assumptions:
| |||||||
Discount rate - 1.46% Expected volatility - 253.14% Expected life (years) - 5 Expected dividend yield - 0% Forfeiture rate - 0% Stock price - CAD$0.06 | |||||||
Mr. Miguens was granted 500,00 stock options in his capacity as a Director.
Mr. Hunt was granted 500,000 stock options in his capacity as a Director.
Mr. Saubidet was granted 500,000 stock options in his capacity as a Director.
Mr. Harper was granted 500,000 stock options in his capacity as a Director.
Mr. Jarvis was granted 500,000 stock options in his capacity as a Director.
|
INCENTIVE PLAN AWARDS
Option-based Awards
|
Share-based Awards
| |||||||
Name
|
Number of securities underlying unexercised options (#) exercisable.
|
Number of securities underlying unexercised options (#) unexercisable.
(1)
|
Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)
|
Option exercise price (CAD $)
|
Option expiration date
|
Number of shares or units that have not vested (#)
|
Market value of shares of units of stock that have not vested ($)
|
Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
|
Jorge Sanguin
|
800,000
|
1,000,000
|
-
|
0.065- 0.16
|
09/25/2024 - 08/13/2025
|
-
|
-
|
-
|
Christopher van Tienhoven
|
1,000,000
|
1,500,000
|
-
|
0.065- 0.16
|
09/25/2024 - 08/13/2025
|
-
|
-
|
-
|
Cristian Lopez Saubidet
|
1,000,000
|
1,000,000
|
-
|
0.065- 0.16
|
09/25/2024 - 08/13/2025
|
-
|
-
|
-
|
TOTAL
|
2,800,000
|
3,500,000
|
-
|
0.065- 0.16
|
09/25/2024 - 08/13/2025
|
-
|
-
|
-
|
C. |
Board practices
|
1.
|
Christopher van Tienhoven, Chief Executive Officer
|
2.
|
Cristian Lopez Saubidet, Chief Financial Officer
|
3.
|
Jorge Sanguin. Chief Operating Officer
|
D. |
Employees
|
Santa Cruz
|
Rio Negro
|
Buenos Aires
|
Total
| |
Operations
|
88
|
-
|
-
|
88
|
Exploration
|
9
|
16
|
-
|
25
|
General and Administrative
|
8
|
5
|
10
|
23
|
Total
|
105
|
21
|
10
|
136
|
E. |
Share Ownership
|
Name and Address of
|
Shares
|
Percent
|
Beneficial Owner
| ||
Carlos J. Miguens (1) |
196,002,445
|
41.96%
|
Tim Hunt (2) |
98,193,902
|
21.02%
|
Christopher van Tienhoven (3) |
1,355,822
|
*
|
Cristian Lopez Saubidet (4) |
1,140,196
|
*
|
David Jarvis (5) |
500,000
|
*
|
Alexander Harper (6) |
2,177,622
|
*
|
Leon Hardy (7) |
635,000
|
*
|
Jorge Sanguin (8) |
800,000
|
*
|
All current executive officers and directors as a
group (8 persons) (9) |
300,804,987
|
64.40%
|
*
|
Holding constitutes less that 1% of the outstanding shares.
| |
(1)
|
Shares reported include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024 and 500,000 vested stock options with an exercise price of CAD $0.16 and an expiry date of August 14, 2025.
| |
(2)
|
94,562,005 of these shares are owned by Hunt Family Limited Partnership, an entity controlled by Mr. Hunt, 3,785,197 shares are owned directly by Mr. Hunt and 346,700 shares are owned by Mr. Hunt's spouse. The shares owned directly by Mr. Hunt include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024 and 500,000 vested stock options with an exercise price of CAD $0.16 and an expiry date of August 14, 2025.
| |
(3)
|
Shares reported include 1,000,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
| |
(4)
|
Shares reported include 1,000,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
| |
(5)
|
Shares reported include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
| |
(6)
|
Shares reported include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
| |
(7)
|
Shares reported include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
| |
(8)
|
Shares reported include 800,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
| |
(9)
|
Shares reported include 5,300,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024.
|
A.
|
Major Shareholders
|
Name of
|
Shares
|
Percent
|
Beneficial Owner
| ||
Carlos J. Miguens (1) |
196,502,445
|
42.07%
|
Tim Hunt (2) |
98,693,902
|
21.13%
|
(1)
|
Shares reported include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024 and 500,000 vested stock options with an exercise price of CAD $0.16 and an expiry date of August 14, 2025.
| |
(2)
|
94,562,005 of these shares are owned by Hunt Family Limited Partnership, an entity controlled by Mr. Hunt, 3,785,197 shares are owned directly by Mr. Hunt and 346,700 shares are owned by Mr. Hunt's spouse. The shares owned directly by Mr. Hunt include 500,000 vested stock options with an exercise price of CAD$0.065 and maturity date of September 25, 2024 and 500,000 vested stock options with an exercise price of CAD $0.16 and an expiry date of August 14, 2025.
|
B.
|
Related Party Transactions
|
-
|
The Company incurred $11,809 in interest expense from Huntwood.
|
-
|
The Company incurred interest expense of $269,831 on the loans from Mr. Hunt.
|
-
|
The Company incurred interest expense of $249,725 on the advances from Hunt FLP.
|
C.
|
Interest of Experts and Counsel
|
A.
|
Consolidated Statements and Other Financial Information.
|
Year
|
Sales
|
2020
|
19,849
|
2019
|
21,938
|
2018
|
48,089
|
B.
|
Significant Changes
|
A.
|
Offer and Listing Details
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
C. |
Material Contracts
|
D.
|
Exchange Controls
|
E. |
Taxation
|
•
|
The holder and persons with whom the holder does not deal at arm's length alone or in any combination has owned 25% or more of the shares of any class or series of shares in the capital of the Company, and
|
•
|
More than 50% of the fair market value of the common shares is derived directly or indirectly from one or any combination of real or immovable properties situated in Canada, Canadian resource properties, timer resource properties, and options in respect of, or interest in or right in any such properties, whether or not such property exists.
|
F.
|
Dividends and Paying Agents
|
G.
|
Statement by Experts
|
H.
|
Documents on Display
|
I. |
Subsidiary Information
|
CAD
|
AR$
|
Euro
| ||||
Cash
|
$
|
13
|
$
|
641
|
$
|
3
|
Other working capital (deficit) items - net
|
(190
|
)
|
(2,574
|
)
|
(340
|
)
|
Non-current financial assets
|
-
|
638
|
-
| |||
Non-current financial liabilities
|
-
|
-
|
(109
|
)
|
•
|
Honest and ethical conduct, including ethical interactions with government officials and the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
•
|
Full, fair, accurate, timely, understandable and transparent disclosure in periodic reports and documents required to be filed by the Company and in other public communications made by the Company;
|
•
|
Compliance with the applicable exchange, government and self-regulatory organization laws, rules and regulations;
|
•
|
Prompt internal reporting of Code violations; and
|
•
|
Accountability for compliance with the Code.
|
Year ended December 31,
| ||
2020
|
2019
| |
Audit fees
|
217,000
|
$198,000
|
Tax fees(1) |
14,000
|
11,000
|
Total
|
231,000
|
$209,000
|
ISSUER PURCHASES OF EQUITY SECURITIES
| ||||
Period (Year ended December 31, 2020)
|
(a) Total Number of Shares purchased
|
(b) Average Price Paid per Share
($ USD)
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
January 1 - 31
|
-
|
-
|
-
|
-
|
February 1 - 29
|
-
|
-
|
-
|
-
|
March 1 - 31
|
-
|
-
|
-
|
-
|
April 1 - 30
|
-
|
-
|
-
|
-
|
May 1 - 31
|
-
|
-
|
-
|
-
|
June 1 - 30
|
-
|
-
|
-
|
-
|
July 1 - 31
|
-
|
-
|
-
|
-
|
August 1 - 31
|
-
|
-
|
155,000
|
Nil
|
September 1 - 30
|
-
|
-
|
-
|
-
|
October 1 - 31
|
-
|
-
|
-
|
-
|
November 1 - 30
|
-
|
-
|
-
|
-
|
December 1 - 31
|
-
|
-
|
-
|
-
|
Total
|
-
|
-
|
155,000
|
Nil
|
1.
|
Audited Consolidated Financial Statements of Patagonia Gold Corp. for the years ended December 31, 2020, 2019 and 2018, comprised of the following:
|
a.
|
Independent Auditor's Report of Registered Public Accounting Firm, Grant Thornton LLP, for the year ended December 31, 2020;
|
b.
|
Consolidated Statements of Financial Position as at December 31, 2020 and 2019;
|
c.
|
Consolidated Statements of Loss and Comprehensive Loss for the years ended December 31, 2020, 2019 and 2018;
|
d.
|
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2020, 2019 and 2018;
|
e.
|
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018;
|
f.
|
Notes to the Consolidated Financial Statements.
|
Incorporated by reference
| |||||
Exhibit
Number
|
Document Description
|
Form
|
Date
|
Number
|
Filed
herewith
|
1.1
|
Articles of Incorporation - British Columbia
|
X
| |||
2.1
|
Stock Option Plan
|
F-1/A-2
|
12/20/12
|
99.1
| |
4.1
|
The Scheme of Arrangement between Patagonia Gold Plc and Hunt Mining Corp.
|
10-K
|
11/18/20
|
2.1
| |
4.2
|
Exploration and Option Agreement between Cerro Cazador S.A. and FK Minera S.A. dated March 28, 2007
|
F-1/A-2
|
12/20/12
|
10.1
| |
4.3
|
Agreement between Fomento Minero de Santa Cruz Sociedad del Estado and Hunt Mining Corp.'s subsidiary, Cerro Cazador, S.A., with respect to the La Josefina property, dated July 24, 2007
|
F-1/A-2
|
12/20/12
|
10.2
| |
4.4
|
Share Purchase Agreement among Sinomar Capital Corp., Cerro Cazador S.A., Hunt Mountain Resources Ltd. and Hunt Mountain Investments, LLC, dated October 13, 2009
|
F-1/A-3
|
03/28/14
|
10.3
| |
4.5
|
Executive Employment Agreement with Timothy R. Hunt dated January 1, 2012
|
F-1/A-3
|
03/28/14
|
10.5
| |
4.6
|
Exploration Agreement Among Eldorado Gold Corporation, Hunt Mining Corp. and Cerro Cazador, S.A. dated May 3, 2012
|
F-1/A-3
|
03/28/14
|
10.8
| |
4.7
|
Agreement between Fomento Minero de Santa Cruz Sociedad del Estado and Hunt Mining Corp.'s subsidiary Cerro Cazador, S.A. with respect to the La Josefina property, dated November 15, 2012
|
F-1/A-4
|
06/30/14
|
10.9
| |
4.8
|
Amended Agreement between Fomento Minero de Santa Cruz Sociedad del Estado and Hunt Mining Corp.'s subsidiary, Cerro Cazador, S.A., with respect to the La Valenciana property, dated November 15, 2012
|
F-1/A-3
|
03/28/14
|
10.10
| |
4.9
|
Buyer's Contract with Ocean Partners USA, Inc., Hunt Mining Corp and Huntwood Industries, Inc. dated September 28, 2016
|
10-K
|
05/22/17
|
10.11
| |
4.10
|
Advance Payment Facility Agreement with Ocean Partners USA, Inc., Hunt Mining Corp and Huntwood Industries, Inc. dated October 28, 2016
|
10-K
|
05/22/17
|
10.12
| |
11.1
|
Code of Business Conduct and Ethics
|
10-K
|
11/18/20
|
14.1
| |
12.1
|
Certification of Chief Executive Officer of Patagonia Gold Corp. pursuant to Rules13a-14 and 15d-14 under the Securities Exchange Act of 1934
|
X
| |||
12.2
|
Certification of Chief Financial Officer of Patagonia Gold Corp. pursuant to Rules13a-14 and 15d-14 under the Securities Exchange Act of 1934
|
X
| |||
13.1
|
Certification of Chief Executive Officer of Patagonia Gold Corp., pursuant to Section906 of the Sarbanes-Oxley Act of 2002
|
X
| |||
13.2
|
Certification of Chief Financial Officer of Patagonia Gold Corp., pursuant to Section906 of the Sarbanes-Oxley Act of 2002
|
X
| |||
15.1
|
Audit Committee Charter
|
X
| |||
15.2
|
Compensation Committee Charter
|
X
| |||
15.3
|
Consent of Donald J. Birak
|
X
| |||
F-1
|
Financial Statements
| ||||
101.INS
|
XBRL Instance Document
|
X
| |||
101.SCH
|
XBRL Taxonomy Extension - Schema
|
X
| |||
101.CAL
|
XBRL Taxonomy Extension - Calculations
|
X
| |||
101.DEF
|
XBRL Taxonomy Extension - Definitions
|
X
| |||
101.LAB
|
XBRL Taxonomy Extension - Labels
|
X
| |||
101.PRE
|
XBRL Taxonomy Extension - Presentation
|
X
|
PATAGONIA GOLD CORP.
| ||
BY:
|
/s/ 'Christopher van Tienhoven'
| |
Christopher Van Tienhoven
| ||
Chief Executive Officer
|
Report of independent registered public accounting firm
|
2 |
Consolidated Statements of Financial Position
|
4 |
Consolidated Statements of Loss and Comprehensive Loss
|
5 |
Consolidated Statements of Changes in Equity
|
6
|
Consolidated Statements of Cash Flows
|
7
|
Notes to the Consolidated Financial Statements
|
8
|
accounting firm
Grant Thornton LLP
Suite 1600
333 Seymour Street
Vancouver, BC
V6B 0A4
T +1 604 687 2711
F +1 604 685 6569
|
Audit | Tax | Advisory
© Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
|
Vancouver, Canada |
Chartered Professional Accountants
|
April 28, 2021 |
Licensed Public Accountants
|
Audit | Tax | Advisory
© Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
|
Patagonia Gold Corp.
