Exhibit 99.2
BLUE GOLD LIMITED
FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED JUNE 30, 2025 AND 2024
1
BLUE
GOLD LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Other receivables | ||||||||
| Accounts Receivable - related party, net | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Mineral rights | ||||||||
| Total assets | $ | $ | | |||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable- related party, net | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Advances payable | ||||||||
| Convertible notes payable | ||||||||
| Total current liabilities | ||||||||
| Warrants liabilities | ||||||||
| Royalty obligation | ||||||||
| Contingent consideration liability | ||||||||
| Asset retirement obligation | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 15) | ||||||||
| Stockholders’ deficit | ||||||||
| Stockholders’ equity deficit | ||||||||
| Class A ordinary Shares, $ | ||||||||
| Additional paid in capital | ||||||||
| Subscription receivables | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
BLUE
GOLD LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Six Months ended | Six Months ended | |||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Operating expenses | ||||||||
| General and administrative expenses | $ | $ | ||||||
| Merger and acquisition expenses | ||||||||
| Plant maintenance costs | ||||||||
| Accretion of asset retirement obligations | ||||||||
| Depreciation | ||||||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Other Income (Expense) | ||||||||
| Interest Expense | ( | ) | ( | ) | ||||
| Related party interest Income (Expense) | ||||||||
| Change in fair value of liabilities | ( | ) | ||||||
| Total Other Income (expense) | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding - basic and diluted | ||||||||
| Income per common share - basic and diluted | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
BLUE
GOLD LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
| Class A Ordinary Shares | Additional Paid- In | Accumulated | Subscription | Other Comprehensive | Total Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Receivable | Income | Deficit | ||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Retroactive application of Business Combination (Note 1) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Issuance of ordinary shares | ( | ) | ||||||||||||||||||||||||||
| Conversion of convertible notes | ||||||||||||||||||||||||||||
| Issuance of shares in business combination | ( | ) | ( | ) | ||||||||||||||||||||||||
| Conversion of preference shares | ( | ) | ||||||||||||||||||||||||||
| Issuance of ordinary shares for services | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | — | |||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Class A Ordinary Shares | Additional Paid- In | Accumulated | Other Comprehensive | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Income | Deficit | |||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Retroactive application of Business Combination (Note 1) | — | ( | ) | |||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Currency translation adjustment | — | ( | ) | |||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
BLUE
GOLD LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For
the Six Months Ended | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustment to reconcile net loss to cash used in operating activities: | ||||||||
| Accretion of asset retirement obligation | ||||||||
| Depreciation | ||||||||
| Non-Cash Interest Expense | ||||||||
| Change in fair value of liabilities | ||||||||
| Operating and prepaid expenses paid by related party | ||||||||
| Compensation expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Other receivables | ( | ) | ( | ) | ||||
| Accounts receivable – related party | ( | ) | ||||||
| Accounts payable | ||||||||
| Accounts payable – related party | ( | ) | ( | ) | ||||
| Accrued expenses and other liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Capitalized asset acquisition costs | ||||||||
| Purchase of fixed assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from convertible notes | ||||||||
| Proceeds from Business Combination | ||||||||
| Issuance of Ordinary Shares | ||||||||
| Net cash used in financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net increase in cash | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Taxes paid | $ | $ | ||||||
| Noncash investing and financing activities: | ||||||||
| Acquisition of Mineral rights in exchange for certain obligations | $ | $ | ||||||
| Acquisition of Property, plant and equipment, net in exchange for certain obligations | $ | $ | ||||||
| Assumption of royalty payable in exchange for mineral rights and property, plant and equipment, net | $ | $ | ||||||
| Assumption of contingent consideration liability in exchange for mineral rights and property, plant and equipment, net | $ | $ | ||||||
| Assumption of asset retirement obligation in connection with obtaining mineral rights and property, plant and equipment | $ | $ | ||||||
| Accounts payable, accrued liabilities and other current liabilities combined | $ | $ | ||||||
| Convertible notes payable combined | $ | $ | ||||||
| Warrant liabilities combined | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
Blue Gold Limited (the “Company”, “BGL”), a Cayman Islands exempted company limited by shares was formed for the purpose of becoming the ultimate parent company following the transactions contemplated in the business combination.
On December 5, 2023, Blue Gold Limited, Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares formerly known as RCF Acquisition Corp. (“Perception”), and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”), entered into a Business Combination Agreement (as it may be amended and/or restated from time to time, the “Business Combination Agreement”).
On June 25, 2025 (the “Closing Date”), Blue Gold Limited, consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024, and further amended on November 7, 2024, January 8, 2025, March 28, 2025, April 30, 2025, May 8, 2025 and June 10, 2025, by and among the Company, Perception and BGHL (as amended and restated, the “BCA”) (See Note 4).
Following the Business Combination, BGL’s Ordinary Shares and Warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “BGL” and “BGLWW”, respectively.
The Company has one wholly owned subsidiary; Blue Gold (Cayman) Limited (“BGCL”). BGCL has one wholly owned subsidiary; BGHL, an England and Wales private limited liability company, formed on November 9, 2023 to develop, finance, license, and operate gold mines in Ghana and elsewhere. BGHL has one subsidiary; Blue Gold Bogoso Prestea Ltd. (“BGBPL”), a company incorporated in Ghana on January 26, 2024.
