CEO.CA Chairman's Briefing

Vancouver, British Columbia--(Newsfile Corp. - May 30, 2023) - Thor Explorations Ltd. (TSXV: THX) (AIM: THX) ("Thor Explorations", "Thor" or the "Company") is pleased to provide an operational and financial review for its Segilola Gold mine, located in Nigeria ("Segilola"), and for the Company's mineral exploration properties located in Nigeria and Senegal for the three months to March 31, 2023 ("Q1 2023" or the "Period").

The Company's Unaudited Consolidated Financial Statements together with the notes related thereto, as well as the Management's Discussion and Analysis for the three months ended March 31, 2023, are available on Thor Explorations' website at https://thorexpl.com/investors/financials/.

All figures are in US dollars ("US$") unless otherwise stated.

Operational Highlights

Segilola Production

• Gold production for the Period totaled 20,629 ounces ("oz")
  • Mill feed grade was 2.95 grammes per tonne ("g/t") gold with recovery at 94.1%
  • An increase in mining rates and the mining of higher grade ore zones is expected in Q2 2023
• The main operating units of the process plant continue to perform better than expected, with the plant operating above nameplate capacity

Segilola Near-Mine Exploration

• Identification of new high grade quartz vein system within 15 kilometers ("km") of Segilola, with multiple high grade drillhole intercepts including 1 meter ("m") at 310 g/t gold which equates to 10 oz of gold per tonne
  • Ongoing drilling will test both the strike length and depth potential of this system with additional drill results expected in Q2 2023
  Regional exploration is continuing with ongoing drilling programs, stream sediment sampling programs and soil/auger programs with drilling results also expected in Q2 2023.

Douta

• Mineral Resource Estimate ("MRE") at Douta supported by a total of 64,567 meters of drilling updated to a global resource of approximately 1.78 million oz of gold, an increase of 144% from its maiden resource.
  • Updated Douta Resource encompasses the Makosa, Makosa Tail and the recently discovered Sambara prospects, all of which remain open along strike and down dip
• During the Period, workstreams designed to advance the project to the prefeasibility stage ("PFS") commenced including metallurgical and geotechnical drilling and also infill resource drilling. Drilling results from Douta are also expected in Q2 2023.

Financial Highlights

• 21,553 oz of gold sold with an average gold price of US$1,902 per oz
• Cash operating cost of US$899 per oz sold and all-in sustaining cost ("AISC") of US$1,346 per oz sold
• Q1 2023 revenue of US$40.3 million (Q1 2022: US$24.9 million)
• Q1 2023 EBITDA of US$16.1 million (Q1 2022: US$13.4 million)
• Q1 2023 net profit of US$4.3 million (Q1 2022: US$3.5 million)
• Cash and cash equivalents of US$4.5 million as at 31 March 2023 (Q1 2022: US$6.3 million)
• Senior debt facility with Africa Finance Corporation amended and restated to facilitate the Company's growth opportunities
  • Senior debt facility reduced to US$27.9 million as at 31 March 2023
• Repayment of all outstanding EPC invoices
• Net debt of US$25 million as at 31 March 2023

Environment, Social and Governance

• The full operation of 6 MW compressed natural gas ("CNG") generators was achieved in January 2023 so as to reduce GHG generated by diesel
  • In Q1 2023, the Company's GHG emissions were 5,303 tons. For the equivalent period in 2022, the GHG emissions were 8,392 tons, a reduction of 3,089 tons representing a drop of 36% in GHG emissions and a significant step in the reduction of its carbon footprint
• Vegetable farm construction commenced in the Period, including the erection of a greenhouse. Construction of fish farming ponds and associated processing and administration structures also commenced using two contractors from the host communities

Outlook

• Production guidance of 85,000 to 95,000 oz for 2023 maintained, weighted towards the second half of the year, with an AISC guidance of US$1,150 to US$1,350 per oz
• Advance exploration programs across the portfolio, including near mine and underground projects at Segilola, extension and infill programs at Douta and the assessment of potential targets in Nigeria
• Completion of the Douta preliminary feasibility study ("PFS") in Q4 2023
• Applications for and acquisition of identified prospective exploration properties in Nigeria

Segun Lawson, President & CEO, stated:

"This was envisaged to be a difficult quarter with a lower mined grade, difficult mining conditions in the Segilola Pit west wall and a higher utilization of heavy equipment. The Company's performance during the period demonstrates the amount of progress we have made at Segilola. The main operating units continue to perform better than expected and operate above capacity, so our production at the mine totaled 20,629 ounces. Our costs were at the higher end of our guidance, however we expect our costs to reduce materially in the second half of the year as we complete our mining in the current difficult areas. We have also had our first significant exploration success outside the Segilola Mine footprint, identifying a new high grade quartz vein system within 15 kilometres of mine and have already begun expanding exploration with multiple drillhole intercepts. We look forward to updating the market with drill results from this program and an additional two ongoing exploration drilling programs in Nigeria.

"We also continue to progress exploration at a fast pace at the Douta Project. Further to the significant growth in the MRE we are excited about the upcoming drilling results from the ongoing exploration program. We also look forward to completing the various PFS work streams in the coming months.

"As always, we have remained committed to our ESG goals, and this Period really reflects our ability to safeguard the environment and the local communities. The full operation of 6MW compressed natural gas generators was achieved in January and will greatly aid in our attempt to reduce GHG emissions. Elsewhere, we have been proudly progressing our livelihood restoration program and we look forward to offering further updates on all things ESG related throughout the year.

"When compared to the same operating period last year, we have significantly improved our numbers across the board, which is a testament to the hard work and efficiencies created in the Company.

"Our production guidance remains between 85,000 and 95,000 oz for 2023, one that is weighted towards the second half of the year, where we foresee less difficult operating conditions and correspondingly, a more efficient six months operationally."

About Thor Explorations

Thor Explorations Ltd. is a mineral exploration company engaged in the acquisition, exploration, development and production of mineral properties located in Nigeria, Senegal and Burkina Faso. Thor Explorations holds a 100% interest in the Segilola Gold Project located in Osun State, Nigeria and has a 70% economic interest in the Douta Gold Project located in south-eastern Senegal. Thor Explorations trades on AIM and the TSX Venture Exchange under the symbol "THX".

THOR EXPLORATIONS LTD.
Segun Lawson
President & CEO

For further information please contact:

Thor Explorations Ltd
Email: info@thorexpl.com

Canaccord Genuity (Nominated Adviser & Broker)
Henry Fitzgerald-O'Connor / James Asensio / Thomas Diehl

Tel: +44 (0) 20 7523 8000

Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield / Franck Nganou

Tel: +44 (0) 20 7907 8500

Fig House Communications (Investor Relations)
Tel: +1 416 822 6483
Email: investor.relations@thorexpl.com

Ibu Lawson (Investor Relations)
Tel: +447909825446
Email: ibu.lawson@thorexpl.com

BlytheRay (Financial PR)
Tim Blythe / Megan Ray / Said Izagaren
Tel: +44 207 138 3203

Management Discussion & Analysis for Q1 2023

HIGHLIGHTS AND ACTIVITIES - FIRST QUARTER 2023

Operating results for the quarter were highlighted by the selling of 21,553 ounces ("oz") of gold during the year at a cash operating cost¹ of $899 per oz sold, with an AISC¹ of $1,346 per oz sold.

The Company maintains its production guidance at 85,000 to 95,000 oz for the year, while AISC¹ guidance for 2023 is also maintained at US$1,150 per ounce to US$1,350 per ounce.

During the Period, the international price of key consumables used by the Company, in particular ammonium nitrate and diesel have reduced significantly from the levels experienced in the second half of 2022. These reductions in price are expected to result in lower than forecast consumable costs at Segilola as the Company resupplies.

Table 1.1 Key Operating and Financial Statistics

1 Refer to "Non-IFRS Measures" section.

Segilola Gold Mine, Nigeria

Mining

During the three months ended March 31, 2023, 4,194,689 tonnes of material was mined, equivalent to a mining rate of 46,608 tonnes of material per day. In this period, 198,425 tonnes of ore were mined, equivalent to mining rates of 2,205 tonnes of ore per day, at an average grade of 2.85g/t. Tonnes were affected by difficult mining conditions encountered in the West wall of the pit. Conditions are improving and an increase in mining rates is expected in the second quarter of 2023.