Consolidated Statements of Financial Position
(In thousands of U.S. dollars)
|
Note
|
December 31, 2020
|
December 31, 2019
(restated - note 29)
| ||||||||||
Current assets
| ||||||||||||
Cash
|
22
|
$
|
819
|
$
|
685
| |||||||
Receivables
|
12, 22
|
2,041
|
1,516
| |||||||||
Inventories
|
6
|
3,289
|
3,206
| |||||||||
Total current assets
|
6,149
|
5,407
| ||||||||||
Non-current assets
| ||||||||||||
Mineral properties
|
7, 25
|
15,922
|
15,457
| |||||||||
Mining rights
|
9
|
17,195
|
16,997
| |||||||||
Property, plant and equipment
|
11
|
13,233
|
15,635
| |||||||||
Goodwill
|
25
|
4,009
|
4,009
| |||||||||
Other financial assets
|
10, 22
|
16
|
334
| |||||||||
Deferred tax assets
|
27
|
-
|
2,841
| |||||||||
Other receivables
|
13, 22
|
3,544
|
3,814
| |||||||||
Total non-current assets
|
53,919
|
59,087
| ||||||||||
Total assets
|
$
|
60,068
|
$
|
64,494
| ||||||||
Current liabilities
| ||||||||||||
Bank indebtedness
|
14
|
$
|
9,636
|
$
|
14,989
| |||||||
Accounts payable and accrued liabilities
|
15, 20, 22
|
4,384
|
5,992
| |||||||||
Accounts payable with related parties
|
15, 20, 22
|
144
|
6,717
| |||||||||
Loan payable and current portion of long-term debt
|
16, 20, 22
|
363
|
334
| |||||||||
Total current liabilities
|
14,527
|
28,032
| ||||||||||
Non-current liabilities
| ||||||||||||
Long-term debt
|
17, 22
|
109
|
312
| |||||||||
Long-term debt with related parties
|
17, 20, 22
|
14,808
|
11,708
| |||||||||
Reclamation and remediation obligations
|
8
|
5,139
|
5,803
| |||||||||
Deferred tax liabilities
|
27
|
4,023
|
4,795
| |||||||||
Other long-term payables
|
57
|
56
| ||||||||||
Total non-current liabilities
|
24,136
|
22,674
| ||||||||||
Total liabilities
|
38,663
|
50,706
| ||||||||||
Shareholders' equity
| ||||||||||||
Capital stock
|
19
|
7,320
|
2,588
| |||||||||
Contributed surplus
|
186,177
|
180,269
| ||||||||||
Accumulated deficit
|
(190,541
|
)
|
(186,135
|
)
| ||||||||
Accumulated other comprehensive income
|
19,744
|
18,386
| ||||||||||
Total shareholders' equity attributable to the parent
|
22,700
|
15,108
| ||||||||||
Non-controlling interest
|
(1,295
|
)
|
(1,320
|
)
| ||||||||
Total shareholders' equity
|
21,405
|
13,788
| ||||||||||
Total liabilities and shareholders' equity
|
$
|
60,068
|
$
|
64,494
| ||||||||
Commitments and contingencies (note 26)
| ||||||||||||
Going concern (note 3)
| ||||||||||||
Subsequent events (note 30)
|
Signed 'Christopher van Tienhoven' , Director
| Signed 'Cristian Lopez Saubidet' , Director |
Patagonia Gold Corp.
Consolidated Statements of Loss and Comprehensive Loss
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars)
|
Note
|
2020
|
2019
(restated - note 29)
|
2018
(restated - note 29)
| |||||||||||||
Revenue
|
$
|
19,849
|
$
|
21,938
|
$
|
48,089
| ||||||||||
Cost of sales
|
6
|
(13,247
|
)
|
(17,138
|
)
|
(44,662
|
)
| |||||||||
Gross profit
|
6,602
|
4,800
|
3,427
| |||||||||||||
Operating income (expenses):
| ||||||||||||||||
Exploration expenses
|
(2,303
|
)
|
(2,608
|
)
|
(2,744
|
)
| ||||||||||
Administrative expenses
|
21
|
(5,611
|
)
|
(11,044
|
)
|
(10,951
|
)
| |||||||||
Impairment of mineral properties
|
7
|
-
|
(1,996
|
)
|
-
| |||||||||||
Share-based payments expense
|
19
|
(382
|
)
|
(127
|
)
|
(190
|
)
| |||||||||
Interest expense
|
(2,100
|
)
|
(2,131
|
)
|
(1,367
|
)
| ||||||||||
Total operating expense:
|
(10,396
|
)
|
(17,906
|
)
|
(15,252
|
)
| ||||||||||
Other income/(expenses)
| ||||||||||||||||
Interest income
|
125
|
191
|
122
| |||||||||||||
Gain/(loss) on foreign exchange
|
(785
|
)
|
481
|
(14,404
|
)
| |||||||||||
Accretion expense
|
8
|
(13
|
)
|
(35
|
)
|
-
| ||||||||||
Gain on hyperinflationary net monetary position
|
-
|
-
|
4,448
| |||||||||||||
Other income
|
23
|
2,155
|
-
|
1,500
| ||||||||||||
Total other income/(expenses)
|
1,482
|
637
|
(8,334
|
)
| ||||||||||||
Loss - before income taxes
|
(2,312
|
)
|
(12,469
|
)
|
(20,159
|
)
| ||||||||||
Income tax benefit (expense)
|
27
|
(2,069
|
)
|
115
|
2,569
| |||||||||||
Net loss
|
$
|
(4,381
|
)
|
$
|
(12,354
|
)
|
$
|
(17,590
|
)
| |||||||
Attributable to non-controlling interest
|
25
|
(383
|
)
|
(1,344
|
)
| |||||||||||
Attributable to equity share owners of the parent
|
(4,406
|
)
|
(11,971
|
)
|
(16,246
|
)
| ||||||||||
(4,381
|
)
|
(12,354
|
)
|
(17,590
|
)
| |||||||||||
Other comprehensive income (loss) net of tax
| ||||||||||||||||
Items that will be reclassified subsequently to profit or loss
| ||||||||||||||||
Foreign currency translation adjustment
|
1,350
|
374
|
7,012
| |||||||||||||
Items that will not be reclassified subsequently to profit or loss
| ||||||||||||||||
Change in fair value of investment
|
10
|
8
|
(28
|
)
|
(13
|
)
| ||||||||||
Total other comprehensive income (loss)
|
1,358
|
346
|
6,999
| |||||||||||||
Total comprehensive loss
|
$
|
(3,023
|
)
|
$
|
(12,008
|
)
|
$
|
(10,591
|
)
| |||||||
Weighted average shares outstanding - basic and diluted
|
18
|
325,483,780
|
282,306,312
|
254,387,482
| ||||||||||||
Net loss per share - basic and diluted
|
18
|
$
|
(0.013
|
)
|
$
|
(0.044
|
)
|
$
|
(0.069
|
)
| ||||||
Patagonia Gold Corp.