2. LIQUIDITY AND GOING CONCERN
Since inception, BGL’s primary sources of liquidity have been
cash flows from advances provided by affiliated companies, as well as funds generated from the issuance of Ordinary Shares and convertible
notes. For the six months ended June 30, 2025, BGL reported an operating loss of $
The funding of BGL’s future capital requirements will depend on many factors, including BGL’s revenue growth rate, the timing and extent of spending to support the restart of the Bogoso Prestea Mine and further exploration activities. To finance these activities, BGL will need to raise additional or alternative capital from outside sources. While there can be no assurances, BGL currently intends to raise such capital through issuances of additional equity, debt finance, trade finance, and/or offtake finance. BGL may not be able to raise capital on terms acceptable to BGL or at all. If BGL is unable to raise additional capital when at the time or in amounts necessary, BGL’s business, results of operations and financial condition will be materially and adversely affected.
As a result of the above, in connection with BGL’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that BGL’s liquidity condition raises substantial doubt about BGL’s ability to continue as a going concern for the next twelve months and thereafter. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should BGL be unable to continue as a going concern.
6
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). References to GAAP issued by the FASB in these accompanying notes to the condensed consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”).
The accompanying condensed consolidated financial statements are stated in United States Dollars unless otherwise stated.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of BGL and its subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
Foreign currency translation and transactions
BGL’s reporting currency is the U.S. dollar. The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction.
BGL translates the financial statements from the local (functional) currency into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”). Assets and liabilities are translated at exchange rates as of the balance sheet date. Expenses are translated at average rates in effect for the periods presented. Translation gains and losses resulting from re-measurement from functional to reporting currency are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity.
Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in general and administrative expenses in the condensed consolidated statements of operations using the average exchange rates in effect during the period.
BGL, through its subsidiary BGBPL, holds certain long-lived assets in Ghana including the mineral assets. Ghana has experienced economic instability and the Ghanian government has implemented various monetary policies. Ghana has also experienced high rates of inflation over the past several years. BGL applies hyper-inflationary accounting to Ghana in accordance with the guidelines in ASC 830, “Foreign Currency.” A hyper-inflationary economy designation occurs when a country has experienced cumulative inflation of approximately 100 percent or more over a 3-year period. The hyper-inflationary designation requires the local subsidiary in Ghana to record all transactions as if they were denominated in U.S. dollars. The subsidiary in Ghana has not generated revenue through the date of this report and total net currency exchange losses were not significant.
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant estimates made by management include, but are not limited to, valuation of mineral rights, valuation of royalty liabilities, contingent consideration, reserve volumes and future net revenues associated with mine resources and the asset retirement obligations.
The Life of Mine model (“LoM”), which has been used as the basis for calculating the mineral rights value and the royalty liability value is prepared to a Scoping Study level. The LoM is preliminary in nature and there is a high degree of uncertainty over the assumptions made. The LoM is solely based on Measured and Indicated Resources which are considered too speculative geologically to have economic considerations applied to them that would allow them to be categorized as mineral reserves, and there is no certainty that the LoM will be realized.
7
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Segment Information
ASC
280, “Segment Reporting” (“ASC 280”), defines operating segments as components of an enterprise where discrete
financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding
how to allocate resources and in assessing performance. BGL’s CODM is the chief executive officer, who has ultimate responsibility
for the operating performance of BGL and the allocation of resources. The CODM reviews the assets, operating results, and financial metrics
for BGL as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined
that there is only
Operating expenses, inclusive of general and administrative costs and sales and marketing costs, are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to fund operations. The CODM also reviews operating expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and the budget. The categories of operating expenses, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
Concentration of Risk
BGL’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash. BGL places its cash with financial institutions of high credit worthiness. At times, its cash with a particular financial institution may exceed any applicable government insurance limits. BGL’s management plans to assess the financial strength and credit worthiness of any party to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Cash and cash equivalents
Cash
is comprised of cash in the bank which is subject to an insignificant risk of changes in value. BGL considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. At June 30, 2025 and December 31, 2024,
cash amounted to $
Property, Plant and Equipment
The value of property, plant and equipment (“PP&E”), including land, buildings and processing equipment, that were acquired as part of the Asset Acquisition (See Note 6) are recorded at a relative fair value assessed at the time of the acquisition less depreciation. Any additional PPE acquired, and any expenditures that extend the life of such assets are recorded at historical cost, including direct acquisition costs, less depreciation and impairment losses. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Capital work in progress is recorded at cost less impairment losses but is not depreciated until it is in use and transferred into other PPE classifications.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to BGL and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred.