Grade was lower than planned due to geotechnical problems encountered in the North of the pit, delaying access to the higher-grade ore zones in this area. These zones will now be mined during the second quarter of 2023.

The stockpile balance at the end of the period was 270,215 tonnes of ore at an average of 1.14g/t. This comprised 2,130 tonnes (4.35g/t) at high grade, 4,327 tonnes (2.03g/t) at medium grade, 273,903 tonnes (1.04g/t) at low grade and 3,442 tonnes (2.65g/t) on the coarse ore stockpile.

Processing

During the three months ended March 31, 2023, a total of 231,001 tonnes of ore, equivalent to a throughput rate of 2,567 tonnes per day, was processed. Throughput was affected by an unplanned reline of the SAG mill.

The mill feed grade was 2.95g/t gold with recovery at 94.1% for a total of 20,629 ounces of gold produced. A delay in the commissioning of an additional crusher, specifically used to reduce mill rejected ore bearing material ("scats"), which was held for several weeks at the Nigerian border crossing, affected grade during the quarter. The scats will be processed during quarter 2.

All of the main operating units of the process plant continue to perform better than expected, with the plant operating above nameplate capacity. Several improvement projects are being undertaken through the remainder of 2023.

Table 1.2: Production Metrics

NON-IFRS MEASURES

This MD&A refers to certain financial measures, such as average realized gold price, cash operating costs, all-in sustaining costs , net debt and EBITDA which are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. These measures have been derived from the Company's financial statements because the Company believes that, with the achievement of gold production, they are of assistance in the understanding of the results of operations and its financial position.

Average realised gold price per ounce sold

The Group believes that, in addition to conventional measures prepared in accordance with GAAP, the average realised gold price, which takes into account the impact of gain/losses on forward sale of commodity contracts, is a metric used to better understand the gold price realised during a period. Management believes that reflecting the impact of these contracts on the Group's realised gold price is a relevant measure and increases the consistency of this calculation with our peer companies.

In addition to the above, in calculating the realised gold price, management has adjusted the revenues as disclosed in the consolidated financial statement to exclude by product revenue, relating to silver revenue, and has reflected the by product revenue as a credit to cash operating costs. The revenues as disclosed in the interim financial statements have been reconciled to the gold revenue for all periods presented.

Table 2.1: Average annual realised price per ounce sold

1 The figures for the Three Month period ended March 31, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.

Cash operating cost per ounce

Cash operating cost per oz sold, combined with revenues, can be used to evaluate the Company's performance and ability to generate operating income and cash flow from operating activities. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors may find this information useful to evaluate the costs of production per ounce.

By product revenues are included as a credit to cash operating costs.

Table 2.2: Average annual cash operating cost per ounce of gold

1 The figures for the Three Month period ended March 31, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further detail s.

All-in sustaining cost per ounce

AISC provides information on the total cost associated with producing gold.

The Group calculates AISC as the sum of total cash operating costs (as described above), other administration expenses and sustaining capital, all divided by the gold ounces sold to arrive at a per oz amount.

Other administration expenses includes administration expenses directly attributable to the Segilola Gold Mine plus a percentage of corporate administration costs allocated to supporting the operations of the Segilola Gold Mine. For the Three Month periods ended March 31, 2023 and 2022, this was deemed to be 50%.

Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied.

Table 2.3: Average annual all-in sustaining cost per ounce of gold

1 The figures for the Three Month period ended March 31, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.
2 Refer to Table - 3.2 Cash operating costs.
3 Refer to Table - 3.3a Sustaining and Non-Sustaining Capital

The Group's all-in sustaining costs include sustaining capital expenditures which management has defined as those capital expenditures related to producing and selling gold from its on-going mine operations. Non-sustaining capital is capital expenditure related to major projects or expansions at existing operations where management believes that these projects will materially benefit the operations. The distinction between sustaining and non-sustaining capital is based on the Company's policies and refers to the definitions set out by the World Gold Council.

This non-GAAP measure provides investors with transparency regarding the capital costs required to support the on-going operations at its operating mine, relative to its total capital expenditures. Readers should be aware that these measures do not have a standardized meaning. It is intended to provide additional information and should not be considered in isolation, or as a substitute for measures of performance prepared in accordance with IFRS.

