Amaroq kynnir uppgjör fyrsta ársfjórðungs 2024
14/05/2024 07:00
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Toronto Ontario, May 14, 2024 (GLOBE NEWSWIRE) -- Amaroq kynnir uppgjör
fyrsta ársfjórðungs 2024
TORONTO, ONTARIO – 14. maí 2024 – Amaroq Minerals Ltd. (AIM, TSX-V,
NASDAQ Iceland: AMRQ), félag sem starfar á sviði námuvinnslu og býr yfir
námuvinnsluréttindum á landi sem hefur að geyma verulegt magn af gulli í
jörðu auk annarra verðmætra málma á Suður-Grænlandi, birtir í dag
uppgjör fyrsta ársfjórðungs (Q1) 2024. Kynningarfundur fyrir greinendur og
fjárfesta verður haldinn á Zoom kl. 15:00 í dag. Uppgjörið fylgir hér
með á ensku.
Eldur Ólafsson, forstjóri Amaroq:
“Á þessum ársfjórðungi kláruðum við vel heppnað hlutafjárútboð
í því skyni að hraða framkvæmdum á Nalunaq námusvæðinu og fjárfesta
frekar í réttindum og vinnslu gulls og „strategic“ málma á Suður
Grænlandi. Ég vil nota tækifærið og þakka hluthöfum fyrir góðan
stuðning í þessu verkefni.
Ég hef verið við störf í Nalunaq síðustu vikurnar, tekið þar þátt
í öllum þeim verkefnum sem eru í gangi og það hefur verið ánægjulegt
að sjá hversu vel framkvæmdir ganga. Það hefur verið mjög gefandi að
vinna með þeim tæplega 80 starfsmönnum námuvinnslu, verkfræðingum og
starfsfólki Amaroq á staðnum, auk verktaka okkar hjá Thyssen Schactbau,
Halyard, HK Transport, Scott Steel og Arctic Unlimited. Undir forystu nýs
framkvæmdastjóra, Jaco Duvenhage, sem hefur yfirumsjón með Nalunaq
verkefninu, erum við að sjá framfarir á öllum sviðum og ég vil þakka
öllu starfsfólkinu fyrir vel unnin störf. Sú reynsla sem fékkst í vetur,
sem var okkar fyrsta heils árs starfsemi, hefur verið ómetanleg til að
bæta skilning okkar og skipuleggja framtíðarverkefni á Suður Grænland.
Það hægði aðeins á byggingarframkvæmdum á þessum fyrsta
ársfjórðungi vegna erfiðra hafísskilyrða, en þökk sé framsýni
starfsmanna var tryggt að allur nauðsynlegur búnaður var fluttur til
svæðisins á réttum tíma. Að auki náðum við mikilvægum áfanga í
Nalunaq þegar sprengt var fyrir nýrri námu neðanjarðar á 720 m dýpi og
heppnaðist hún afar vel.
Ég hlakka til að veita nánari upplýsingar um verkefnið í Nalunaq á
Fjárfestadeginum 13. júní, þar sem við munum með myndrænum hætti kynna
framgang verkefnisins til þessa, upplýsa um kostnaðarþætti og áætlaðar
dagsetningar um gullframleiðslu. Að auki munum við kynna áætlanir okkar
um hvenær nýtt auðlindamat í Nalunaq liggur fyrir, ásamt
ítarupplýsingum um borunarframkvæmdir í tengslum við umfangsmikinn
kopar-nikkel fund á Stendalen svæðinu.
Loks má geta þess að vel gengur með önnur vaxtartækifæri á Suður
Grænlandi, þar á meðal á sviði „strategic“ málma, vatnsaflsvirkjana
og þjónustu. Við hlökkum til að veita markaðnum nýjustu upplýsingar
þegar þar að kemur, á eða í kringum Fjárfestadaginn. “
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/m (3) 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 STATEMENTS
For 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 common shares outstanding Capital Stock Contributed surplus Accumulated other comprehensive loss 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 and infrastruc- 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 and infrastruc- 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 at March 31, 2024 As at December 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.
1. 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 months ended 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 months ended 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 months ended 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 months ended 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 $65.1 million at the period end
Recent news on Amaroq
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Brief: Amaroq Reiterates FY2026 Gold Production Guidance Of 25-35 Koz
Canada gold miner Amaroq's Q1 revenue reaches C$ 18.9 mln, posts net profit
Q1 2026 Operational and Financial Results
Notice of Results and further details for Capital Markets Update