Consolidated Statements of Changes in Equity
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars)
|
Capital stock
|
Accumulated
deficit
|
Accumulated other comprehensive income
|
Contributed surplus
|
Total Attributable to parent
|
Non-controlling interest
|
Total
| ||||||||||||||||||||||
Balance - January 1, 2018 (restated - note 29)
|
31,886
|
(158,003
|
)
|
300
|
159,193
|
33,376
|
407
|
33,783
| ||||||||||||||||||||
Net loss (restated - note 29)
|
-
|
(16,246
|
)
|
-
|
-
|
(16,246
|
)
|
(1,344
|
)
|
(17,590
|
)
| |||||||||||||||||
Expiry of stock options
|
- |
98
|
- |
(98
|
)
|
- |
- |
- | ||||||||||||||||||||
Share reorganization
|
(31,585
|
)
|
-
|
-
|
31,585
|
-
|
-
|
-
| ||||||||||||||||||||
Other comprehensive income (restated - note 29)
|
-
|
(13
|
)
|
17,740
|
(10,728
|
)
|
6,999
|
-
|
6,999
| |||||||||||||||||||
Share based payments
|
-
|
-
|
-
|
190
|
190
|
-
|
190
| |||||||||||||||||||||
Balance - December 31, 2018 (restated - note 29)
|
301
|
(174,164
|
)
|
18,040
|
180,142
|
24,319
|
(937
|
)
|
23,382
| |||||||||||||||||||
Balance - January 1, 2019
|
301
|
(174,164
|
)
|
18,040
|
180,142
|
24,319
|
(937
|
)
|
23,382
| |||||||||||||||||||
Shares issued in reverse acquisition (note 25)
|
2,287
|
-
|
-
|
-
|
2,287
|
-
|
2,287
| |||||||||||||||||||||
Net loss (restated - note 29)
|
-
|
(11,971
|
)
|
-
|
-
|
(11,971
|
)
|
(383
|
)
|
(12,354
|
)
| |||||||||||||||||
Other comprehensive income (restated - note 29)
|
-
|
-
|
346
|
-
|
346
|
-
|
346
| |||||||||||||||||||||
Share based payments
|
-
|
-
|
-
|
127
|
127
|
-
|
127
| |||||||||||||||||||||
Balance - December 31, 2019 (restated - note 29)
|
2,588
|
(186,135
|
)
|
18,386
|
180,269
|
15,108
|
(1,320
|
)
|
13,788
| |||||||||||||||||||
Balance - January 1, 2020
|
2,588
|
(186,135
|
)
|
18,386
|
180,269
|
15,108
|
(1,320
|
)
|
13,788
| |||||||||||||||||||
Shares repurchased under NCIB (note 19)
|
(17
|
)
|
-
|
-
|
-
|
(17
|
)
|
-
|
(17
|
)
| ||||||||||||||||||
Shares issued to settle debts (note 19)
|
4,749
|
-
|
-
|
5,526
|
10,275
|
-
|
10,275
| |||||||||||||||||||||
Net loss
|
-
|
(4,406
|
)
|
-
|
-
|
(4,406
|
)
|
25
|
(4,381
|
)
| ||||||||||||||||||
Other comprehensive income
|
-
|
-
|
1,358
|
-
|
1,358
|
-
|
1,358
| |||||||||||||||||||||
Share based payments
|
-
|
-
|
-
|
382
|
382
|
-
|
382
| |||||||||||||||||||||
Balance - December 31, 2020
|
7,320
|
(190,541
|
)
|
19,744
|
186,177
|
22,700
|
(1,295
|
)
|
21,405
| |||||||||||||||||||
Patagonia Gold Corp.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars)
| ||||||||||||||||
Note
|
2020
|
2019 (restated - note 29)
|
2018(restated - note 29)
| |||||||||||||
Cash flow from operating activities
| ||||||||||||||||
Net loss
|
$
|
(4,381
|
)
|
$
|
(12,354
|
)
|
$
|
(17,590
|
)
| |||||||
Items not affecting cash
| ||||||||||||||||
Depreciation of property, plant and equipment
|
11
|
2,639
|
3,028
|
7,346
| ||||||||||||
Depreciation of mineral properties
|
7
|
477
|
3,456
|
3,069
| ||||||||||||
Amortization of mining rights
|
9
|
100
|
100
|
100
| ||||||||||||
Net impairment of assets
|
-
|
-
|
2,260
| |||||||||||||
Share based payment expense
|
19
|
382
|
127
|
190
| ||||||||||||
Provisions
|
(677
|
)
|
2,419
|
-
| ||||||||||||
Impairment of mineral properties
|
-
|
1,996
|
-
| |||||||||||||
Write-down of inventory
|
6
|
-
|
2,368
|
15,147
| ||||||||||||
Accretion expense
|
8
|
13
|
35
|
-
| ||||||||||||
Restatement for hyperinflation
|
-
|
-
|
(17,047
|
)
| ||||||||||||
Deferred tax expense/(benefit)
|
2,069
|
(115
|
)
|
(2,569
|
)
| |||||||||||
622
|
1,060
|
(9,094
|
)
| |||||||||||||
Net change in non-cash working capital items
| ||||||||||||||||
(Increase)/decrease in receivables
|
(255
|
)
|
3,864
|
3,840
| ||||||||||||
(Increase)/decrease in deferred tax assets
|
-
|
1,793
|
438
| |||||||||||||
(Increase)/decrease in inventory
|
239
|
1,246
|
1,045
| |||||||||||||
(Increase)/decrease in other financial assets
|
310
|
28
|
-
| |||||||||||||
Increase/(decrease) in accounts payable and accrued liabilities
|
(1,505
|
)
|
(3,124
|
)
|
378
| |||||||||||
Increase/(decrease) in accounts payable and accrued liabilities with related parties
|
156
|
301
|
-
| |||||||||||||
Increase/(decrease) in interest payable
|
-
|
(9
|
)
|
-
| ||||||||||||
Increase/(decrease) in provision
|
1
|
(24
|
)
|
(216
|
)
| |||||||||||
Increase/(decrease) in transaction taxes payable
|
(103
|
)
|
(126
|
)
|
(329
|
)
| ||||||||||
(1,157
|
)
|
3,949
|
5,156
| |||||||||||||
Net cash provided by/(used in) operating activities
|
(535
|
)
|
5,009
|
(3,938
|
)
| |||||||||||
Cash flows from investing activities
| ||||||||||||||||
Purchase of property, plant and equipment
|
11
|
(976
|
)
|
(777
|
)
|
(4,310
|
)
| |||||||||
Purchase of mineral property
|
7
|
(942
|
)
|
(2,926
|
)
|
(1,243
|
)
| |||||||||
Purchase of mining rights
|
-
|
-
|
(14,612
|
)
| ||||||||||||
Proceeds from disposal of property, plant and equipment
|
417
|
189
|
7,500
| |||||||||||||
Net cash used in investing activities
|
(1,501
|
)
|
(3,514
|
)
|
(12,665
|
)
| ||||||||||
Cash flow from financing activities
| ||||||||||||||||
Bank indebtedness (repayment)
|
(5,353
|
)
|
2,608
|
7,878
| ||||||||||||
Proceeds from loans with related parties
|
6,646
|
8,515
|
-
| |||||||||||||
Proceeds from loans
|
-
|
-
|
29,938
| |||||||||||||
Repayment of loans
|
(174
|
)
|
(10,530
|
)
|
(38,468
|
)
| ||||||||||
Shares repurchased under NCIB
|
19
|
(17
|
)
|
-
|
-
| |||||||||||
Net cash provided by/(used in) financing activities
|
1,102
|
593
|
(652
|
)
| ||||||||||||
Net increase/(decrease) in cash
|
(934
|
)
|
2,088
|
(17,255
|
)
| |||||||||||
Effect of foreign exchange on cash
|
1,068
|
(2,057
|
)
|
16,625
| ||||||||||||
Cash, beginning of year
|
685
|
654
|
1,284
| |||||||||||||
Cash, end of the year
|
$
|
819
|
$
|
685
|
$
|
654
| ||||||||||
Taxes paid
|
(103
|
)
|
(126
|
)
|
(329
|
)
| ||||||||||
Interest paid
|
(342
|
)
|
(416
|
)
|
(1,333
|
)
| ||||||||||
Supplemental non-cash information
| ||||||||||||||||
Shares issued to settle debts
|
19
|
10,275
|
-
|
-
| ||||||||||||
Change in value of investments
|
10
|
8
|
(28
|
)
|
(13
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Corporation
|
Incorporation
|
Percentage
ownership
|
Functional currency
|
Business purpose
|
Patagonia Gold S.A. ('PGSA')
|
Argentina
|
95.3
|
US$
|
Production and Exploration Stage
|
Minera Minamalu S.A.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Huemules S.A.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Leleque Exploración S.A.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Patagonia Gold Limited (formerly Patagonia Gold PLC)
|
UK
|
100
|
GBP$
|
Holding
|
Minera Aquiline S.A.U.
|
Argentina
|
100
|
US$
|
Exploration Stage
|
Patagonia Gold Canada Inc.
|
Canada
|
100
|
CAD$
|
Holding
|
Patagonia Gold Chile S.C.M.
|
Chile
|
100
|
CH$
|
Exploration Stage
|
Ganadera Patagonia S.R.L.
|
Argentina
|
100
|
US$
|
Land Holding
|
1272680 B.C. Ltd (formerly 1494716 Alberta Ltd.)
|
Canada
|
100
|
CAD$
|
Nominee Shareholder
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
-
|
Income and expenses on the statement of loss and comprehensive loss have been translated using the average exchange rates prevailing during the year;
|
-
|
Assets and liabilities have been translated using the exchange rate prevailing at the date of the statement of financial position;
|
-
|
Translation adjustments are recognized in other comprehensive income (loss).
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Materials and supplies are valued at the lower of cost or net realizable value. Any provision for obsolescence is determined by reference to specific items of stock. A regular review is undertaken to determine the extent of any provision for obsolescence.
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Fair value is based on an estimate of the amount that the Company may obtain in a sale transaction on an arm's length basis. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash generating unit ('CGU') to which the asset belongs. The Company's CGUs are the lowest level of identifiable groups of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGUs, otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
-
|
The Company and the customer have an identifiable contract and are committed to perform their respective obligations;
|
-
|
The Company and the customer can identify each other's rights regarding the goods to be transferred;
|
-
|
The Company can identify the payment terms for the goods to be transferred;
|
-
|
The risk, timing or amount of the Company's future cashflows is expected to change as a result of the contract;
|
-
|
It is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods that will be transferred to the customer.
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
(p) Segment reporting
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
•
|
Specifying that an entity's right to defer settlement must exist at the end of the reporting period;
|
•
|
Clarifying that classification is unaffected by management's intentions or expectations about whether the entity will exercise its right to defer settlement;
|
•
|
Clarifying how lending conditions affect classification; and
|
•
|
Clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments.
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
The Company has receivables due from the Argentinean government for value-added taxes. Significant estimates and judgments are involved in the assessment of recoverability of these receivables. Changes in management's impairment assumptions may result in an additional impairment provision, or a reduction to any previously recorded impairment provision, with the impact recorded in profit or loss.
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
December 31, 2020
|
December 31, 2019
| |||||
$'000
|
$'000
| |||||
Gold held on carbon
|
$
|
1,421
|
$
|
1,603
| ||
Silver and gold concentrate
|
-
|
157
| ||||
Material stockpiles
|
-
|
-
| ||||
Materials and supplies
|
1,868
|
1,446
| ||||
$
|
3,289
|
$
|
3,206
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Mining assets
|
Surface rights acquired
|
Total
| ||||
$'000
|
$'000
|
$'000
| ||||
Cost
| ||||||
Balance - January 1, 2019
|
$
|
13,425
|
$
|
5,032
|
$
|
18,457
|
Reverse acquisition (note 25)
|
6,830
|
1,427
|
8,257
| |||
Additions
|
2,926
|
-
|
2,926
| |||
Balance - December 31, 2019
|
$
|
23,181
|
$
|
6,459
|
$
|
29,640
|
Additions
|
942
|
-
|
942
| |||
Balance - December 31, 2020
|
$
|
24,123
|
$
|
6,459
|
$
|
30,582
|
Amortization
| ||||||
Balance - January 1, 2019
|
$
|
7,823
|
$
|
908
|
$
|
8,731
|
Change for the year
|
3,456
|
-
|
3,456
| |||
Impairment
|
1,996
|
-
|
1,996
| |||
Balance - December 31, 2019
|
$
|
13,275
|
$
|
908
|
$
|
14,183
|
Charge for the year
|
477
|
-
|
477
| |||
Disposals
|
-
|
-
|
-
| |||
Balance - December 31, 2020
|
$
|
13,752
|
$ |
908
|
$
|
14,660
|
Net book value
| ||||||
December 31, 2019
|
$
|
9,906
|
$
|
5,551
|
$
|
15,457
|
December 31, 2020
|
$
|
10,371
|
$
|
5,551
|
$
|
15,922
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
In July 2007, the Company entered into an agreement (subsequently amended) with Fomicruz which provides that, in the event that a positive feasibility study is completed on the La Josefina property, a Joint Venture Corporation ('JV Corporation') would be formed by the Company and Fomicruz. The Company would own 81% of the joint venture company and Fomicruz would own the remaining 19%. Fomicruz has the option to earn up to a 49% participating interest in the JV Corporation by reimbursing the Company an equivalent amount, up to 49%, of the exploration investment made by the Company. The Company has the right to buy back any increase in Fomicruz's ownership interest in the JV Corporation at a purchase price of $0.2 million per each percentage interest owned by Fomicruz down to its initial ownership interest of 19%; the Company can also purchase 10% of the Fomicruz's initial 19% JV Corporation ownership interest by negotiating a purchase price with Fomicruz. Under the agreement, the Company has until the end of 2019 to complete cumulative exploration expenditures of $18 million and determine if it will enter into production on the property. As at December 31, 2018, the Company had incurred approximately $20 million and is in current discussions with Fomicruz to develop a plan for production. In October 2019, the agreement was extended until April 30, 2021 which period may be extended for an additional one-year term.