Table 2.3a: Sustaining and Non-Sustaining Capital

1 The figures for the Three Month period ended March 31, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.
2 Includes EPC and other construction costs for the Segilola Mine
3 Includes capitalized production stripping costs of $4,609,165 (March 31, 2022: $2,983,318)

Net Debt

Net debt is calculated as total debt adjusted for unamortized deferred financing charges less cash and cash equivalents and short-term investments at the end of the reporting period. This measure is used by management to measure the Company's debt leverage. The Group considers that in addition to conventional measures prepared in accordance with IFRS, net debt is useful to evaluate the Group's performance.

Table 2.4: Net Debt

Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)

EBITDA is calculated as the total earnings before interest, taxes, depreciation and amortisation. This measure helps management assess the operating performance of each operating unit.

Table 2.5: Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

1 The figures for the Three Month period ended March 31, 2022 have been restated in connection with the restatement of the interim financial statements. Refer to note 22 of the interim financial statements for further details.

OUTLOOK AND UPCOMING MILESTONES

This Section 5 of the MD&A contains forward looking information as defined by National Instrument 51-102. Refer to Section 16 of this MD&A for further information on forward looking statements.

We are focused on advancing the Company's strategic objectives and near-term milestones which include:

• 2023 Operational Guidance and Outlook

1 This excludes production stripping costs capitalizations.
2 This includes purchase of licenses.

• The critical factors that influence whether Segilola can achieve these targets include:

  • Segilola's ability to maintain an adequate supply of consumables (in particular ammonium nitrate, flux and cyanide) and equipment

  • Fluctuations in the price of key consumables, in particular ammonium nitrate, and diesel

  • Segilola's workforce remaining healthy

  • Continuing to receive full and on-time payment for gold sales

  • Continuing to be able to make local and international payments in the ordinary course of business

• Continue to advance the Douta project towards preliminary feasibility study ("PFS")

• Continue to advance exploration programmes across the portfolio:

  • Segilola near mine exploration

  • Segilola underground project

  • Segilola regional exploration programme

  • Douta extension programme

  • Douta infill programme

  • Assess regional potential targets in Nigeria

  • Acquiring new concessions and joint venture options on potential targets

SUMMARY OF QUARTERLY RESULTS

The table below sets forth selected results of operations for the Company's eight most recently completed quarters.

Table 3.1: Summary of quarterly results

RESULTS FOR THREE MONTHS ENDED MARCH 31, 2023

The review of the results of operations should be read in conjunction with the Interim Financial Statements and notes thereto.

The Group reported a net profit of $4,331,347 (0.58 cents per share) for the three-month period ended March 31, 2023, as compared to a net profit of $3,490,938 (0.55 cents per share) for the three-month period ended March 31, 2022. The increase in profit for the period was largely due to:

• revenue during the period of $40,287,830 (Q1 2022: $24,865,482)

These were offset partially by:

• Amortization and depreciation of $8,360,110 (Q4 2021: $6,162,872);
• Interest of $3,370,781 (Q1 2022: $3,758,131); and
• Productions costs of $18,306,502 (Q1 2022: $8,219,530)

No interest was earned during the three-month period ended March 31, 2023, and 2022.

LIQUIDITY AND CAPITAL RESOURCES

As at March 31, 2023, the Group had cash of $4,505,688 (December 31 2022: $6,688,037) and a working capital deficit of $38,308,404 (December 31, 2022: deficit of $29,116,915).

The decrease in cash from December 31, 2022 is due mainly to cash generated in operations of $19,214,348 offset by cash used in investing and financing activities of $15,515,468 and $5,976,329, respectively.

The total EPC amount has been finalized with our EPC contractor, and we have paid all due outstanding EPC payments at the date of this report.

Working Capital Calculation

The Working Capital Calculation excludes $9,979,413 (2022: $10,187,630) of Gold Stream liabilities, and $805,801 (2022: $2,215,585) in third party royalties included in current accounts payable, that are contingent upon the achievement of the revised gold sales forecast of 85,000 to 95,000 ounces for the year ending December 31, 2023.

Included in working capital, in Accounts payable and accrued liabilities, is a balance of $1,463,353 (2022: $10,196,105) due to our EPC contractors. As of the date of this report, the Company has made all outstanding due payments in relation to the EPC contract.

