20-F: Blue Gold Limited Completes Business Combination Amidst Gold Mine Lease Dispute and Going Concern Warning

Blue Gold Limited has finalized its business combination with Perception Capital Corp. IV, but faces significant liquidity challenges, an ongoing legal dispute over its key Ghanaian gold mine leases, and a going concern warning from auditors.

Summary

• Blue Gold Limited (BGL) completed a reverse recapitalization with Perception Capital Corp. IV on June 25, 2025, with BGL's shares and warrants now trading on Nasdaq under symbols BGL and BGLWW.
• The company's primary business is conducted through its indirect subsidiary, Blue Gold Holdings Limited (BGHL), which acquired mining leases for the Bogoso Prestea gold mine in Ghana on May 15, 2024.
• BGHL reported an operating loss of $11.6 million and used $6.2 million in cash from operations for the year ended December 31, 2024, with no revenue generated since inception.
• As of December 31, 2024, BGHL had a cash balance of $170,557 and a net working capital deficit of $7.6 million, leading management to raise substantial doubt about its ability to continue as a going concern.
• The company is engaged in an international arbitration proceeding against the Republic of Ghana, initiated on April 2, 2025, to resolve a dispute over the termination of its mining leases for the Bogoso Prestea mine, which could reduce mineral rights value to zero if unfavorable.
• To fund operations and restart costs, BGHL has secured a Gold Advance Payment Purchase Agreement (GAPPA) with Gerald Metals SARL for up to $25 million, subject to conditions, and raised $1,902,586 through new convertible notes as of June 25, 2025.
• Outstanding shares post-combination total 30,571,764 Class A ordinary shares, with 11,500,000 warrants outstanding exercisable at $11.50 per share.
• Certain shares issued in the Business Combination are subject to lock-up restrictions, with phased releases based on time and share price performance.

Sentiment

Score: 2

Explanation: The sentiment is very negative due to significant operating losses, no revenue, a substantial working capital deficit, and explicit 'going concern' warnings from management and auditors. The ongoing legal dispute over core mining leases and the reliance on future, conditional financing further exacerbate the negative outlook, despite the completion of the business combination and Nasdaq listing.

Positives

• Successful completion of the business combination with Perception Capital Corp. IV, leading to Nasdaq listing for Blue Gold Limited's shares and warrants.
• Acquisition of the Bogoso Prestea gold mine assets, including mineral rights valued at $30.1 million, providing a foundational asset for future operations.
• Secured a Gold Advance Payment Purchase Agreement (GAPPA) with Gerald Metals SARL for up to $25 million to fund restart costs, indicating external financial support.
• Raised $1,902,586 through new convertible notes as of June 25, 2025, demonstrating continued ability to attract capital, albeit with significant conversion terms.
• Management is actively disputing the termination of mining leases and has initiated international arbitration, indicating a proactive approach to protecting assets.

Negatives

• BGHL reported a significant operating loss of $11.6 million and cash flows used in operations of $6.2 million for the year ended December 31, 2024.
• The company has not generated any revenue since its inception, highlighting its pre-operational status and reliance on external funding.
• A net working capital deficit of $7.6 million and a cash balance of only $170,557 as of December 31, 2024, indicate severe liquidity constraints.
• Management has determined that BGHL's liquidity condition raises substantial doubt about its ability to continue as a going concern.
• The ongoing dispute with the Minerals Commission of Ghana regarding the termination of mining leases poses a material uncertainty; an unfavorable arbitration outcome could reduce mineral rights value to zero.
• Ghana's economic instability, including significant cedi depreciation, high inflation (54% in Dec 2022), and sovereign debt crisis, creates a challenging operating environment.
• The Gold Advance Payment Purchase Agreement (GAPPA) with Gerald Metals SARL is subject to several conditions precedent, and its conversion options could lead to significant dilution for existing shareholders.
• Previous convertible notes totaling $2.5 million matured on December 14, 2024, and were extended to June 14, 2025, with increased interest rates, indicating past financial strain and reliance on debt restructuring.