December 31, 2020
|
December 31,2019
| |||||
$'000
|
$'000
| |||||
Reclamation and remediation obligation - beginning of year
|
$
|
5,803
|
$
|
1,274
| ||
Reverse acquisition (note 25)
|
-
|
2,075
| ||||
Change in estimate
|
(677
|
)
|
2,419
| |||
Accretion expense
|
13
|
35
| ||||
Reclamation and remediation obligation - end of year
|
$
|
5,139
|
$
|
5,803
|
Fomicruz Agreement
|
Minera Aquiline Argentina
|
Total
| ||||
$'000
|
$'000
|
$'000
| ||||
Balance - January 1, 2019
|
$
|
3,288
|
$
|
13,187
|
$
|
16,475
|
Amortization
|
(100)
|
-
|
(100)
| |||
Exchange differences
|
-
|
622
|
622
| |||
Balance - December 31, 2019
|
$
|
3,188
|
$
|
13,809
|
$
|
16,997
|
Amortization
|
(100)
|
-
|
(100)
| |||
Exchange differences
|
-
|
298
|
298
| |||
Balance - December 31, 2020
|
$
|
3,088
|
$
|
14,107
|
$
|
17,195
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Fomicruz Agreement
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Plant
|
Buildings
|
Vehicles and equipment
|
Improvements and advances
|
Total
| ||||||||||||||||
$'000
|
$'000
|
$'000
|
$'000
|
$'000
| ||||||||||||||||
Cost
| ||||||||||||||||||||
Balance - January 1, 2019
|
$
|
12,945
|
$
|
823
|
$
|
22,004
|
$
|
673
|
$
|
36,445
| ||||||||||
Reverse acquisition (note 25)
|
2,178
|
1,156
|
1,233
|
-
|
4,567
| |||||||||||||||
Additions
|
203
|
-
|
244
|
330
|
777
| |||||||||||||||
Disposals
|
-
|
-
|
(560
|
)
|
(48
|
)
|
(608
|
)
| ||||||||||||
Transfers
|
-
|
-
|
103
|
(103
|
)
|
-
| ||||||||||||||
Balance - December 31, 2019
|
$
|
15,326
|
$
|
1,979
|
$
|
23,024
|
$
|
852
|
$
|
41,181
| ||||||||||
Additions
|
114
|
-
|
260
|
602
|
976
| |||||||||||||||
Disposals
|
-
|
-
|
(14
|
)
|
(415
|
)
|
(429
|
)
| ||||||||||||
Balance - December 31, 2020
|
$
|
15,440
|
$
|
1,979
|
$
|
23,270
|
$
|
1,039
|
$
|
41,728
| ||||||||||
Accumulated depreciation
| ||||||||||||||||||||
Balance - January 1, 2019
|
$
|
12,648
|
$
|
125
|
$
|
10,164
|
$
|
-
|
$
|
22,937
| ||||||||||
Disposals
|
-
|
-
|
(419
|
)
|
-
|
(419
|
)
| |||||||||||||
Depreciation for the year
|
482
|
76
|
2,470
|
-
|
3,028
| |||||||||||||||
Balance - December 31, 2019
|
$
|
13,130
|
$
|
201
|
$
|
12,215
|
$
|
-
|
$
|
25,546
| ||||||||||
Disposals
|
-
|
-
|
(12
|
)
|
-
|
(12
|
)
| |||||||||||||
Depreciation for the year
|
272
|
161
|
2,528
|
-
|
2,961
| |||||||||||||||
Balance - December 31, 2020
|
$
|
13,402
|
$
|
362
|
$
|
14,731
|
$
|
-
|
$
|
28,495
| ||||||||||
Net book value
| ||||||||||||||||||||
December 31, 2019
|
$
|
2,196
|
$
|
1,778
|
$
|
10,809
|
$
|
852
|
$
|
15,635
| ||||||||||
December 31, 2020
|
$
|
2,038
|
$
|
1,617
|
$
|
8,539
|
$
|
1,039
|
$
|
13,233
|
December 31,
|
December 31,
| ||||
2020
|
2019
| ||||
$'000
|
$'000
| ||||
Receivable from sale
| $ |
156
|
$ |
150 | |
Recoverable value added tax ('VAT')
|
1,217
|
880
| |||
Other receivables
|
668
|
486
| |||
Total
| $ |
2,041
| $ |
1,516
|
December 31,
|
December 31,
| ||||
2020
|
2019
| ||||
$'000
|
$'000
| ||||
Recoverable value added tax ('VAT')
| $ |
722
| $ |
1,226
| |
Other receivables
|
2,822
|
2,588
| |||
Total
| $ |
3,544
| $ |
3,814
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
December 31,
|
December 31,
| |||||
2020
|
2019
| |||||
$'000
|
$'000
| |||||
Trade accounts payable and accrued liabilities
|
$
|
2,510
|
$
|
5,102
| ||
Income tax
|
-
|
-
| ||||
Other accruals
|
1,874
|
890
| ||||
Accounts payable to related parties (note 20)
|
144
|
6,717
| ||||
Total
|
$
|
4,528
|
$
|
12,709
|
December 31,
|
December 31,
| |||||
2020
|
2019
| |||||
$'000
|
$'000
| |||||
Current portion of long-term debt(note 17)
|
$
|
340
|
$
|
200
| ||
Leases payable
|
23
|
134
| ||||
Loans payable
|
-
|
-
| ||||
Total
|
$
|
363
|
$
|
334
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
December 31,
|
December 31,
| |||
2020
|
2019
| |||
$'000
|
$'000
| |||
Loan to related party secured by a letter of guarantee from the Company, at 5% interest per annum, due 2022 (note 20) (1) |
$
|
13,961
|
$
|
7,908
|
Loan to related party secured by assets of the Company payable 5.75% interest per annum, due 2022
|
448
|
512
| ||
Acquired in reverse acquisition. Unsecured loan payable to related party at 8% interest per annum, due 2022 (note 20 and 25)
|
-
|
990
| ||
Acquired in reverse acquisition. Unsecured loan payable to related party at 8% interest per annum, due 2021 (note 20 and 25)
|
-
|
826
| ||
Acquired in reverse acquisition. Unsecured loan payable to related party at 7% interest per annum, due 2021 (note 20 and 25)
|
-
|
1,038
| ||
Accrued interest on debt
|
848
|
946
| ||
$
|
15,257
|
$
|
12,220
| |
Less current portion
|
(340
|
)
|
(200
|
)
|
$
|
14,917
|
$
|
12,020
|
(1)
|
On November 16, 2020, the maturity of the loan was extended from March 31, 2021 to December 31, 2022. All other terms of the loan remain unchanged.
|
Year ending December 31,
| |
2021
|
340
|
2022
|
14,917
|
December 31,
|
December 31,
|
December 31,
| ||||||||
2020
|
2019
|
2018
| ||||||||
Net loss
|
$
|
(4,381
|
)
|
$
|
(12,354
|
)
|
$
|
(17,590
|
)
| |
Weighted average number of common shares outstanding - basic and diluted
|
325,483,780
|
282,306,312
|
254,387,482
| |||||||
Net loss per share - basic and diluted
|
$
|
(0.013
|
)
|
$
|
(0.044
|
)
|
$
|
(0.069
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Number of common
|
Amount
| ||||
share outstanding
|
$'000
| ||||
Balance at January 1, 2019
|
254,355,192
|
$
|
301
| ||
Share issued in reverse acquisition (note 25)
|
63,588,798
|
2,287
| |||
Balance at December 31, 2019
|
317,943,990
|
$
|
2,588
| ||
Shares issued to settle debts
|
45,241,388
|
4,749
| |||
Share repurchased
|
(155,000
|
)
|
(17
|
)
| |
Balance at December 31, 2020
|
363,030,378
|
$
|
7,320
| ||
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Year ended December 31, 2020
|
Year ended December 31, 2019
| |||||||||||
Number of options
|
Weighted Average Price (CAD)
|
Number of options
|
Weighted Average Price (CAD)
| |||||||||
Balance, beginning of year
|
7,650,000
|
$
|
0.065
|
1,706,830
|
$
|
13.896
| ||||||
Granted
|
9,600,000
|
0.160
|
7,650,000
|
0.065
| ||||||||
Cancelled
|
-
|
-
|
(1,706,830
|
)
|
(13.896
|
)
| ||||||
Balance, end of year
|
17,250,000
|
$
|
0.118
|
7,650,000
|
$
|
0.065
|
Exercise price (CAD)
|
Options vested
|
Options unvested
|
Total outstanding
|
Remaining contractual life (years)
|
Expiry date
|
$0.065
|
7,650,000
|
-
|
7,650,000
|
3.73
|
September 25, 2024
|
$0.160
|
-
|
9,600,000
|
9,600,000
|
4.62
|
August 13, 2025
|
7,650,000
|
9,600,000
|
17,250,000
|
4.23
|
Discount rate
|
1.46%
|
Expected volatility
|
253.14%
|
Expected life (years)
|
5
|
Expected dividend yield
|
0%
|
Forfeiture rate
|
0%
|
Stock price
|
CAD$ 0.06
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Discount rate
|
0.35%
|
Expected volatility
|
172.95%
|
Expected life (years)
|
5
|
Expected dividend yield
|
0%
|
Forfeiture rate
|
0%
|
Stock price
|
CAD$ 0.15
|
Name and Principal Position
|
Remuneration, fees or interest expense
|
Loans or Advances
|
Remuneration, fees, or interest payments
|
Loan payments
|
Included in Accounts Payable
|
Included in Loan Payable and Long-term debt
| |
Year ended December 31,
|
As at December 31, 2020
and 2019
| ||||||
$'000
|
$'000
|
$'000
|
$'000
|
$'000
|
$'000
| ||
A company controlled by a director1
- admin, office, and interest expenses
|
2020
|
262
|
-
|
-
|
6,636
|
-
|
-
|
2019
|
-
|
-
|
-
|
-
|
6,374
|
-
| |
2018
|
-
|
-
|
-
|
-
| |||
A company controlled by a director
- admin, office, and interest expenses
|
2020
|
703
|
6,053
|
212
|
-
|
126
|
14,808
|
2019
|
346
|
7,908
|
33
|
-
|
227
|
8,163
| |
2018
|
66
|
-
|
-
|
-
| |||
Directors
- salaries and wages
|
2020
|
394
|
-
|
492
|
-
|
18
|
-
|
2019
|
337
|
-
|
317
|
-
|
116
|
-
| |
2018
|
293
|
-
|
-
|
-
| |||
Director1
-loans
|
2020
|
-
|
532
|
962
|
3,270
|
-
|
-
|
2019
|
-
|
347
|
-
|
-
|
-
|
3,545
| |
2018
|
-
|
-
|
-
|
-
| |||
1 Balances owed to related parties were acquired as part of the reverse acquisition (note 25)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Year ended December 31,
| ||||||
2020
|
2019
|
2018
| ||||
Salaries and benefits
|
$
|
820
|
$
|
375
|
$
|
365
|
Director's fees
|
71
|
30
|
48
| |||
Share-based compensation
|
230
|
51
|
190
| |||
Other compensation, including short-term benefits
|
-
|
-
|
173
| |||
$
|
1,121
|
$
|
456
|
$
|
776
|
Year ended December 31,
| ||||||
2020
|
2019
|
2018
| ||||
$'000
|
$'000
|
$'000
| ||||
General and administrative
|
$
|
2,353
|
$
|
4,175
|
$
|
3,489
|
Argentina statutory taxes
|
654
|
641
|
581
| |||
Professional fees
|
986
|
1,566
|
863
| |||
Operating leases
|
132
|
130
|
89
| |||
Directors' remuneration
|
244
|
259
|
257
| |||
Loss (gain) on sale of property, plant and equipment
|
194
|
(76)
|
(46)
| |||
Depreciation of property, plant and equipment
|
2,961
|
3,028
|
7,346
| |||
Depreciation allocated to inventory
|
(2,605)
|
(2,501)
|
(7,087)
| |||
Depreciation of mineral properties
|
477
|
3,456
|
3,069
| |||
Amortization of mining rights
|
100
|
100
|
100
| |||
Impairment of assets
|
-
|
-
|
2,260
| |||
Consulting fees
|
115
|
18
|
26
| |||
Transaction taxes expense (income)
|
-
|
248
|
4
| |||
Total
|
$
|
5,611
|
$
|
11,044
|
$ |
10,951
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
•
|
Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
•
|
Level 2: inputs, other than quoted prices, that are observable, either directly or indirectly. Level 2 valuations are based on inputs, including quoted forward prices for commodities, market interest rates, and volatility factors, which can be observed or corroborated in the marketplace.
|
•
|
Level 3: inputs are less observable, unavoidable or where the observable data does not support the majority of the instruments' fair value.