Table 4.1: Working Capital

Inventory

Gold inventory is recognised in the ore stockpiles and in production inventory, comprised principally of ore stockpile and doré at site or in transit to the refinery, with a component of gold-in-circuit.

Table 4.2: Inventory

Liquidity and Capital Resources

The Group has generated positive operating cash flow during Q1 2023 and expects to continue to do so based on its production and AISC guidance. This operating cash flow will support debt repayments, regional exploration and underground expansion drilling at Segilola, planned capital expenditures and corporate overhead costs.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The Group's financial instruments are classified as follows:

The fair value of these financial instruments approximates their carrying value.

As noted above, the Group has certain financial liabilities that are held at fair value. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques to measure fair value:

Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

As at March 31, 2023 and December 31, 2022, all the Group`s liabilities measured at fair value through profit and loss are categorized as Level 3 and their fair value was determined using discounted cash flow valuation models, taking into account assumptions with respect to gold prices and discount rates as well as estimates with respect to production and operating results for the Segilola mine.

DISCLOSURE OF OUTSTANDING SHARE DATA

As at the date of this MD&A, there were 644,696,185 common shares issued and outstanding stock options to purchase a total of 26,901,000 common shares.

Authorized Common Shares

Table 5.1: Common shares issued

Warrants

There were no warrants that were outstanding at March 31, 2023, and as at the date of this report.

During the quarter ended March 31, 2023, no warrants were issued.

Stock Options

The number of stock options that were outstanding and the remaining contractual lives of the options at March 31, 2023, were as follows.

Table 5.2: Options outstanding

The Company has granted employees, consultants, directors and officers share purchase options. These options were granted pursuant to the Company's stock option plan.

No options were issued during the three months period ended March 31, 2023 and year ended December 31, 2022.

A total of 9,250,000 options were exercised at a price of C$0.12 each and 689,000 at a price of C$0.145 during the year ended December 31, 2022.

Under the Company's Omnibus Incentive Plan approved by shareholder on December 17, 2021, 44,900,000 common shares of the Company are reserved for issuance upon exercise of options or other securities.

During the year ended December 31, 2022, 2,399,176 Restricted Share Units ("RSUs") were granted to members of Executive Management under the Company's Long Term Incentive Plan ("LTIP").

In March 2023, the Board considered that it was subject to a share trading restriction. As a result, the Board resolved to extend the expiry date of 12,111,000 shares with an exercise price of C$0.145 past the original expiry date of March 12, 2023 up until June 15, 2023.

Condensed Interim Consolidated Financial Statements

For the Three Months Ended March 31, 2023, and 2022

(in United States Dollars)

THOR EXPLORATIONS LTD.

March 31, 2023
(Unaudited)

Table of contents

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of condensed interim consolidated financial statements by an entity's auditor.

1. CORPORATE INFORMATION

Thor Explorations Ltd. (the "Company"), together with its subsidiaries (collectively, "Thor" or the "Group") is a West African focused gold producer and explorer, dually listed on the TSX-Venture Exchange (THX.V) and AIM Market of the London Stock Exchange (THX.L).

The Company was formed in 1968 and is organized under the Business Corporations Act (British Columbia) (BCBCA) with its registered office at 550 Burrard St, Suite 2900 Vancouver, BC, CA, V6C 0A3. The Company evolved into its current form in August 2011 following a reverse takeover and completed the transformational acquisition of its flagship Segilola Gold Project in Nigeria in August 2016.

2. BASIS OF PREPARATION

a) Statement of compliance

These condensed interim consolidated financial statements ("interim financial statements") have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, of International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS").

These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022, which have been prepared in accordance with IFRS.

These interim financial statements were authorized for issue by the Board of Directors on May 29, 2023.

b) Basis of measurement

These interim financial statements are presented in United States dollars ("US$").

These interim financial statements have been prepared on a historical cost basis, except for certain financial instruments that are measured at fair value at the end of each reporting period.

The Group's accounting policies have been applied consistently to all periods in the preparation of these interim financial statements. In preparing the Group 's interim financial statements for the three months ended March 31, 2023, the Group applied the critical judgments and estimates as disclosed in note 3 of its annual financial statements for the year ended December 31, 2022.