8
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Depreciation
Depreciation for mobile equipment and other assets is computed using the straight-line method at rates calculated to depreciate the cost of the assets, less their anticipated residual values, if any, over their estimated useful lives as follows:
| Vehicles | |||
| Other Equipment | |||
| Computer and accessories |
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
BGL evaluates the carrying value of property, plant and equipment and finite-lived intangible assets whenever a change in circumstances indicates that the net carrying value may not be recoverable from the entity-specific undiscounted future cash flows expected to result from our use of and eventual disposition of a long-lived asset or asset group. Events or circumstances that could trigger an impairment review of a long-lived asset or asset group include, but are not limited to: (i) a significant decrease in the market price of the asset, (ii) a significant adverse change in the extent or manner that the asset is used or in its physical condition, (iii) a significant adverse change in legal factors or in the business climate that could affect the value of the asset, (iv) an accumulation of costs significantly in excess of original expectation for the acquisition or construction of the asset, (v) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast of continuing losses associated with the use of the asset and (vi) a more-likely-than-not expectation that the asset will be sold or disposed of significantly before the end of its previously estimated useful life. If an impairment exists, the net carrying values are reduced to fair values. BGL estimates the fair values of these long-lived assets by performing a discounted future cash flow analysis for the remaining useful life of the asset, or the remaining useful life of the primary asset in the case of an asset group. An individual asset within an asset group is not impaired below its estimated fair value. There were no impairments recorded as of June 30, 2025 and December 31, 2024.
Mineral Rights and Amortization
Amortization of Mineral Rights (“Mine Properties”), buildings, leasehold land and plant and machinery (collectively the “mineral assets”) is provided for using the unit-of-production method with separate calculations made for each mineral resource.
The calculation of the units-of-production rate of amortization could be impacted to the extent that actual production in the future differs from current forecasted production resulting in possible revision to the estimate of total resources to be produced.
The carrying values of the mineral rights are assessed for impairment by management on an annual basis (while under development) or when indicators of impairment exist. BGL compares the carrying value of the mine assets to its estimates of undiscounted future cash flows from the underlying resources. Should management determine that these carrying values cannot be recovered, the carrying value is compared to an estimate of fair value and the unrecoverable amounts are written off against earnings and cannot be subsequently reversed. As of June 30, 2025, as the lease termination and ensuing dispute (as described more fully in Note 15) represented a triggering event, in accordance with ASC 360, BGL compared the undiscounted cash flows of the long-lived asset group to their carrying amounts which determined there was no impairment required.
9
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Mineral Exploration Rights and Costs, Exploration, Evaluation and Development Expenditures
Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred. When it is determined that a mineral deposit can be economically developed as a result of establishing proven and probable reserves and all regulatory operating permits have been secured, the costs incurred after such determination will be capitalized until the commencement of production and amortized over their useful lives. To date, BGL has not established commercial feasibility and received the necessary regulatory operating permits for any of its exploration prospects; therefore, all exploration costs are expensed.
Asset Retirement Obligation
BGL follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), which established a uniform methodology for accounting for estimated reclamation and abandonment costs. FASB ASC 410 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred or when acquired. When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its future value each period and charged to accretion expense, and the initial capitalized cost is amortized over the useful life of the related asset. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the amount of cash paid, a gain or loss upon settlement is recorded.
Convertible Notes Payable
BGL and its subsidiary may enter into convertible notes, some of which contain fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder into common shares at a fixed rate at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. BGL records the convertible note liability at its fixed monetary amount on the issuance date and interest expense charged over the outstanding period of the note.
Business Combination and Asset acquisition
BGL applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction should be accounted for as an asset acquisition or business combination.
When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii) the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, BGL accounts for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase consideration.
When an acquisition is accounted for as a business combination, BGL recognizes and measures the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration in excess of the aggregate fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, BGL engages independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using discrete financial forecasts, long-term growth rates, appropriate discount rates, and expected future capital requirements. The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets. The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset. The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long-lived tangible assets. During the measurement period, not to exceed one year from the date of acquisition, BGL may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the period the adjustment arises.
10
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurement
As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (exit price). BGL utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that participants used to measure fair value. The hierarchy gives us the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.
Level 1: Quoted prices are available in an active market for identical assets or liabilities as of the reporting data. Active markets are those in which transactions for the assets or liability occur in sufficient frequency and volume to provide information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2:Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Subsequently all these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supposed by observable level at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, option and collar.
Level 3: Pricing inputs includes significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
The fair value of cash, prepaid expenses and other assets, advances to related parties, accrued expenses and other liabilities, and due to related parties approximates their carrying values due to their relatively short maturities. The royalty payable, contingent consideration payable and the asset retirement obligation were recorded at fair value as of the closing date of the Purchase and Assumption Agreement using level 3 inputs (Note 14).
Income Taxes
BGL accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740,
a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in
a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is
greater than
As of June 30, 2025, a valuation allowance has been recorded for the full value of its net deferred tax asset due to the uncertainty as to the future recoverability until such time that taxable income is reasonably assured.
Warrants
The Company reviews the terms of warrants to purchase its Ordinary Shares to determine whether warrants should be classified as liabilities or stockholders’ deficit in its condensed consolidated balance sheets. In order for a warrant to be classified in stockholders’ deficit, the warrant must be (i) indexed to the Company’s equity and (ii) meet the conditions for equity classification.