|
December 31, 2020
|
December 31, 2019
| ||||||||||||||
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
| ||||||||||||
$'000
|
$'000
|
$'000
|
$'000
| ||||||||||||
Financial assets
| |||||||||||||||
Amortized cost
| |||||||||||||||
Cash
|
819
|
819
|
685
|
685
| |||||||||||
Receivables and other receivable ¹
|
3,646
|
3,646
|
3,224
|
3,224
| |||||||||||
Fair value through other comprehensive income
| |||||||||||||||
Other financial assets (Level 1)
|
16
|
16
|
334
|
334
| |||||||||||
Financial liabilities
| |||||||||||||||
Amortized cost
| |||||||||||||||
Bank indebtedness
|
9,636
|
9,636
|
14,989
|
14,989
| |||||||||||
Accounts payable and accrued liabilities
|
4,528
|
4,528
|
12,709
|
12,709
| |||||||||||
Loan payable and current portion of long-term debt
|
363
|
363
|
334
|
334
| |||||||||||
Long-term debt
|
14,917
|
14,917
|
13,026
|
12,020
| |||||||||||
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
CAD
|
AR$
|
Euro
| ||||
Cash
|
$
|
13
|
$
|
641
|
$
|
3
|
Other working capital (deficit) items - net
|
(190
|
)
|
(2,574
|
)
|
(340
|
)
|
Non-current financial assets
|
-
|
638
|
-
| |||
Non-current financial liabilities
|
-
|
-
|
(109
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As of December 31, 2020
|
Payments Due by Period
| ||||
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
| |
Bank indebtedness
|
$9,636
|
$9,636
|
-
|
-
|
-
|
Accounts payable and accrued liabilities
|
4,384
|
4,384
|
-
|
-
|
-
|
Accounts payable with related parties
|
144
|
144
|
-
|
-
|
-
|
Loan payable and current portion of long-term debt
|
363
|
363
|
-
|
-
|
-
|
Long-term debt
|
109
|
-
|
109
|
-
|
-
|
Long-term debt with related parties
|
14,808
|
-
|
14,808
|
-
|
-
|
Reclamation and remediation obligations
|
5,139
|
-
|
-
|
-
|
5,139
|
Other long-term payables
|
57
|
-
|
57
|
-
|
-
|
Total
|
$34,640
|
$14,527
|
$14,974
|
-
|
$5,139
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
For the year ended December 31, 2020
| |||||||||||||||||||||||
Argentina
| |||||||||||||||||||||||
Lomada Project
|
Cap- Oeste Project
|
Calcatreu Project
|
Martha and La Josefina Projects
|
Argentina Uruguay and Chile
|
UK
|
North America
|
Total
| ||||||||||||||||
Revenue
|
$
|
6,482
|
$
|
12,417
|
$
|
-
|
$
|
950
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
19,849
| |||||||
Cost of sales
|
(4,391
|
)
|
(6,589
|
)
|
-
|
(2,267
|
)
|
-
|
-
|
-
|
(13,247
|
)
| |||||||||||
Gross profit (loss)
|
$
|
2,091
|
$
|
5,828
|
$
|
-
|
$
|
(1,317
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
6,602
| ||||||
Operating expense
| |||||||||||||||||||||||
Exploration expense
|
$
|
-
|
$
|
-
|
$
|
(884
|
)
|
$
|
(83
|
)
|
$
|
(1,336
|
)
|
$
|
-
|
$
|
-
|
$
|
(2,303
|
)
| |||
Administrative expenses
|
-
|
(495
|
)
|
(217
|
)
|
-
|
(2,946
|
)
|
(212
|
)
|
(1,285
|
)
|
(5,155
|
)
| |||||||||
Depreciation expense
|
-
|
-
|
(18
|
)
|
-
|
(338
|
)
|
(100
|
)
|
-
|
(456
|
)
| |||||||||||
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
-
|
(382
|
)
|
(382
|
)
| |||||||||||||
Interest expense
|
-
|
-
|
(1
|
)
|
-
|
(318
|
)
|
(610
|
)
|
(1,171
|
)
|
(2,100
|
)
| ||||||||||
Total operating expense
|
$
|
-
|
$
|
(495
|
)
|
$
|
(1,120
|
)
|
$
|
(83
|
)
|
$
|
(4,938
|
)
|
$
|
(922
|
)
|
$
|
(2,838
|
)
|
$
|
(10,396
|
)
|
Other income/(expense)
| |||||||||||||||||||||||
Interest income
|
$
|
-
|
$
|
-
|
$
|
1
|
$
|
-
|
$
|
124
|
$
|
-
|
$
|
-
|
$
|
125
| |||||||
Gain/(loss) on foreign exchange
|
-
|
-
|
713
|
-
|
(1,159
|
)
|
(369
|
)
|
30
|
(785
|
)
| ||||||||||||
Accretion expense
|
(6
|
)
|
(3
|
)
|
-
|
(4
|
)
|
-
|
-
|
-
|
(13
|
)
| |||||||||||
Other expenses
|
-
|
-
|
(297
|
)
|
-
|
2,452
|
-
|
-
|
2,155
| ||||||||||||||
Total other income/(expense)
|
$
|
(6
|
)
|
$
|
(3
|
)
|
$
|
417
|
$
|
(4
|
)
|
$
|
1,417
|
$
|
(369
|
)
|
$
|
30
|
$
|
1,482
| |||
Income/(loss) - before income tax
|
$
|
2,085
|
$
|
5,330
|
$
|
(703
|
)
|
$
|
(1,404
|
)
|
$
|
(3,521
|
)
|
$
|
(1,291
|
)
|
$
|
(2,808
|
)
|
$
|
(2,312
|
)
| |
Income tax/(benefit)
|
-
|
-
|
138
|
-
|
(2,207
|
)
|
-
|
-
|
(2,069
|
)
| |||||||||||||
Net income/(loss)
|
$
|
2,085
|
$
|
5,330
|
$
|
(565
|
)
|
$
|
(1,404
|
)
|
$
|
(5,728
|
)
|
$
|
(1,291
|
) |
$
|
(2,808
|
)
|
$
|
(4,381
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
For the year ended December 31, 2019
| ||||||||||||||||||||||||
Argentina
| ||||||||||||||||||||||||
Lomada Project
|
Cap- Oeste Project
|
Calcatreu Project
|
Martha and La Josefina Projects
|
Argentina Uruguay and Chile
|
UK
|
North America
|
Total
| |||||||||||||||||
Revenue
|
$
|
4,750
|
$
|
14,903
|
$
|
-
|
$
|
2,285
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
21,938
| ||||||||
Cost of sales
|
(3,765
|
)
|
(11,828
|
)
|
-
|
(1,545
|
)
|
-
|
-
|
-
|
(17,138
|
)
| ||||||||||||
Gross profit (loss)
|
$
|
985
|
$
|
3,075
|
$
|
-
|
$
|
740
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
4,800
| ||||||||
Operating expense
| ||||||||||||||||||||||||
Exploration expense
|
$
|
-
|
$
|
-
|
$
|
(1,300
|
)
|
$
|
(321
|
)
|
$
|
(987
|
)
|
$
|
-
|
$
|
-
|
$
|
(2,608
|
)
| ||||
Administrative expenses
|
(2,860
|
)
|
(596
|
)
|
(279
|
)
|
(871
|
)
|
(4,232
|
)
|
(1,433
|
)
|
(307
|
)
|
(10,578
|
)
| ||||||||
Depreciation expense
|
-
|
-
|
(17
|
)
|
(115
|
)
|
(234
|
)
|
(100
|
)
|
-
|
(466
|
)
| |||||||||||
Impairment of mineral properties
|
-
|
-
|
-
|
-
|
-
|
(1,996
|
)
|
- |
(1,996 |
) | ||||||||||||||
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
(40
|
)
|
(87
|
)
|
(127
|
)
| |||||||||||||
Interest expense
|
-
|
-
|
-
|
-
|
(765
|
)
|
(782
|
)
|
(584
|
)
|
(2,131
|
)
| ||||||||||||
Total operating expense
|
$
|
(2,860
|
)
|
$
|
(596
|
)
|
$
|
(1,596
|
)
|
$
|
(1,307
|
)
|
$
|
(6,218
|
)
|
$
|
(4,351
|
)
|
$
|
(978
|
)
|
$
|
(17,906
|
)
|
Other income/(expense)
| ||||||||||||||||||||||||
Interest income
|
$
|
-
|
$
|
-
|
$
|
34
|
$
|
-
|
$
|
157
|
$
|
-
|
$
|
-
|
$
|
191
| ||||||||
Gain/(loss) on foreign exchange
|
-
|
-
|
(10
|
)
|
1,714
|
(1,082
|
)
|
(467
|
)
|
326
|
481
| |||||||||||||
Accretion expense
|
(7
|
)
|
(12
|
)
|
-
|
(16
|
)
|
-
|
-
|
-
|
(35
|
)
| ||||||||||||
Total other income/(expense)
|
$
|
(7
|
)
|
$
|
(12
|
)
|
$
|
24
|
$
|
1,698
|
$
|
(925
|
)
|
$
|
(467
|
)
|
$
|
326
|
$
|
637
| ||||
Income/(loss) - before income tax
|
$
|
(1,882
|
)
|
$
|
2,467
|
$
|
(1,572
|
)
|
$
|
1,131
|
$
|
(7,143
|
)
|
$
|
(4,818
|
)
|
$
|
(652
|
)
|
$
|
(12,469
|
)
| ||
Income tax/(benefit)
|
-
|
-
|
(869
|
)
|
(2,030
|
)
|
3,014
|
-
|
-
|
115
| ||||||||||||||
Net income/(loss)
|
$
|
(1,882
|
)
|
$
|
2,467
|
$
|
(2,441
|
)
|
$
|
(899
|
)
|
$
|
(4,129
|
)
|
$
|
(4,818
|
)
|
$
|
(652
|
)
|
$
|
(12,354
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
For the year ended December 31, 2018
| ||||||||||||||||||
Argentina
| ||||||||||||||||||
Lomada Project
|
Cap- Oeste Project
|
COSE Project
|
Argentina Uruguay and Chile
|
UK
|
Total
| |||||||||||||
Revenue
|
$
|
-
|
$
|
48,089
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
48,089
| ||||||
Cost of sales
|
(1,666
|
)
|
(42,996
|
)
|
-
|
-
|
-
|
(44,662
|
)
| |||||||||
Gross profit (loss)
|
$
|
(1,666
|
)
|
$
|
5,093
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
3,427
| |||||
Operating expense
| ||||||||||||||||||
Exploration expense
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(2,744
|
)
|
$
|
-
|
$
|
(2,744
|
)
| ||||
Administrative expenses
|
(681
|
)
|
(2,388
|
)
|
-
|
(6,890
|
)
|
(992
|
)
|
(10,951
|
)
| |||||||
Share-based payments
|
-
|
-
|
-
|
-
|
(190
|
)
|
(190
|
)
| ||||||||||
Interest expense
|
-
|
-
|
-
|
(977
|
)
|
(390
|
)
|
(1,367
|
)
| |||||||||
Total operating expense
|
$
|
(681
|
)
|
$
|
(2,388
|
)
|
$
|
-
|
$
|
(10,611
|
)
|
$
|
(1,572
|
)
|
$
|
(15,252
|
)
| |
Other income/(expense)
| ||||||||||||||||||
Interest income
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
122
|
$
|
-
|
$
|
122
| ||||||
Gain/(loss) on foreign exchange
|
-
|
-
|
-
|
(13,817
|
)
|
(587
|
)
|
(14,404
|
)
| |||||||||
Gain on hyperinflationary net monetary position
|
-
|
-
|
-
|
4,448
|
-
|
4,448
| ||||||||||||
Other income
|
-
|
-
|
1,500
|
-
|
-
|
1,500
| ||||||||||||
Total other income/(expense)
|
$
|
-
|
$
|
-
|
$
|
1,500
|
$
|
(9,247
|
)
|
$
|
(587
|
)
|
$
|
(8,334
|
)
| |||
Income/(loss) - before income tax
|
$
|
(2,347
|
)
|
$
|
2,705
|
$
|
1,500
|
$
|
(19,858
|
)
|
$
|
(2,159
|
)
|
$
|
(20,159
|
)
| ||
Income tax/(benefit)
|
-
|
-
|
-
|
2,569
|
2,569
| |||||||||||||
Net income/(loss)
|
$
|
(2,347
|
)
|
$
|
2,705
|
$
|
1,500
|
$
|
(17,289
|
)
|
$
|
(2,159
|
)
|
$
|
(17,590
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Total Assets
|
Total liabilities
| |||||||
December 31, 2020
|
December 31, 2019
|
December 31, 2020
|
December 31, 2019
| |||||
$'000
|
$'000
|
$'000
|
$'000
| |||||
Argentina - Cap Oeste
|
$
|
14,585
|
$
|
16,081
|
$
|
1,880
|
$
|
2,629
|
Argentina - Lomada
|
4,616
|
4,267
|
3,808
|
1,979
| ||||
Argentina - Calcatreu
|
15,343
|
18,036
|
490
|
1,591
| ||||
Argentina - Martha & La Josefina
|
12,704
|
14,220
|
2,298
|
8,466
| ||||
Argentina and Chile
|
8,553
|
7,308
|
5,355
|
5,977
| ||||
United Kingdom
|
122
|
176
|
15,678
|
20,240
| ||||
North America
|
4,145
|
4,406
|
9,154
|
9,824
| ||||
Total
|
$
|
60,068
|
$
|
64,494
|
$
|
38,663
|
$
|
50,706
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Preliminary
|
Adjustment
|
Final
| ||||||||||
$ ('000) | $ ('000) |
$ ('000)
| ||||||||||
Fair value of the Company's shares (1)
|
$
|
2,287
| $ |
- | $ |
2,287 | ||||||
Less net identifiable assets (liabilities) of the Company
| ||||||||||||
Cash
|
60
|
-
|
60
| |||||||||
Accounts receivable
|
1,183
|
-
|
1,183
| |||||||||
Prepaid expenses
|
14
|
-
|
14
| |||||||||
Inventory
|
906
|
7
|
913
| |||||||||
Mineral properties
|
7,865
|
391
|
8,256
| |||||||||
Property, plant and equipment
|
2,210
|
2,357
|
4,567
| |||||||||
Goodwill
|
5,715
|
(1,706
| ) |
4,009
| ||||||||
Performance bond
|
351
|
-
|
351
| |||||||||
Accounts payable and accrued liabilities
|
(8,725
|
)
|
-
|
(8,725
|
)
| |||||||
Bank indebtedness
|
(400
|
)
|
-
|
(400
|
)
| |||||||
Loan payable and current portion of long-term debt
|
(581
|
)
|
-
|
(581
|
)
| |||||||
Long-term debt
|
(2,062
|
)
|
-
|
(2,062
|
)
| |||||||
Accrued interest on debt
|
(550
|
)
|
-
|
(550
|
)
| |||||||
Reclamation and remediation obligations
|
(2,075
|
)
|
-
|
(2,075
|
)
| |||||||
Deferred tax liabilities
|
(1,624
|
)
|
(1,049
|
) |
(2,673
|
)
| ||||||
$
|
2,287
|
$
|
-
|
$
|
2,287
|
(1)
|
The fair value of 5,908,687 common shares issued to pre-reverse acquisition Hunt shareholders is $2,287 based on the fair value of $0.387 per common share (converted from GBP 0.310 closing stock price of Patagonia Gold Limited prior to the transaction on July 24, 2019).
