Amaroq Minerals Ltd. birtir uppgjör fyrir þriðja ársfjórðung 2024 og kynnir nýjustu áfanga í rekstri félagsins
14/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241114:nGNEbCt6ZK&default-theme=true
Reykjavík, Nov. 14, 2024 (GLOBE NEWSWIRE) -- (“Amaroq” or the
“Corporation” or the “Company”)
Amaroq Minerals Ltd. birtir uppgjör fyrir þriðja ársfjórðung 2024 og
kynnir nýjustu áfanga í rekstri félagsins
TORONTO, ONTARIO – 14. nóvember 2024 – Amaroq Minerals Ltd. (AIM, TSX-V,
NASDAQ Iceland: AMRQ), birtir í dag uppgjör þriðja ársfjórðungs (Q3)
2024. Allar upphæðir í dollurum tákna kanadíska dollara, nema annað sé
tekið fram. Uppgjörið fylgir hér með á ensku.
Fjarfundur fyrir greiningaraðila og fjárfesta verður haldinn á morgun, 15.
nóvember 2024, kl. 08:30 GMT. Upplýsingar um fundinn má finna neðar í
þessari tilkynningu.
Eldur Ólafsson, forstjóri Amaroq:
„Við erum nú við það að hefja vinnslu á gulli úr Nalunaq, sem er
afar stór áfangi fyrir félagið og mun skila tekjuflæði samhliða því
sem við vinnum okkur upp í fulla framleiðslu.
„Við náðum verulegum framförum í uppbyggingu í Nalunaq á þriðja
ársfjórðungi. Við settum upp og tengdum flest af þeim mikilvægu tækjum
og íhlutum sem þarf til að hefja framleiðslu í vinnslustöðinni. Við
höfum einnig haldið áfram þróun námunnar innan Mountain Block og safnað
saman bergi fyrir fyrstu gullframleiðslu, sem hefst á þessum
ársfjórðungi. Rannsóknir og boranir í fjórðungnum hafa aukið skilning
okkar enn frekar á gullæðinni með borunum á Target Block svæðinu og í
gegnum 75-æðina. Við væntum þess að niðurstöður þessara rannsókna,
sem og úr Mountain Block, liggi fyrir fljótlega. Við teljum að þessar
niðurstöður, til viðbótar við niðurstöður úr rannsóknarborunum
síðustu tveggja ára, muni leiða til uppfærðs auðlindamats (MRE4) fyrir
Nalunaq snemma á næsta ári.
„Félagið stundaði viðamiklar rannsóknir á þriðja ársfjórðungi og
er ég afar stoltur af því sem rannsóknarteymi okkar hefur áorkað á
þessu ári. Auk Nalunaq boruðum við fyrstu tvær holurnar í
Nanoq-gullleyfinu sem og Target North í Sava, starfræktum þrjá borpalla í
Stendalen og tókst einnig að bora tvær tilraunaholur í hinni sögufrægu
Josva koparnámu. Við reiknum með niðurstöðum úr öllum þessum
verkefnum á næstu mánuðum. Þessi vinna hefur lagt traustan grunn að
frekari rannsóknum á gulli, kopar og nikkel á næsta ári og stuðlar að
því að við raungerum verðmæti eignasafns okkar á Grænlandi."
Q3 2024 Corporate Highlights
* Amaroq group liquidity of $26.0 million consisting of cash balances, undrawn
revolving credit overrun facility less trade payables ($62.2 million as of
June 30, 2024).
* Gold business working capital before convertible note liability and loan
payable of $37.9 million that includes prepaid contractors on the Nalunaq
project of $17.8 million as of September 30, 2024 ($50.5 million that includes
prepaid contractors on the Nalunaq project of $19.6 million as of June 30,
2024)
* The Gardaq Joint Venture that comprises the Strategic Minerals business has
available liquidity of $8.3 million as of September 30, 2024 ($13.5 million as
of June 30, 2024).
* In July 2024, the Company agreed heads of terms, subject to final
documentation, with Landsbankinn for US$35 million in three Revolving Credit
Facilities, securing a substantial increase and extension to its current debt
facilities. Final documentation is currently in progress.
* Post period on 4 October, Amaroq entered into an agreement with the holders
of its US$22.4 million convertible notes to convert the notes’ outstanding
balance into new common shares. That measure serves to simplify Amaroq’s
capital structure, reduces cash interest costs and increases future financial
flexibility.
* Amaroq continues to develop opportunities in Servicing and Hydro to enhance
local procurement options and support the transition towards cleaner energy
sources.
Q3 2024 Operational Highlights
* Permitting: The Company is working with stakeholders on the Impact Benefit
Agreement (IBA), which it aims to have in place by the end of the year.
* Contracting and Procurement: Procurement of all key contract packages is
100% complete and all of the critical path items have been procured and have
arrived on site already.
* Engineering: Process plant detail design and engineering is 98% complete
with all packages issued to the market and manufactured.
* Construction: Plant pad earthworks and civil construction at Nalunaq is 100%
complete. The plant building structural steel is complete and cladding is 98%
complete. Mechanical installation of the crushing circuit is 68% complete and
installation of the civil foundations for the retaining walls, stockpile
reclaimer and stacker conveyor were completed in August 2024. The installation
of the grinding and gold room section started in July 2024 and was completed
post-period. The trackless mining machines and light vehicle workshop
construction is complete and in operation. The grinding circuit structural and
mechanical installations are complete and electrical installation is in
progress. The reclaim feeder has been cleared for use. The thickener tank
structure, mechanical and pipework is complete, and electrical installation is
also complete. Cable tray installation is complete, and installation of power
and control cabling has commenced and is 92% complete. A new wing was
installed at the camp to accommodate up to 120 people on site.
* Mining: Amaroq continues to focus on optimising mine development in the
Mountain Block. The ramp has been completed to 742 level and ore development
continued on 732 level. Both MineArc refuge stations have been commissioned,
and the leaky feeder communication system was installed from 300 to the 720
level. Construction of the underground main heating system is progressing at
the 300 level portal, and preparations have been made for heating of the ramp.
The exhaust raise fan for Target Block was commissioned in preparation for the
development of an exploration drift for diamond drilling and resource
expansion, and another portal is planned on 742 level to support further
development in Mountain Block. The Company is looking to improve its
development rates and increase availability of mining fleet with its
contractor Thyssen. Amaroq is also reviewing adding further mining equipment
to optimise operations going forward. Finally, the Company has started
employing its own mining team personnel.
* Gold and Strategic Minerals Exploration: Post period, Amaroq announced the
completion of the 2024 exploration programme, including over 8,600 metres of
core drilling across the gold and strategic metals portfolio. Results for the
programme are expected over the coming months.
Nalunaq Project KPIs
Metric Q2 2024 Q3 2024 Change
Total hours worked 103,680 hours 129,516 hours +25%
Daily average of people working on site 96 people 107 people +12%
Ratio of Greenlandic personnel 51% 43% -8%
Outlook
* Activities at Nalunaq remain on track to deliver first gold in Q4 2024.
* Exploration results from gold, copper and nickel exploration expected at
various intervals in Q4 2024 and Q1 2025.
* Updated measured resource statement for Nalunaq Gold mine expected to be
published in Q1 2025.
Exploration activities overview
Gold projects:
* Nalunaq * All additional 75 Vein sampling from historical core housed at
Nalunaq has been completed. A total of 2,895 meters of core drilling has been
completed across the Target Block Extension zone to the west of the historical
mining areas.
* In parallel to this, a programme of surface samples along the outcropping
Main Vein and 75 Vein to the west was completed with mountaineering
specialists.
* A Mineral Resource Estimate update for Nalunaq has been initiated with a
Qualified Person’s site visit conducted by Mining Plus.
* The Company is now awaiting the assay results before conducting a detailed
review of the Target Block Extension zone and conducting further planning to
address its 2025 exploration priorities.
* Nanoq
* A 130-meter scout drilling programme was completed at Nanoq across previous
channel sampling results with core geologically assessed and sampled at
Nalunaq. These cores will be geologically logged and sampled results will then
be used to guide objectives for the 2025 season.
* Nalunaq Satellite Targets * Following the discovery of an outcropping vein
above historical high grade float results, a small surface sampling programme
was completed at Eagle’s Nest with mountaineering specialists. The Company
is now awaiting the results of the surface sampling, which will be used to
help direct further work programmes.
* Amaroq continues to assess the viability of other surrounding projects to
become potential satellite feeds to Nalunaq.
Strategic Minerals:
* Stendalen * A new surface geophysical programme was completed ahead of
commencing the 2024 drilling programme.
* A total of 4,733 meters of exploration drilling was completed at Stendalen
with the aim of providing greater geological understanding to the
mineralisation style and geometry. Demobilisation of equipment from Stendalen
is underway to ensure operational readiness for 2025.
* Assay and downhole geophysical results, once received, will be used in
conjunction with the University of Leicester to assess the mineral system
present and produce targeting models. Environmental samples will also be
analysed to commence the environmental baseline data for the project.
* Copper Belt (Sava/North Sava, Kobberminebugt) * The geological field team
has completed a programme of mapping and sampling across the copper belt area,
assessing both potential porphyry and magmatic Cu-Ni targets.
* The team has been supplemented by external support from copper subject
matter expert.
* Following this work, a 212-meter scout drilling programme was completed at
Josva copper skarn target within the Kobberminebugt licence as well as 501
meters of scout drilling within the epithermal copper/gold target at Target
North within the Sava licence.
* Nunarsuit * The Company is reviewing the geological maps and results
received from prospecting across the Nunarsuit licence.
Details of conference call
A conference call for analysts and investors will be held tomorrow, 15
November, at 08:30am GMT BST, 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_dhWLE36tQGabAf9MI_zcCA
Amaroq Financial Results
The following selected financial data is extracted from the Financial
Statements for the six months ended June 30, 2024.
Financial Results
Nine months ended Sep 30
2024 2023
$ $
Exploration and evaluation expenses (5,172,947) (5,737,257)
Site development costs - -
General and administrative (11,831,157) (8,015,379)
Gain on loss of control of subsidiary - 31,340,880
Share of 9-months loss of an equity-accounted joint arrangement (6,698,550) (5,021,231)
Unrealized gain on derivative liability 1,636,567 273,780
Net (loss) income and comprehensive (loss) income (18,001,712) 13,425,594
Basic and diluted (loss) income per common share (0.057) 0.05
Financial Position
As at Sep 30 As at June 30
2024 2024
$ $
Cash on hand 25,937,983 31,663,204
Total assets 199,102,439 177,950,773
Total current liabilities (before convertible notes liability and loan payable) 13,596,239 8,490,107
Total current liabilities (including convertible notes liability and loan payable) 76,516,905 41,932,965
Shareholders’ equity 121,963,411 135,365,745
Working capital - gold business (before convertible notes liability and loan payable) 37,937,316 50,734,743
Working capital - gold business (after convertible notes liability and loan payable) (24,983,350) 17,291,885
Gold business liquidity (excluding $8.3 and $13.5M ring-fenced for strategic mineral exploration as of September 30, 2024 and June 30, 2024, respectively) 25,958,581 61,787,888
Enquiries:
Amaroq Minerals Ltd.
Eldur Olafsson, Executive Director and CEO
eo@amaroqminerals.com
Eddie Wyvill, Corporate Development
+44 (0)7713 126727
ew@amaroqminerals.com
Panmure Liberum (UK) Limited (Nominated Adviser and Corporate Broker)
Scott Mathieson
Kieron Hodgson
+44 (0) 20 7886 2500
Canaccord Genuity Limited (Corporate Broker)
James Asensio
Harry Rees
Tel: +44 (0) 20 7523 8000
Camarco (Financial PR)
Billy Clegg
Elfie Kent
Fergus Young
+44 (0) 20 3757 4980
For Company updates:
Follow @Amaroq_minerals on X (Formerly known as Twitter)
Follow Amaroq Minerals Ltd 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 South Greenland. The Company's principal asset is a 100%
interest in the past producing Nalunaq Gold mine which is due to go into
production towards the end of 2024. The Company has a portfolio of gold and
strategic metal assets in Southern Greenland covering the two known gold belts
in the region as well as advanced exploration projects at Stendalen and the
Sava Copper Belt exploring for Strategic metals such as Copper, Nickel, Rare
Earths and other minerals. Amaroq Minerals is continued under the Business
Corporations Act (Ontario) and wholly owns Nalunaq A/S, incorporated under the
Greenland Public Companies Act.
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 and nine months ended September 30, 2024
The attached financial statements have been prepared by Management of Amaroq
Minerals Ltd. and have not been reviewed by the auditor
As at As at
September 30, December 31,
Notes 2024 2023
$ $
ASSETS
Current assets
Cash 25,937,983 21,014,633
Sales tax receivable 72,087 69,756
Prepaid expenses and others 17,812,986 18,681,568
Interest receivable 876,478 -
Inventory 6,834,021 680,358
Total current assets 51,533,555 40,446,315
Non-current assets
Deposit 177,944 27,944
Escrow account for environmental rehabilitation 6,872,073 598,939
Financial Asset - Related Party 3,13 5,762,187 3,521,938
Investment in equity accounted joint arrangement 3 16,794,261 23,492,811
Mineral properties 4 48,683 48,821
Right of use asset 7 652,190 574,856
Capital assets 5 117,261,546 38,241,559
Total non-current assets 147,568,884 66,506,868
TOTAL ASSETS 199,102,439 106,953,183
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities 13,479,402 6,273,979
Convertible notes 6 38,395,349 35,743,127
Loan payable 6.1 24,525,317 -
Lease liabilities – current portion 7 116,837 80,206
Total current liabilities 76,516,905 42,097,312
Non-current liabilities
Lease liabilities 7 622,123 577,234
Total non-current liabilities 622,123 577,234
Total liabilities 77,139,028 42,674,546
Equity
Capital stock 8 207,202,359 132,117,971
Contributed surplus 7,327,666 6,725,568
Accumulated other comprehensive loss (36,772) (36,772)
Deficit (92,529,842) (74,528,130)
Total equity 121,963,411 64,278,637
TOTAL LIABILITIES AND EQUITY 199,102,439 106,953,183
Subsequent events 16
The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements.
Three months Nine months
ended September 30, ended September 30,
Notes 2024 2023 2024 2023
$ $ $ $
Expenses
Exploration and evaluation expenses 10 (4,424,907) (2,277,540) (5,172,947) (5,737,257)
Site development costs - 1,825,564 - -
General and administrative 11 (3,536,240) (2,632,041) (11,831,157) (8,015,379)
Loss on disposal of capital assets 5 (149,917) - (149,917) (37,791)
Foreign exchange gain (loss) 1,040,420 (83,882) 1,475,432 (58,707)
Operating loss (7,070,644) (3,167,899) (15,678,589) (13,849,134)
Other income (expenses)
Interest income 901,831 141,443 943,023 613,031
Gardaq management income and allocated cost 608,392 601,461 1,823,286 1,108,101
Gain on loss of control of subsidiary 3 - - - 31,340,880
Share of net loss of joint arrangement 3 (4,788,733) (3,381,749) (6,698,550) (5,021,231)
Unrealized gain (loss) on derivative liability 6 (3,655,048) 273,780 1,636,567 273,780
Finance costs 12 (9,317) (1,022,258) (27,449) (1,039,833)
Net income (loss) and comprehensive income (loss) (14,013, 51 9) (6,555,222) (18,001, 712 ) 13,425,594
Weighted average number of common shares outstanding - basic 327,418,727 263,579,331 314,985,260 263,356,034
Weighted average number of common shares outstanding – diluted 327,418,727 306,335,274 314,985,260 306,111,977
Basic earnings (loss) per share 14 (0.043) (0.02) (0.057) 0.05
Diluted earnings (loss) per common share 14 (0.043) (0.02) (0.057) 0.04
Effect of dilution - - - 0.01
Share options 7,261,353 9,126,875 7,261,353 9,126,875
Restricted shares 6,659,409 - 6,659,409 -
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)
Notes Number of common shares outstanding Capital Stock Contributed surplus Accumulated other comprehensive Deficit Total Equity
loss
$ $ $ $ $
Balance at January 1, 2023 263,073,022 131,708,387 5,250,865 (36,772) (73,694, 581 ) 63,227,8 99
Net income and comprehensive income - - - - 13,425,594 13,425,594
Options exercised, net 597,029 409,584 (433,600) - - (24,016)
Stock-based compensation 9 - - 1,353,042 - - 1,353,042
Balance at September 30, 2023 263,670,051 132,117,971 6,170,307 (36,772) (60,268,987) 77,982,519
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 - - - - (18,001,712) (18,001,712)
Shares issued under a fundraising 8 62,724,758 75,574,600 - - - 75,574,600
Shares issuance costs 8 - (1,218,285) - - - (1,218,285)
Options exercised – net 9.1 1,023,918 728,073 (745,500) - - (17,427)
Stock-based compensation 9 - - 1,347,598 - - 1,347,598
Balance at September 30, 2024 327,418,727 207,202,359 7,327,666 (36,772) (92,529,842) 121,963,411
The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements.
Notes Nine months ended September 30,
2024 2023
$ $
Operating activities
Net (loss) income for the period (18,001,712) 13,425,594
Adjustments for:
Depreciation 5 603,135 525,518
Amortisation of ROU asset 7 83,704 59,991
Stock-based compensation 9 1,347,598 1,353,042
Gain on loss of control of subsidiary 3 - (31,340,880)
Unrealized gain on derivative liability 6 (1,636,567) (273,780)
Embedded derivate related transaction costs - 641,526
Loss on disposal of capital assets 149,916 37,791
Share of net losses of joint arrangement 3 6,698,550 5,021,231
Gardaq management income and allocated cost 3,13 (1,823,286) (1,108,101)
Interest income (943,023) (613,031)
Other expenses (17,427) -
Foreign exchange (1,624,654) (1,114,277)
Finance costs 27,449 -
(15,136,317) (13,385,376)
Changes in non-cash working capital items:
Sales tax receivable (2,331) 30,178
Due from related party 3,13 (388,400) (52,304)
Prepaid expenses and others (5,154,320) (5,808,291)
Accounts payable and accrued liabilities 7,203,774 1,179,419
1,658,723 (4,650,998)
Cash flow used in operating activities (13,477,594) (18,036,374)
Investing activities
Transfer to escrow account for environmental rehabilitation (6,044,556) (165,946)
Construction in progress and acquisition of capital assets 5 (75,508,967) (9,409,183)
Prepayment for acquisition of ROU asset (5,825) -
Deposit (150,000) -
Cash flow used in investing activities (81,709,348) (9,575,129)
Financing activities
Proceeds from issuance of shares 8 75,574,600 -
Proceeds from convertible notes, net of issue costs 6 - 29,427,152
Proceeds from loan, net of transaction cost 6 24,394,364 -
Shares issuance costs 8 (1,218,285) -
Lease payments 7 (101,143) (53,583)
Interest received 66,545 613,031
Cash flow from financing activities 98,716,081 29,986,600
Net change in cash before effects of exchange rate changes on cash during the period 3,529,139 2,375,097
Effects of exchange rate changes on cash 1,394,211 1,143,288
Net change in cash during the period 4,923,350 3,518,385
Cash, beginning of period 21,014,633 50,137,569
Cash, end of period 25,937,98 3 53,655,954
Supplemental cash flow information
Borrowing costs capitalised to capital assets 5 4,263,933 -
ROU assets acquired through lease 7 155,214 -
Shares issued as a result of options exercised - net 9.1 728,073 -
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. As of June 19, 2024, the
Corporation completed its continuance from the Canada Business Corporations
Act into the Province of Ontario under the Business Corporations Act
(Ontario). The Corporation’s head office is situated at 100 King Street
West, Suite 3400, First Canadian Place, 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
nine months ended September 30, 2024 (“Financial Statements”) were
approved by the Board of Directors on November 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 share 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 audited 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 As at
September 30, December 3 1 ,
2024 2023
$ $
Balance at beginning of period 23,492,811 -
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
Share of joint venture’s net losses (6,698,550) (7,892,387)
Balance at end of period 16,794,261 2 3 , 492 , 811
Original investment in Gardaq ApS 7,422 7,422
Transfer of non-gold strategic minerals licences at cost 36,896 36,896
Investment at conversion of Gardaq ApS to Gardaq A/S 55,344 55,344
Gain on FV recognition of equity accounted investment in joint venture 31,285,536 31,285,536
Investment retained at fair value- 51% share 31,385,198 31,385,198
Share of joint venture’s cumulative net losses (14,590,937) (7,892,387)
Balance at end of period 16,794,261 23,492,811
The following tables summarize the unaudited financial information of Gardaq
A/S.
As at As at
September 30, December 3 1 ,
2024 2023
$ $
Cash and cash equivalent 8,325,045 18,377,850
Prepaid expenses and other 560,579 351,752
Total current assets 8,885,624 18,729,602
Mineral property 117,576 92,239
Total assets 9,003,200 18,821,841
Accounts payable and accrued liabilities 1,603,757 528,235
Financial liability - related party 5,762,187 3,521,938
Total liabilities 7,365,944 4,050,173
Capital stock 30,246,937 30,246,937
Deficit (28,609,681) (15,475,269)
Total equity 1,637,256 14,771,668
Total liabilities and equity 9,003,200 18 , 821 , 8 4 1
3. INVESTMENT IN AN ASSOCIATE OR JOINT VENTURE CORPORATION
(CONT’d)
As at As at
September 30, September 30,
2024 2023
$ $
Exploration and Evaluation expenses 12,144,276 8,565,658
Interest expense (income) (5,985) -
Foreign exchange loss (gain) (858,925) 171,792
Operating loss 11,279,366 8,737,450
Other expenses 1,855,047 1,108,101
Net loss and comprehensive loss 13,134,413 9,845,551
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 9,048,791 as at 30
September 2024). See note 13.1.
During the nine-month period ended 30 September 2024, the Corporation
determined that the financial asset should be reclassified to the non-current
asset category since the amount will be settled during April 2026. As a
result, an amount of $5,762,187 has been reclassified to non-current assets as
at 30 September 2024 ($3,521,938 reclassified as at 31 December 2023).
4. MINERAL PROPERTIES
As at December 31, Transfer As at September 30,
2023 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
Total mineral properties 48,821 (138) 48,683
4. MINERAL PROPERTIES (CONT’d)
As at December 31, Transfers As at September 30,
2022 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 (36,758) 48,821
5. CAPITAL ASSETS
Field equipment and Vehicles and rolling stock Equipment (including software) Construction in progress Total
infrastructure
$ $ $ $ $
Nine months ended September 30, 2024
Opening net book value 1,537,379 3,312,118 108,822 33,283,240 38,241,559
Additions - 1,941,750 138 77,831,150 79,773,038
Disposals - (149,916) - - (149,916)
Depreciation (148,780) (407,563) (46,792) - (603,135)
Closing net book value 1,388,599 4,696,389 62,168 111,114,390 117,261,546
Field equipment and Vehicles and rolling stock Equipment (including software) Construc tion in progress Total
infrastructure
$ $ $ $ $
As at September 30, 2024
Cost 2,351,042 6,197,074 232,231 111,114,390 119,894,737
Accumulated depreciation (962,443) (1,500,685) (170,063) - (2,633,191)
Closing net book value 1,388,599 4,696,389 62,168 111,114,390 117,261,546
5. CAPITAL ASSETS (CONT’d)
Field equipment and Vehicles and rolling stock Equipment (including software) Construc tion In progress Total
infrastruc ture
$ $ $ $ $
December 31, 2023
Opening net book value 1,735,752 3,742,384 216,385 7,522,085 13,216,606
Additions - - - 25,761,155 25,761,155
Disposals - - (80,983) - (80,983)
Adjustment - - 43,054 - 43,054
Depreciation (198,373) (430,266) (69,634) - (698,273)
Closing net book value 1,537,379 3,312,118 108,822 33,283,240 38,241,559
Field equipment and Vehicles and rolling stock Equipment (including software) Construc tion In progress Total
infrastruc ture
$ $ $ $ $
As at December 31, 2023
Cost 2,351,041 4,466,971 232,231 33,283,240 40,333,483
Accumulated depreciation (813,662) (1,154,853) (123,409) - (2,091,924)
Closing net book value 1,537,379 3,312,118 108,822 33,283,240 38,241,559
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 $556,632 ($478,519 for the nine months ended September 30, 2023) was
expensed as exploration and evaluation expenses during the nine months ended
September 30, 2024.
As at September 30, 2024, the Corporation had capital commitments, of
$25,532,115. 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 the first nine months of 2024 the Corporation capitalised borrowing
costs of $4,263,933 to construction in progress, which are included in
additions.
6. CONVERTIBLE NOTES AND LOAN PAYABLE
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 2,910,769 - 2,910,769
Accrued interest 1,142,212 - 1,142,212
Fair value change - (1,636,567) (1,636,567)
Foreign exchange loss 235,808 - 235,808
Balance as at September 30, 2024 16,051,842 22,343,507 38,395,349
Non-current portion - - -
Current portion 16,051,842 22,343,507 38,395,349
6. CONVERTIBLE NOTES AND LOAN PAYABLE (CONT’d)
CONVERTIBLE NOTES Convertible notes loan Embedded Derivatives at FVTPL Total
$ $ $
Balance as at December 31, 2022 - - -
Gross proceeds from issue 30,431,180 - 30,431,180
Embedded derivative component (19,443,663) 19,443,663 -
Transaction costs (362,502) - (362,502)
Accretion of discount 949,062 - 949,062
Accrued interest 508,576 - 508,576
Fair value change - 4,536,411 4,536,411
Foreign exchange gain (319,600) - (319,600)
Balance as at December 31, 2023 11,763,053 23,980,074 35,743,127
Non-current portion - - -
Current portion 11,763,053 23,980,074 35,743,127
LOAN PAYABLE As at As at
September 30, December 31,
2024 2023
$ $
Balance as at December 31, 2023 - -
Gross proceeds from issue 25,087,636 -
Transaction costs (693,272) -
Accretion of discount 32,973 -
Accrued interest 177,979 -
Foreign exchange gain (79,999) -
Balance as at September 30, 2023 24,525,317 -
Non-current portion - -
Current portion 24,525,317 -
6.1 Revolving Credit Facility
A $25 million (US$18.5 million) Revolving Credit Facility (“RCF”) was
entered into with Landsbankinn hf. and Fossar Investment Bank on September 1,
2023, with a two-year term expiring on September 1, 2025 and priced at the
Secured Overnight Financing Rate (“SOFR”) plus 950bps. Interest is
capitalized and payable at the end of the term.
The RCF 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 RCF
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% has been paid on the closing date of the facility and 0.50% was
paid at the first draw down. The facility is not convertible into any
securities of the Corporation.
The facility is 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. During September 2024, the Corporation has drawn on this
facility and the loan payable amount as of September 30, 2024, is
$25,069,002.
This facility will be replaced by the new revolving credit facilities that are
expected to be finalized subsequent to the interim financial reporting date
(see note 6.4).
6. CONVERTIBLE NOTES AND LOAN PAYABLE (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) on September 1, 2023 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 33,629,068 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 initially recognised at fair value and subsequently measured
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 September 30, 2024, the Corporation identified the fair value of embedded
derivative associated with the early conversion option to be $22.3 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 September 30, 2024 has been
recognized in the consolidated statement of comprehensive 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.
Amendments and conversion of these convertible notes were concluded
subsequently to the interim financial reporting date (see note 6.4).
6. CONVERTIBLE NOTES AND LOAN PAYABLE (CONT’D)
6.3 Cost Overrun Facility
$13.5 million (US$10 million) Revolving Cost Overrun Facility was entered into
with JLE Property Ltd. on September 1, 2023, 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 September 1, 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.
This facility will be replaced by the new revolving credit facilities that are
expected to be finalized subsequent to the interim financial reporting date
(see note 6.4).
6.4 US$35 million Revolving Credit Facility Heads of Terms
On July 2, 2024, the Corporation announced that it agreed a Head of Terms,
subject to final approval and documentation, with Landsbankinn for US$35
million in three Revolving Credit Facilities, securing a substantial increase
and extension to its existing debt facilities.
* The financing package will replace the existing credit and cost overrun
facilities, simplifying the structure of the debt package and increasing
financial flexibility and liquidity for the Corporation.
* Amaroq has signed term sheets for a US$35 million debt financing package
with Landsbankinn consisting of: * US$28.5 million facility with a margin of
9.5% per annum, reducing to 7.5% once the full amount has been drawn and the
Corporation’s cumulative EBITDA over a three-month period exceeds CAD 6
million. This facility will replace the Corporation’s existing revolving
credit and cost overrun facilities entered into on September 1, 2023. US$18.5
million of the facility is to be used towards the completion of the Nalunaq
development with the balance available for general corporate purposes.
* US$6.5 million facility with a margin of 7.5% per annum, available for
general corporate purposes once all other facilities have been fully drawn.
* The new facilities will have a 1.5% arrangement fee, a 0.4% commitment fee
on unutilised amounts, and an expected maturity date of October 1, 2026.
* The new facilities will be subject to certain ongoing covenant tests,
further detail of which will be provided on closing of definitive
documentation.
* Amaroq will finalise the new facilities’ legally binding documentation and
expects to be in a position to sign binding documents before the end of the
year. The Corporation’s currently undrawn US$10.0 million debt facilities
will remain in place until this time.
7. LEASE LIABILITIES
As at As at
September 30, December 31,
2024 2023
$ $
Balance beginning 657,440 729,237
Lease additions 155,214 -
Lease payment (101,143) (105,894)
Interest 27,449 34,097
Balance ending 738,960 657,440
Non-current portion – lease liabilities (622,123) (577,234)
Current portion – lease liabilities 116,837 80,206
The Corporation has two leases for its offices. In October 2020, the
Corporation started a 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.
7.1 Right of use asset
As at As at
September 30, December 31,
2024 2023
$ $
Opening net book value 574,856 655,063
Additions 161,038 -
Amortisation (83,704) (80,207)
Closing net book value 652,19 0 574,856
Cost 997,23 8 836,200
Accumulated amortisation (345,048) (261,344)
Closing net book value 652,19 0 574,856
8. SHARE CAPITAL
On February 23, 2024, the Corporation successfully completed its
oversubscribed fundraising which resulted in a total of 62,724,758 new common
shares being placed with new and existing institutional investors at a placing
price of 74 pence (CAD $1.25 at the closing exchange rate on 9 February 2024).
The placing price represents a 5.7% premium to the closing share price on 9
February 2024 on the AIM exchange. The fundraising consisted of:
* A placing of new common shares with new and existing institutional investors
at the placing price (the “UK Placing”). Stifel Nicolaus Europe Limited
acted as the sole bookrunner and broker on the UK Placing.
* A placing of new depository receipts representing new common shares with new
and existing investors at the placing price (the “Icelandic Placing”).
Landsbankinn hf. and Fossar fjarfestingarbanki hf. acted as joint bookrunners
on the Icelandic Placing and Landsbankinn hf. acted as underwriter.
* A private placement of new common shares by certain existing institutional
investors and a director of the Corporation at the placing price (the
“Canadian Subscription”). The Director subscribed to approximately CAD
$3.4 million (equivalent to GBP 2.0 million) in the fundraising.
As a result of the subscription, net proceeds of approximately GBP 44 million
(CAD 75.6 million) have been raised, exceeding the initial targeted amount of
GBP 30 million. The shares subscribed to were credited as fully paid and rank
pari passu in all respects with the existing common shares of the Corporation.
9. STOCK-BASED COMPENSATION
9.1 Stock options
An incentive stock option plan (the “Plan”) was approved initially in 2017
and renewed by shareholders on June 14, 2024. 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 attributes that 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 May 14, 2024, and June 3, 2024, the Corporation granted its employees
22,988 stock options with an exercise price ranging from $1.30 to $1.31 per
share. 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 amounted to
$18,163 for an estimated fair value of $0.72 per share.
On January 5, 2024, a former director of the Corporation exercised his
options. As a result, 150,000 options were exercised which resulted in the
former director receiving 60,637 shares net of applicable withholdings. On May
23, 2024, the former Chief Financial Officer (“CFO”) of the Corporation
exercised his options. As a result, 1,800,000 options were exercised which
resulted in the former CFO receiving 963,281 shares net of applicable
withholdings.On October 9, 2024, an employee of the Corporation exercised his
options. As a result, 31,278 options were exercised which resulted in the
employee receiving 11,090 shares net of applicable withholdings
9. STOCK-BASED COMPENSATION (CONT’d)
Changes in stock options are as follows:
Nine months ended September 30, 2024 December 31, 2023
Number of options Weighted average exercise price Number of options Weighted average exercise price
$ $
Balance, beginning 9,188,365 0.59 10,717,395 0.57
Granted 22,988 1.30 80,970 1.01
Exercised (1,950,000) 0.60 (1,610,000) 0.46
Balance, end 7,261,353 0.59 9,188,365 0.59
Balance, end exercisable 7,261,353 0.59 9,188,365 0.59
Stock options outstanding and exercisable as at September 30, 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
100,000 100,000 0.50 September 13, 2026
1,245,000 1,245,000 0.70 December 31, 2026
2,700,000 2,700,000 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
19,480 19,480 0.77 July 24, 2028
61,490 61,490 1.09 December 20, 2028
11,538 11,538 1.30 May 14, 2029
11,450 11,450 1.31 June 3, 2029
7,261,353 7,261,353
9.2 Restricted Share Unit
9.2.1 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.
9. STOCK-BASED COMPENSATION (CONT’d)
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.
* Awards 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.
9.2.2 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 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 9.2.4.
9. STOCK-BASED COMPENSATION (CONT’d)
9.2.3 New Conditional Award under RSU Plan
On October 13, 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.
On August 14, 2024, 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 August 14, 2024
Initial Price CAD 1.04
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 Date.
Participant proportion Ellert Arnarson, Chief Financial Officer, 12%
Performance Period August 6, 2024, to December 31, 2025 (inclusive)
Measurement Date December 31, 2025, vesting on the first anniversary of grant.
RSU Grant Date First quarter of 2026
RSU Vesting Date 100% of the shares will vest on the first anniversary of grant (first quarter of 2027)
9. STOCK-BASED COMPENSATION (CONT’d)
9.2.4 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.
During June 2024, some of the awards were forfeited due to the departure of
Jaco Crouse, CFO of the Corporation, effective June 3, 2024 (see note 9.2.5).
As a result of the departure, previously recognised RSU award vesting charges
of $566,875 were reversed and the percentage of the pool that was allocated
was reduced to 70%.
During August 2024, new awards granted to the CFO increased the percentage of
the pool that was allocated to 82%.
A charge of $610,654 and $1,328,904 was recorded during the three and nine
months ended September 30, 2024 respectively, including the reduction of
$566,875 of previously recognized RSU vesting charges which were reversed
during the period as a result of the forfeiture of the RSU awards (a charge of
$449,000 and $1,347,000 was recorded during the three and nine months ended
September 30, 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
Forfeiture of 20% of the awards date June 3, 2024
Additional award date August 14, 2024
Expected life (years) 1.38 – 3.00
Share price at grant date $0.70 - $1.02
Exercise price N/A
Dividend yield 0%
Risk-free rate 3.44% - 4.71%
Volatility 49.5% - 72%
Fair value of awards - First Measurement Date $ 3,538 ,000
Fair value of awards - Second Measurement Date $1, 526 ,000
Fair value of awards - Third Measurement Date $ 1,496,000
Total fair value of awards ( 82 % of pool) $ 6 , 56 0 ,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. STOCK-BASED COMPENSATION (CONT’d)
9.2.5 Awards under Restricted Share Unit Plan (the “RSU”)
On February 23, 2024, in alignment with the Company’s RSU plan dated 15
June 2023, the Company granted an award (the “Award”) to directors and
employees of the Company as listed below.
Award Date February 23, 2024
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 Company’s share capital
The number of shares is determined at the Measurement Dates
Participant proportions and Number of shares Eldur Olafsson, CEO 40% 3,805,377 shares
subject to RSU
Jaco Crouse (1), CFO 20% 1,902,688 shares
Joan Plant, Executive VP 10% 951,344 shares
James Gilbertson, VP Exploration 10% 951,344 shares
Edward Wyvill, Corporate Development 10% 951,344 shares
First Measurement Date: 31 December 2023
50% of the Shares will vest on the first anniversary of grant, with the remaining 50% vesting on the third anniversary of grant.
(1)The shares awarded under the RSU to Jaco Crouse, CFO, have been forfeited
as a result of his departure effective June 3, 2024.
10. EXPLORATION AND EVALUATION EXPENSES (RECOVERY)
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
$ $ $ $
Geology 440,058 201,738 573,208 176,116
Drilling 2,028,481 173,776 2,088,481 1,210,428
Lodging and on-site support 284,812 151,495 284,812 203,208
Analysis 60,176 27,416 193,086 1,061
Geophysical survey - - - (416,177)
Transport 14,059 25,510 18,968 650,263
Helicopter charter 805,327 205,073 805,327 886,755
Logistic support - - - (51,509)
Insurance - - - -
Maintenance infrastructure 363,154 628,733 379,986 1,207,624
Supplies and equipment 180,338 706,545 230,849 1,309,562
Project Engineering - - - 55,792
Government fees 8,750 - 41,599 25,615
Exploration and evaluation expenses before depreciation 4,185,155 2,120,286 4,616,316 5,258,738
Depreciation 239,752 157,254 556,631 478,519
Exploration and evaluation expenses 4,424,907 2,277,540 5,1 7 2, 947 5,737,257
11. GENERAL AND ADMINISTRATION
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
$ $ $ $
Salaries and benefits 924,737 626,384 3,916,009 1,864,046
Director’s fees 159,000 158,667 477,000 472,667
Professional fees 793,524 296,024 2,645,492 1,818,781
Marketing and investor relations 169,781 173,572 482,952 480,258
Insurance 83,536 76,002 256,369 211,206
Travel and other expenses 534,375 471,992 1,778,834 993,167
Regulatory fees 214,236 342,668 796,695 715,222
General and administration before following elements 2,879,189 2,145,309 10,353,351 6,555,347
Stock-based compensation 611,185 451,014 1,347,598 1,353,042
Depreciation 45,866 35,718 130,208 106,990
General and administration 3,5 36 , 240 2,632,041 11,8 31 , 157 8,015,379
12. FINANCE COSTS
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
$ $ $ $
Transaction costs and service fees - 1,013,771 - 1,013,771
Lease interest 9,317 8,487 27,449 26,062
9,317 1,022,258 27,449 1,039,833
13. RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION
13.1 Gardaq Joint Venture
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
$ $ $ $
Gardaq management fees and allocated cost 608,392 601,461 1,823,286 1,108,101
Other allocated costs 212,489 803,567 388,152 2,516,430
Foreign exchange revaluation (34,116) 17,480 28,811 16,581
786,765 1,422,508 2,240,249 3,641,112
As at September 30, 2024, the balance receivable from Gardaq amounted to
$5,762,187 ($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 April 13, 2023 (See note 3.1).
13. RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION
(CONT’d)
13.2 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 Executive Vice President. Key management
compensation is as follows:
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
$ $ $ $
Short-term benefits
Salaries and benefits 385,277 316,736 1,225,843 971,553
Director’s fees 159,000 158,667 477,000 472,667
Long-term benefits
Stock-based compensation 531 2,014 2,143 6,042
Stock-based compensation - RSU 610,654 449,000 1,328,904 1,347,000
Total compensation 1,155,462 926,417 3,033,890 2,797,262
14. NET EARNINGS (LOSS) PER COMMON SHARE
The calculation of net loss per share is shown in the table below.
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
$ $ $ $
Net income (loss) and comprehensive income (loss) (14,013,519) (6,555,222) (18,001,712) 13,425,594
Weighted average number of common shares outstanding - basic 327,418,727 263,579,331 314,985,260 263,356,034
Weighted average number of common shares outstanding – diluted 327,418,727 306,335,274 314,985,260 306,111,977
Basic earnings (loss) per share (0.043) (0.02) (0.057) 0.05
Diluted earnings (loss) per common share (0.043) (0.02) (0.057) 0.04
15. 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 September 30, 2024:
15.1 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.
15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT’d)
15.2 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)
The following table summarizes the carrying value of the Corporation’s
financial instruments:
September 30, December 31, 2023
2024
$ $
Cash 25,937,983 21,014,633
Sales tax receivable 72,087 69,756
Prepaid expenses and others 17,812,986 18,681,568
Interest receivable 876,478 -
Deposit 177,944 27,944
Escrow account for environmental monitoring 6,872,073 598,939
Financial Asset – Related Party 5,762,187 3,521,938
Investment in equity-accounted joint arrangement 16,794,261 23,492,811
Accounts payable and accrued liabilities (13,479,402) (6,273,979)
Convertible notes (38,395,349) (35,743,127)
Loan payable (24,525,317) -
Lease liabilities (738,960) (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 the loan payable approximate its fair value.
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.
15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT’d)
15.3 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 is currently negotiating new
Head of Terms with Landsbankinn in order to fund general and administrative
costs, exploration and evaluation costs and Nalunaq project development costs.
The Corporation’s 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 September 30, 2024 As at December 31, 2023
Trade and other payables Convertible notes Loan payable Lease liabilities Trade and other payables Convertible Notes Lease liabilities
$ $ $ $ $ $ $
Within 1 year 13,479,402 38,395,349 24,525,317 150,250 6,273,979 - 108,345
1 to 5 years - - - 545,633 - 35,743,127 544,178
5 to 10 years - - - 154,184 - - 126,975
Total 13,479,402 38,395,349 24,525,317 850,067 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 $25,937,983 at the period end
and to the subsequent conversion of the convertible note into shares of the
Corporation (see note 16).
16. SUBSEQUENT EVENTS
Amendments and conversion of convertible notes
On October 4, 2024, the Corporation entered into an agreement with the holders
of its US $22.4M convertible notes, due in 2027, to convert the notes into new
common shares in order to simplify the Corporation’s capital structure,
reduce cash interest costs and permit future financial flexibility.
The Corporation has amended the convertible notes to permit the payment of the
outstanding interest and commitment fees in common shares of the Corporation
at a conversion price equal to the closing price of the common shares on the
TSX-V on the trading day immediately prior to such conversion. These
amendments were approved by the TSX-V on October 14, 2024.
The holders of the convertible notes have elected to convert all of the
outstanding principal of the convertible notes into 33,629,068 Common Shares
(the “Principal Conversion Shares”) at a conversion price of CAD 0.90
(£0.525) per Principal Conversion Share and all of the outstanding interest
of the convertible notes in 1,293,356 Common Shares (the “Interest
Conversion Shares”) at a conversion price of CAD $1.3 (£0.73) per Interest
Conversion Share. The Corporation and the holders of the convertible notes
also agreed to make 70% of the total amount of the outstanding commitment fee
immediately payable. The holders of the convertible notes have elected to
convert such commitment fee payable into 3,307,502 Common Shares (the
“Commitment Fee Conversion Shares”) in aggregate, at a conversion price of
CAD $1.3 (£0.73) per Commitment Fee Conversion Share.
Following the consent of the TSX-V, and their approval of the amendments to
the convertible notes, the 33,629,068 Principal Conversion Shares, 1,293,356
Interest Conversion Shares and 3,307,502 Commitment Fee Conversion Shares were
admitted to trading on AIM, and TSX-V and Nasdaq Iceland’s main market
Recent news on Amaroq
See all newsTrump's designs on Greenland prod investment, tourism likely to pay off faster than mines
Brief: Amaroq Reiterates FY2026 Gold Production Guidance Of 25-35 Koz
Canada gold miner Amaroq's Q1 revenue reaches C$ 18.9 mln, posts net profit
Q1 2026 Operational and Financial Results
Notice of Results and further details for Capital Markets Update