Risks

• Insufficient funds to develop projects or service expenses and other liquidity needs, requiring substantial additional capital which may not be secured on acceptable terms or at all.
• Substantial doubt about the company's ability to continue as a going concern due to operating losses, negative cash flows from operations, and a net working capital deficit.
• Operations in Ghana are subject to political, economic, and other risks, including currency fluctuations, high inflation, sovereign debt crisis, and anti-mining sentiment.
• Failure to obtain the advance payment facility from Gerald Metals SARL or delays in obtaining it could materially adversely affect the ability to explore, develop, and operationalize the mines.
• The ongoing lease dispute with the Republic of Ghana and the possibility that mining leases may not be returned to BGBPL, which could reduce mineral rights value to zero.
• The Ordinary Shares issued in the Business Combination are subject to lock-up restrictions, and large numbers of shares becoming available for sale at one time could reduce the trading price and impede future capital raises.
• Competition and competitive pressures from other companies worldwide in the industries in which Blue Gold Limited operates.
• Inability to retain, recruit, or hire officers, key employees, or directors.
• Challenges in managing and staffing international operations, longer payment cycles, and difficulties in collecting accounts receivable in Ghana.
• Exposure to negative terms-of-trade shocks from Ghana's overreliance on commodities.
• Potential for the government to grant artisanal mining rights or alternative mining rights in locations where BGHL has land rights but no active operations.

Future Outlook

The company's future outlook is heavily dependent on its ability to secure substantial additional capital to finance operations and restart the Bogoso Prestea gold mine, as well as the successful resolution of the ongoing lease dispute with the Republic of Ghana. Management anticipates offsetting Cedi-denominated inflation by generating revenue in USD through gold sales, but growth is predicted to remain muted over the coming years, with a potential pick-up starting in 2026 driven by oil, gas, and new gold mine developments.

Management Comments

• Management has determined that BGHL's liquidity condition raises substantial doubt about its ability to continue as a going concern for the next twelve months and thereafter.
• BGHL currently intends to raise additional or alternative capital through issuances of additional equity, debt finance, trade finance, and/or offtake finance.
• BGHL actively disputes the contents and legality of the Commission Notice and the appointment of an Interim Management Committee by the Minerals Commission of Ghana.
• BGHL has been advised by its legal counsel in Ghana that, pursuant to Section 27(5) of the Mining Act, the leases remain valid and in full effect pending 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 and licenses.
• 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 BGHL's balance sheet to zero.

Industry Context

The company operates in the gold mining sector, specifically within Ghana's Ashanti Gold Belt. Ghana's economy has experienced significant instability, including high inflation and a sovereign debt crisis, which could adversely affect the company's operations. The government's pressure to obtain more revenue from mining companies and anti-mining sentiment also pose challenges. The company's strategy to generate revenue in USD from gold sales aims to mitigate local Cedi inflation. The broader industry context includes global gold market demand and the need for regulatory approvals for mining operations.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results to assess performance against global benchmarks. It primarily focuses on the company's internal financial state and operational challenges.
• The company's current status as pre-revenue with significant operating losses and a going concern warning places it far below the operational and financial standards of established, revenue-generating gold producers.
• The reliance on a 'Scoping Study level' Life of Mine model for mineral rights valuation, based solely on Measured and Indicated Resources not yet categorized as mineral reserves, indicates a preliminary stage of project development compared to industry standards for proven and probable reserves.

Management Changes

Corporate Governance

Legal Proceedings

• On September 20, 2024, FGRBPL (the previous leaseholder of the Bogoso Prestea Mine) received a notice of termination of mining leases from the Minerals Commission of Ghana, alleging violations.
• An Interim Management Committee (IMC) assumed managerial control of the mine site following the Commission Notice.
• BGHL and the Previous Leaseholder actively dispute the contents and legality of the Commission Notice and the IMC appointment, asserting the leases remain valid under Ghanaian law.
• On October 14, 2024, BGHL delivered notice to the Republic of Ghana requesting settlement of the dispute pursuant to the UK-Ghana Bilateral Investment Treaty (BIT).
• On April 2, 2025, BGHL served a notice of arbitration on the Republic of Ghana to commence international arbitration proceedings under Article 10 of the UK-Ghana BIT.
• On June 6, 2025, the Republic of Ghana submitted its response, contesting jurisdiction and disputing the validity and merits of BGHL's claims, but agreed to a three-person tribunal administered by the Permanent Court of Arbitration in The Hague.
• The outcome of the arbitration is uncertain, and an unfavorable outcome would adversely affect the value of BGHL's business and could reduce the mineral rights value to zero.

