(“Amaroq” or the “Corporation” or the “Company”)
Q1 2024 Financial Results
TORONTO, ONTARIO – 14 May 2024 - Amaroq Minerals
Ltd. (AIM, TSXV, NASDAQ Iceland: AMRQ), an independent mine
development company with a substantial land package of gold and
strategic mineral assets in Southern Greenland, presents its Q1
2024 financials. A conference call for analysts and investors will
be held today at 16:00 BST (15:00 GMT, 11:00 EST), details of which
can be found further down in this announcement. All dollar amounts
are expressed in Canadian dollars unless otherwise noted.
Eldur Olafsson, CEO of Amaroq,
commented:
“During the quarter we successfully completed a
fundraise to accelerate mining at Nalunaq, whilst continuing to
invest in our wider gold and strategic minerals portfolio in South
Greenland. I would like to thank all participating shareholders for
their strong support shown in this financing.
"I have been on site at Nalunaq now for some
weeks, participating across all workstreams, and am highly
encouraged by how operations are progressing. It has been excellent
to be working alongside around 80 people from the Amaroq mining,
engineering and site teams, in addition to our contractors Thyssen
Schachtbau, Halyard, HK Transport, Scott Steel and Arctic
Unlimited. With our new General Manager Jaco Duvenhage hired to
oversee all operations at Nalunaq, we are seeing good progress on
all fronts, and I would like to thank the team for their hard work.
The experience gained this winter, in our first year of year-round
operations, has been invaluable to improving our understanding and
planning for developing future projects in South Greenland.
Construction works over this period were completed despite pack ice
conditions, thanks to the foresight of the team who ensured that
all the required equipment was mobilised to site ahead of time. In
addition, at the end of March, the successful first underground
mining blast at Nalunaq was initiated at the 720m level, which was
a key milestone.
"I look forward to providing the market with a
more complete update on Nalunaq operations at our Capital Markets
event on 13 June, where we will present visuals of the progress
made to date and providing guidance on the cost to complete as well
as the expected date of first gold production. In addition, we will
present our plan for resource growth at Nalunaq, along with details
of our expanded drilling programme at the Stendalen copper-nickel
discovery."Finally, progress on new growth opportunities within
South Greenland, including Strategic Minerals, Hydro and Servicing
are progressing well and we look forward to providing an update to
the market in due course, during or before the Capital Markets
Day.”
Q1 2024 Corporate
Highlights
- Amaroq group liquidity of $96.31
million consisting of cash balances, undrawn revolving credit
facilities, undrawn revolving credit overrun facility less trade
payables ($52.42 million as at December 31, 2023).
- Gold business working capital of
$78.2 million that includes prepaid contractors on the Nalunaq
project of $17.47 million as of March 31, 2024 ($37.6 million as at
December 31, 2023 including prepaid contractors on the Nalunaq
project of $18.68 million)
- The Gardaq Joint Venture that
comprises the Strategic Minerals business has available liquidity
of $17.0 million ($18.7 million as at December 31, 2023) on a 100%
basis.
- In February 2024 the Company
completed a Fundraising, raising net proceeds of approximately
$74.52 million, to accelerate mining of the Target Block at the
Nalunaq mine to maintain the processing plant’s current nameplate
capacity of 300 tonnes of ore processed per day in 2025 and for the
extension of the process plant to include a flotation circuit and
dry-stack tailings facility.
- The Company intends to provide an
update on the Nalunaq project at a Capital Markets event to be held
in Iceland on 13 June 2024
- The Company increased the amount
placed in escrow from $0.68 million as at December 31, 2023 to
$5.70 million as at March 31, 2024 as a pre-requisite for mining
and construction permits.
- Post-period, Jaco Duvenhage was
appointed as Nalunaq General Manager to oversee the operation
Q1 2024 Operational
Highlights
- Permitting:
The public consultation for the Environmental Impact Assessment
(EIA) and Social Impact Assessment (SIA) for Nalunaq closed on 1st
March 2024
- Contracting and
Procurement: After the re-scoping of the work, 81% of the
key contracts for the processing plant were concluded and
procurement was 81% complete at the end of Q1. The last major
contract for structural, mechanical, piping and processing plant
equipment installation was awarded to Scott Steel Erectors in early
April
- Engineering:
Process plant detailed design and engineering was 86% complete at
the end of Q1 based on the updated project scope
- Construction:
Processing plant pad construction is 95% complete, Precast
foundations received and on site, foundation excavations completed,
all plinths installed up to crusher area. Erection of processing
plant steel structure is in progress. Overall processing plant
construction is 24% complete
- Mining: Mine
rehabilitation was completed in mid-March, and the successful first
underground blast at Nalunaq was initiated on March 30, 2024.
Development work continues, with Rehabilitation of 570L access
commenced to establish underground diamond drill location for
drilling-off the Target Block extension. Mine equipment, including
the second development drill and two ST-7 scoops, are on route to
Greenland and awaiting delivery to site as per schedule
- Exploration:
The Company has been busy finalising interpretation and preparing
for a busy 2024 field season to include a targeted Mineral Resource
growth plans at Nalunaq and Copper-Nickel-Cobalt drilling at
Stendalen among other project development programmes
Nalunaq Project KPIs
- 60,372 total hours worked
during Q1 2024
- Daily average of 55 people
working on site at Nalunaq in Q1 2024
- Zero Lost Time Injuries in Q1
2024
- Ratio of Greenlandic personnel
at Nalunaq standing at 53% in Q1 2024
Outlook
- Following the announcement that
Jaco Crouse would step down as Chief Financial Officer and as a
Director of the Company with effect from 3 June 2024, the
recruitment process to appoint a new CFO is well advanced. The
Company will update the market in due course
- All engineering for the process
plant will be completed during quarter two and the procurement
packages will be issued to the market for these.
- Post period, activities at
Nalunaq continue to progress well, with 80 people now present on
site. Construction of the processing plant structure is underway
and expected to complete in June 2024. Management intends to
provide a further update on the Nalunaq Project at a Capital
Markets Day in Iceland, to take place on 13 June 2024
Exploration activities
overview
Gold projects:
- Nalunaq
- Additional 75 vein
intersections from historical core drilling have been selected
using core photography and will be assessed and sampled during Q2
2024
- A Resource development
exploration programme has been developed to work alongside
continued underground rehabilitation and development
activities
- Nanoq
- Further desk-based modelling from
the ALS Goldspot interpretation has allowed the Company to produce
detailed resource drilling plans that can be progressed in
2024/25
- Vagar Ridge
- The Corporation has progressed with
the construction of a robust geological and mineralization model to
inform future exploration at Vagar as well as designing future
exploration options
Strategic Minerals:
- Sava Copper Belt
(Sava/North Sava)
- Amaroq has continued to assess the
results from the 2023 field season alongside recognised subject
matter experts in porphyry mineralisation as the Company develops
its 2024 exploration programmes
- Stendalen
- Geophysical data reviewed points to
the likely feeder zone and other sulphide accumulation areas. 2024
exploration drilling plans have been developed
- Kobberminebugt:
- High resolution geophysical data
(MT) has been received and inverted for the Kobberminebugt licence
and is currently being reviewed ahead of the development of a 2024
field programme
- Nunarsuit
- High resolution geophysical data
(Magnetics, Gravity and Radiometics) has been received for the
western sections of the licence and is currently being reviewed
ahead of the development of a 2024 field programme
- Regional
Exploration
- The Company has continued its desk
based regional exploration programmes developing further targets to
be assessed as part of the 2024 field programmes
Details of conference
call
A conference call for analysts and investors
will be held today at 16:00 BST (15:00 GMT, 11:00 EST), including a
management presentation and Q&A session.
To join the meeting, please register at the
below link:
https://us06web.zoom.us/webinar/register/WN_nfp5J0EwQy6ZI6VB522KOg
Notice of Iceland Capital Markets
Day
The Company intends to hold a Capital
Markets Day in Iceland on 13 June 2024, during which Management
will provide an update on the Nalunaq Project.
Details of registration and remote access
will be provided in advance of the session.
Amaroq Financial
Results
The following selected financial data is extracted from the
Financial Statements for the three months ended March 31, 2024.
Financial Results
|
|
Three months ended March 31 |
|
|
2024$ |
2023$ |
|
Exploration and evaluation expenses |
875,213 |
1,181,653 |
|
General and administrative |
3,959,226 |
2,577,035 |
|
Share of 3-month loss of an equity-accounted joint arrangement |
646,432 |
- |
|
Unrealized loss on derivative liability |
4,300,213 |
- |
|
Net loss and comprehensive loss |
9,217,515 |
3,376,893 |
|
Basic and diluted loss per common share |
(0.03) |
(0.01) |
Financial Position
|
|
As at March 31 |
As at December 31 |
|
|
2024$ |
2023$ |
|
Cash on hand |
65,086,851 |
21,014,633 |
|
Total assets |
179,887,713 |
106,953,183 |
|
Total current liabilities (before convertible notes liability) |
7,371,146 |
6,354,185 |
|
Total current liabilities (including convertible notes
liability) |
48,922,487 |
42,097,312 |
|
Shareholders’ equity |
130,283,503 |
64,278,637 |
|
Working capital-gold business (before convertible notes
liability) |
78,210,475 |
37,614,068 |
|
Working capital-gold business (after convertible notes
liability) |
36,659,134 |
1,870,941 |
|
Gold business liquidity (excludes $17.0 and $18.7M ring-fenced for
strategic mineral exploration as of March 31, 2024 and Dec 31,
2023) |
96,303,850 |
52,419,243 |
Ends
Enquiries: Amaroq Minerals
Ltd. Eldur Olafsson, Executive Director and
CEO eo@amaroqminerals.com Eddie
Wyvill, Corporate Development+44 (0)7713
126727 ew@amaroqminerals.com Stifel
Nicolaus Europe Limited (Nominated Adviser and
Broker) Callum Stewart Varun
Talwar Simon Mensley Ashton
Clanfield +44 (0) 20 7710
7600 Panmure Gordon (UK) Limited
(Joint Broker) Hugh Rich Dougie
Mcleod +44 (0) 20 7886
2500 Camarco (Financial
PR) Billy Clegg Elfie
Kent Charlie Dingwall +44 (0) 20 3757
4980
For Company updates: Follow
@Amaroq_minerals on Twitter Follow Amaroq Minerals Inc.
on LinkedIn
Further Information:
About Amaroq Minerals
Amaroq Minerals' principal business objectives
are the identification, acquisition, exploration, and development
of gold and strategic metal properties in Greenland. The Company's
principal asset is a 100% interest in the Nalunaq Project, a
development stage property with an exploitation license including
the previously operating Nalunaq gold mine. The Corporation has a
portfolio of gold and strategic metal assets in Southern Greenland
covering the two known gold belts in the region. Amaroq Minerals is
incorporated under the Canada Business Corporations Act and wholly
owns Nalunaq A/S, incorporated under the Greenland Public Companies
Act.
Certain statements in this release constitute
"forward-looking statements" or "forward-looking information"
within the meaning of applicable securities laws. Such statements
and information involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or
achievements of the company, its projects, or industry results, to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements or information. Such statements can be identified by the
use of words such as "may", "would", "could", "will", "intend",
"expect", "believe", "plan", "anticipate", "estimate", "scheduled",
"forecast", "predict" and other similar terminology, or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. These statements reflect
the Company's current expectations regarding future events,
performance and results and speak only as of the date of this
release.
Forward-looking statements and information
involve significant risks and uncertainties, should not be read as
guarantees of future performance or results and will not
necessarily be accurate indicators of whether or not such results
will be achieved. A number of factors could cause actual results to
differ materially from the results discussed in the forward-looking
statements or information, including, but not limited to: material
adverse changes, unexpected changes in laws, rules or regulations,
or their enforcement by applicable authorities; the failure of
parties to contracts with the company to perform as agreed; social
or labour unrest; changes in commodity prices; and the failure of
exploration, refurbishment, development or mining programs or
studies to deliver anticipated results or results that would
justify and support continued exploration, studies, development or
operations.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Glossary
|
Ag |
silver |
|
Au |
gold |
|
Bt |
Billion tonnes |
|
Cu |
copper |
|
g |
grams |
|
g/t |
grams per tonne |
|
km |
kilometers |
|
Koz |
thousand ounces |
|
m |
meters |
|
Mo |
molybdenum |
|
MRE |
Mineral Resource Estimate |
|
MT |
Magnetotelluric data |
|
Nb |
niobium |
|
Ni |
nickel |
|
oz |
ounces |
|
REE |
Rare Earth Elements |
|
t |
tonnes |
|
Ti |
Titanium |
|
t/m3 |
tonne per cubic meter |
|
U |
uranium |
|
USD/ozAu |
US Dollar per ounce of gold |
|
V |
Vanadium |
|
Zn |
zinc |
Inside Information
This announcement contains inside information
for the purposes of Article 7 of the UK version of
Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as it
forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018, and Regulation
(EU) No. 596/2014 on Market Abuse ("EU MAR").
Qualified Person Statement
The technical information presented in this
press release has been approved by James Gilbertson CGeol, VP
Exploration for Amaroq Minerals and a Chartered Geologist with the
Geological Society of London, and as such a Qualified Person as
defined by NI 43-101.
Amaroq Minerals
Ltd.
UNAUDITED
CONDENSED INTERIM
CONSOLIDATED FINANCIAL
STATEMENTSFor the three months ended March 31,
2024
The attached financial statements have been
prepared by Management of Amaroq Minerals Ltd. and have not been
reviewed by the auditor
|
|
|
|
|
|
|
|
As at March 31, |
As at December 31, |
|
|
Notes |
2024 |
2023 |
|
|
|
$ |
$ |
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
| Cash |
|
65,086,851 |
21,014,633 |
| Due from a related
party |
3,12 |
- |
3,521,938 |
| Sales tax
receivable |
|
144,108 |
69,756 |
| Prepaid expenses and
others |
|
17,469,706 |
18,681,568 |
|
Inventory |
|
2,880,956 |
680,358 |
|
Total current
assets |
|
85,581,621 |
43,968,253 |
|
Non-current assets |
|
|
|
| Deposit |
|
27,944 |
27,944 |
|
| Escrow account for
environmental rehabilitation |
|
5,697,903 |
598,939 |
|
| Financial Asset -
Related Party |
3,12 |
4,200,379 |
- |
| Investment in equity
accounted joint arrangement |
3 |
22,846,379 |
23,492,811 |
|
| Mineral
properties |
4 |
48,683 |
48,821 |
|
| Right of use
asset |
7 |
715,898 |
574,856 |
|
|
Capital assets |
5 |
60,768,906 |
38,241,559 |
|
|
Total non-current
assets |
|
94,306,092 |
62,984,930 |
|
TOTAL ASSETS |
|
179,887,713 |
106,953,183 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current liabilities |
|
|
|
| Accounts payable and
accrued liabilities |
|
7,258,359 |
6,273,979 |
| Convertible
notes |
6 |
41,551,341 |
35,743,127 |
|
Lease liabilities – current portion |
7 |
112,787 |
80,206 |
|
Total current
liabilities |
|
48,922,487 |
42,097,312 |
|
Non-current liabilities |
|
|
|
|
Lease liabilities |
7 |
681,723 |
577,234 |
|
Total non-current
liabilities |
|
681,723 |
577,234 |
|
Total liabilities |
|
49,604,210 |
42,674,546 |
|
Equity |
|
|
|
| Capital stock |
|
206,698,546 |
132,117,971 |
| Contributed
surplus |
|
7,367,374 |
6,725,568 |
| Accumulated other
comprehensive loss |
|
(36,772) |
(36,772) |
|
Deficit |
|
(83,745,645) |
(74,528,130) |
|
Total equity |
|
130,283,503 |
64,278,637 |
|
TOTAL LIABILITIES
AND EQUITY |
|
179,887,713 |
106,953,183 |
|
|
|
|
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
|
|
|
Three months ended March
31, |
|
|
Notes |
2024 |
2023 |
|
|
|
$ |
$ |
|
Expenses |
|
|
|
| Exploration and
evaluation expenses |
9 |
875,213 |
1,181,653 |
|
| General and
administrative |
10 |
3,959,226 |
2,577,035 |
|
| Loss on disposal
of capital assets |
|
- |
37,791 |
|
|
Foreign exchange loss (gain) |
|
79,509 |
(197,004) |
|
|
Operating loss |
|
4,913,948 |
3,599,475 |
|
|
Other expenses
(income) |
|
|
|
|
| Interest
income |
|
(15,326) |
(231,319) |
|
| Gardaq management
income and allocated cost |
|
(636,326) |
- |
|
| Share of net
losses of joint arrangement |
3 |
646,432 |
- |
|
| Unrealized loss
on derivative liability |
6 |
4,300,213 |
- |
|
|
Finance costs |
11 |
8,574 |
8,737 |
|
|
Net loss and
comprehensive loss |
|
(9,217,515) |
(3,376,893) |
|
|
Weighted average number of common shares outstanding - basic and
diluted |
|
290,574,484 |
263,203,347 |
|
Basic and diluted loss per common share |
|
(0.03) |
(0.01) |
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
Amaroq Minerals
Ltd.Consolidated
Statements of
Changes in
Equity(Unaudited, in Canadian Dollars)
|
Number of
commonshares outstanding |
Capital Stock |
Contributed surplus |
Accumulated other
comprehensiveloss |
Deficit |
Total Equity |
|
|
|
|
$ |
$ |
$ |
$ |
$ |
|
Balance at
January 1,
2023 |
|
263,073,022 |
131,708,387 |
5,250,865 |
(36,772) |
(73,694,617) |
63,227,863 |
| Net loss and
comprehensive loss |
|
- |
- |
- |
- |
(3,376,893) |
(3,376,893) |
| Options
exercised |
|
208,275 |
128,758 |
(150,000) |
- |
- |
(21,242) |
|
Stock-based compensation |
8 |
- |
- |
451,014 |
- |
- |
451,014 |
|
Balance at March
31, 2023 |
|
263,281,297 |
131,837,145 |
5,551,879 |
(36,772) |
(77,071,510) |
60,280,742 |
|
|
|
|
|
|
|
|
|
|
Balance at
January 1,
2024 |
|
263,670,051 |
132,117,971 |
6,725,568 |
(36,772) |
(74,528,130) |
64,278,637 |
| Net loss and
comprehensive loss |
|
- |
- |
- |
- |
(9,217,515) |
(9,217,515) |
| Share issuance
under a fundraising |
|
62,724,758 |
75,574,600 |
- |
- |
- |
75,574,600 |
| Share issuance
costs |
|
- |
(1,047,098) |
- |
- |
- |
(1,047,098) |
| Options exercised
- net |
|
60,637 |
53,073 |
(70,500) |
- |
- |
(17,427) |
|
Stock-based compensation |
8 |
- |
- |
712,306 |
- |
- |
712,306 |
|
Balance at March
31, 2024 |
|
326,455,446 |
206,698,546 |
7,367,374 |
(36,772) |
(83,745,645) |
130,283,503 |
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
|
|
|
|
|
|
Notes |
Three months ended March
31, |
|
|
|
2024 |
2023 |
|
|
|
$ |
$ |
|
Operating activities |
|
|
|
| Net loss for the
period |
|
(9,217,515) |
(3,376,893) |
| Adjustments
for: |
|
|
|
|
Depreciation |
5 |
172,763 |
180,008 |
|
Amortisation of ROU asset |
7 |
19,997 |
19,777 |
|
Stock-based compensation |
8 |
712,306 |
451,014 |
|
Unrealized loss on derivative liability |
6 |
4,300,213 |
- |
|
Loss on disposal of capital assets |
5 |
- |
37,791 |
|
Share of net losses of joint arrangement |
3 |
646,432 |
- |
|
Gardaq management income and allocated cost |
3,12 |
(636,326) |
|
|
Other expenses |
|
- |
8,737 |
|
Foreign exchange |
|
(195,812) |
(216,560) |
|
|
|
(4,197,942) |
(2,896,126) |
| Changes in
non-cash working capital items: |
|
|
|
|
Sales tax receivable |
|
(74,352) |
16,076 |
|
Prepaid expenses and others |
|
(988,735) |
(515,244) |
|
Trade and other payables |
|
955,992 |
(127,977) |
|
|
|
(107,095) |
(627,145) |
|
Cash flow used
in operating
activities |
|
(4,305,037) |
(3,523,271) |
|
Investing activities |
|
|
|
|
Transfer to escrow account for environmental rehabilitation |
|
(5,066,194) |
- |
| Construction in
progress and acquisition of capital assets |
5 |
(21,476,951) |
- |
|
Prepayment for acquisition of ROU asset |
|
(5,825) |
- |
|
Cash flow used
in investing
activities |
|
(26,548,970) |
- |
|
Financing activities |
|
|
|
| Share
issuance |
|
75,574,600 |
|
| Share issuance
costs |
|
(1,047,098) |
|
| Principal
repayment – lease liabilities |
7 |
(18,145) |
(26,474) |
|
Cash flow from
financing activities |
|
74,509,357 |
(26,474) |
|
Net change in cash before effects of exchange rate changes on cash
during the period |
|
43,655,350 |
(3,549,745) |
|
Effects of exchange rate changes on cash |
|
416,868 |
196,583 |
|
Net change in cash during the period |
|
44,072,218 |
(3,353,162) |
|
Cash, beginning of period |
|
21,014,633 |
50,137,569 |
|
Cash, end of
period |
|
65,086,851 |
46,784,407 |
|
Supplemental cash
flow information |
|
|
|
| Borrowing costs
capitalised to capital assets (note 5) |
|
1,223,021 |
- |
| Interest
received |
|
15,327 |
231,319 |
| ROU assets
acquired through lease |
|
155,214 |
- |
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
1. NATURE
OF OPERATIONS,
BASIS OF
PRESENTATION
Amaroq Minerals Ltd. (the “Corporation”) was
incorporated on February 22, 2017 under the Canada Business
Corporations Act. The Corporation’s head office is situated at
3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X
1A4, Canada. The Corporation operates in one industry segment,
being the acquisition, exploration and development of mineral
properties. It owns interests in properties located in Greenland.
The Corporation’s financial year ends on December 31. Since July
2017, the Corporation’s shares are listed on the TSX Venture
Exchange (the “TSX-V”), since July 2020, the Corporation’s shares
are also listed on the AIM market of the London Stock Exchange
(“AIM”) and from November 1, 2022, on Nasdaq First North Growth
Market Iceland which were transferred on
September 21, 2023 on Nasdaq Main Market Iceland
(“Nasdaq”) under the AMRQ ticker.
These unaudited condensed interim consolidated
financial statements for the three months ended
March 31, 2024 (“Financial Statements”) were approved by
the Board of Directors on May 14, 2024
1.1 Basis
of presentation
and consolidation
The Financial Statements include the accounts of
the Corporation and those of its 100% owned subsidiary
Nalunaq A/S, company incorporated under the Greenland Public
Companies Act. The Financial Statements also include the
Corporation’s 51% equity pick-up of Gardaq A/S, a joint venture
with GCAM LP (Note 3).
The Financial Statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board
(“IASB”) including International Accounting Standard (“IAS”) 34,
Interim Financial Reporting. The Financial Statements have been
prepared under the historical cost convention.
The Financial Statements should be read in
conjunction with the annual financial statements for the year ended
December 31, 2023, which have been prepared in accordance with IFRS
as issued by the IASB. The accounting policies, methods of
computation and presentation applied in these Financial Statements
are consistent with those of the previous financial year ended
December 31, 2023.
2. CRITICAL
ACCOUNTING JUDGMENTS
AND ASSUMPTIONS
The preparation of the Financial Statements
requires Management to make judgments and form assumptions that
affect the reported amounts of assets and liabilities at the date
of the Financial Statements and reported amounts of expenses during
the reporting period. On an ongoing basis, Management evaluates its
judgments in relation to assets, liabilities and expenses.
Management uses past experience and various other factors it
believes to be reasonable under the given circumstances as the
basis for its judgments. Actual outcomes may differ from these
estimates under different assumptions and conditions.
In preparing the Financial Statements, the
significant judgements made by Management in applying the
Corporation accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the
Corporation’s audited annual financial statements for the year
ended December 31, 2023.
3. INVESTMENT
IN AN ASSOCIATE OR JOINT VENTURE CORPORATION
|
|
As at
March 31, 2024 |
As at March 31,
2023 |
|
|
$ |
$ |
| Balance at
beginning of period |
23,492,811 |
- |
| Share of joint
venture’s net losses- for 3 months ended March 31 |
(646,432) |
- |
|
Balance at end of period |
22,846,379 |
- |
|
Original Investment
in Gardaq ApS |
7,422 |
- |
|
Transfer of
non-gold strategic minerals licences at cost |
36,896 |
- |
|
Investment at
conversion of Gardaq ApS to Gardaq A/S |
55,344 |
- |
|
Gain on FV
recognition of equity accounted investment in joint venture |
31,285,536 |
- |
|
Investment retained
at fair value- 51% share |
31,385,198 |
- |
|
Share of joint venture’s cumulative net losses |
(8,538,819) |
- |
|
Balance at end of period |
22,846,379 |
- |
The following tables summarize the unaudited
financial information of Gardaq A/S as of March 31, 2024.
|
|
As at March
31, 2024 |
|
|
$ |
| Cash and cash
equivalent |
17,002,319 |
|
Prepaid expenses and other |
815,896 |
|
Total current assets |
17,818,215 |
|
Mineral property |
92,240 |
|
Total Assets |
17,910,455 |
|
Accounts payable and accrued liabilities |
205,922 |
|
Financial Liability - Related Party |
4,200,379 |
|
Capital stock |
30,246,937 |
|
Deficit |
(16,742,783) |
|
Total equity |
13,504,154 |
|
Total liabilities and equity |
17,910,455 |
|
|
As at March
31, 2024 |
|
|
$ |
| Exploration and
Evaluation expenses |
842,840 |
| Interest
expense (income) |
(2,928) |
| Foreign
exchange loss (gain) |
(177,623) |
|
Operating loss |
662,289 |
|
Other expenses (income) |
605,225 |
|
Net loss and comprehensive loss |
1,267,514 |
3. INVESTMENT
IN AN ASSOCIATE OR JOINT VENTURE CORPORATION (CONT’d)
3.1 Financial Asset – Related
Party
Subject to a Subscription and Shareholder
Agreement dated 13 April 2023, the Corporation undertakes to
subscribe to two ordinary shares in Gardaq (the “Amaroq shares”) at
a subscription price of GBP 5,000,000 no later than 10 business
days after the third anniversary of the completion of the
subscription agreement.
Amaroq’s subscription will be completed by the
conversion of Gardaq’s related party balance into equity shares.
Gardaq’s related party payable balance consists of overhead,
management, general and administrative expenses payable to the
Corporation. In the event that the related party payable balance is
less than GBP 5,000,000, the Corporation shall, no later than 10
business days after the third anniversary of Completion:
(a) subscribe to one Amaroq
share by conversion of the amount payable to the
Corporation,(b) subscribe to one Amaroq share at a
subscription price equal to GBP 5,000,000 less the amount payable
to the Corporation
In the event that the amount payable to the
Corporation exceeds GBP 5,000,000, the Corporation shall subscribe
to the Amaroq shares at a subscription price equal to GBP 5,000,000
by conversion of GBP 5,000,000 of the amount due from Gardaq.
Gardaq shall not be liable to repay any of the balance payable to
the Corporation that exceeds GBP 5,000,000 (equivalent to CAD
8,557,000 as at 31 March 2024). See note 12.1.
4. MINERAL
PROPERTIES
|
|
As at December
31,2023 |
Transfer |
As at March
31,2024 |
|
|
$ |
$ |
$ |
| Nalunaq - Au |
1 |
- |
1 |
| Tartoq - Au |
18,431 |
- |
18,431 |
| Vagar - Au |
11,103 |
- |
11,103 |
| Nuna Nutaaq -
Au |
6,076 |
- |
6,076 |
| Anoritooq -
Au |
6,389 |
- |
6,389 |
| Siku - Au |
6,821 |
(138) |
6,683 |
| Naalagaaffiup
Portornga - Strategic Minerals |
- |
- |
- |
| Saarloq -
Strategic Minerals |
- |
- |
- |
| Sava - Strategic
Minerals |
- |
- |
- |
| Kobberminebugt -
Strategic Minerals |
- |
- |
- |
| Stendalen -
Strategic Minerals |
- |
- |
- |
|
North Sava - Strategic Minerals |
- |
- |
- |
|
Total mineral
properties |
48,821 |
- |
48,683 |
4. MINERAL
PROPERTIES (CONT’d)
|
|
As at December
31,2022 |
Additions |
As at March
31,2023 |
|
|
$ |
$ |
$ |
| Nalunaq - Au |
1 |
- |
1 |
| Tartoq - Au |
18,431 |
- |
18,431 |
| Vagar - Au |
11,103 |
- |
11,103 |
| Nuna Nutaaq -
Au |
6,076 |
- |
6,076 |
| Anoritooq -
Au |
6,389 |
- |
6,389 |
| Siku - Au |
6,821 |
- |
6,821 |
| Naalagaaffiup
Portornga - Strategic Minerals |
6,334 |
- |
6,334 |
| Saarloq -
Strategic Minerals |
7,348 |
- |
7,348 |
| Sava - Strategic
Minerals |
6,562 |
- |
6,562 |
| Kobberminebugt -
Strategic Minerals |
6,840 |
- |
6,840 |
| Stendalen -
Strategic Minerals |
4,837 |
- |
4,837 |
|
North Sava - Strategic Minerals |
4,837 |
- |
4,837 |
|
Total mineral
properties |
85,579 |
- |
85,579 |
5. CAPITAL
ASSETS
|
|
Field equipment
andinfrastruc-
ture |
Vehicles and
rolling stock |
Equipment (including software) |
Construc- tion In
Progress |
Total |
|
|
$ |
$ |
$ |
$ |
$ |
|
Three months ended March
31, 2024 |
|
|
|
|
|
|
Opening net book value |
1,537,379 |
3,312,118 |
108,822 |
33,283,240 |
38,241,559 |
|
Additions |
- |
- |
138 |
22,699,972 |
22,700,110 |
|
Disposals |
- |
- |
- |
- |
- |
|
Depreciation |
(49,594) |
(107,571) |
(15,598) |
- |
(172,763) |
|
Closing net book
value |
1,487,785 |
3,204,547 |
93,362 |
55,983,212 |
60,768,906 |
|
|
Field equipment
andinfrastruc-
ture |
Vehicles and
rolling stock |
Equipment (including software) |
Construc- tion In
Progress |
Total |
|
|
$ |
$ |
$ |
$ |
$ |
|
As at March
31, 2024 |
|
|
|
|
|
|
Cost |
2,351,041 |
4,466,971 |
232,369 |
55,983,212 |
63,033,593 |
|
Accumulated depreciation |
(863,256) |
(1,262,424) |
(139,007) |
- |
(2,264,687) |
|
Closing net book
value |
1,487,785 |
3,204,547 |
93,362 |
55,983,212 |
60,768,906 |
5. CAPITAL
ASSETS (CONT’d)
Depreciation of capital assets related to
exploration and evaluation properties is being recorded in
exploration and evaluation expenses in the consolidated statement
of comprehensive loss, under depreciation. Depreciation of $157,262
($164,011 for the three months ended March 31, 2023) was expensed
as exploration and evaluation expenses during the three months
ended March 31, 2024 and the remaining depreciation was capitalised
to Construction in Progress.
As at March 31, 2024, the Corporation had
capital commitments, of $88,948,607. These commitments relate to
the development of Nalunaq Project, rehabilitation of the Nalunaq
mine, construction of processing plant, purchases of mobile
equipment and establishment of surface infrastructure.
During first three months of 2024 the Company
capitalised borrowing costs of $1,223,021 to construction in
progress, which are included in additions.
6. CONVERTIBLE
NOTES
|
|
Convertible notes loan |
Embedded Derivatives at FVTPL |
Total |
|
|
$ |
$ |
$ |
| Balance as at
December 31, 2023 |
11,763,053 |
23,980,074 |
35,743,127 |
| Accretion of
discount |
843,673 |
- |
843,673 |
| Accrued
interest |
379,348 |
- |
379,348 |
| Fair value
change |
- |
4,300,213 |
4,300,213 |
|
Foreign exchange loss (gain) |
284,980 |
- |
284,980 |
|
Balance as at December 31, 2023 |
13,271,054 |
28,280,287 |
41,551,341 |
|
Non-current portion |
- |
- |
- |
|
Current portion |
13,271,054 |
28,280,287 |
41,551,341 |
6.1 Revolving Credit
Facility
A $25 million (US$18.5 million) Revolving Credit Facility
(“RCF”) provided by Landsbankinn hf. and Fossar Investment Bank,
with a two-year term expiring on 1 September 2025 and priced at
SOFR plus 950bps. Interest is capitalized and payable at the end of
the term.
The credit facility is denominated in US Dollars and the SOFR
interest rate is determined with reference to the CME Term SOFR
Rates published by CME Group Inc. The Landsbankinn hf. and Fosar
revolving credit facility carries (i) a commitment fee of 0.40% per
annum calculated on the undrawn facility amount and (ii) an
arrangement fee of 2.00% on the facility amount where 1.5% is to be
paid on or before the closing date of the facility and 0.50% is to
be paid on or before the first draw down. The facility is not
convertible into any securities of the Corporation.The facility
will be secured by (i) a bank account pledge from the Corporation
and Nalunaq A/S, (ii) share pledges over all current and future
acquired shares in Nalunaq A/S and Gardaq A/S held by the
Corporation pursuant to the terms of share pledge agreements, (iii)
a proceeds loan assignment agreement, (iv) a pledge agreement in
respect of owner’s mortgage deeds and (v) a licence transfer
agreement. The Corporation has not yet drawn on this facility.
6. CONVERTIBLE
NOTES (CONT’d)
6.2 Convertible notes
Convertible notes represent $30.4 million (US$22.4 million)
notes issued to ECAM LP (US$16 million), JLE Property Ltd.
(US$4 million) and Livermore Partners LLC (US$2.4 million)
with a four-year term and a fixed interest rate of 5%. The
conversion price of $0.90 per common share is the closing Canadian
market price of the Amaroq shares on the day, prior to the closing
day of the Debt Financing.
The convertible notes are denominated in US Dollars and will
mature on September 30, 2027, being the date that is four years
from the convertible note offering closing date. The principal
amount of the convertible notes will be convertible, in whole or in
part, at any time from one month after issuance into common shares
of the Corporation ("Common Shares") at a conversion price of $0.90
(£0.525) per Common Share for a total of up to 33,812,401 Common
Shares. The Corporation may repay the convertible notes and accrued
interest at any time, in cash, subject to providing 30 days’ notice
to the relevant noteholders, with such noteholders having the
option to convert such convertible notes into Common Shares at the
conversion price up to 5 days prior to the redemption date. If the
Corporation chooses to redeem some but not all of the outstanding
convertible notes, the Corporation shall redeem a pro rata share of
each noteholder's holding of convertible notes. The Corporation
shall pay a commitment fee to the holders of the convertible notes
of, in aggregate, $5,511,293 (US$4,484,032), which shall be paid
pro rata to each noteholder's holding of convertible notes. The
commitment fee is payable on the earlier of (a) the date falling 20
business days after all amounts outstanding under the Bank
Revolving Credit Facility have been repaid in full, but no earlier
than the date that is 24 months after the date of issuance of the
notes; and (b) the date falling 30 (thirty) months after the date
of the subscription agreement in respect of the notes, irrespective
of whether or not notes have converted at that date or been
repaid.
The convertible notes will be secured by (i) bank account pledge
agreements from the Corporation and Nalunaq A/S, (ii) share pledges
over all current and future acquired shares in Nalunaq A/S and
Gardaq A/S held by the Corporation pursuant to the terms of share
pledge agreements, (iii) a proceeds loan assignment agreement, (iv)
a pledge agreement in respect of owner’s mortgage deeds and (v) a
licence transfer agreement.
The convertible notes represent hybrid financial instruments
with embedded derivatives requiring separation. The debt host
portion (the “Host”) of the instrument is classified at amortized
cost, whereas the aggregate conversion and repayment options (the
“Embedded Derivatives”) are classified at fair value through profit
and loss (FVTPL).
The fair value of the convertible notes at inception was
recognized at $30.4 million (US$22.4 million) and $19.4 million
(US$14.3 million) embedded derivative component was isolated and
determined using a Black Scholes valuation model which required the
use of significant unobservable inputs. As of March 31, 2024 the
Corporation identified the fair value of embedded derivative
associated with the early conversion option to be $28.2 million
($24.0 million as of December 31, 2023). The change in fair value
of embedded derivative in the period from January 1, 2024 to March
31, 2024 has been recognized in the statement of Income (loss) and
comprehensive income (loss). The Host liability component at
inception, before deducting transaction costs, was recognized to be
the residual amount of $10.9 million (US$8.1 million) which is
subsequently measured at amortized cost. Transaction costs incurred
on the issuance of the convertible note amounted to $1,004,030, of
which $362,502 was allocated to, and deducted from, the host
liability component, and $641,528 was allocated to the embedded
derivative component and charged to profit and loss.
6. CONVERTIBLE
NOTES (CONT’D)
6.3 Cost Overrun Facility
$13.5 million (US$10 million) Revolving Cost Overrun Facility
from JLE Property Ltd. on the same terms as the Bank Revolving
Credit Facility.
The Overrun Facility is denominated in US Dollars with a
two-year term, expiring on 1 September 2025, and will bear interest
at the CME Term SOFR Rates by CME Group Inc. and have a margin of
9.5% per annum. The Overrun Facility carries a stand-by fee of 2.5%
on the amount of committed funds. The Overrun Facility is not
convertible into any securities of the Corporation.
The Overrun Facility will be secured by (i) bank account pledge
agreements from the Corporation and Nalunaq A/S, (ii) share pledges
over all current and future acquired shares in Nalunaq A/S and
Gardaq A/S held by the Corporation pursuant to the terms of share
pledge agreements, (iii) a proceeds loan assignment agreement, (iv)
a pledge agreement in respect of owner’s mortgage deeds and (v) a
licence transfer agreement. The Corporation has not yet
drawn on this facility.
7.
LEASE LIABILITIES
|
|
As atMarch
31,2024 |
As atDecember
31,2023 |
|
|
$ |
$ |
| Balance
beginning |
657,440 |
729,237 |
| Lease
additions |
155,214 |
- |
| Lease
payment |
(26,718) |
(105,894) |
| Interest |
8,574 |
34,097 |
|
Adjustment |
- |
- |
|
Balance ending |
794,510 |
657,440 |
|
Non-current portion – lease liabilities |
(681,723) |
(577,234) |
|
Current portion – lease liabilities |
112,787 |
80,206 |
The Corporation has two leases for its offices.
In October 2020, the Corporation started the lease for five years
and five months including five free rent months during this period.
The monthly rent is $8,825 until March 2024 and $9,070 for the
balance of the lease. The Corporation has the option to renew the
lease for an additional five-year period at $9,070 monthly rent
indexed annually to the increase of the consumer price index of the
previous year for the Montreal area. In March 2024, the Corporation
started a new lease for a two-year term with the option to extend
for two more years. The monthly rent is $5,825 until March 2025
after which the monthly rent may increase as per the lease
terms.
7. LEASE LIABILITIES
(CONT’d)
7.1
Right of use asset
|
|
As at |
As at |
|
|
March 31, |
December 31, |
|
|
2024 |
2023 |
|
|
$ |
$ |
| Opening net book
value |
574,856 |
655,063 |
| Additions |
161,039 |
- |
| Disposals |
- |
- |
| Adjustment |
- |
- |
|
Amortisation |
(19,997) |
(80,207) |
|
Closing net book value |
715,898 |
574,856 |
| |
|
|
|
Cost |
997,239 |
836,200 |
|
Accumulated amortisation |
(281,341) |
(261,344) |
|
Closing net book value |
715,898 |
574,856 |
8. STOCK-BASED
COMPENSATION
8.1 Stock
options
An incentive stock option plan (the “Plan”) was
approved initially in 2017 and renewed by shareholders on
June 15, 2023. The Plan is a “rolling” plan whereby a
maximum of 10% of the issued shares at the time of the grant are
reserved for issue under the Plan to executive officers, directors,
employees and consultants. The Board of directors grants the stock
options and the exercise price of the options shall not be less
than the closing price on the last trading day, preceding the grant
date. The options have a maximum term of ten years. Options granted
pursuant to the Plan shall vest and become exercisable at such time
or times as may be determined by the Board, except options granted
to consultants providing investor relations activities shall vest
in stages over a 12-month period with a maximum of one-quarter of
the options vesting in any three-month period. The Corporation has
no legal or constructive obligation to repurchase or settle the
options in cash.
On January 17, 2022, the Corporation granted its
officers, employees and consultant 4,100,000 stock options with an
exercise price of $0.60 and expiry date of
January 17, 2027. The stock options vested 100% at the
grant date. The options were granted at an exercise price equal to
the closing market price of the shares the day prior to the grant.
Total stock-based compensation costs amount to $1,435,000 for an
estimated fair value of $0.35 per option.
On April 20, 2022, the Corporation granted a
senior employee 73,333 stock options with an exercise price of
$0.75 and expiry date of April 20, 2027. The stock
options vested 100% at the grant date. The options were granted
with an exercise price equal to the closing market price of the
shares the day prior to the grant. Total stock-based compensation
costs amount to $32,267 for an estimated fair value of $0.44 per
option. The fair value of the options granted was estimated using
the Black-Scholes model with no expected dividend yield, 68.9%
expected volatility, 2.7% risk-free interest rate and a 5-year
term. The expected life and expected volatility were estimated by
benchmarking comparable companies to the Corporation.
- STOCK-BASED
COMPENSATION (CONT’d)
On July 14, 2022, the Corporation granted an
employee 39,062 stock options with an exercise price of $0.64 and
expiry date of July 14, 2027. The stock options vested 100% at the
grant date. The options were granted with an exercise price equal
to the closing market price of the shares the day prior to the
grant. Total stock-based compensation costs amount to $14,844 for
an estimated fair value of $0.38 per option. The fair value of the
options granted was estimated using the Black-Scholes model with no
expected dividend yield, 69% expected volatility, 3.1% risk-free
interest rate and a 5-year term. The expected life and expected
volatility were estimated by benchmarking comparable companies to
the Corporation.
On December 30, 2022, the Corporation granted
its employees and consultant 1,330,000 stock options with an
exercise price of $0.70 and expiry date of
December 30, 2027. The stock options vested 100% at the
grant date. The options were granted at an exercise price equal to
the closing market price of the shares the day prior to the grant.
Total stock-based compensation costs amount to $545,300 for an
estimated fair value of $0.41 per option.
On July 24, 2023, the Corporation granted an
on-hire incentive stock option award to a new senior employee of
Amaroq. The option award gives the employee the right to acquire up
to 19,480 common shares under the Corporation's stock option Plan.
The option has an exercise price of $0.77 per share which vested on
October 24, 2023. The option will expire if it remains unexercised
five years from the date of the award.
Changes in stock options are as follows:
|
Three months ended March
31, 2024 |
|
|
Number of
options |
Weighted average exercise
price |
|
|
|
$ |
| Balance,
beginning |
9,188,365 |
0.57 |
|
Exercised |
(150,000) |
0.43 |
|
Balance, end |
9,038,365 |
0.58 |
|
Balance, end exercisable |
9,033,755 |
0.59 |
Stock options outstanding and exercisable as at
March 31, 2024 are as follows:
|
Number of
options outstanding |
Number of
options exercisable |
Exercise price |
Expiry date |
|
|
|
$ |
|
|
1,670,000 |
1,670,000 |
0.38 |
December 31, 2025 |
|
100,000 |
95,390 |
0.50 |
September 13, 2026 |
|
1,245,000 |
1,245,000 |
0.78 |
December 31, 2026 |
|
3,600,000 |
3,600,000 |
0.60 |
January 17, 2027 |
|
73,333 |
73,333 |
0.75 |
April 20, 2027 |
|
39,062 |
39,062 |
0.64 |
July 14, 2027 |
|
1,330,000 |
1,330,000 |
0.70 |
December 30, 2027 |
|
900,000 |
900,000 |
0.59 |
December 31, 2027 |
|
19,480 |
19,480 |
0.77 |
July 24, 2028 |
|
61,490 |
61,490 |
1.09 |
December 20, 2028 |
|
9,038,365 |
9,033,755 |
|
|
8. STOCK-BASED COMPENSATION
(CONT’d)
8.2
Restricted Share Unit
8.2.1 Description
Conditional awards were made in 2022 that give
participants the opportunity to earn restricted share unit awards
under the Corporation’s Restricted Share Unit Plan (“RSU Plan”)
subject to the generation of shareholder value over a four-year
performance period.
The awards are designed to align the interests
of the Corporation’s employees and shareholders, by incentivising
the delivery of exceptional shareholder returns over the long-term.
Participants receive a 10% share of a pool which is defined by the
total shareholder value created above a 10% per annum compound
hurdle.
The awards comprise three tranches, based on
performance measured from January 1, 2022, to the following
three measurement dates:
- First Measurement Date:
December 31, 2023;
- Second Measurement Date:
December 31, 2024; and
- Third Measurement Date:
December 31, 2025.
Restricted share unit awards granted under the
RSU Plan as a result of achievement of the total shareholder return
performance conditions are subject to continued service, with
vesting as follows:
- Awards granted after the First
Measurement Date - 50% vest after one year, 50% vest after three
years.
- Awards granted after the Second
Measurement Date - 50% vest after one year, 50% vest after two
years.
- RSUs granted after the Third
Measurement Date - 100% vest after one year.
The maximum term of the awards is therefore four
years from grant.
The Corporation’s starting market capitalization
is based on a fixed share price of $0.552. Value created by share
price growth and dividends paid at each measurement date will be
calculated with reference to the average closing share price over
the three months ending on that date.
- After December 31, 2023, 100%
of the pool value at the First Measurement Date is delivered as
restricted share units under the RSU Plan, subject to the maximum
number of shares that can be allotted not being exceeded.
- After December 31, 2024, the
pool value at the Second Measurement Date is reduced by the pool
value from the First Measurement Date (increased in line with share
price movements between the First and Second Measurement Dates).
100% of the remaining pool value, if any, is delivered as
restricted share units under the RSU Plan.
- After December 31, 2025, the
pool value at the Third Measurement Date is reduced by the pool
value from the Second Measurement Date (increased in line with
share price movements between the Second and Third Measurement
Dates), and then further reduced by the pool value from the First
Measurement Date (increased in line with share price movements
between the First Measurement Date and the Third Measurement Date).
100% of the remaining pool value, if any, is delivered as
restricted share units under the RSU Plan.
8.2.2 RSU Plan Amendment
The RSU Plan was amended by a shareholders
General Meeting on June 15, 2023. As a result of the amendment the
number of shares that could be issued under the RSU Plan to satisfy
the conditional awards and other share awards was increased from
10% of a fixed share capital amount of 177,098,740 shares to 10% of
share capital at the time of award, amounting to 10% of 263,073,022
shares, reduced by the number
8. STOCK-BASED COMPENSATION (CONT’d)
of outstanding options at each calculation date.
As a result, an additional expense based on the difference between
the fair value of the conditional awards before and after the
modification will be recognised over the service period. The
incremental fair value was determined and incorporated info the
valuation in 12.2.2.
8.2.3 New Conditional Award under RSU
Plan
On 13 October 2023, Amaroq made an award (the
“Award”) under the RSU Plan as detailed below. The Award consists
of a conditional right to receive value if the future performance
targets, applicable to the Award, are met. Any value to which the
participants are eligible in respect of the Award will be granted
as Restricted Share Units (each an “RSU”), with each RSU entitling
a participant to receive common shares in the Corporation. Each RSU
will be granted under, and governed in accordance with, the rules
of the Corporation's Restricted Share Unit Plan.
|
Award Date |
October 13, 2023 |
|
Initial Price |
CAD 0.552 |
|
Hurdle Rate |
10% p.a. above the Initial Price |
|
Total Pool |
10% of the growth in value above the Hurdle rate, not exceeding 10%
of the Corporation’s share capital.The number of shares will be
determined at the Measurement Dates. |
|
Participant proportion |
Edward Wyvill, Corporate Development 10% |
|
Performance Period |
January 1, 2022 to December 31, 2025 (inclusive) |
|
Normal Measurement Dates |
First Measurement Date: December 31, 2023, 50% vesting on the
first anniversary of grant, with the remaining 50% vesting on the
third anniversary of grant. Second Measurement Date:
December 31, 2024, 50% vesting on the first anniversary of
grant, with the remaining 50% vesting on the second anniversary of
grant. Third Measurement Date: December 31, 2025, vesting on
the first anniversary of grant. |
8.2.4
Valuation
The fair value of the award granted in December
2022 and modified June 2023, in addition to the award granted
October 13, 2023, increased to $7,378,000 based on 90% of the
available pool being awarded. A charge of $711,500 was recorded
during the three months ended March 31, 2024 ($449,000 during the
three months ended March 31, 2023).
The fair value was obtained through the use of a
Monte Carlo simulation model which calculates a fair value based on
a large number of randomly generated projections of the
Corporation’s share price.
|
Assumption |
Value |
|
Grant date |
December 30, 2022 |
|
Amendment date |
June 15, 2023 |
|
Additional award date |
October 13, 2023 |
|
Expected life (years) |
2.22 – 3.00 |
|
Share price at grant date |
$0.70 - $0.97 |
|
Exercise price |
N/A |
|
Dividend yield |
0% |
|
Risk-free rate |
3.60% - 4.71% |
|
Volatility |
55% - 72% |
|
Fair value of awards - First Measurement Date |
$4,420,000 |
|
Fair value of awards - Second Measurement Date |
$1,946,000 |
|
Fair value of awards - Third Measurement Date |
$1,012,000 |
|
Total fair value of awards (90% of pool) |
$7,378,000 |
Expected volatility was determined from the
daily share price volatility over a historical period prior to the
date of grant with length commensurate with the expected life. A
zero dividend yield has been used based on the dividend yield as at
the date of grant.
9. EXPLORATION AND
EVALUATION EXPENSES
|
Three months ended March
31, |
|
|
2024 |
2023 |
|
|
$ |
$ |
| Geology |
13,997 |
113,105 |
| Drilling |
- |
- |
| Lodging and
on-site support |
184,469 |
|
| Analysis |
5,033 |
- |
| Transport |
- |
304,200 |
| Helicopter
charter |
- |
79,868 |
| Logistic
support |
- |
- |
| Insurance |
- |
- |
| Maintenance
infrastructure |
480,754 |
294,119 |
| Supplies and
equipment |
31,722 |
170,558 |
| Project
Engineering |
- |
55,792 |
|
Government fees |
1,976 |
- |
|
Exploration and
evaluation expenses
before depreciation |
717,951 |
1,017,642 |
|
Depreciation |
157,262 |
164,011 |
|
Exploration and
evaluation expenses |
875,213 |
1,181,653 |
10.GENERAL AND
ADMINISTRATION
|
Three months ended March
31, |
|
|
2024 |
2023 |
|
|
$ |
$ |
| Salaries and
benefits |
869,415 |
617,589 |
| Director’s
fees |
159,000 |
157,000 |
| Professional
fees |
939,809 |
611,878 |
| Marketing and
investor relations |
166,037 |
141,968 |
| Insurance |
78,916 |
67,602 |
| Travel and other
expenses |
604,513 |
301,269 |
|
Regulatory fees |
393,733 |
192,941 |
|
General and
administration before
following elements |
3,211,423 |
2,090,247 |
| Stock-based
compensation |
712,306 |
451,014 |
|
Depreciation |
35,498 |
35,774 |
|
General and
administration |
3,959,227 |
2,577,035 |
11. FINANCE
COSTS
|
|
Three monthsended March 31, |
|
|
2024 |
2023 |
|
|
$ |
$ |
| Lease
interest |
8,574 |
8,737 |
|
|
8,574 |
8,737 |
12. RELATED
PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION
12.1 Gardaq Joint Venture
|
|
Three monthsended March 31, |
|
|
2024 |
2023 |
|
|
$ |
$ |
| Gardaq
management fees and allocated cost |
636,326 |
- |
| Foreign
exchange revaluation |
42,115 |
- |
|
|
678,441 |
- |
As at March 31, 2024, the balance receivable
from Gardaq amounted to $4,200,379 ($3,521,938 as at
December 31, 2023). This receivable balance represents
allocated overhead and general administration costs to manage the
exploration work programmes and day-to-day activities of the joint
venture. This balance will be converted to shares in Gardaq within
10 business days after the third anniversary of the completion of
the Subscription and Shareholder Agreement dated 13 April 2023 (See
note 3.1).
12.2 Key Management Compensation
The Corporation’s key management are the members
of the board of directors, the President and Chief Executive
Officer, the Chief Financial Officer, the Vice President
Exploration, and the Corporate Secretary. Key management
compensation is as follows:
|
|
Three monthsended September
31 |
|
|
2024 |
2023 |
|
|
$ |
$ |
| Short-term
benefits |
|
|
|
Salaries and benefits |
445,723 |
331,747 |
|
Director’s fees |
159,000 |
157,000 |
| Long-term
benefits |
|
|
|
Stock-based compensation |
- |
- |
|
Total compensation |
604,723 |
488,747 |
13. NET EARNINGS (LOSS) PER COMMON SHARE
The calculation of net loss per share is shown
in the table below. As a result of the net loss incurred during the
periods presented, all potentially dilutive common shares are
deemed to be antidilutive and thus diluted net loss per share is
equal to the basic net loss per share for these periods.
|
|
|
Three monthsended March
31, |
|
|
|
2024 |
2023 |
|
|
|
$ |
$ |
|
Net income (loss) and comprehensive income
(loss) |
|
(9,217,515) |
(3,376,893) |
|
|
|
|
|
| Weighted
average number of common shares outstanding - basic |
|
290,574,484 |
263,203,347 |
| Weighted
average number of common shares outstanding – diluted |
|
290,574,484 |
263,203,347 |
| Basic earnings
(loss) per share |
|
(0.03) |
(0.01) |
|
Diluted earnings (loss) per common share |
|
(0.03) |
(0.01) |
14. FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT
The Corporation is exposed to various risks
through its financial instruments. The following analysis provides
a summary of the Corporation's exposure to and concentrations of
risk at March 31, 2024:
14.1 Credit Risk
Credit risk is the risk that one party to a
financial instrument will cause financial loss for the other party
by failing to discharge an obligation. The Corporation’s main
credit risk relates to its prepaid amounts to suppliers for placing
orders, manufacturing and delivery of process plant equipment, as
well as an advance payment to a mining contractor. The Corporation
performed expected credit loss assessment and assessed the amounts
to be fully recoverable.
14.2 Fair Value
Financial assets and liabilities recognized or
disclosed at fair value are classified in the fair value hierarchy
based upon the nature of the inputs used in the determination of
fair value. The levels of the fair value hierarchy are:
• 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 (i.e., as prices) or indirectly (i.e.,
derived from prices) • Level 3 - Inputs for the asset or liability
that are not based on observable market data (i.e., unobservable
inputs)
14. FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT (CONT’d)
The following table summarizes the carrying value of the
Corporation’s financial instruments:
|
|
March 31,2024 |
December 31, 2023 |
|
|
$ |
$ |
|
Cash |
65,086,851 |
21,014,633 |
|
Due from a related party |
- |
3,521,938 |
|
Sales tax receivable |
144,108 |
69,756 |
|
Prepaid expenses and others |
17,469,706 |
18,681,568 |
|
Deposit |
27,944 |
27,944 |
|
Escrow account for environmental monitoring |
5,697,903 |
598,939 |
|
Financial Asset – Related Party |
4,200,379 |
- |
|
Investment in equity-accounted joint arrangement |
22,846,379 |
23,492,811 |
|
Accounts payable and accrued liabilities |
(7,258,359) |
(6,273,979) |
|
Convertible notes |
(41,551,341) |
(35,743,127) |
|
Lease liabilities |
(794,510) |
(657,440) |
Due to the short-term maturities of cash,
prepaid expenses, and accounts payable and accrued liabilities, the
carrying amounts of these financial instruments approximate fair
value at the respective balance sheet date.
The carrying value of the convertible note
instrument approximates its fair value at maturity and includes the
embedded derivative associated with the early conversion option and
the host liability at amortized cost.
The carrying value of lease liabilities
approximate its fair value based upon a discounted cash flows
method using a discount rate that reflects the Corporation’s
borrowing rate at the end of the period.
14.3 Liquidity Risk
Liquidity risk is the risk that the Corporation
will encounter difficulty in meeting obligations associated with
financial liabilities. The Corporation seeks to ensure that it has
sufficient capital to meet short-term financial obligations after
taking into account its exploration and operating obligations and
cash on hand. The Corporation anticipates seeking additional
financing in order to fund general and administrative costs and
exploration and evaluation costs. The Corporation’ options to
enhance liquidity include the issuance of new equity instruments or
debt.
The following table summarizes the carrying
amounts and contractual maturities of financial liabilities:
|
|
As at March 31, 2024 |
As at December 31, 2023 |
|
|
Trade and other payables |
Convertible Notes |
Lease liabilities |
Trade and other payables |
Convertible Notes |
Lease liabilities |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
| Within 1 year |
7,258,359 |
- |
149,050 |
6,273,979 |
- |
108,345 |
| 1 to 5 years |
- |
41,551,341 |
566,839 |
- |
35,743,127 |
544,178 |
|
5 to 10 years |
- |
- |
208,601 |
- |
- |
126,975 |
|
Total |
7,258,359 |
41,551,341 |
924,490 |
6,273,979 |
35,743,127 |
779,498 |
The Corporation has assessed that it is not
exposed to significant liquidity risk due to its cash balance in
the amount of $65.1 million at the period end.
- Q1 2024 Financial Results
Amaroq Minerals (TSXV:AMRQ)
過去 株価チャート
から 4 2024 まで 5 2024
Amaroq Minerals (TSXV:AMRQ)
過去 株価チャート
から 5 2023 まで 5 2024