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
December 31, 2020
|
December 31, 2019
|
December 31, 2018
| |||||||||
Current tax expense (benefit)
| |||||||||||
Current period | $ |
- | $ | 47 | $ | 803 | |||||
Deferred tax expense (benefit)
| |||||||||||
Current period
|
2,096
|
(350
|
)
|
(3,372
|
)
| ||||||
Prior period tax adjustments
|
(27
|
)
|
188
|
- | |||||||
Total income tax expense (benefit)
|
$
|
2,069
|
$
|
(115
|
)
|
$
|
(2,569
|
)
|
December 31, 2020
|
December 31, 2019
|
December 31, 2018
| |||||||||
Loss before tax |
$ | (2,312 |
) | $ | (12,469 |
) | $ | (20,159 | ) | ||
Statutory income tax rate | 25% | 25% | 19% | ||||||||
Expected income tax (benefit)
|
$
|
(578
|
)
|
$
|
(3,117
|
)
|
$
|
(3,830
|
)
| ||
Increase (decrease) resulting from:
| |||||||||||
Non-taxable items
|
2,005
|
118
|
1,281
| ||||||||
Change in unrecognized deferred tax assets
|
534
|
1,335
|
4,365
| ||||||||
Tax rate changes, tax rate differences
|
135
|
1,361
|
(1,012
|
)
| |||||||
Prior period tax adjustments
|
(27
|
)
|
188
|
(3,373
|
)
| ||||||
Total income tax expense (benefit)
|
$
|
2,069
|
$
|
(115
|
)
|
$
|
(2,569
|
)
|
December 31, 2020
|
December 31, 2019
| ||||
Deferred tax assets are attributable to the following:
| |||||
Property, plant and equipment
|
$
|
869
|
$
|
786
| |
Loss carryforwards
|
793
|
2,385
| |||
Other
|
2,898
|
1,428
| |||
Deferred tax assets
|
4,560
|
4,599
| |||
Set-off of tax
|
(4,560
|
)
|
(1,758
|
)
| |
Net deferred tax asset
|
$
|
-
|
$
|
2,841
|
December 31, 2020
|
December 31, 2019
| |||||
Deferred tax liabilities are attributable to the following:
| ||||||
Property, plant and equipment
|
$
|
(5,552
|
)
|
$
|
(4,263
|
)
|
Mineral properties
|
(1,741
|
)
|
(1,741
|
)
| ||
Long-term debt
|
(322
|
)
|
(322
|
)
| ||
Other
|
(968
|
)
|
(227
|
)
| ||
Deferred tax liabilities
|
(8,583
|
)
|
(6,553
|
)
| ||
Set-off of tax
|
4,560
|
1,758
| ||||
Net deferred tax liability
|
$
|
(4,023
|
)
|
$
|
(4,795
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Balance December 31, 2019
|
Recognized in net income (loss)
|
Acquired in a business combination
|
Balance December 31, 2020
| |||||||
Property, plant and equipment
|
$
|
786
|
$
|
83
|
$
|
-
|
$
|
869
| ||
Loss carryforwards
|
2,385
|
(1,592
|
)
|
-
|
793
| |||||
Other
|
1,428
|
1,470
|
-
|
2,898
| ||||||
Property, plant and equipment
|
(4,263
|
)
|
(1,289
|
)
|
-
|
(5,552
|
)
| |||
Mineral properties
|
(1,741
|
)
|
-
|
-
|
(1,741
|
)
| ||||
Long-term debt
|
(322
|
)
|
-
|
-
|
(322
|
)
| ||||
Other
|
(227
|
)
|
(741
|
)
|
-
|
(968
|
)
| |||
$
|
(1,954
|
)
|
$
|
(2,069
|
)
|
$
|
-
|
$
|
(4,023
|
)
|
Balance December 31, 2018
|
Recognized in net income (loss)
|
Acquired in a business combination
|
Balance December 31, 2019
| ||||||
Property, plant and equipment
|
$
|
580
|
$
|
206
|
$
|
-
|
$
|
786
| |
Loss carryforwards
|
720
|
1,665
|
-
|
2,385
| |||||
Other
|
333
|
1,095
|
-
|
1,428
| |||||
Property, plant and equipment
|
-
|
(3,870
|
)
|
(393
|
)
|
(4,263
|
)
| ||
Mineral properties
|
-
|
-
|
(1,741
|
)
|
(1,741
|
)
| |||
Long-term debt
|
-
|
-
|
(322
|
)
|
(322
|
)
| |||
Other
|
(1,075
|
)
|
1,065
|
(217
|
)
|
(227
|
)
| ||
$
|
558
|
$
|
161
|
$
|
(2,673
|
)
|
$
|
(1,954
|
)
|
December 31, 2020
|
December 31, 2019
| |
Deductible temporary differences
|
103,894
|
102,519
|
Tax losses
|
24,204
|
19,779
|
128,098
|
122,298
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As reported
US GAAP
|
Adjustment for final PPA (e)
|
Adjusted US GAAP
|
Adjustment reference
|
As restated
IFRS
| ||||||||||||||||||||
$'000
| ||||||||||||||||||||||||
$'000 | $'000 | $'000 |
(a) | (b) |
(c) | (d) | $ ('000) | |||||||||||||||||
Current assets
| ||||||||||||||||||||||||
Cash
|
$
|
685
|
$
|
-
|
$
|
685
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
685
| ||||||||
Receivables
|
1,516
|
-
|
1,516
|
-
|
-
|
-
|
-
|
1,516
| ||||||||||||||||
Inventories
|
3,347
|
-
|
3,347
|
(141
|
)
|
-
|
-
|
-
|
3,206
| |||||||||||||||
Total current assets
|
5,548
|
-
|
5,548
|
(141
|
)
|
-
|
-
|
5,407
| ||||||||||||||||
Non-current assets
| ||||||||||||||||||||||||
Mineral properties
|
8,610
|
391
|
9,001
|
-
|
6,456
|
-
|
-
|
15,457
| ||||||||||||||||
Mining rights
|
16,997
|
-
|
16,997
|
-
|
-
|
-
|
-
|
16,997
| ||||||||||||||||
Property, plant and equipment
|
10,508
|
2,196
|
12,704
|
2,931
|
-
|
-
|
-
|
15,635
| ||||||||||||||||
Goodwill
|
4,379
|
(1,706
|
)
|
2,673
|
-
|
-
|
1,336
|
-
|
4,009
| |||||||||||||||
Other financial assets
|
334
|
-
|
334
|
-
|
-
|
-
|
-
|
334
| ||||||||||||||||
Deferred tax assets
|
4,599
|
-
|
4,599
|
(1,758
|
)
|
-
|
-
|
-
|
2,841
| |||||||||||||||
Other receivables
|
3,814
|
-
|
3,814
|
-
|
-
|
-
|
-
|
3,814
| ||||||||||||||||
Total non-current assets
|
49,241
|
881
|
50,122
|
1,173
|
6,456
|
1,336
|
-
|
59,087
| ||||||||||||||||
Total assets
|
$
|
54,789
|
$
|
881
|
$
|
55,670
|
$
|
1,032
|
$
|
6,456
|
$
|
1,336
|
$
|
-
|
$
|
64,494
| ||||||||
Current liabilities
| ||||||||||||||||||||||||
Bank indebtedness
|
$
|
14,989
|
$
|
-
|
$
|
14,989
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
14,989
| ||||||||
Accounts payable and accrued liabilities
|
5,992
|
-
|
5,992
|
-
|
-
|
-
|
-
|
5,992
| ||||||||||||||||
Accounts payable with related parties
|
6,717
|
-
|
6,717
|
-
|
-
|
-
|
-
|
6,717
| ||||||||||||||||
Loan payable and current portion long-term debt
|
334
|
-
|
334
|
-
|
-
|
-
|
-
|
334
| ||||||||||||||||
Total current liabilities
|
28,032
|
-
|
28,032
|
-
|
-
|
-
|
-
|
28,032
| ||||||||||||||||
Non-current liabilities
| ||||||||||||||||||||||||
Long-term debt
|
312
|
-
|
312
|
-
|
-
|
-
|
-
|
312
| ||||||||||||||||
Long-term debt with related parties
|
11,708
|
-
|
11,708
|
-
|
-
|
-
|
-
|
11,708
| ||||||||||||||||
Asset retirement obligation
|
2,812
|
-
|
2,812
|
-
|
-
|
(2,812
|
)
|
-
| ||||||||||||||||
Reclamation and remediation obligations
|
-
|
-
|
2,991
|
2,812
|
5,803
| |||||||||||||||||||
Deferred tax liabilities
|
2,693
|
1,050
|
3,743
|
1,052
|
-
|
-
|
-
|
4,795
| ||||||||||||||||
Other long-term payables
|
56
|
-
|
56
|
-
|
-
|
-
|
-
|
56
| ||||||||||||||||
Total non-current liabilities
|
17,581
|
1,050
|
18,631
|
1,052
|
-
|
2,991
|
-
|
22,674
| ||||||||||||||||
Total liabilities
|
45,613
|
1,050
|
46,663
|
1,052
|
-
|
2,991
|
-
|
50,706
| ||||||||||||||||
Shareholders' equity
| ||||||||||||||||||||||||
Capital stock
|
2,588
|
-
|
2,588
|
-
|
-
|
-
|
-
|
2,588
| ||||||||||||||||
Additional paid in capital
|
181,676
|
-
|
181,676
|
-
|
-
|
-
|
(181,676
|
)
|
-
| |||||||||||||||
Contributed surplus
|
- |
- |
- |
- |
- |
- |
180,269
|
180,269
| ||||||||||||||||
Accumulated deficit
|
(174,270
|
)
|
(169
|
)
|
(174,439
|
)
|
10
|
6,687
|
(1,655
|
)
|
(16,738
|
)
|
(186,135
|
)
| ||||||||||
Accumulated other comprehensive income (loss)
|
(575
|
)
|
-
|
(575
|
)
|
-
|
-
|
-
|
18,961
|
18,386
| ||||||||||||||
Total shareholders' equity attributable to the parent:
|
9,419
|
(169
|
)
|
9,250
|
10
|
6,687
|
(1,655
|
)
|
816
|
15,108
| ||||||||||||||
Non-controlling interest
|
(243
|
)
|
-
|
(243
|
)
|
(30
|
)
|
(231
|
)
|
-
|
(816
|
)
|
(1,320
|
)
| ||||||||||
Total shareholders' equity
|
9,176
|
(169
|
)
|
9,007
|
(20
|
)
|
6,456
|
(1,655
|
)
|
-
|
13,788
| |||||||||||||
Total liabilities and shareholders' equity
|
$
|
54,789
|
$
|
881
|
$
|
55,670
|
$
|
1,032
|
$
|
6,456
|
$
|
1,336
|
$
|
-
|
$
|
64,494
| ||||||||
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As reported
US GAAP
|
Adjustment reference
|
As restated
IFRS
| ||||||||||||||
$'000
| ||||||||||||||||
$'000
|
(a) |
(b) |
(c) | (d) |
$'000
| |||||||||||
Revenue
|
$
|
47,441
|
$
|
648
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
48,089
| ||||
Cost of sales
|
(36,361
|
)
|
(8,301
|
)
|
-
|
-
|
-
|
(44,662
|
)
| |||||||
Gross profit
|
11,080
|
(7,653
|
)
|
-
|
-
|
-
|
3,427
| |||||||||
Operating income (expenses):
| ||||||||||||||||
Other operating income
|
1,505
|
-
|
-
|
-
|
(1,505
|
)
|
-
| |||||||||
Exploration expenses
|
(1,802
|
)
|
3
|
(367
|
)
|
(578
|
) |
-
|
(2,744
|
)
| ||||||
Administrative expenses
|
(6,017
|
)
|
(3,100
|
)
|
(1,834
|
)
|
-
|
-
|
(10,951
|
)
| ||||||
Share-based payments expense
|
(190
|
)
|
-
|
-
|
-
|
-
|
(190
|
)
| ||||||||
Interest expense
|
(1,665
|
)
|
298
|
-
|
-
|
-
|
(1,367
|
)
| ||||||||
Total operating expense:
|
(8,169
|
)
|
(2,799
|
)
|
(2,201
|
)
|
(578
|
) |
(1,505
|
)
|
(15,252
|
)
| ||||
Other income/(expenses)
| ||||||||||||||||
Interest income
|
142
|
(20
|
)
|
-
|
-
|
-
|
122
| |||||||||
Loss on foreign exchange
|
(12,761
|
)
|
(1,643
|
)
|
-
|
-
|
-
|
(14,404
|
)
| |||||||
Accretion expense
|
(578
|
)
|
-
|
-
|
578
|
-
|
-
| |||||||||