Related Party Transactions

• BGHL received a $345,000 advance from Attachy Construction Limited on November 7, 2024, which is non-interest bearing and due on demand.
• BGHL's subsidiary, BGBPL, received aggregate advances of $303,000 from Attachy on October 2, 2024, October 28, 2024, and November 13, 2024, which are non-interest bearing and due on demand.
• BGHL received an advance of $866,691 from BC2 (BGHL's current parent company) in March 2025.
• BGHL had a net amount of $2,101,113 owed to Blue International Holdings Limited (BIHL) and its consolidated subsidiaries as of December 31, 2024, primarily for mine maintenance services provided by FGRBPL (BIHL's subsidiary) under a Transition Services Agreement (TSA).
• Interest on funds advanced/received between BGHL and BIHL/subsidiaries is calculated monthly based on SOFR plus 1%.
• Previous $2.5 million convertible notes were converted into shares by accepting shares issued by BC2, creating a corresponding intercompany loan owed by BGHL to BC2.
• Perception Capital Corp. IV issued a convertible promissory note to Blue Capital Management Partners, LLP (later novated to Blue Perception Capital LLP) for up to $2,000,000, which was subsequently cancelled and replaced with a new note with Blue Perception, converting into Class A ordinary shares upon Business Combination closing.
• Perception entered into a Preferred Stock Purchase Agreement to issue 609,250 preference shares to BCMP Services Limited (an entity jointly owned by BGHL's CEO and a significant shareholder) for $700,000.
• Perception and an affiliated party entered into a letter agreement with Cibreo Partners LLC (Second Advisor) for subscription agreements to purchase 432,891 Class A ordinary shares of Blue Gold Limited.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from warrant exercises and convertible note conversions. The lock-up provisions on Restricted Shares could lead to price volatility upon release. The ongoing going concern issue and potential loss of mining leases pose substantial risk to investment value.
• **Employees**: The company's ability to restart the mine and continue operations is uncertain, potentially impacting job security and future employment opportunities.
• **Creditors**: The company's liquidity challenges and going concern warning indicate increased credit risk. Unsecured obligations like the new convertible notes and advances from Attachy are particularly exposed.
• **Government of Ghana**: Involved in a legal dispute over mining leases, which could impact future revenue from mining operations and foreign investment perception. The 10% non-controlling interest in BGBPL by the Government of Ghana means they share in losses.
• **Gerald Metals SARL**: As a key financier, their investment is tied to the successful restart of the mine and resolution of the lease dispute. Their conversion options and board seats give them significant influence.
• **Attachy Construction Limited**: A supplier and financier, their repayment is dependent on the mine's restart and the company's financial health.

Next Steps

• Resolve the lease dispute with the Republic of Ghana through international arbitration proceedings.
• Obtain all necessary consents, approvals, and licenses for the successful design, construction, and operation of efficient mining, processing, and transportation facilities at the Bogoso Prestea mine.
• Secure substantial additional capital through equity, debt, trade, and/or offtake financing to fund operations and restart the Bogoso Prestea Mine.
• Satisfy conditions precedent for the Gold Advance Payment Purchase Agreement with Gerald Metals SARL to access the $25 million advance.
• Manage the conversion of new convertible notes into Blue Gold Limited ordinary shares 30 days after listing.
• Continue to comply with SEC filing requirements as a foreign private issuer, including annual reports on Form 20-F.

Key Dates

Recommendation

Keywords

Gold mining, Ghana, SEC filing, 20-F, Business Combination, Reverse recapitalization, Bogoso Prestea mine, Going concern, Liquidity, Mining leases dispute, International arbitration, Convertible notes, Advance payment, Nasdaq listing, Mineral rights, Corporate governance, Risk factors, Exploration, Development, Offtake agreement