11
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
If a warrant does not meet the conditions for stockholders’ deficit classification, it is carried on the condensed consolidated balance sheets as a warrant liability measured at fair value, with subsequent changes in the fair value of the warrant recorded in other non-operating losses (gains) in the condensed consolidated statements of operations. If a warrant meets both conditions for equity classification, the warrant is initially recorded, at its relative fair value on the date of issuance, in stockholders’ deficit in the condensed consolidated balance sheets, and the amount initially recorded is not subsequently remeasured at fair value.
Net Loss Per Share
Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average shares outstanding at the end of the period. Diluted income (loss) per share is computed by giving effect to all potential shares of common shares to the extent dilutive. For the six months ending June 30, 2025, the Company’s diluted weighted-average shares outstanding is equal to basic weighted-average shares, due to the Company’s net loss position. Hence, no common shares equivalents were included in the computation of diluted net loss per unit since such inclusion would have been antidilutive. At June 30, 2025, potentially dilutive securities include the public warrants.
Recent Accounting Pronouncements
Certain new standards, amendments and interpretations, and improvements to existing standards have been published by the FASB and United States Securities and Exchange Commission but are not yet effective and have not been adopted early by BGL. BGL does not anticipate that any of these pronouncements will have a material impact on its condensed consolidated financial statements.
4. RECAPITALIZATION
On June 25, 2025 (the “Closing Date”), Blue Gold Limited, consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024, and further amended on November 7, 2024, January 8, 2025, March 28, 2025, April 30, 2025, May 8, 2025 and June 10, 2025, by and among the Company, Perception, and BGHL (as amended and restated, the “BCA”).
The following transactions occurred pursuant to the terms of the BCA (collectively, the “Business Combination”):
| ● | Blue Gold Limited formed Blue Merger Sub, an exempted company incorporated under the laws of the Cayman Islands (“Blue Merger Sub”), for the purpose of effectuating the business combination; |
| ● | Perception merged with and into Blue Gold Limited, with Blue Gold Limited being the surviving entity (the “Perception Reorganization”); |
| ● | Blue Cayman 1, an exempted company incorporated under the laws of the Cayman Islands (“BC1”), acquired the entirety of the BGHL Shares; |
| ● | BC1 transferred the entire undertaking of BC1, including the entire share capital of BGHL to Blue Cayman 2, an exempted company incorporated under the laws of the Cayman Islands (“BC2”). The name of Blue Cayman 2 was changed to Blue Gold (Cayman) Limited; |
| ● | Blue Merger Sub merged with and into BC2, with BC2 being the surviving entity and becoming a wholly owned subsidiary of Blue Gold Limited; |
| ● | In
connection with the Perception Reorganization, each (a) issued and outstanding Class A ordinary share, par value $ |
12
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| ● | Blue
Perception Capital LLP, a private limited partnership, delivered, on behalf of itself and the other shareholders of BC2 (collectively,
the “Blue Shareholders”), all of the original certificates for BC2 common stock (the “BC2 Common Stock”) to Continental
Stock Exchange, as exchange agent, and Blue Gold Limited issued and caused Continental Stock Exchange to deliver to the Blue Shareholders
an aggregate of |
Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of a capital transaction in which BGHL issued stock for the net assets of PC4. The net assets of PC4 will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of BGHL.
Transaction Proceeds
Upon
closing of the Business Combination, the Company received gross proceeds of $
| Cash-trust and cash, net of redemptions | $ | |||
| Less: transaction costs, paid | ( | ) | ||
| Net proceeds from the Business Combination | ||||
| Less: accounts payable, accrued liabilities and other current liabilities combined | ( | ) | ||
| Less: Convertible notes payable combined | ( | ) | ||
| Less: Warrants liabilities combined | ( | ) | ||
| Reverse recapitalization, net | $ | ( | ) |
The number of shares of Common Stock issued immediately following the consummation of the Business Combination were:
| PC4 Class A common stock, outstanding prior to the Business Combination | ||||
| Less: Redemption of PC4 Class A common stock | ( | ) | ||
| Class A common stock of PC4 | ||||
| PC4 Class B common stock, outstanding prior to the Business Combination | ||||
| Business Combination Class A common stock | ||||
| Issuance of shares related to preference shares conversion | ||||
| Issuance of shares related to working capital agreements | ||||
| BC2 Shares | ||||
| Class A Common Shares immediately after the Business Combination |
The number of BC2 shares was determined as follows:
| BC2 Shares | BC2’s shares after conversion ratio | |||||||
| Class A Common Stock issued to existing BC2 Shareholders | ||||||||
13
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Public warrants
The
Redemption
Prior
to the closing of the Business Combination, certain PC4 public shareholders exercised their right to redeem certain of their outstanding
shares for cash, resulting in the redemption of
5. INVESTMENT IN EQUITY SECURITY
Preferred Stock Purchase
In
March 2025, BGHL entered into a Preferred Stock Purchase Agreement to purchase
6. ASSET ACQUISITION
On January 27, 2024, the BGBPL and Future Gold Resource BPL (“FGRBPL”) entered into the Purchase Agreement for BGBPL to acquire certain mining assets, primarily mining leases, of the Bogoso Prestea Mine, subject to certain closing conditions including approval by the Ministry of Lands and Natural Resources of the Republic of Ghana. The Purchase Agreement provided for the transfer of mining assets from FGRBPL (the previous leaseholder) to BGBPL, including four mining leases (Bogoso I, Bogoso II, Prestea Surface and Prestea Underground), a government indemnity in favor of the previous leaseholder in respect of certain environmental damage and liabilities, fixed assets including immovable structures, buildings and facilities. Consideration for the transfer of the mining assets is the assumption of the previous leaseholder’s royalty agreement obligation with Golden Star Resources and stream agreement with Royal Gold.