These interim financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company, which is defined as having the power over the entity, rights to variable returns from its involvement with the entity, and the ability to use its power to affect the amount of returns. All intercompany transactions and balances are eliminated on consolidation. The Company's subsidiaries at March 31, 2023 are consistent with the subsidiaries as at December 31, 2022 as disclosed in note 3 to the annual financial statements.

None of the new standards or amendments to standards and interpretations applicable during the period has had a material impact on the financial position or performance of the Group. The Group has not early adopted any standard, interpretation or amendment that was issued but is not yet effective.

c) Nature of operations and going concern

The Board of Directors have performed an assessment of whether the Company and Group would be able to continue as a going concern until at least May 2024. In their assessment, the Group has taken into account its financial position, expected future trading performance, its debt and other available credit facilities, future debt servicing requirements, its working capital and capital expenditure commitments and forecasts.

At March 31, 2023, the Group had a cash position of $4.5 million and a net debt position of $24.9 million, calculated as total debt adjusted for unamortized deferred financing charges less cash and cash equivalents and short-term investments. Cash flows from operating activities for the three months ended March 31, 2023 were inflows of $19.2 million.

The Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for at least the next twelve months and that, as at the date of this report, there are no material uncertainties regarding going concern.

The Board of Directors is satisfied that the going concern basis of accounting is an appropriate assumption to adopt in the preparation of the interim financial statements as at, and for the period ended March 31, 2023.

3. PROFIT FROM OPERATIONS

3a. REVENUE

The Group`s revenue is generated in Nigeria. All sales are made to the Group`s only customer.

3b. COST OF SALES

* The total foreign exchange gain for the current period was $7,244,732, which comprises of realized foreign exchange gains of $3,443,738 and unrealized foreign exchange gains of $3,800,994. During the period, SROL purchased its local currency on a spot basis. The foreign exchange gains and losses from these trades are generated from the differences between the local currency values achieved on the trades versus the currency translation rate at the time of the trade.

3c. AMORTISATION AND DEPRECIATION

3d. OTHER ADMINISTRATION EXPENSES

4. INVENTORY

There were no write downs to reduce the carrying value of inventories to net realizable value during the periods ended March 31, 2023 and 2022.

5. AMOUNTS RECEIVABLE

The value of receivables recorded on the balance sheet is approximate to their recoverable value and there are no expected material credit losses.

6. PREPAID EXPENSES, ADVANCES AND DEPOSITS

Included in Advance deposits to vendors, are payment deposits towards key equipment, materials and spare parts, with longer lead times to delivery, which are of critical importance to maintain efficient operations of the mine and process plant. These were made to mitigate against price volatility and inflation currently affecting the sector.

7. LEASES

The Group accounts for leases in accordance with IFRS 16. The definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after January 1, 2019. The Group has elected not to recognize right-of-use assets and lease liabilities for leases which have low value, or short-term leases with a duration of 12 months or less. The payments associated with such leases are charged directly to the income statement on a straight-line basis over the lease term. There were no such leases for the periods ended March 31, 2023 and 2022.

Leases relate principally to corporate offices and the mining fleet at the Segilola mine. Corporate offices are depreciated over 5 years and mining fleet over the life of mine of Segilola.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position for the period ended March 31, 2023, were as follows:

The key impacts on the Statement of Comprehensive Loss and the Statement of Financial Position for the year ended December 31, 2022, were as follows:

8. GOLD STREAM LIABILITY

Gold stream liability

On April 29, 2020, the Group announced the closing of project financing for its flagship Segilola Gold Project ("Segilola") in Osun State, Nigeria. The financing included a $21 million gold stream upfront deposit ("the Prepayment") over future gold production at Segilola under the terms of a Gold Purchase and Sale Agreement ("GSA") entered into between the Group's wholly owned subsidiary SROL and the AFC. The Prepayment is secured over the shares in SROL as well as over SROL's assets and is not subject to interest. The initial term of the GSA is for ten years with an automatic extension of a further ten years. The AFC will receive 10.27% of gold production from the Segilola ML41 mining license until the $21 million Prepayment has been repaid in full. Thereafter, the AFC will continue to receive 10.27% of gold production from material mined within the ML41 mining license until a further $26.25 million is received, representing a total money multiple of 2.25 times the value of the Prepayment, at which point the GSA will terminate. The AFC are not entitled to receive an allocation of gold production from material mined from any of the Group's other gold tenements under the terms of the GSA.