Gain on hyperinflationary net monetary position
|
-
|
4,448
|
-
|
-
|
-
|
4,448
| ||||||||||
Other income
|
-
|
(5
|
)
|
-
|
-
|
1,505
|
1,500
| |||||||||
Total other income/(expenses)
|
(13,197
|
)
|
2,780
|
-
|
578
|
1,505
|
(8,334
|
)
| ||||||||
Loss - before income taxes
|
(10,286
|
)
|
(7,672
|
)
|
(2,201
|
)
|
-
|
-
|
(20,159
|
)
| ||||||
Income tax benefit
|
2,440
|
129
|
-
|
-
|
-
|
2,569
| ||||||||||
Net loss
|
$
|
(7,846
|
)
|
$
|
(7,543
|
)
|
$
|
(2,201
|
)
|
$
|
-
|
$
|
-
|
$
|
(17,590
|
)
|
Attributable to non-controlling interest
|
(528
|
)
|
(538
|
)
|
(220
|
)
|
(58
|
)
|
-
|
(1,344
|
)
| |||||
Attributable to equity share owners of the parent
|
(7,318
|
)
|
(7,005
|
)
|
(1,981
|
)
|
58
|
-
|
(16,246
|
)
| ||||||
(7,846
|
)
|
(7,543
|
)
|
(2,201
|
)
|
-
|
-
|
(17,590
|
)
| |||||||
Other comprehensive income (loss) net of tax
| ||||||||||||||||
Change in fair value of investment
|
(13
|
)
|
-
|
-
|
-
|
-
|
(13
|
)
| ||||||||
Foreign currency translation adjustment
|
(2,824
|
)
|
9,836
|
-
|
-
|
-
|
7,012
| |||||||||
Total other comprehensive income (loss)
|
(2,837
|
)
|
9,836
|
-
|
-
|
-
|
6,999
| |||||||||
Total comprehensive income (loss)
|
$
|
(10,683
|
)
|
$
|
2,293
|
$
|
(2,201
|
)
|
$
|
-
|
$
|
-
|
$
|
(10,591
|
)
| |
Weighted average shares outstanding - basic and diluted
|
254,387,482
|
254,387,482
| ||||||||||||||
Net loss per share - basic and diluted
|
$
|
(0.031
|
)
|
$
|
(0.030
|
)
|
$
|
(0.008
|
)
|
$
|
-
|
$
|
-
|
$
|
(0.069
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As reported
US GAAP
|
Adjustment for final PPA (e)
|
Adjusted US GAAP
|
Adjustment reference
|
As restated
IFRS
| ||||||||||||||||
$'000
| ||||||||||||||||||||
$'000
|
$'000
|
$'000
| (a) | (b) | (c) |
$'000
| ||||||||||||||
Revenue
|
$
|
21,938
|
$
|
-
|
$
|
21,938
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
21,938
| ||||||
Cost of sales
|
(16,430
|
)
|
7
|
(16,423
|
)
|
(715
|
)
|
-
|
-
|
(17,138
|
)
| |||||||||
Gross profit
|
5,508
|
7
|
5,515
|
(715
|
)
|
-
|
-
|
4,800
| ||||||||||||
Operating income (expenses):
| ||||||||||||||||||||
Exploration expenses
|
(3,758
|
)
|
-
|
(3,758
|
)
|
-
|
1,150
|
-
|
(2,608
|
)
| ||||||||||
Administrative expenses
|
(7,262
|
)
|
(169
|
)
|
(7,431
|
)
|
(157
|
)
|
(3,456
|
)
|
-
|
(11,044
|
)
| |||||||
Impairment of mineral properties
|
(1,996
|
)
|
-
|
(1,996
|
)
|
-
|
-
|
-
|
(1,996
|
)
| ||||||||||
Share-based payments expense
|
(127
|
)
|
-
|
(127
|
)
|
-
|
-
|
-
|
(127
|
)
| ||||||||||
Interest expense
|
(2,131
|
)
|
-
|
(2,131
|
)
|
-
|
-
|
-
|
(2,131
|
)
| ||||||||||
Total operating expense:
|
(15,274
|
)
|
(169
|
)
|
(15,443
|
)
|
(157
|
)
|
(2,306
|
)
|
-
|
(17,906
|
)
| |||||||
Other income/(expenses)
| ||||||||||||||||||||
Interest income
|
191
|
-
|
191
|
-
|
-
|
-
|
191
| |||||||||||||
Gain/(loss) on foreign exchange
|
377
|
-
|
377
|
104
|
-
|
-
|
481
| |||||||||||||
Accretion expense
|
(179
|
)
|
-
|
(179
|
)
|
-
|
-
|
144
|
(35
|
)
| ||||||||||
Total other income/(expenses)
|
389
|
-
|
389
|
104
|
-
|
144
|
637
| |||||||||||||
Income (loss) - before income taxes
|
(9,377
|
)
|
(162
|
)
|
(9,539
|
)
|
(768
|
)
|
(2,306
|
)
|
144
|
(12,469
|
)
| |||||||
Income tax benefit (expense)
|
(298
|
)
|
-
|
(298
|
)
|
413
|
-
|
-
|
115
| |||||||||||
Net income (loss)
|
$
|
(9,675
|
)
|
$
|
(162
|
)
|
$
|
(9,837
|
)
|
$
|
(355
|
)
|
$
|
(2,306
|
)
|
$
|
144
|
$
|
(12,354
|
)
|
Attributable to non-controlling interest
|
(122
|
)
|
-
|
(122
|
)
|
(30
|
)
|
(231
|
)
|
-
|
(383
|
)
| ||||||||
Attributable to equity share owners of the parent
|
(9,553
|
)
|
(162
|
)
|
(9,715
|
)
|
(325
|
)
|
(2,075
|
)
|
144
|
(11,971
|
)
| |||||||
(9,675
|
)
|
(162
|
)
|
(9,837
|
)
|
(355
|
)
|
(2,306
|
)
|
144
|
(12,354
|
)
| ||||||||
Other comprehensive income (loss) net of tax
| ||||||||||||||||||||
Change in fair value of investment
|
(28
|
)
|
-
|
(28
|
)
|
-
|
-
|
(28
|
)
| |||||||||||
Foreign currency translation adjustment
|
(28
|
)
|
-
|
(28
|
)
|
402
|
-
|
-
|
374
| |||||||||||
Total other comprehensive income (loss)
|
(56
|
)
|
-
|
(56
|
)
|
402
|
-
|
-
|
346
| |||||||||||
Total comprehensive income (loss)
|
$
|
(9,731
|
)
|
$
|
(162
|
)
|
$
|
(9,893
|
)
|
$
|
47
|
$
|
(2,306
|
)
|
$
|
144
|
$
|
(12,008
|
)
| |
Weighted average shares outstanding - basic and diluted
|
282,306,312
|
-
|
282,306,312
|
-
|
-
|
-
|
282,306,312
| |||||||||||||
Net income (loss) per share - basic and diluted
|
$
|
(0.034
|
)
|
$
|
-
|
$
|
(0.035
|
)
|
$
|
-
|
$
|
(0.009
|
)
|
$
|
-
|
$
|
(0.044
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As reported US GAAP
|
Adjustments
|
As Restated IFRS
| ||||
Capital stock
|
$
|
31,868
|
$
|
18
|
$
|
31,886
|
Accumulated Deficit
|
(157,399
|
)
|
(604
|
)
|
(158,003
|
)
|
Contributed surplus
|
-
|
159,193
|
159,193
| |||
Accumulated other comprehensive income
|
2,318
|
(2,018
|
)
|
300
| ||
Additional paid in capital
|
149,982
|
(149,982
|
)
|
-
| ||
Total attributed to parent
|
$
|
26,769
|
$
|
6,607
|
$
|
33,376
|
Non-controlling interest
|
407
|
-
|
407
| |||
Total
|
$
|
27,176
|
$
|
6,607
|
$
|
33,783
|
As reported
US GAAP
|
January 1, 2018 Opening balance adjustments as per table above
|
As restated
IFRS
| |||||||||||||
Adjustment reference
| |||||||||||||||
(a) | (b) | (c) | (d) | ||||||||||||
Capital stock
|
$
|
301
|
$
|
18
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(18
|
)
|
$
|
301
|
Accumulated Deficit
|
(164,717
|
)
|
(604
|
)
|
(7,005
|
)
|
(1,981
|
)
|
58
|
85
|
(174,164
|
)
| |||
Contributed surplus
|
-
|
159,193
|
-
|
-
|
-
|
20,949
|
180,142
| ||||||||
Accumulated other comprehensive income
|
(519
|
)
|
(2,018
|
)
|
9,836
|
-
|
-
|
10,741
|
18,040
| ||||||
Additional paid in capital
|
181,549
|
(149,982
|
)
|
-
|
-
|
-
|
(31,567
|
)
|
-
| ||||||
Total attributed to parent
|
$
|
16,614
|
$
|
6,607
|
$
|
2,831
|
$
|
(1,981
|
)
|
$
|
58
|
$
|
190
|
$
|
24,319
|
Non-controlling interest
|
(121
|
)
|
-
|
(538
|
)
|
(220
|
)
|
(58
|
)
|
-
|
(937
|
)
| |||
Total
|
$
|
16,493
|
$
|
6,607
|
$
|
2,293
|
$
|
(2,201
|
)
|
$
|
-
|
$
|
190
|
$
|
23,382
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As reported
US GAAP
|
Adjustment
|
As restated
IFRS
| |||||||
Cash flow from operating activities
| |||||||||
Net loss
|
$
|
(7,846
|
)
|
$
|
(9,744
|
)
|
$
|
(17,590
|
)
|
Items not affecting cash
| |||||||||
Depreciation of property, plant and equipment
|
4,512
|
2,834
|
7,346
| ||||||
Depreciation of mineral properties
|
-
|
3,069
|
3,069
| ||||||
Amortization of mining rights
|
100
|
-
|
100
| ||||||
Net impairment of assets
|
690
|
1,570
|
2,260
| ||||||
Share based payment expense
|
190
|
-
|
190
| ||||||
Asset retirement obligation
|
(712
|
)
|
712
|
-
| |||||
Write-down of inventory
|
8,881
|
6,266
|
15,147
| ||||||
Accretion expense
|
578
|
(578
|
)
|
-
| |||||
Restatement for hyperinflation
|
-
|
(17,047
|
)
|
(17,047
|
)
| ||||
Deferred tax expense/(benefit)
|
(2,440
|
)
|
(129
|
)
|
(2,569
|
)
| |||
3,953
|
(13,047
|
)
|
(9,094
|
)
| |||||
Net change in non-cash working capital items
| |||||||||
(Increase)/decrease in receivables
|
3,841
|
(1
|
)
|
3,840
| |||||
(Increase)/decrease in deferred tax assets
|
1,548
|
(1,110
|
)
|
438
| |||||
(Increase)/decrease in inventory
|
6,932
|
(5,887
|
)
|
1,045
| |||||
Increase/(decrease) in accounts payable and accrued liabilities
|
(4,094
|
)
|
4,472
|
378
| |||||
Increase/(decrease) in other long-term payables
|
(82
|
)
|
82
|
-
| |||||
Increase/(decrease) in provision
|
-
|
(216
|
)
|
(216
|
)
| ||||
Increase/(decrease) in transaction taxes payable
|
(329
|
)
|
-
|
(329
|
)
| ||||
7,816
|
(2,660
|
)
|
5,156
| ||||||
Net cash provided by/(used in) operating activities
|
11,769
|
(15,707
|
)
|
(3,938
|
)
| ||||
Cash flows from investing activities
| |||||||||
Purchase of property, plant and equipment
|
(4,063
|
)
|
(247
|
)
|
(4,310
|
)
| |||
Purchase of mineral property
|
(698
|
)
|
(545
|
)
|
(1,243
|
)
| |||
Purchase of mining rights
|
(14,612
|
)
|
-
|
(14,612
|
)
| ||||
Proceeds from disposal of property, plant and equipment
|
7,515
|
(15
|
)
|
7,500
| |||||
Net cash used in investing activities
|
(11,858
|
)
|
(807
|
)
|
(12,665
|
)
| |||
Cash flow from financing activities
| |||||||||
Bank indebtedness (repayment)
|
7,877
|
1
|
7,878
| ||||||
Proceeds from loans
|
6,278
|
23,660
|
29,938
| ||||||
Repayment of loans
|
(18,625
|
)
|
(19,843
|
)
|
(38,468
|
)
| |||
Net cash provided by/(used in) financing activities
|
(4,470
|
)
|
3,818
|
(652
|
)
| ||||
Net increase/(decrease) in cash
|
(4,559
|
)
|
(12,696
|
)
|
(17,255
|
)
| |||
Effect of foreign exchange on cash
|
3,934
|
12,691
|
16,625
| ||||||
Cash, beginning of year
|
1,285
|
(1
|
)
|
1,284
| |||||
Cash, end of the year
|
$
|
660
|
$
|
(6
|
)
|
$
|
654
| ||
Taxes paid
|
(329
|
)
|
-
|
(329
|
)
| ||||
Interest paid
|
(634
|
)
|
(699
|
)
|
(1,333
|
)
| |||
Supplemental non-cash information
| |||||||||
Change in value of investments
|
(13
|
)
|
-
|
(13
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
As reported
US GAAP
|
Adjustment
|
As restated
IFRS
| |||||||
Cash flow from operating activities
| |||||||||
Net loss
|
$
|
(9,675
|
)
|
$
|
(2,679
|
)
|
$
|
(12,354
|
)
|
Items not affecting cash
| |||||||||
Depreciation of property, plant and equipment
|
1,844
|
1,184
|
3,028
| ||||||
Depreciation of mineral properties
|
-
|
3,456
|
3,456
| ||||||
Amortization of mining rights
|
100
|
-
|
100
| ||||||
Net impairment of assets
|
1,996
|
(1,996
|
)
|
-
| |||||
Share based payment expense
|
127
|
-
|
127
| ||||||
Asset retirement obligation
|
1,342
|
(1,342
|
)
|
-
| |||||
Provisions
|
-
|
2,419
|
2,419
| ||||||
Impairment of mineral properties
|
-
|
1,996
|
1,996
| ||||||
Write-down of inventory
|
2,368
|
-
|
2,368
| ||||||
Accretion expense
|
179
|
(144
|
)
|
35
| |||||
Deferred tax expense/(benefit)
|
298
|
(413
|
)
|
(115
|
)
| ||||
(1,421
|
)
|
2,481
|
1,060
| ||||||
Net change in non-cash working capital items
| |||||||||
(Increase)/decrease in receivables
|
3,863
|
1
|
3,864
| ||||||
(Increase)/decrease in deferred tax assets
|
1,787
|
6
|
1,793
| ||||||
(Increase)/decrease in inventory
|
1,477
|
(231
|
)
|
1,246
| |||||
(Increase)/decrease in other financial assets
|
32
|
(4
|
)
|
28
| |||||
Increase/(decrease) in accounts payable and accrued liabilities
|
(3,116
|
)
|
(8
|
)
|
(3,124
|
)
| |||
Increase/(decrease) in accounts payable and accrued liabilities with related parties
|
301
|
-
|
301
| ||||||
Increase/(decrease) in interest payable
|
-
|
(9
|
)
|
(9
|
)
| ||||
Increase/(decrease) in provision
|
-
|
(24
|
)
|
(24
|
)
| ||||
Increase/(decrease) in other long-term payables
|
(23
|
)
|
23
|
-
| |||||
Increase/(decrease) in transaction taxes payable
|
(126
|
)
|
-
|
(126
|
)
| ||||
4,195
|
(246
|
)
|
3,949
| ||||||
Net cash provided by/(used in) operating activities
|
2,774
|
2,235
|
5,009
| ||||||
Cash flows from investing activities
| |||||||||
Purchase of property, plant and equipment
|
(777
|
)
|
-
|
(777
|
)
| ||||
Purchase of mineral property
|
(216
|
)
|
(2,710
|
)
|
(2,926
|
)
| |||
Proceeds from disposal of property, plant and equipment
|
113
|
76
|
189
| ||||||
Net cash used in investing activities
|
(880
|
)
|
(2,634
|
)
|
(3,514
|
)
| |||
Cash flow from financing activities
| |||||||||
Bank indebtedness (repayment)
|
2,608
|
-
|
2,608
| ||||||
Proceeds from loans with related parties
|
8,515
|
-
|
8,515
| ||||||
Repayment of loans
|
(10,530
|
)
|
-
|
(10,530
|
)
| ||||
Net cash provided by/(used in) financing activities
|
593
|
-
|
593
| ||||||
Net increase/(decrease) in cash
|
2,487
|
(399
|
)
|
2,088
| |||||
Effect of foreign exchange on cash
|
(2,462
|
)
|
405
|
(2,057
|
)
| ||||
Cash, beginning of year
|
660
|
(6
|
)
|
654
| |||||
Cash, end of the year
|
$
|
685
|
$
|
-
|
$
|
685
| |||
Taxes paid
|
(126
|
)
|
-
|
(126
|
)
| ||||
Interest paid
|
(416
|
)
|
-
|
(416
|
)
| ||||
Supplemental non-cash information
| |||||||||
Change in value of investments
|
(28
|
)
|
-
|
(28
|
)
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
a)
|
Hyperinflationary economies
|
b)
|
Development and exploration costs
|
c)
|
Reclamation and remediation obligations
|
d)
|
Presentation differences
|
e)
|
Final purchase price allocation
|
Patagonia Gold Corp.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019 and 2018
(In thousands of U.S. dollars unless otherwise stated)
|
a)
|
As of February 2021, Cantomi Uruguay is no longer a related party as Carlos Miguens no longer has control of the Company.
| |
b) | On March 8, 2021, the Company received definitive environmental permits ('Permits') for both the development of its flagship Cap-Oeste Gold/Silver Project and the restart of its Lomada de Leiva ('Lomada') Gold Project. These Permits allow for the development and operation of mining operations in the mining friendly Santa Cruz Province in Argentina. | |
c) | On March 10, 2021, the Company completed a private placement offering and raised gross proceeds of $9.3 million through the issuance of 104,086,063 units of the Company at a price of $0.09 per unit. Each unit consisted of one common share of the Company and one common share purchase warrant ('Warrant'). Each Warrant entitles the holder thereof to purchase one common share at an exercise price of $0.13 until March 10, 2024. | |
In connection with the private placement, the Company paid $226 in cash commission and advisory fees to the Agents and issued 2,509,586 compensation options. Each compensation option is exercisable for one unit of the Company at a price of $0.09 per compensation option. Each unit consists of one common share of the Company and one Warrant. Each Warrant entitles the holder thereof to purchase one common share at an exercise price of $0.13 until March 10, 2024.
| ||
d) | On March 12, 2021, the Company exercised the option to acquire 100% interest in the Mina Angela property. In connection with the exercising of the option, the Company will pay the second earn-in payment of $250 and a final payment of $500 is expected to be paid within 30 days of the verification that legal restrictions preventing development of mining activity in the Chubut Province and at the Mina Angela property have been lifted in such a manner that Patagonia thereafter has the ability to perform exploration and exploitation mining activities on Mina Angela property. For more information, see note 7. | |
e) | On April 19, 2021, the Company entered into definitive agreements to acquire two projects in Argentina. Patagonia entered into a definitive option agreement dated April 15, 2021 (the 'Option Agreement') with Mirasol Resources Ltd. ('Mirasol') and Mirasol's wholly-owned subsidiary Australis S.A. ('Australis' and together with Mirasol, the 'Vendors'), which grants Patagonia an option to acquire a 75% undivided interest in and to Australis' rights and interest in the Homenaje project (the 'Homenaje Project') located in Santa Cruz Province, Argentina. Patagonia also entered into a definitive transfer agreement dated April 15, 2021 (the 'Transfer Agreement') with the Vendors, which grants Patagonia a 100% undivided interest in and to Australis' rights and interest in the Nico project (the 'Nico Project') located in Santa Cruz Province, Argentina. The Nico Project was previously explored by Mirasol, while the Homenaje Project, which is adjacent to two mining operations, holds targets that have yet to be drilled. | |
Pursuant to the Option Agreement, Patagonia has an option to earn a 75% interest in the Homenaje Project over six years upon achievement of the following (collectively, the 'Earn-In Obligations'): | ||
• |
an initial work program over six years of $2.55 million in exploration expenditures, including 2,500 meters of drilling, on the Homenaje Project;
| |
• | expenditures on exploration activities with respect to the Homenaje Project (the 'Exploration Expenditures') of a minimum of $0.4 million over the first 18-months; | |
• | following completion of the initial Exploration Expenditures and drilling obligations due within the first 30 months, Patagonia must complete a minimum of $0.4 million of Exploration Expenditures in any 12-month period, and a minimum of $0.2 million of Exploration Expenditures in any six-month period; and | |
• | a pre-feasibility study, prepared in accordance with NI 43-101, for a mineral resource of not less than 300,000 ounces of gold equivalent. | |
Upon Patagonia completing the Earn-In Obligations, Patagonia and the Vendors will hold 75% and 25%, respectively, in a joint venture company holding the Homenaje Project. If either party's equity interest is diluted below 10%, it will convert to a 2% NSR royalty. | ||
Pursuant to the terms of the Transfer Agreement, Patagonia has acquired the Vendors' interest in the Nico Project in exchange for a 1.5% NSR royalty. If, by the end of third-year, the Nico Project has not been operated as a producing mine, or Patagonia has not produced and shipped minerals in commercial quantities (excluding bulk sampling or pilot plant operations, if any) from the Nico Project for a period of 30 consecutive days, Mirasol will have the right to regain full ownership of the Nico Project at no cost. |
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Patagonia Gold Corp. published this content on 05 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2021 10:10:09 UTC.