The
Purchase Agreement became effective as of May 1, 2024. The closing conditions have been met, with a number of subsequent closing
deliverables still to be concluded (including the Royal Gold Agreement novation, the Golden Star Resources Agreement novation, and the
Corporate Social Responsibility Agreement novation). The registration of the legal transfer was completed on May 15, 2024.
In accordance with the laws of Ghana, BGBPL will ultimately be
BGL evaluated this acquisition under ASC 805, Business Combinations. ASC 805 requires that an acquirer determine whether it has acquired a business. If the criteria of ASC 805 are met, a transaction would be accounted for as a business combination and the purchase price is allocated to the respective net assets and liabilities assumed based on their fair values and a determination is made whether any goodwill results from the transaction. This mine has been shut in with limited activities necessary to maintain the surface as required by regulation. In evaluating the criteria outlined by this standard, BGL concluded that the acquired set of assets did not meet the US GAAP definition of a business. BGL did not acquire an assembled workforce nor a substantive process. BGL has contracted through a transition services agreement (the “TSA”), FGRBPL to continue various mine maintenance processes. In order to commence operations, BGL will need to hire additional skilled workers to execute its exploration and development plan. Therefore, BGL accounted for the purchase as an asset acquisition rather than a business combination, and allocated the total consideration transferred on the date of the acquisition to the assets and liabilities acquired on a relative fair value basis.
14
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Also
on January 27, 2024, Blue Gold Bogoso Prestea Ltd entered into the Bond SPV Royalty with FGRBPL and Bond SPV. The Bond SPV
Royalty provides for Blue Gold Bogoso Prestea Ltd to pay a royalty in refined gold to Bond SPV (as priority payee) and the previous leaseholder
(as secondary payee, once Bond SPV debt service obligations are met) at a rate of the lesser of (i)
The following table summarizes the acquisition date fair value of the assets acquired and the liabilities assumed:(1)
| Assets acquired | ||||
| Property, plant and equipment(2) | $ | |||
| Intangible assets: mineral rights(3) | ||||
| Total assets acquired | $ | |||
| Liabilities assumed | ||||
| GSR royalty liability(4) | $ | |||
| GSR contingent consideration liabilities(5) | ||||
| Asset retirement obligations(6) | ||||
| Total Liabilities assumed | $ | |||
| (1) |
| (2) |
| (3) |
| (4) |
| (5) |
| (6) |
15
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. MINERAL RIGHTS
As
of June 30, 2025, BGL has mineral rights in Ghana to mine the Bogoso and Prestea properties acquired under the Purchase Agreement. These
mineral rights were acquired through staking and purchase, lease or option agreements and are subject to varying royalty interests, some
of which are indexed to the sale price of gold. The mine is currently on care and maintenance; no mining activities are being undertaken
and there is currently no production from the mine. As of June 30, 2025, the carrying value of the mineral rights of $
Due to the uncertainty surrounding the outcome of the lease dispute with the Government of Ghana (Note 15), and the possibility that the mining leases may not be returned to BGBPL, there is a material uncertainty that BGL will not be able to undertake its business plan to restart the Bogoso Prestea mine. If BGL is not successful with its arbitration proceedings with the Republic of Ghana, the leases may be relinquished which will reduce the mineral rights value reflected in BGL’s balance sheet to zero.
8. PROPERTY, PLANT AND EQUIPMENT, NET
| Property, plant and equipment consisted of the following: | June 30, 2025 | December 31, 2024 | ||||||
| Vehicles | $ | $ | ||||||
| Building and leasehold land | ||||||||
| Plant and machinery | ||||||||
| Computer and accessories | ||||||||
| Total Property, plant and equipment | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
During
the six months ended June 30, 2025 and 2024, there was depreciation of $
9. ADVANCES PAYABLE
On
November 7, 2024, BGL received a $
On
each of October 2, 2024, October 28, 2024, and November 31, 2024, BGHL’s subsidiary, BGBPL, received an aggregate amount of $
10. CONVERTIBLE NOTES PAYABLES
On
June 16, 2024, BGHL executed $
16
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
During
the six months ended June 30, 2025, BGHL undertook a fundraising in the form of a convertible note ( the “June Notes”), The
June Notes have a maturity date of
Prior
to the close of the Business Combination, PC4 incurred and owed certain legal fees related to the Business Combination transactions.
Upon the close of the Business Combination on June 25, 2025, PC4 entered into a convertible note agreement (the “PC4 Convertible
Note”) with the legal firm with respect to the balance owed. The PC4 convertible Note including unpaid interest can be converted
into shares of BGL per the conversion price defined in the agreement and expires on December 15, 2025. The PC4 Convertible Note carries
an interest rate of
11. ROYALTY AGREEMENT AND CONTINGENT CONSIDERATION
Bond SPV Royalty Agreement
On
January 27, 2024, in conjunction with the Purchase Agreement (see Note 6), BGBPL entered into the Bond SPV Royalty with FGRBPL and
Bond SPV which closed in May 2024. The Bond SPV Royalty provides for BGBPL to pay a royalty in refined gold to Bond SPV (as priority
payee) and the previous leaseholder (as secondary payee, once Bond SPV debt service obligations are met) at a rate of the lesser of (i)
GSR Royalty Agreement
The
consideration for the transfer of mining assets under the Purchase Agreement also includes the assumption of FGRBPL’s royalty agreement
with Golden Star Resources, a royalty and a contingent payment. On September 30, 2021, FGR entered into Royalty and Contingent Payment
Agreement with Golden Star Resources Limited (“GSR Royalty”). The GSR Royalty provides for the payments of two types
of royalties to Golden Star Resources Limited. First, a royalty of
17
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On the closing date, the GSR Royalty liability under this agreement was measured at fair value using an income approach. The contingent payment also resulted in a liability that was measured using the Black Scholes Merton model (See Note 14).
12. ASSET RETIREMENT OBLIGATIONS
BGL accounts for its asset retirement obligations in accordance with ASC 410, Asset Retirement and Environmental Obligations. Remediation, reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties. BGL uses assumptions about future costs, capital costs and reclamation costs. Such assumptions are based on BGL’s current mining plan and the best available information for making such estimates. At the closing date of acquiring the mine, the asset retirement obligation was measured at fair value. The estimate was determined using the present value technique based on forecasted remediation costs at end of life of mine (incorporating an appropriate forward rate), and development and application of appropriate discount rate.
BGL accounts for its asset retirement obligations in accordance with ASC 410, Asset Retirement and Environmental Obligations. This requires that legal obligations associated with the retirement of long-lived assets be recognized at fair value when incurred and capitalized as part of the related long-lived asset. Over time, the liability is accreted to its future value each period, and the capitalized asset is depreciated over the useful life of the long-lived asset.
In the absence of quoted market prices, BGL estimates the fair value of our asset retirement obligations at inception using present value techniques, in which estimates of future cash flows associated with retirement activities are discounted using a credit-adjusted risk-free rate. BGL’s estimated liability could change significantly if actual costs vary from assumptions or if governmental regulations change significantly.
BGL’s
cash flow estimate for the asset retirement obligation is based upon the assumption of a 18.3-year expected life of the mine and discounted
using a credit-adjusted risk-free discount rate of
BGL’s
asset retirement obligation was established in May 2024, subsequent to the Purchase Agreement, and initially recorded at fair value.
BGL’s accretion expense totaled $
Changes to the asset retirement obligations are as follows:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Asset Retirement obligations, beginning of year | $ | $ | ||||||
| Liability assumed | ||||||||
| Accretion expense | ||||||||
| Asset Retirement obligations, end of year | $ | $ | | |||||
13. WARRANT LIABILITIES
At
the close of the Business Combination (See Note 1), the
18
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Warrants are accounted for in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the warrants are classified as a liability at its fair value, with the change in the fair value recognized in the Company’s consolidated statements of operations. The Public Warrants are recorded at fair value based on the period-end publicly stated close price, which is a Level 1 input
Each
warrant entitles the registered holder to purchase
Redemption
of warrants when the price per Class A Ordinary Shares equals or exceeds $
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at
a price of $ |
| ● | upon a minimum of 30 days’ prior written notice of redemption, and |
| ● | if,
and only if, the last reported sale price (the “closing price”) of the Company’s Class A Ordinary Shares equals or
exceeds $ |
Redemption
of warrants when the price per Class A Ordinary Shares equals or exceeds $
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| ● | at
$ |
| ● | if,
and only if, the closing price of the Company’s Class A Ordinary Shares equals or exceeds $ |
19
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
“fair market value” of the Company’s Class A Ordinary Shares for the above purpose shall mean the volume weighted average
price of the Company’s Class A Ordinary Shares during the
No fractional Class A Ordinary Shares will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of Class A Ordinary Shares to be issued to the holder.
If the Company calls the Public Warrants for redemption, Company management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number of Ordinary Shares issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or the Company’s recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of ordinary shares at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In
addition, if the Company issues additional Ordinary Shares or equity-linked securities for capital raising purposes in connection with
the closing of a Business Combination at an issue price or effective issue price of less than $
14. FAIR VALUE MEASUREMENT
Financial Assets Measured at Fair Value on a Nonrecurring Basis
The significant Level 3 assumptions used in the calculation of estimated discounted cash flow model vary depending on its application and may include projections of estimated quantities of gold resources and reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. See Note 6 for additional information regarding the mine acquisitions.
Royalty Liabilities
The
estimated fair value of the royalty liabilities was determined using the income approach. Key inputs in the income valuation method include
long-term gold prices (average gold price of $
20
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Contingent Liability
The estimated fair value of the contingent consideration was determined using the Black-Scholes option-pricing model and were based on the following assumptions:
May
15, | ||||
| Dividend yield | % | |||
| Volatility | % | |||
| Risk Free Rate | % | |||
| Expected life | ||||
| Cost of debt | % | |||
Asset Retirement Obligation
BGL
estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment
and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and
timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount
rates, and consideration of changes in legal, regulatory, environmental and political environments. Asset retirement obligation fair
value measurements in the current period were Level 3 fair value measurements. The estimated fair value of the asset retirement obligation
was determined using an income approach. Key assumptions included the remaining term –
15. RELATED PARTY TRANSACTIONS
Related party balances with BIHL and consolidated subsidiaries
The
Company has various related party transactions with FGRBPL, its parent, BIHL and BIHL’s condensed consolidated subsidiaries. These
transactions primarily relate to mine maintenance services provided by FGRBPL to BGBPL in connection with the TSA. In order to fund these
transactions, at times, money is advanced to a BIHL condensed consolidated entity, thereby creating a due from/due to balance. BIHL through
its subsidiaries carry out the business activities of the mine and the amounts advanced are used to fund these activities.
| As of June 30, | As of December 31, | |||||||
| Legal entity name | 2025 | 2024 | ||||||
| (due to)/due from | (due to)/due from | |||||||
| FGR-BPL | $ | ( | ) | $ | ( | ) | ||
| Future Global Resources Limited (“FGR”) | ||||||||
| Blue International Holdings Limited (“BIHL”) | ||||||||
| $ | $ | ( | ) | |||||
21
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On
June 30, 2025, the Company was owed a net amount of $
Other Related party balances
Prior
to the close of the Business Combination, the sponsor of PC4 and another affiliated company advanced the company funds to pay certain
working capital costs. On June 25, 2025, BGL assumed $
On
June 25, 2025, BGHL owed BCMP $
16. STOCKHOLDERS’ DEFICIT
Preference
shares — BGL is authorized to issue
Class
A ordinary shares — BGL is authorized to issue
Perception Capital Corp. IV Warrants
At
the close of the Business Combination (See Note 4), the
The Warrants are accounted for in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the warrants are classified as a liability at its fair value, with the change in the fair value recognized in the Company’s consolidated statements of operations (See Note 14).
17. COMMITMENTS AND CONTINGENCIES
Notice of Termination of Mining Leases
On September 20, 2024, FGR-BPL, the previous leaseholder of the Bogoso Prestea Mine, received a notice of termination of mining leases (the “Commission Notice”) from the Minerals Commission of Ghana (the “Mineral Commission”) alleging violations of the related leases. After the Commission Notice, the Mineral Commission formed an Interim Management Committee (“IMC”), and the IMC assumed managerial control of the mine site. BGL and the Previous Leaseholder, pursuant to the Minerals and Mining Act 2006 (Act 703) (the “Mining Act”), actively dispute the contents and legality of the Commission Notice and the appointment of an IMC. On October 14, 2024, BGL delivered notice to the Republic of Ghana requesting settlement of BGL’s dispute pursuant to the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ghana for the Promotion and Protection of Investments, signed in Accra on March 22, 1989 and entered into force on October 25, 1991 (“UK-Ghana BIT”).
22
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On April 2, 2025, BGHL served a notice of arbitration on the Republic of Ghana to commence international arbitration proceedings against the Republic of Ghana pursuant to Article 10 of the UK-Ghana BIT. On June 6, 2025, the Republic of Ghana submitted its response to the notice of arbitration in which it contests jurisdiction and disputes the validity and merits of BGL’s claims and has agreed to have a three-person tribunal hear the dispute and for it to be administered by an arbitral institution (the Permanent Court of Arbitration in The Hague). Pending the resolution of the dispute, BGHL has been advised by Kimathi & Partners, Corporate Attorneys (“Kimathi & Partners”), its legal counsel in Ghana, that pursuant to Section 27(5) of the Mining Act, the mineral right, its term and area held in the Bogoso Prestea Mine at the time of the Commission Notice, shall continue without diminution until thirty days after the resolution of the dispute.
In the event the arbitration outcome or any of these actions is favourable to the existing mining leases, successful mine development, infrastructure construction, and mineral production is dependent on obtaining all necessary consents, approvals, licenses, and funding for a successful design, construction, and operation of efficient mining, processing, and transportation facilities. No assurance can be given that we will be able to resolve this matter or obtain all necessary consents, approvals licenses, and funding in a timely manner, or at all. If the outcome of the arbitration is unfavourable, it will adversely affect the value of BGL’s business. Delays or difficulties in obtaining a favourable arbitration outcome or in obtaining relevant approvals may interfere with future mining operations or plans of BGL, which will materially impact our business and financial position in the future.
Due
to the uncertainty surrounding the outcome of the lease dispute with the Government of Ghana, and the possibility that the mining leases
may not be returned to BGBPL, there is a material uncertainty that BGL will be able to undertake its business plan to restart the Bogoso
Prestea mine. If the Company is not successful with its arbitration proceedings with the Republic of Ghana, the leases may be relinquished
which will reduce the mineral rights value reflected in BGL’s balance sheet to
Royal Gold Stream Agreement
Another
obligation for the transfer of mining assets under the Purchase Agreement is the assumption by BGBPL of the previous leaseholder’s
stream agreement with RGLD Gold AG (“Royal Gold”). Royal Gold has the right to purchase
Gold Advance Payment Purchase Agreements
In
August 2024, BGL signed a Gold Advance Payment Purchase Agreement (“GAPPA”) with Gerald Metals SARL (“Gerald”),
whereby, subject to satisfying several conditions precedent, Gerald will make advance payments of up to an aggregate of $
23
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Mining Equipment Supply Framework Agreement
In
September 2024, BG-BPL signed a Mining Equipment Supply Framework Agreement with Attachy, whereby Attachy will procure certain goods
and equipment necessary for the restart of the Bogoso Prestea mine, up to a total value of $
18. SUBSEQUENT EVENTS
Subsequent events have been evaluated through October 16, 2025, which represents the date the condensed consolidated financial statements were available to be issued and those that are material to the condensed consolidated financial statements are included below.
Convertible Note Purchase Agreement
In
July 2025, the Company entered into several additional convertible note purchase agreements raising an aggregate amount of approximately
$
Shareholder Actions
On July 28, 2025, RCF VII Sponsors LLC, the former sponsor of Perception Capital Corp. IV, and S&R Capital Ltd. (together, “Plaintiffs”) filed an originating summons against the Company in the Grand Court of the Cayman Islands (the “Court”). Plaintiffs seek a declaration that the ordinary shares received in exchange for Perception shares are unrestricted shares, as such term is defined in the Company’s Memorandum and Articles of Association (the “Pending Action”). The Company believes this claim has no merit and intends to vigorously defend against it. This claim poses a reasonable possibility of loss to the Company, but the Company is unable to reasonably estimate an amount or range of reasonably possible loss at this time.
24
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On August 29, 2025, the Company filed a Form 6-K to provide its notice and proxy statement related to the extraordinary general meeting of shareholders (the “EGM”) that was scheduled to be held on September 8, 2025. Subsequently, the Plaintiffs filed an application for an interim injunction with the Court (the “Injunction Proceeding”) to prevent the Company from holding such EGM. The Injunction Proceeding was brought before the Court ex parte by the Plaintiffs. On September 5, 2025, the Court issued an interim injunction in favor of the Plaintiffs. On September 10, 2025, the Company filed a Form 6-K disclosing that the directors of the Company have determined to postpone the EGM indefinitely. Following a direction hearing on September 22 and 23, 2025, the Court ordered the conversion of the originating summons proceedings to a writ action and gave directions for the exchange of full pleadings and further evidence, leading to a trial of preliminary issues which is currently scheduled for November 20 and 21, 2025. In addition, at that trial of the preliminary issues, the Court shall determine whether to continue, discharge or vary the injunction.
Securities Purchase Agreement and Registration Rights
On
August 29, 2025, the Company entered into a Securities Purchase Agreement (the “August Note SPA”) authorizing a new
series of senior convertible notes, in the aggregate principal amount of up to $
At
any time after issuance, the Senior Convertible Notes are convertible into ordinary shares, subject to customary terms and conditions.
The Senior Convertible Notes convert into ordinary shares at a conversion price of $
In
addition, pursuant to the August Note SPA, the buyer may be eligible to receive up to an aggregate of
Ordinary Share Purchase Agreement and Registration Rights Agreement
On
August 29, 2025, the Company entered into an Ordinary Share Purchase Agreement (the “August SPA”), pursuant to which the
Company may sell up to $
25
BLUE GOLD LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Mampon Gold and Copper Mining Lease
On
September 17, 2025, the Company entered into a definitive Agreement for the Purchase of the Mampon Gold and Copper Mining Lease (“Mampon”)
in Ghana (the “Purchase Agreement”) with FGR Bogoso Prestea Limited (“FGRBPL”) to acquire up to a
First
Tranche: Subject to closing conditions, including the approval of the licensing assignment by all relevant parties, including the
government of Ghana, being met, the Company will pay $
| ● | if the VWAP Price is equal to or greater than $20.00, no additional Ordinary Shares shall be issued and the First Tranche Consideration Shares shall be the 750,000 Ordinary Shares; and |
| ● | if the VWAP Price is less than $10.00, the maximum number of First Tranche Consideration Shares to be issued shall be 1,500,000 Ordinary Shares. |
Second Tranche: Structured as an option exercisable by the Company between 12 and 18 months following the date of the Purchase Agreement, whereby independently verified resource upgrades in accordance with the standards of Regulation S-K 1300 of the Securities Act of 1933, as amended, above the base resource will be paid for by the Company by issuing shares in accordance with the following value:
| ● | Up to $50 per ton of copper (capped at 4 million tons); and |
if the option is exercised, FGR BPL will transfer the remaining 50% stake in the SPV to the Company.
26