The $26.25 million represented interest on the Prepayment. A calculation of the implied interest rate was made as at drawdown date with interest being apportioned over the expected life of the Stream Facility. The principal input variables used in calculating the implied interest rate and repayment profile were the production profile and gold price. The future gold price estimates were based on market forecast reports for the years 2021 to 2025 and, the production profile was based on the latest life of mine plan model. The liability was to be re-estimated on a periodic basis to include changes to the production profile, any extension to the life of mine plan and movement in the gold price. Upon commencement of production, any change to the implied interest rate will be expensed through the Condensed Interim Consolidated Statement of Income (Loss).

In December 2021, the Group entered into a cash settlement agreement with the AFC where the gold sold to the AFC is settled in a net-cash sum payable to the AFC instead of delivery of bullion in repayment of the gold stream arrangement.

The following table represents the Group's loans and borrowings measured and recognised at fair value.

The liabilities included in the above table are carried at fair value through profit and loss.

9. LOANS AND BORROWINGS

Loans from the Africa Finance Corporation

On December 1, 2020, the Group announced that its subsidiary Segilola Resources Operating Limited ("SROL") had completed the financial closing of a $54 million project finance senior debt facility ("the Facility") from the Africa Finance Corporation ("AFC") for the construction of the Segilola Gold Project in Nigeria. The Facility could be drawn down at the Group's request in minimum disbursements of $5 million. As at December 31, 2022, SROL has received total disbursements of $52.6 million (2021: $52.6 million), with $nil drawn down in 2022 (2021: $31.2 million) and the remaining $1.35m undrawn facility cancelled by the Group during the period under review (2021: $nil). Total disbursements received represent 97% of the Facility. The Facility is secured over the share capital of SROL and its assets, with repayments commencing in March 2022 and to conclude in March 2025.

Repayment of the aggregate Facility will be made in instalments over a 36-month period by repaying an amount on a series of repayment dates, as set out in the Facility Agreement, which reduces the amount of the outstanding aggregate Facility by the amount equal to the relevant percentage of Loans borrowed as at the close of business in London on the date of Financial Close. Interest accrues at SOFR plus 9% and is payable on a quarterly basis in arrears.

In conjunction with the granting of the Facility, Thor issued 33,329,480 bonus shares to the AFC. Thor also incurred transaction costs of $4,663,652 in relation to the loan facility. The fair value of the liability at inception was determined at $45,822,943 taking into account the transaction costs and equity component and recognized at amortized cost using an effective rate of interest, with the fair value of the shares issued in April 2020 of $5,666,011 recognized within equity.

On 31 January 2023, the Group entered into an agreement with the AFC amending the terms of its senior debt facility.

The amended facility removes the project finance cash sweep requirement and allows for free distributions from SROL (subject to a 20% distribution sweep to the senior debt facility), as well as releasing the Group from restrictions regarding acquisitions, distribution of dividends and certain indebtedness covenants. The payment timetable was also re-scheduled to reallocate a higher percentage of the repayments to a later period in the Facility's term.

Deferred payment facility on EPC contract for the construction of the Segilola Gold Mine

The Group has constructed its Segilola Gold Mine through an engineering, procurement, and construction contract ("EPC Contract"). The EPC Contract has been agreed on a lump sum turnkey basis which provides Thor with a fixed price of $67.5 million for the full delivery of design, engineering, procurement, construction, and commissioning of the proposed 715,000 ton per annum gold ore processing plant.

The EPC Contract includes a deferred element ("the Deferred Payment Facility") of 10% of the fixed price. As at March 31, 2023, a total of $2,762,303 (December 31, 2022: $3,682,715) was deferred under the facility. The 10% deferred element is repayable in instalments over a 36-month period by repaying an amount on a series of repayment dates, as set out in the Deferred Payment Facility. Repayments commenced in March 2022 and will conclude in 2025. Interest on this element of the EPC deferred facility accrues at 8% per annum from the time the Facility taking-over Certificate was issued.

10. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES