Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Plan of Arrangement. Unless otherwise specified, references to sections are to sections of this Plan of Arrangement.
Unless the context otherwise requires, words importing the singular number only will include the plural and vice versa; words importing the use of any gender will include all genders; and words importing persons will include firms and corporations and vice versa.
In the event that any date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action will be required to be taken on the next succeeding Business Day.
Any reference in this Plan of Arrangement to a statute includes all regulations and rules made thereunder, all amendments to such statute or regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.
This Plan of Arrangement is made pursuant to and is subject to the provisions of the Arrangement Agreement, provided, however, that in the event of any inconsistency between this Plan of Arrangement and the Arrangement Agreement, the provisions of this Plan of Arrangement will prevail. At the Effective Time, without any further act or formality, the Arrangement will be binding upon Paramount, Calico and the Calico Shareholders.
Commencing at the Effective Time, the following will occur and will be deemed to occur in the following sequence without any further authorization, act or formality by Paramount, Calico, Calico Shareholders or any other person:
If the aggregate number of Paramount Shares to which a Calico Shareholder would otherwise be entitled under the Arrangement would include a fractional Paramount Share, then the number of Paramount Shares that such Calico Shareholder is entitled to receive will be rounded down to the next whole number and such Calico Shareholder will not receive cash or any other compensation in lieu of such fractional Paramount Share.
certificates representing the number of Paramount Shares issuable to such former Calico Shareholder as determined in accordance with the provisions hereof. Such certificates will be deemed to have been delivered to such former Calico Shareholder at the time such certificates are forwarded or made available for pick-up in accordance with this Section 5.1(d).
Calico, Paramount and the Depositary will be entitled to deduct and withhold from any consideration deliverable or otherwise payable to any Calico Shareholder such amounts as Calico, Paramount or the Depositary is required or permitted to deduct or withhold with respect to such consideration under the Tax Act or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty, in each case, as amended. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts will be treated for all purposes hereof as having been paid to the Calico Shareholder in respect of which such deduction and withholding was made, provided that such deducted or withheld amounts are actually remitted to the appropriate taxing authority. The Depositary is authorized, as agent for the Calico Shareholders, to sell such portion of the Paramount Shares otherwise deliverable to applicable Calico Shareholders as is necessary to provide sufficient funds to Paramount, Calico or the Depositary, as the case may be, to enable them to comply with such deduction or withholding requirement (after deducting commission, other reasonable expenses incurred in connection with the sale, and any applicable taxes), and Paramount, Calico or the Depositary will notify the applicable Calico Shareholder and remit any unapplied consideration including any unapplied balance of the net proceeds of such sale.
If any certificate which prior to the Effective Date represented outstanding Calico Shares which were exchanged pursuant to Section 3.1 has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, certificates representing Paramount Shares deliverable in respect thereof, if any, as determined in accordance with Section 3.1. When seeking such certificate in exchange for any lost, stolen or destroyed certificate, the person to whom certificates representing Paramount Shares are to be issued will, as a condition precedent to the issuance thereof, give a bond satisfactory to Paramount and its transfer agent, in such sum as Paramount may direct or otherwise indemnify Paramount and its transfer agent in a manner satisfactory to Paramount and its transfer agent against any claim that may be made against Paramount or its transfer agent with respect to the certificate alleged to have been lost, stolen or destroyed.
This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the terms of the Arrangement Agreement.
2015 Annual Meeting Admission Ticket 2015 Annual Meeting of Paramount Gold Nevada Corp. Stockholders 17, 12, 2015, Grand Sierra Resort 2500 East 2nd Street Reno, NV, 89502 10:00 AM Local time Upon arrival, please present this admission ticket and photo identification at the registration desk. Important notice regarding the availability of proxy materials for the Annual Meeting of Stockholders to be held on December 17, 2015: The proxy statement and annual report to shareholders are available at www.paramountnevada.com/PZGProxy.pdf. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — PARAMOUNT GOLD NEVADA CORP. Notice of 2015 Annual Meeting of Stockholders Grand Sierra Resort 2500 East 2nd Street Reno, NV, 89502 10:00 AM Local time December 17, 2015 GLEN VAN TREEK AND CARLO BUFFONE, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Paramount Gold Nevada Corp. to be held on December 17, 2015 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees and FOR Proposal 2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.)
You have asked us to render an opinion, as of the date hereof, with respect to the fairness, from a financial point of view, of the Arrangement Consideration to the holders of Paramount Shares.
For purposes of the opinion set forth herein, we have reviewed a draft of the Arrangement Agreement, Plan of Arrangement, Share Issuance Resolution in the forms of drafts thereof dated March 1, 2016, and related ancillary documents, and we have also, among other things:
In conducting our review and arriving at our opinion, with your consent, we have not independently investigated or verified any of the foregoing information and we have assumed and relied upon such information as being accurate and complete in all material respects, and we have further relied upon verbal or written assurances of senior management of Paramount that such information was accurate and complete in all material respects when given to us and that they are not aware of any facts or circumstances that would make or render any of such information inaccurate, incomplete or misleading in any material respect. With respect to the Calico Forecasts, we have assumed that they have been reasonably prepared on bases reflecting the best then-currently available estimates and good faith judgments of the management of Calico as to the future financial performance of Calico. We have not been engaged to assess the achievability of any projections or the assumptions on which they were based, and we express no view as to such projections or assumptions. In addition, we have not assumed any responsibility for any independent valuation or appraisal of the assets, liabilities or business operations of Paramount or Calico, nor have we been furnished with any such valuation or appraisal. In addition, we have not assumed any obligation to conduct, nor have we actually conducted, any physical inspection of the properties or facilities of Paramount or Calico.
We also have assumed, with your consent, that (i) the Arrangement will be consummated substantially in accordance with the terms set forth in the Arrangement Agreement and in compliance with the applicable provisions of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended, British Columbia Business Corporations Act, and all other applicable federal, state and local statutes, rules, regulations promulgated thereunder and the rules and regulations of NYSE MKT, LLC, TSC Venture Exchange and any other applicable exchanges (collectively, “Securities and Exchange Rules”), (ii) the representations and warranties of each party in the Arrangement Agreement are true and correct (except to the extent such representations and warranties may be reasonably construed as a determination or conclusion of or by any such party regarding the fairness of the Arrangement), (iii) each party to the Arrangement will perform on a timely basis all covenants and agreements required to be performed by it under the Share Implementation Agreement, and (iv) all conditions to the consummation of the Arrangement will be satisfied without waiver thereof. We have further assumed that the final Arrangement Agreement when signed by all relevant parties will conform in all material respects to the draft Arrangement Agreement dated March 1, 2016, and that the Arrangement will be consummated as described in the draft Arrangement Agreement. We have also assumed that all governmental, regulatory and other consents and approvals contemplated by the Arrangement Agreement will be timely obtained and that, in the course of obtaining any of those consents and approvals, no modification, delay, limitation, restriction or condition will be imposed or waivers made that would have a material adverse effect on Paramount or Calico or on the contemplated benefits of the Arrangement.
We have acted as financial advisor to Paramount in connection with the Arrangement and will receive a fee for our services payable upon delivery of this opinion to the Special Committee of the Board of Directors of Paramount following a request from such Committee that our opinion be so delivered. Our fee is not contingent upon the consummation of the Arrangement. We will be reimbursed for our reasonable out of pocket expenses incurred in rendering services to Paramount, subject to an agreed maximum amount. Payment of such reimbursement is not contingent upon consummation of the Arrangement. Paramount has agreed to indemnify us for certain losses, claims, damages and liabilities arising out our performance of services pursuant to our engagement with Paramount. In the two years prior to the date hereof, we have not provided any services to the Paramount where we received a fee.
Roth, as part of its investment banking business, is continually engaged in the valuation of businesses and their securities in connection with Arrangements and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. We are a full service securities firm engaged in securities trading and brokerage activities, as well as providing investment banking and other financial services. In the ordinary course of business, we and our affiliates may acquire, hold or sell, for our and our affiliates’ own accounts and for the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of Paramount or Calico, and, accordingly, may at any time hold a long or a short position in such securities.
It is understood that this letter is solely for the information and use of the Special Committee of the Board of Directors of Paramount in connection with its evaluation and possible recommendation of the Arrangement and does not constitute a recommendation to any stockholder of Paramount as to how such stockholder should vote or otherwise act or refrain from acting on any matter relating to the Arrangement. This opinion may not be relied upon by any other person, or used for any other purpose except that, subject to all qualifications, limitations and assumptions set forth herein, the Board of Directors of Paramount is entitled to rely on this opinion in connection with its evaluation and possible approval and recommendation of the Arrangement. Except as otherwise set forth herein, or as expressly contemplated by and subject to the limitations set forth in the Arrangement Agreement, this opinion may not be reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose without our prior written consent, provided that we hereby authorize a copy of this opinion to be included in its entirety as an exhibit, and a summary of the contents of this opinion to be disclosed, in any filing or other disclosure that Paramount is required to make under Securities and Exchange Rules in connection with the Arrangement, but only to the extent Paramount has reasonably concluded that such inclusion or disclosure is required by or advisable under applicable law.
On the basis of and subject to the foregoing, we are of the opinion, as of the date hereof, that the Arrangement Consideration is fair, from a financial point of view, to the holders of Paramount Shares.
Calico has one wholly-owned subsidiary, Calico Resources USA Corp. (“Calico US”), which was incorporated in Nevada on April 10, 2011.
Calico is an exploration and development stage company, engaged principally in the acquisition, exploration and development of mineral property interests.
Calico’s main focus is the ongoing development of its 100% Grassy Mountain Gold Project (the “Grassy Mountain Project”) is located in northern Malheur County, Oregon, approximately 22 miles south of Vale, Oregon, and roughly 70 miles west of Boise, Idaho. The project site is situated in the rolling hills of the high desert region of the far western Snake River Plain and consists of 418 unpatented lode claims, three patented lode claims, nine mill site claims, six association placer claims, and various leased fee land surface and surface/mineral rights, all totaling roughly 9,300 acres. The local terrain is gentle to moderate, with elevations ranging from 3300 to 4,300 ft. above mean sea level.
The following maps illustrates the general location of the Grassy Mountain Project:
To effect mining operations power and water source infrastructure would need to be developed as it does not currently exist.
Calico US owns and controls an undivided 100% right, title and interest (including water rights) in the Grassy Mountain Project (subject to certain underlying agreements and royalties).
During the 2011 exploration program, Calico mapped and sampled the Grassy Mountain Project deposit and completed three core and nine reverse circulation drill holes in the primary zone of mineralization on the property. Calico’s exploration strategy was to target areas where resource expansion was most probable. Historical data was thoroughly reviewed prior to drilling, and fresh sets of cross-sections and long-sections were constructed based on existing information. New interpretations of the orientation of mineralization and geology were plotted on the new sections. The new sections were then used to select areas where in-fill drilling was needed and areas where gold mineralization was open-ended and resource expansion probable. A detailed geologic model was produced based on the results of the 2011 exploration work, and subsequent supporting geophysical surveys were completed in March, 2012.
A mineralized material estimate was prepared by Hardrock Consulting Inc. in November, 2014. An independent preliminary economic assessment (“PEA”) was prepared in February, 2015 by Metal Mining Consultants Inc., which verified the mineralized material estimate and included all drill data obtained as of September 26, 2014. The PEA concluded that potential exists for the discovery of additional mineralized material at exploration target areas identified within the Grassy Mountain claim block and the current mineralized material at Grassy Mountain is sufficient to warrant continued planning and effort to explore, permit, and develop the Grassy Mountain Project. There is sufficient data to support a basic geologic model and continuing development of the project and the detailed geologic model described in the PEA, along with the results of the exploration, drilling, and geophysical surveys completed as of October 2014, are sufficient to support preparation of a Preliminary Feasibility Study.
There is no certainty that the scenarios or estimated economics in the PEA will be realized.
The geology of the Grassy Mountain Project is dominated by the Grassy Mountain Formation, which consists of a thick sequence of pebble conglomerate, arkosic sandstone, sandstone, clay-rich siltstone, reworked tuff, and olivine basalt flows. The sedimentary portion of the Grassy Mountain Formation is 700 to 1000 ft thick, and within the project area most sedimentary units are silicified and strongly indurated.
Gold mineralization at the Grassy Mountain Project occurs primarily in interbedded siltstone and fine-grained sandstone (arkose) sediments that are brecciated and cut by thin quartz chalcedony-adularia veinlets and stockworks. Mineralization is associated with epithermal hot springs deposition, and several siliceous sinter terraces are interbedded with the silicified clastic sediments.
The following table sets out Calico’s consolidated share and loan capital as at June 30, 2015. Financial information is provided in Calico’s comparative financial statements and management discussion and analysis in respect of its most recently completed financial year.
Calico Management’s Discussion of Financial Condition and Results of Operations
You should read the following discussion and analysis of Calico’s financial condition and results of operations together with its financial statements and related notes appearing elsewhere in this Proxy Statement. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under “Risk Factors Relating to the Arrangement” above.
Calico recorded a net loss of $810,920 for the year ended June 30, 2015 as compared to a loss of $968,838 for the year ended June 30, 2014.
The expenses for the year ended June 30, 2015 were $796,363 compared to $965,858 in the prior period. Included in expenses is a non-cash charge of $198,848 (June 30, 2014 - $Nil) for share-based compensation. After deducting this non-cash adjustment for expenses, expenses totaled $597,515 (June 30, 2014 - $965,858) representing a decrease of $368,343 or 38%. Material variances over the comparable period are as follows:
Included in legal expenses are two specific matters not in the course of the usual corporate activities.
(a) In the year ended June 30, 2015 fees totalling $37,243 were paid to US corporate counsel toward a successful defense of an action commenced in the state of Colorado by the former President and Chief Executive Officer.
(b) At the end of the fiscal year June 30, 2014 Calico recorded an accrued liability for services provided by previous legal counsel in the amount of $573,725. Of this amount, $200,000 was settled by the issuance of 1,666,667 common shares and 833,333 warrants. This same previous legal counsel invoiced Calico a further amount of $69,520 on June 7, 2015. A total of $443,246 then has been recorded by Calico as an unpaid amount, being the invoiced totals less the amount settled by issuing common shares and warrants. Calico is contesting the amount of these invoices and an action has commenced in the Supreme Court of British Columbia for a review of all of these invoices to determine what amount for which Calico would then be liable. Calico is uncertain, at this time, as to how long the review process will take. Legal counsel retained by Calico on this matter has invoiced an amount of $37,093 in legal costs as at June 30, 2015. Additional legal costs are being incurred as the review process is undertaken by this legal counsel.
As at June 30, 2015, Calico had current assets of $1,815,189 and current liabilities of $907,563 compared to current assets of $49,202 and current liabilities of $1,158,605 as at June 30, 2014. Working capital was $907,626 at June 30, 2015 compared to a negative $1,109,403 at June 30, 2014.
Included in trade payables is the amount of $443,246 representing invoiced legal fees from Calico’s previous legal counsel. Calico is contesting the amount of these invoices and an action has commenced in the Supreme Court of British Columbia for a review of all of these invoices to determine what amount for which Calico would then be liable. Calico is uncertain at this time as to how long the review process will take.
Cash and cash equivalents at June 30, 2015, were $1,791,499 compared to $7,689 at June 30, 2014
Calico recorded a net loss of $263,605 for the six month period ended December 31, 2015, compared to a net loss of $424,386 for the six month period ended December 31, 2014.
The expenses for the six month period ended December 31, 2015 were $277,433 compared to $432,429 in the prior period. Included in expenses is a non-cash charge of $24,922 (December 31, 2014 - $154,562) for share-based compensation. After deducting this non-cash adjustment for expenses, expenses totalled $252,511 (December 31, 2014 - $277,867) representing a decrease of $25,356 or 9%. Material variances over the comparable period are as follows:
In the six month period ended December 31, 2015 legal counsel retained by Calico on this matter invoiced Calico an amount of $65,276. Additional legal costs will be incurred as the review process is undertaken by this legal counsel on behalf of Calico.
As at December 31, 2015, Calico had current assets of $513,254 and current liabilities of $904,201 compared to
current assets of $1,815,189 and current liabilities of $907,563 as at June 30, 2015. Working capital was negative
$390,947 at December 31, 2015 compared to positive $907,626 at June 30, 2015.
Included in trade payables is the amount of $443,246 representing invoiced legal fees from Calico’s previous legal counsel. Calico is contesting the amount of these invoices and an action was started in the Supreme Court of British Columbia for a review of all of these invoices to determine what amount for which Calico would then be liable. The review was completed on January 29, 2016 and Calico is currently waiting for the Court’s decision.
Cash and cash equivalents at December 31, 2015, were $493,152 compared to $1,791,499 at June 30, 2015.
The consolidated financial statements of Calico Resources Corp. (An Exploration Stage Company) are the responsibility of the Company’s management. The financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and reflect management’s best estimates and judgment based on information currently available.
Management has developed and maintains a system of internal controls to ensure that the Company’s assets are safeguarded, transactions are authorized and properly recorded and financial information is reliable.
The Board of Directors is responsible for ensuring management fulfills its responsibilities for financial reporting and internal controls through an audit committee. The Audit Committee reviews the results of the consolidated financial statements prior to their submission to the Board of Directors for approval.
Independent Auditor's Report
To the shareholders of Calico Resources Corp.
We have audited the accompanying consolidated financial statements of Calico Resources Corp., which comprise the consolidated statements of financial position as at June 30, 2015 and 2014 and the consolidated statements of loss and comprehensive income/(loss), changes in shareholders’ equity and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Calico Resources Corp. as at June 30, 2015 and 2014 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 2 in the consolidated financial statements, which indicates that at June 30, 2015, the Company had net loss of $810,920 for the year then ended and an accumulated deficit of $9,577,023 since inception and expects to incur further losses in the development of its business. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt upon the Company’s ability to continue as a going concern.
(signed) “BDO CANADA LLP”
Chartered Professional Accountants
Vancouver, British Columbia
September 28, 2015
800 Canada LLP, a Canadian limited liability partnership,
is a member of 800 International
Limited,
a UK company limited by guarantee, and forms part of the international BOO network of Independent member firms.
Calico Resources Corp.
Consolidated statements of financial position
(Expressed in Canadian dollars)
|
|
Notes
|
|
|
June 30,
2015
|
|
|
June 30,
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
4
|
|
|
$
|
1,791,499
|
|
|
$
|
7,689
|
|
Receivables
|
|
|
|
|
|
|
11,207
|
|
|
|
33,982
|
|
Prepaid expenses
|
|
|
|
|
|
|
12,483
|
|
|
|
7,531
|
|
|
|
|
|
|
|
|
1,815,189
|
|
|
|
49,202
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
-
|
|
|
|
1,349
|
|
Exploration and evaluation assets
|
|
5, 10
|
|
|
|
12,433,509
|
|
|
|
8,777,390
|
|
|
|
|
|
|
|
|
12,433,509
|
|
|
|
8,778,739
|
|
TOTAL ASSETS
|
|
|
|
|
|
$
|
14,248,698
|
|
|
$
|
8,827,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables and accrued liabilities
|
|
6, 10
|
|
|
$
|
907,563
|
|
|
$
|
908,605
|
|
Loans payable
|
|
|
7
|
|
|
-
|
|
|
|
250,000
|
|
TOTAL LIABILIITES
|
|
|
|
|
|
|
907,563
|
|
|
|
1,158,605
|
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
8
|
|
|
|
18,613,384
|
|
|
|
13,721,608
|
|
Subscriptions received
|
|
|
8
|
|
|
-
|
|
|
|
54,000
|
|
Reserves
|
|
|
9
|
|
|
|
2,463,604
|
|
|
|
2,399,598
|
|
Accumulated other comprehensive income
|
|
|
|
|
|
|
1,841,170
|
|
|
|
260,233
|
|
Deficit
|
|
|
|
|
|
|
(9,577,023
|
)
|
|
|
(8,766,103
|
)
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
13,341,135
|
|
|
|
7,669,336
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
$
|
14,248,698
|
|
|
$
|
8,827,941
|
|
Approved on behalf of the Board by:
|
|
|
|
“John Pollesel”
|
|
Director
|
John Pollesel
|
|
|
|
|
|
“Kevin Milledge”
|
|
Director
|
Kevin Milledge
|
|
|
See accompanying notes to the consolidated financial statements
Calico Resources Corp.
Consolidated statements of loss and comprehensive income / (loss)
(Expressed in Canadian dollars)
|
|
|
|
|
|
Year ended June 30,
|
|
|
|
Notes
|
|
|
2015
|
|
|
2014
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit and tax services
|
|
|
|
|
|
$
|
27,468
|
|
|
$
|
34,624
|
|
Administration
|
|
|
|
|
|
|
105,495
|
|
|
|
109,450
|
|
Depreciation
|
|
|
|
|
|
|
1,349
|
|
|
|
578
|
|
Director fees
|
|
|
10
|
|
|
-
|
|
|
|
24,025
|
|
Insurance
|
|
|
|
|
|
|
10,650
|
|
|
|
17,282
|
|
Investor relations
|
|
|
|
|
|
|
12,183
|
|
|
|
98,893
|
|
Legal services
|
|
|
6
|
|
|
|
189,917
|
|
|
|
472,153
|
|
Management fees
|
|
|
10
|
|
|
|
186,034
|
|
|
|
159,994
|
|
Project generation
|
|
|
|
|
|
-
|
|
|
|
2,989
|
|
Share-based payments
|
|
|
10
|
|
|
|
198,848
|
|
|
-
|
|
Transfer agent and filing fees
|
|
|
|
|
|
|
44,673
|
|
|
|
38,903
|
|
Travel, promotion and board meetings
|
|
|
|
|
|
|
19,746
|
|
|
|
6,967
|
|
|
|
|
|
|
|
|
(796,363
|
)
|
|
|
(965,858
|
)
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
4,201
|
|
|
|
1,471
|
|
Interest expense
|
|
|
|
|
|
|
(4,723
|
)
|
|
|
(2,112
|
)
|
Other income
|
|
|
|
|
|
|
3,991
|
|
|
-
|
|
Foreign exchange loss
|
|
|
|
|
|
|
(18,026
|
)
|
|
|
(2,339
|
)
|
Net loss for year
|
|
|
|
|
|
|
(810,920
|
)
|
|
|
(968,838
|
)
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations
|
|
|
|
|
|
|
1,580,937
|
|
|
|
114,961
|
|
Total comprehensive income / (loss)
|
|
|
|
|
|
$
|
770,017
|
|
|
$
|
(853,877
|
)
|
Loss per share – basic and diluted
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
75,785,794
|
|
|
|
51,557,212
|
|
See accompanying notes to the consolidated financial statements
Calico Resources Corp.
Consolidated statements of changes in shareholders’ equity
(Expressed in Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
|
|
|
|
|
Accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
Share Capital
|
|
|
|
|
|
|
Received
|
|
|
Reserves
|
|
|
comprehensive income
|
|
|
Deficit
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant and stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of shares
|
|
|
Amount
|
|
|
Amount
|
|
|
option reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2013
|
|
|
48,853,869
|
|
|
$
|
12,954,481
|
|
|
$
|
-
|
|
|
$
|
2,735,553
|
|
|
$
|
145,272
|
|
|
$
|
(7,797,265
|
)
|
|
$
|
8,038,041
|
|
Shares issued for cash - private
placements
|
|
|
2,441,667
|
|
|
|
293,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
293,000
|
|
Fair value of share purchase warrants
|
|
|
|
|
|
|
(24,252
|
)
|
|
|
-
|
|
|
|
24,252
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Shares issued for cash - warrants exercised
|
|
|
1,170,500
|
|
|
|
140,460
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
140,460
|
|
Share issue costs
|
|
|
-
|
|
|
|
(2,288
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,288
|
)
|
Subscriptions received
|
|
|
-
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,000
|
|
Fair value of warrants exercised
|
|
|
-
|
|
|
|
42,717
|
|
|
|
-
|
|
|
|
(42,717
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Shares issued non-cash
|
|
|
1,671,000
|
|
|
|
317,490
|
|
|
|
-
|
|
|
|
(317,490
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
114,961
|
|
|
|
-
|
|
|
|
114,961
|
|
Net loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(968,838
|
)
|
|
|
(968,838
|
)
|
Balance at June 30, 2014
|
|
|
54,137,036
|
|
|
$
|
13,721,608
|
|
|
$
|
54,000
|
|
|
$
|
2,399,598
|
|
|
$
|
260,233
|
|
|
$
|
(8,766,103
|
)
|
|
$
|
7,669,336
|
|
Shares issued for cash - private
placements
|
|
|
42,886,665
|
|
|
|
4,508,000
|
|
|
|
(54,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,454,000
|
|
Fair value of share purchase warrants
|
|
|
|
|
|
|
(421,197
|
)
|
|
|
-
|
|
|
|
421,197
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Shares issued for debt
|
|
|
2,526,144
|
|
|
|
303,137
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
303,137
|
|
Share issue costs
|
|
|
-
|
|
|
|
(48,404
|
)
|
|
|
-
|
|
|
|
(5,799
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(54,203
|
)
|
Shares issued non-cash
|
|
|
2,896,000
|
|
|
|
550,240
|
|
|
|
-
|
|
|
|
(550,240
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Share-based payment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
198,848
|
|
|
|
-
|
|
|
|
-
|
|
|
|
198,848
|
|
Currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,580,937
|
|
|
|
-
|
|
|
|
1,580,937
|
|
Net loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(810,920
|
)
|
|
|
(810,920
|
)
|
Balance at June 30, 2015
|
|
|
102,445,845
|
|
|
$
|
18,613,384
|
|
|
$
|
-
|
|
|
$
|
2,463,604
|
|
|
$
|
1,841,170
|
|
|
$
|
(9,577,023
|
)
|
|
$
|
13,341,135
|
|
See accompanying notes to the consolidated financial statements
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
Calico Resources Corp.
Consolidated statements of cash flows
(Expressed in Canadian dollars)
|
|
Year ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Net loss for year
|
|
$
|
(810,920
|
)
|
|
$
|
(968,838
|
)
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,349
|
|
|
|
578
|
|
Share-based payments
|
|
|
198,848
|
|
|
-
|
|
Changes in non-cash working capital items:
|
|
|
|
|
|
|
|
|
Other receivable and prepaid expenses
|
|
|
17,823
|
|
|
|
8,448
|
|
Trade payables and accrued liabilities
|
|
|
15,743
|
|
|
|
531,424
|
|
Net cash flows used in operating activities
|
|
|
(577,157
|
)
|
|
|
(428,388
|
)
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditures on exploration and evaluation assets
|
|
|
(1,977,514
|
)
|
|
|
(1,104,473
|
)
|
Other income
|
|
-
|
|
|
|
388,235
|
|
Net cash flows used in investing activities
|
|
|
(1,977,514
|
)
|
|
|
(716,238
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
Proceeds on issuance of common shares
|
|
|
4,399,797
|
|
|
|
431,172
|
|
Subscriptions received
|
|
-
|
|
|
|
54,000
|
|
Loans payable
|
|
|
(150,000
|
)
|
|
|
250,000
|
|
Net cash flows from investing activities
|
|
|
4,249,797
|
|
|
|
735,172
|
|
Currency translation adjustment
|
|
|
88,684
|
|
|
-
|
|
Increase / (decrease) in cash and cash equivalents
|
|
|
1,783,810
|
|
|
|
(409,454
|
)
|
Cash and cash equivalents, beginning of the year
|
|
|
7,689
|
|
|
|
417,143
|
|
Cash and cash equivalents, end of the year
|
|
$
|
1,791,499
|
|
|
$
|
7,689
|
|
Note 13 – Non-cash transactions
See accompanying notes to the consolidated financial statements
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
1.
Nature of operations
Calico Resources Corp. (the “Company”) and its wholly owned subsidiary, Calico Resources USA Corp. are focused on advancing its 100% owned Grassy Mountain Gold Project (“Grassy Mountain”) located in Oregon, U.S.A. The Company’s shares are traded on the TSX Venture Exchange (“TSX-V”) under the symbol “CKB”. The head office and principal address of the Company is located at Suite 615, 800 West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6. The Company’s registered and records office address is Suite 2600, 1066 West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X1.
2.
Statement of compliance and basis of preparation
These consolidated financial statements were authorized for issue on September 28, 2015 by the directors of the Company.
Statement of compliance
These consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Going concern
These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. A different basis of measurement may be appropriate if the Company was not expected to continue operations for the foreseeable future. At June 30, 2015, the Company had not achieved profitable operations, had a net loss of $810,920 for the year ended June 30, 2015 and accumulated losses of $9,577,023 since inception, had not advanced its mineral properties to commercial production and expects to incur further losses in the development of its business, all of which indicate a material uncertainty that may cast significant doubt upon the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon successful results from its mineral property exploration activities and its ability to attain profitable operations to generate funds and/or its ability to raise equity capital or borrowings sufficient to meet its current and future obligations. Although the Company has been successful in the past in raising funds to continue operations, there is no assurance it will be able to do so in the future.
Basis of preparation
The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are presented in Canadian dollars.
Significant accounting judgments and estimates
The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes may differ.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
2.
|
Statement of compliance and basis of preparation (cont’d)
|
The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.
Information about critical judgments in applying accounting policies and estimates that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the next financial year are discussed below.
Exploration and evaluation assets
The application of the Company’s accounting policy for exploration and evaluation assets requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates made may change if new information becomes available. If, after an expenditure is capitalized, information becomes available suggesting that the recovery of such expenditure is unlikely, the amount capitalized is written off in the statement of loss and comprehensive loss in the period the new information becomes available.
Title to mineral property interests
Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.
Share-based payments
Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility, interest rates and, dividend yield and expected vesting dates and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 8.
3.
|
Summary of significant accounting policies
|
Consolidation
The consolidated financial statements include the accounts of the Company and its controlled entity. Details of its controlled entity are as follows:
|
|
|
|
Percentage owned
|
|
|
|
Country of incorporation
|
|
June 30,
2015
|
|
|
June 30,
2014
|
|
Calico Resources USA Corp.
|
|
U.S.
|
|
|
100
|
%
|
|
|
100
|
%
|
*Percentage of voting power is in proportion to ownership.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
3.
|
Summary of significant accounting policies (cont’d)
|
Inter-company balances and transactions are eliminated on consolidation
Foreign currency translation
The functional currency of each of the Company’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Canadian dollars which is the parent Company’s functional currency.
Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items are measured at historical cost and continue to be carried at the exchange rate at the date of the transaction. Non-monetary items are measured at fair value and are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in the statement of loss in the period in which they arise.
Reporting currency translation:
The financial statements of the subsidiary have the US dollar as the functional currency and are translated into Canadian dollars as follows: assets and liabilities – at the closing rate at the date of the statement of financial position, and income and expenses – at the average rate of the period (as this is considered a reasonable approximation to actual rates). All resulting changes are recognized in other comprehensive income as cumulative translation adjustments.
Exploration and evaluation assets
Exploration and evaluation expenditures relating to mineral properties include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets. Exploration and evaluation expenditures are capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit or loss.
Exploration and evaluation assets are assessed for impairment when events and circumstances suggest that the carrying amount exceeds the recoverable amount.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.
The Company may occasionally enter into arrangements, whereby the Company may sell all or part of a mineral interest.
Any cash consideration received from an agreement is credited against the costs previously capitalized to the mineral interest given up by the Company, with any excess cash accounted for as a gain on disposal.
As the Company currently has no operational income, any incidental income earned in connection with the exploration activities are applied as a reduction to capitalized exploration costs.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
3.
Summary of significant accounting policies (cont’d)
Share capital
Equity instruments are contracts that give a residual interest in the net assets of the Company. Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company’s common shares, share warrants and flow-through shares are classified as equity instruments. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Share-based payments
Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of loss and comprehensive loss over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, as measured immediately before and after the modification, is also charged to the statement of loss and comprehensive income (loss) over the remaining vesting period.
Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. If the fair value of the goods or services received cannot be estimated reliably, the share-based payment transaction is measured at fair value of the equity instruments granted at the date the Company receives the goods or the services or is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for effects of non-transferability, exercise restrictions and behavioural considerations.
Financial Assets
Financial assets are classified based on the purpose for which the asset was acquired. All transactions related to financial instruments are recorded on a trade date basis. There are no financial assets designated as fair value through profit or loss (“FVTPL”), held to maturity, or available for sale. The Company's accounting policy for the remaining financial asset category is as follows:
Loans and Receivables
These assets are non-derivative financial assets resulting from the delivery of cash or other assets by a lender to a borrower in return for a promise to repay on a specified date or dates, or on demand. They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue and subsequently carried at amortized cost, using the effective interest rate method, less any impairment losses. Amortized cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs. Gains and losses are recognized in the consolidated statements of loss and comprehensive loss when the loans and receivables are derecognized or impaired, as well as through the amortization process.
The Company has classified its cash and cash equivalents as loans and receivables.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
3.
|
Summary of significant accounting policies (cont’d)
|
Financial Liabilities
Financial liabilities are classified as other financial liabilities, based on the purpose for which the liability was incurred, and comprise trade payables and accrued liabilities and loans payable. These liabilities are initially recognized at fair value net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method. This ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statement of financial position. Interest expense in this context includes initial transaction costs and premiums payable on redemption, as well as any interest or coupon payable while the liability is outstanding. The Company has no financial liabilities designated upon initial recognition as fair value through profit and loss (“FVTPL”), or held for trading.
Trade and other payables represent liabilities for goods and services provided to the Company prior to the end of the period which are unpaid. Trade payable amounts are unsecured and are usually paid within 30 days of recognition.
Trade payables and accrued liabilities and loans payable are classified as other financial liabilities.
Impairment of Financial Assets
At each reporting date the Company assesses whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or group of financial assets is deemed to be impaired, if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.
Impairment of long lived assets
Long lived assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of loss and comprehensive loss.
The recoverable amount is the greater of an asset’s fair value less cost to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and, other highly liquid investments with original maturities up to three months that can be redeemed into known amounts at any time without penalty.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
3.
|
Summary of significant accounting policies (cont’d)
|
Income taxes
Current income tax:
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognized directly is recorded in other comprehensive income or equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred income tax:
Deferred income tax is accounted for by providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred income taxes is not recognized for temporary differences related to the initial recognition of the assets or liabilities that affect neither accounting nor taxable profit nor investments in subsidiaries, associates and interests in joint ventures to the extent it is probable that they will not reverse in the foreseeable future.
The amount of deferred income tax provided is based on the expected manner and expected date of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred income tax asset is recognized only to the extent that it is probable that future taxable amounts will be available against which the asset can be utilized.
Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the weighted number of average shares outstanding are increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that the proceeds from the exercise of such instruments were used to acquire common shares at the average market price during the reporting period.
Restoration and environmental obligations
The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction development or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized along with a corresponding increase in the restoration provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be depreciated on the same basis as other mining assets. As at June 30, 2015 and 2014, the Company did not have any significant restoration or environmental obligations.
Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to consolidated statements of loss and comprehensive income (loss) for the period.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
3.
|
Summary of significant accounti
ng policies (cont’d)
|
Other Provisions
Provisions are recognized for liabilities of uncertain timing or amount that have arisen as a result of past transactions, including legal or constructive obligations. The provision is measured at the best estimate of the expenditure required to settle the obligation at the reporting date.
New accounting standards and interpretations adopted
Effective July 1, 2014, the Company adopted the following accounting standards issued by IASB.
IAS 24— Related Party Disclosures
The amendments to IAS 24 clarify that a management entity, or any member of a group of which it is a part, that provides key management services to a reporting entity, or its parent, is a related party of the reporting entity. The amendments also require an entity to disclose amounts incurred for key management personnel services provided by a separate management entity. This replaces the more detailed disclosure by category required for other key management personnel compensation. The application of this IAS did not have a material impact on the amounts reported for the current or prior years but may affect the disclosure for future transactions or arrangements.
IFRIC 21 – Levies
The IASB issued IFRIC 21 – Levies (“IFRIC 21”), an interpretation of IAS 37 – Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”), on the accounting for levies imposed by governments. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (“Obligating Event”). IFRIC 21 clarifies that the Obligating Event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. The application of this IFRS did not have a material impact on the amounts reported for the current or prior years but may affect the accounting for future transactions or arrangements.
The following standards and interpretations have been issued but are not yet effective:
The following standards, interpretations and amendments, which have not been applied to in these consolidated financial statements, will or may have an effect on the Company’s future consolidated financial statements. The Company is in the process of evaluating these new standards.
IFRS 9 — Financial instruments, classification and measurement
IFRS 9 Financial Instruments is part of the IASB's wider project to replace IAS 39 Financial Instruments:
Recognition and Measurement. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. The standard is effective for annual periods beginning on or after January 1, 2018. The Company is in the process of evaluating the impact of the new standard.
4.
|
Cash and cash equivalents
|
Cash and cash equivalents include guaranteed investment certificates with a term to maturity of up to three months from date of acquisition and which can be redeemed at any time without penalty.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
5.
|
Exploration and evaluation assets
|
The following is a description of the Company’s Grassy Mountain exploration and evaluation assets and the related spending commitments.
Year ended June 30, 2015
|
|
|
Year ended June 30, 2014
|
|
Property acquisition costs
|
|
|
|
|
|
Property acquisition costs
|
|
|
|
|
Balance, June 30, 2014
|
|
$
|
3,370,184
|
|
|
Balance, June 30, 2013
|
|
$
|
3,157,221
|
|
Additions
|
|
|
257,801
|
|
|
Additions
|
|
|
212,963
|
|
Balance, June 30, 2015
|
|
$
|
3,627,985
|
|
|
Balance, June 30, 2014
|
|
$
|
3,370,184
|
|
Exploration and evaluation costs
|
|
|
|
|
|
Exploration and evaluation costs
|
|
|
|
|
Balance, June 30, 2014
|
|
$
|
5,407,206
|
|
|
Balance, June 30, 2013
|
|
$
|
4,784,552
|
|
Costs incurred during year:
|
|
|
|
|
|
Costs incurred during year:
|
|
|
|
|
Consulting (Note 10)
|
|
|
360,113
|
|
|
Consulting (Note 10)
|
|
|
180,696
|
|
Engineering
|
|
|
585,833
|
|
|
Engineering
|
|
|
128,678
|
|
Environmental
|
|
|
627,328
|
|
|
Environmental
|
|
|
461,864
|
|
Field supplies
|
|
|
225
|
|
|
Field supplies
|
|
|
473
|
|
Metallurgy
|
|
-
|
|
|
Metallurgy
|
|
|
854
|
|
Other costs
|
|
|
51,175
|
|
|
Other costs
|
|
|
52,623
|
|
Permits and fees
|
|
|
249,841
|
|
|
Permits and fees
|
|
|
49,510
|
|
Travel and accommodations
|
|
|
31,805
|
|
|
Travel and accommodations
|
|
|
21,230
|
|
|
|
|
1,906,320
|
|
|
|
|
|
895,928
|
|
Balance, June 30, 2015
|
|
|
7,313,526
|
|
|
Balance, June 30, 2014
|
|
|
5,680,480
|
|
Other income
|
|
-
|
|
|
Other income
|
|
|
(388,235
|
)
|
Currency translation adjustment
|
|
|
1,491,998
|
|
|
Currency translation adjustment
|
|
|
114,961
|
|
Balance, June 30, 2015
|
|
$
|
12,433,509
|
|
|
Balance, June 30, 2014
|
|
$
|
8,777,390
|
|
USA – Oregon
On February 5, 2013, the Company exercised its option to acquire a 100% interest in the Grassy Mountain Project from Seabridge Gold Inc. (“Seabridge”) by issuing 6,433,000 common shares (the “Issued Shares”) and 4,567,000 Special Warrants to Seabridge. The shares and Special Warrants were valued at $0.19 each which was based on the trading price of the shares at the date of issuance. Each Special Warrant is exercisable to acquire one additional common share of the Company (a “Special Warrant Share”) for no additional consideration. The Special Warrants can only be exercised to the extent that, after exercise, Seabridge holds less than 20% of the outstanding shares of the Company. Calico has agreed to ask its shareholders to approve the exercise of those outstanding Special Warrants and approve Seabridge then holding more than 20% of the issued shares in Calico. Pursuant to the agreement, the Company agreed to guarantee the obligations of Calico Resources USA Corp., including those guaranteed to Seabridge.
On September 26, 2013, Seabridge acquired, on behalf of its wholly owned subsidiary, Seabridge Gold Corp., 1,671,000 common shares upon exercise of 1,671,000 Special Warrants. Including the initial 2,000,000 common shares issued under the original definitive option agreement dated April 18, 2011, at that time, Seabridge then owned and controlled 10,104,000 common shares and 2,896,000 Special Warrants of the Company, representing 19.55% of the outstanding common shares and 100% of the Special Warrants of the Company.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
5.
|
Explorat
ion and evaluation assets
(cont’d)
|
On February 19, 2014, the Company held its Annual and Special General Meeting of its shareholders. Shareholders approved the exercise by Seabridge of the balance of its 2,896,000 Special Warrants, then resulting in Seabridge holding 13 million common shares of the Company, representing 23.81% of Calico’s common shares at that time. With subsequent share issuances, this interest has fallen below 20%.
There are existing letters of credit posted with the State of Oregon – Department of Geology and Mineral Industries (DOGAMI) in the amount of $146,200 in respect of possible reclamation work required on the property. This existing security has been posted by Seabridge. The Company is required to use reasonable commercial efforts to arrange for the release of the existing security and replace this existing security with new letters of credit or reclamation bonds as soon as possible after registered title to the property has transferred to the Company. The intention of the Company is to replacement of security; however this has not been completed.
On November 1, 2014, the Company entered into an amendment of the mining lease and agreement regarding Grassy Mountain with Sherry and Yates Inc., which originally provided the Company with an option to buy down the royalty to 1%, with a cash payment of $2.1 US million at any time up to February 16, 2015. The terms of the agreement as originally entered into on February 16, 2004 provided for production royalty payments to be based on the price of gold. The rates are as follows:
Production Royalty Rate on Gross Proceeds
|
|
Gold Price Per Ounce ($US)
|
4.0%
|
|
Less than $500
|
5.0%
|
|
$500-800
|
6.0%
|
|
Over $800
|
In addition, the original agreement provides for a 4% production royalty on any other metals, other than gold.
On November 1, 2014, Sherry & Yates Inc. agreed to amend the buy down option as follows:
from February 17, 2015 to February 16, 2016 the royalty can be bought down to 1% for $2.2 US million;
from February 17, 2016 to February 16, 2017 the royalty can be bought down to 1.25% for $2.3 US million; and
from February 17, 2017 to February 16, 2018 the royalty can be bought down to 1.5% for $2.4 US million.
The advance royalty payment remains the same at $100,000 US per year, due on February 15th of each year.
6.
Trade payables and accrued liabilities
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Trade payables *
|
|
$
|
671,942
|
|
|
$
|
763,705
|
|
Amounts due to related parties (Note 10)
|
|
|
121,217
|
|
|
|
112,900
|
|
Accrued liabilities
|
|
|
114,404
|
|
|
|
32,000
|
|
|
|
$
|
907,563
|
|
|
$
|
908,605
|
|
*Included in trade payables is the amount of $443,246 (2014: $573,725) representing invoiced legal fees from the Company’s previous legal counsel. The Company is contesting the amount of these invoices, and an action has commenced in the Supreme Court of British Columbia for a review of all of these invoices to determine what amount for which the Company would then be liable. The Company is uncertain, at this time, as to how long the review process will take.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
7.
Loans payable
At June 30, 2014, the Company had two loans payable as follows:
On November 13, 2013, the Company received a loan from Seabridge Gold Inc. and as a result issued a promissory note in the principal amount of $100,000 plus simple interest of 5%. On July 14, 2014, the Company issued 859,477 common shares at a price of $0.12 in settlement of the Seabridge loan of $100,000, plus accrued interest of $3,137.
On March 21, 2014, the Company received a loan from an unrelated party and as a result issued a promissory note in the principal amount of $150,000 plus interest accruing at a rate of 5%. On July 17, 2014, the Company repaid the loan plus interest in full settlement.
8.
|
Share capital and other components of equity
|
Authorized share capital
Unlimited number of common shares without par value.
Issued share capital
At June 30, 2015, there were 102,445,845 issued and fully paid common shares (June 30, 2014 – 54,137,036).
On August 7 and September 26, 2013 1,170,500 warrants with an expiry date of September 26, 2013 were exercised at $0.12 per share for total proceeds of $140,460.
On September 26, 2013, Seabridge acquired, on behalf of its wholly owned subsidiary, Seabridge Gold Corp., 1,671,000 common shares upon exercise of 1,671,000 Special Warrants.
On April 30, 2014, the Company announced the closing of the first tranche of private placement financing. In the first tranche, Calico issued a total of 2,441,667 units at the price of $0.12 per unit, raising gross proceeds of $293,000.
On July 3, 2014, the Company closed the second tranche of its non-brokered private placement originally announced March 25, 2014. In the second tranche, the Company issued 800,000 units at a price of $0.12 per unit. The total gross proceeds raised in this tranche amounted to $96,000.
On July 14, 2014, the TSX Venture Exchange approved the issuance of a total of 2,526,144 shares and 833,333 share purchase warrants in settlement of a total of $303,137 in Company debt. The Company issued 1,666,667 units at a price of $0.12 per unit in settlement of legal fees of $200,000. Each unit is comprised of one common share and one-half of one transferable share purchase warrant. Each warrant is exercisable at a price of $0.15 into one common share until July 14, 2015. Additionally, the Company issued 859,477 common shares at a price of $0.12 in settlement of the Seabridge loan of $100,000, plus accrued interest of $3,137.
On July 17 and 25, 2014, the Company closed the third and final tranche of its non-brokered private placement originally announced March 25, 2014. In the third tranche, the Company issued a total of 5,033,334 units at a price of $0.12 per unit. The total gross proceeds raised in this tranche amounted to $604,000.
On August 6, 2014, Seabridge Gold Inc., on behalf of its wholly-owned subsidiary, Seabridge Gold Corporation, exercised 2,896,000 special warrants and was issued 2,896,000 common shares.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
8.
|
Share capital and other components of equity
(cont’d)
|
On October 6 and 17, 2014, the Company closed the first and second tranche of a non brokered private placement originally announced September 10, 2014. The Company issued a total of 12,053,331 units at $0.15 per unit, raising total gross proceeds of $1,808,000. Each Unit consists of one common share and one-half of one share purchase warrant. Each full warrant entitles the holder to purchase one additional common share of the Company for a period of 12 months from closing of the private placement, at an exercise price of $0.18 per share for the first six-month period following closing and at an exercise price of $0.21 per share for the second six-month period following closing. The Company paid a 5% cash finder’s fee to certain parties who qualified in accordance with securities legislation and TSX Venture Exchange policies to receive a finders’ fee.
On May 28, 2015, the Company closed its non-brokered private placement financing originally announced on May 6, 2015. The Company issued 25,000,000 common shares in the private placement, raising total gross proceeds of $2,000,000. No warrants, commissions or finder’s fees were paid in connection with the financing.
Warrants
The following table summarizes information about the issued and outstanding warrants for the year ended June 30, 2015 and 2014:
|
|
June 30, 2015
|
|
|
June 30, 2014
|
|
|
|
Number
of warrants
|
|
|
Weighted average exercise price
|
|
|
Number of warrants
|
|
|
Weighted average exercise price
|
|
Warrants outstanding, beginning of year
|
|
|
5,753,683
|
|
|
$
|
0.29
|
|
|
|
8,860,350
|
|
|
$
|
0.35
|
|
Warrants issued
|
|
|
9,776,663
|
|
|
|
0.18
|
|
|
|
1,220,833
|
|
|
|
0.15
|
|
Warrants exercised
|
|
-
|
|
|
-
|
|
|
|
(1,170,500
|
)
|
|
|
0.12
|
|
Warrants expired
|
|
|
(5,753,683
|
)
|
|
|
0.29
|
|
|
|
(3,157,000
|
)
|
|
|
0.46
|
|
Warrants outstanding and exercisable, end of
year
|
|
|
9,776,663
|
|
|
$
|
0.18
|
|
|
|
5,753,683
|
|
|
$
|
0.29
|
|
Subsequent to June 30, 2015, 3,750,000 warrants with an exercise price of $0.15 expired.
As at June 30, 2015 there were 9,776,663 warrants outstanding and exercisable as follows:
Number of warrants outstanding
|
|
Exercise price
|
|
|
Expiry date
|
400,000
|
|
|
$
|
0.15
|
|
|
July 3, 2015
|
833,333
|
|
|
$
|
0.15
|
|
|
July 14, 2015
|
1,266,667
|
|
|
$
|
0.15
|
|
|
July 17, 2015
|
1,250,000
|
|
|
$
|
0.15
|
|
|
July 25, 2015
|
3,981,663
|
|
|
$
|
0.21
|
|
|
October 6, 2015
|
2,045,000
|
|
|
$
|
0.21
|
|
|
October 17, 2015
|
9,776,663
|
|
|
|
|
|
|
|
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
8.
|
Share capital and other components of equity (cont’d)
|
Special warrants
|
|
June 30, 2015
|
|
|
|
Number of special warrants
|
|
|
Weighted average exercise price
|
|
Special warrants outstanding, beginning of year
|
|
|
2,896,000
|
|
|
$
|
-
|
|
Special warrants exercised
|
|
|
(2,896,000
|
)
|
|
|
-
|
|
Special warrants outstanding, end of year
|
|
|
-
|
|
|
$
|
-
|
|
On August 6, 2014, Seabridge Gold Inc., on behalf of its wholly-owned subsidiary, Seabridge Gold Corporation, exercised 2,896,000 special warrants and was issued 2,896,000 common shares.
Stock options
The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX Venture Exchange requirements, grant to directors, officers, employees and technical consultants of the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance is a rolling plan of 10% of the issued and outstanding common shares. Such options will be exercisable for a period of up to 5 years from the date of grant. Subject to the Board of Directors discretion, options vest on date of grant.
The changes in options during the year ended June 30, 2015 and 2014 are as set out below:
|
|
June 30, 2015
|
|
|
June 30, 2014
|
|
|
|
Number of
options
|
|
|
Weighted average exercise price
|
|
|
Number of
options
|
|
|
Weighted average exercise price
|
|
Options outstanding and exercisable, beginning
of year
|
|
|
1,415,000
|
|
|
$
|
0.45
|
|
|
|
2,195,000
|
|
|
$
|
0.46
|
|
Options granted
|
|
|
2,375,000
|
|
|
|
0.16
|
|
|
|
-
|
|
|
|
-
|
|
Options cancelled/expired
|
|
|
(570,000
|
)
|
|
|
0.40
|
|
|
|
(780,000
|
)
|
|
|
0.47
|
|
Options outstanding and exercisable, end of year
|
|
|
3,220,000
|
|
|
$
|
0.25
|
|
|
|
1,415,000
|
|
|
$
|
0.45
|
|
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
8.
|
Share capital and other components of equity (cont’d)
|
As at June 30, 2015 there were 3,220,000 stock options outstanding as follows:
Number of stock options outstanding
|
|
|
Exercise price
|
|
|
Expiry date
|
100,000
|
|
|
$
|
0.40
|
|
|
October 12, 2015
|
500,000
|
|
|
$
|
0.35
|
|
|
December 14, 2015
|
50,000
|
|
|
$
|
0.40
|
|
|
May 12, 2016
|
110,000
|
|
|
$
|
0.60
|
|
|
June 10, 2016
|
25,000
|
|
|
$
|
0.60
|
|
|
August 22, 2016
|
185,000
|
|
|
$
|
0.60
|
|
|
December 22, 2016
|
1,35,0000
|
|
|
$
|
0.16
|
|
|
August 18, 2019
|
600,000
|
|
|
$
|
0.17
|
|
|
August 25, 2019
|
300,000
|
|
|
$
|
0.17
|
|
|
January 20, 2020
|
3,220,000
|
|
|
|
|
|
|
|
The weighted average expected life remaining of stock options outstanding at June 30, 2015 is 3.16 years (June 30, 2014 – 2.40 years).
On August 18, 2014, the Company granted 1.35 million incentive stock options to key non-director employees of the Company at an exercise price of $0.16 per share and exercisable for five years. Of these options, 675,000 vest immediately while the remaining 675,000 will vest immediately while the remaining
675,000 will vest upon the earlier of: (1) the sale of the Company; (2) sale of the Grassy Mountain asset; (3) completion of a joint venture agreement on Grassy Mountain; or (4) approval of a Plan of Operation by the state of Oregon.
On August 25, 2014, the Company granted 725,000 incentive stock options to directors and consultants of the Company pursuant to its stock option plan. These options are exercisable for a period of five years from the grant date at a price of $0.17 per share. Of these options 362,500 will vest immediately while the remaining 362,500 will vest upon the earlier of: (1) the sale of the Company; (2) sale of the Grassy Mountain asset; (3) completion of a joint venture agreement on Grassy Mountain; or (4) approval of a Plan of Operation by the state of Oregon.
On January 20, 2015, the Company granted 300,000 incentive stock options to directors of the Company pursuant to its stock option plan. These options are exercisable for a period of five years from the grant date at a price of $0.17 per share. Of these options 150,000 will vest immediately while the remaining 150,000 will vest upon the earlier of: (1) the sale of the Company; (2) sale of the Grassy Mountain asset; (3) completion of a joint venture agreement on Grassy Mountain; or (4) approval of a Plan of Operation by the state of Oregon.
For the year ended June 30, 2015, the Company recorded share-based payments of $198,848 (2014 - $Nil), based on the following weighted average assumptions:
|
|
June 30, 2015
|
|
|
June 30, 2014
|
|
Expected life of options
|
|
5 years
|
|
|
|
-
|
|
Annualized volatility
|
|
|
113
|
%
|
|
|
-
|
|
Risk-free interest rate
|
|
|
1.39
|
%
|
|
|
-
|
|
Dividend rate
|
|
|
0
|
%
|
|
|
-
|
|
Stock option reserves
The stock option reserve records items recognized as share-based payments until such time that the stock options are exercised, at which time the corresponding amount will be transferred to share capital.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
Warrant reserves
The warrant reserve records items recognized as part of a unit financing, and for special warrants issued, until such time that the warrants are exercised, at which time the corresponding amount will be transferred to share capital.
Accumulated other comprehensive income
The accumulated other comprehensive income reserve records exchange differences arising on translation of a subsidiary of the Company that has a functional currency other than the Canadian dollar.
10.
|
Related party balances and key management personnel
|
The following amounts due to related parties are included in trade payables and accrued liabilities. These amounts are unsecured, non-interest bearing and have no fixed terms of payments. All related party amounts are to key management personnel.
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Directors and officers of the Company
|
|
$
|
121,217
|
|
|
$
|
112,900
|
|
Transactions with related parties are summarized in the table below:
|
|
Year ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Management fees and other (1)
|
|
$
|
400,295
|
|
|
$
|
326,808
|
|
Director fees
|
|
-
|
|
|
|
24,025
|
|
Share-based payment
|
|
|
175,506
|
|
|
-
|
|
|
|
$
|
575,801
|
|
|
$
|
350,833
|
|
(1) in 2015, $192,863 (2014: $142,295) of management fees were allocated to exploration and evaluation assets as warranted.
During the year, the Company issued 859,477 common shares at a price of $0.12 in settlement of a related party loan (Note 8).
11.
|
Financial risk management
|
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
11.
|
Financial risk management (cont’d)
|
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash and cash equivalents held in bank accounts. The majority of cash and cash equivalents are deposited in bank accounts which are held with major banks in Canada and U.S.A. This risk is managed by using major banks that are high credit quality financial institutions as determined by rating agencies.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.
Historically, the Company’s main source of funding has been the issuance of equity securities for cash and cash equivalents, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.
Foreign exchange risk
Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company does not hedge its exposure to fluctuations in foreign exchange rates.
The following is an analysis of the Canadian dollar equivalent of financial assets and liabilities that are denominated in U.S. dollars:
|
|
June 30,
2015
|
|
|
June 30,
2014
|
|
Cash and cash equivalents
|
|
$
|
5,551
|
|
|
$
|
3,934
|
|
Accounts payable
|
|
|
(478,185
|
)
|
|
|
(271,447
|
)
|
|
|
$
|
(472,634
|
)
|
|
$
|
(267,513
|
)
|
Based on the above net exposures, as at June 30, 2015, a 10% change in the U.S. dollar to Canadian dollar exchange rate would impact the Company’s net loss by $47,263.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risks.
Capital management
The Company’s policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Company consists of equity, comprising share capital, net of accumulated deficit.
There were no changes in the Company’s approach to capital management during the year. The Company is not subject to any externally imposed capital requirements.
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
11.
|
Financial risk management (cont’d)
|
Fair value
The Company’s financial instruments consist of cash and cash equivalents, trade payables and accrued liabilities and loans payable. The carrying value of these financial instruments approximates their fair values due to the short term nature of these instruments.
12.
|
Segmented information
|
Operating segments
The Company operates in a single reportable operating segment – the acquisition and exploration of mineral properties.
Geographic segments
The Company’s non-current assets are located in the following countries:
|
|
As at June 30, 2015
|
|
|
|
Canada
|
|
|
U.S.A.
|
|
|
Total
|
|
Exploration and evaluation assets
|
|
-
|
|
|
|
12,433,509
|
|
|
|
12,433,509
|
|
|
|
$
|
-
|
|
|
$
|
12,433,509
|
|
|
$
|
12,433,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30, 2014
|
|
|
|
Canada
|
|
|
U.S.A.
|
|
|
Total
|
|
Equipment
|
|
$
|
1,349
|
|
|
$
|
-
|
|
|
$
|
1,349
|
|
Exploration and evaluation assets
|
|
-
|
|
|
|
8,777,390
|
|
|
|
8,777,390
|
|
|
|
$
|
1,349
|
|
|
$
|
8,777,390
|
|
|
$
|
8,778,739
|
|
13.
|
Supplemental disclosure with respect to cash flows
|
During the year ended June 30, 2015 and 2014, the Company incurred the following non-cash investing and financing activities that are not reflected in the statements of cash flows:
|
|
Year ended
|
|
|
|
June 30,
2015
|
|
|
June 30,
2014
|
|
Exploration and evaluation assets included in trade payables and accrued
liabilities
|
|
$
|
289,104
|
|
|
$
|
102,752
|
|
Shares issued for debt
|
|
$
|
303,137
|
|
|
-
|
|
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
The difference between tax expense for the year and the expected income taxes based on the statutory tax rates arises as follows:
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Loss before tax per the accounts
|
|
$
|
(810,920
|
)
|
|
$
|
(968,836
|
)
|
Income taxed at local statutory rates –26%
|
|
|
|
|
|
|
|
|
(2014 – 26%)
|
|
$
|
(211,000
|
)
|
|
$
|
(252,000
|
)
|
Foreign income taxed at other rate
|
|
-
|
|
|
|
(2,000
|
)
|
Non-deductible expense
|
|
|
52,000
|
|
|
|
2,000
|
|
Share issue costs
|
|
|
(13,000
|
)
|
|
|
(1,000
|
)
|
Expiry of loss carryforward
|
|
|
60,000
|
|
|
-
|
|
Effect of foreign exchange and other
|
|
|
(104,000
|
)
|
|
|
75,000
|
|
Unrecognized deferred tax assets
|
|
|
216,000
|
|
|
|
178,000
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Effective July 1, 2014, the Canadian Federal corporate tax rate remained at 15% and the British Columbia provincial tax at 11%. The combined US Federal and applicable State tax rate is 38.36%.
The nature and tax effect of the taxable temporary differences giving rise to deferred tax assets and liabilities are summarized as follows:
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Non-capital losses
|
|
$
|
2,285,000
|
|
|
$
|
1,898,000
|
|
Undeducted financing costs
|
|
|
28,000
|
|
|
|
37,000
|
|
Cumulative eligible capital
|
|
|
5,000
|
|
|
|
5,000
|
|
Deferred Tax Asset
|
|
|
2,318,000
|
|
|
|
1,940,000
|
|
Offset deferred tax liabilities
|
|
|
(832,000
|
)
|
|
|
(670,000
|
)
|
|
|
|
1,486,000
|
|
|
|
1,270,000
|
|
Unrecognized deferred tax liability
|
|
|
(1,486,000
|
)
|
|
|
(1,270,000
|
)
|
Net deferred tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
Calico Resources Corp.
Notes to the consolidated financial statements
(Expressed in Canadian dollars)
For the year ended June 30, 2015 and 2014
14.
Income tax (cont’d)
Deferred Tax Assets and Liabilities
As at June 30, 2015, the Company has estimated non-capital losses for income tax purposes that may be carried forward to reduce taxable income derived in future years, as summarized below.
Canadian non-capital losses expire as follows:
Year of Expiry
|
|
|
|
|
2026
|
|
$
|
68,000
|
|
2027
|
|
|
29,000
|
|
2028
|
|
|
57,000
|
|
2029
|
|
|
81,000
|
|
2030
|
|
|
179,000
|
|
2031
|
|
|
644,000
|
|
2032
|
|
|
1,117,000
|
|
2033
|
|
|
1,027,000
|
|
2034
|
|
|
1,042,000
|
|
2035
|
|
|
692,000
|
|
Total
|
|
$
|
4,936,000
|
|
United States operating tax losses expire as follows:
Year of Expiry
|
|
|
|
|
2031
|
|
$
|
8,000
|
|
2032
|
|
|
569,000
|
|
2033
|
|
|
421,000
|
|
2034
|
|
|
501,000
|
|
2035
|
|
|
591,000
|
|
Total
|
|
$
|
2,090,000
|
|
Prior year comparatives have been reclassified in order to conform to the current year presentation.
Calico Resources Corp.
Condensed Consolidated Interim Financial Statements
Six Month Period Ended December 31, 2015
(Unaudited – prepared by Management)
(Expressed in Canadian Dollars)
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
The condensed consolidated interim unaudited financial statements of Calico Resources Corp. (An Exploration Stage Company) are the responsibility of the Company’s management. The financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and reflect management’s best estimates and judgment based on information currently available.
Management has developed and maintains a system of internal controls to ensure that the Company’s assets are safeguarded, transactions are authorized and properly recorded and financial information is reliable.
The Board of Directors is responsible for ensuring management fulfills its responsibilities for financial reporting and internal controls through an audit committee. The Audit Committee reviews the results of the condensed consolidated interim unaudited financial statements prior to their submission to the Board of Directors for approval.
|
|
|
“Paul A Parisotto”
|
|
“Alec Peck”
|
Paul A Parisotto
|
|
Alec Peck
|
Chief Executive Officer
|
|
Chief Financial Officer
|
Condensed Consolidated Unaudited Interim Financial Statements
In accordance with National Instruments 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the condensed consolidated interim unaudited financial statements for the six months ended December 31, 2015.
Calico Resources Corp.
Condensed consolidated interim unaudited statements of financial position
(Expressed in Canadian dollars)
|
|
Notes
|
|
|
December
31,
2015
|
|
|
June 30,
2015
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
3
|
|
|
$
|
493,152
|
|
|
$
|
1,791,499
|
|
Receivables
|
|
|
|
|
|
|
6,936
|
|
|
|
11,207
|
|
Prepaid expenses
|
|
|
|
|
|
|
13,166
|
|
|
|
12,483
|
|
|
|
|
|
|
|
|
513,254
|
|
|
|
1,815,189
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and evaluation assets
|
|
4, 8
|
|
|
|
14,856,601
|
|
|
|
12,433,509
|
|
|
|
|
|
|
|
|
14,856,601
|
|
|
|
12,433,509
|
|
TOTAL ASSETS
|
|
|
|
|
|
$
|
15,369,855
|
|
|
$
|
14,248,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables and accrued liabilities
|
|
5, 8
|
|
|
$
|
904,201
|
|
|
$
|
907,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILIITES
|
|
|
|
|
|
|
904,201
|
|
|
|
907,563
|
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
6
|
|
|
|
18,615,361
|
|
|
|
18,613,384
|
|
Reserves
|
|
|
7
|
|
|
|
2,488,526
|
|
|
|
2,463,604
|
|
Accumulated other comprehensive income
|
|
|
|
|
|
|
3,202,395
|
|
|
|
1,841,170
|
|
Deficit
|
|
|
|
|
|
|
(9,840,628
|
)
|
|
|
(9,577,023
|
)
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
14,465,654
|
|
|
|
13,341,135
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
$
|
15,369,855
|
|
|
$
|
14,248,698
|
|
Approved on behalf of the Board by:
Approved on behalf of the Board by:
|
|
|
|
“John Pollesel”
|
|
Director
|
John Pollesel
|
|
|
|
|
|
“Kevin Milledge”
|
|
Director
|
Kevin Milledge
|
|
Kevin Milledge
|
See accompanying notes to the condensed consolidated interim unaudited financial statements
Calico Resources Corp.
Condensed consolidated interim unaudited statements of loss and comprehensive income
(Expressed in Canadian dollars)
|
|
Three month period ended
|
|
|
Six month period ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit and tax services
|
|
$
|
7,900
|
|
|
$
|
10,468
|
|
|
$
|
14,150
|
|
|
$
|
18,468
|
|
Administration
|
|
|
16,729
|
|
|
|
22,133
|
|
|
|
41,306
|
|
|
|
52,267
|
|
Insurance
|
|
|
4,708
|
|
|
|
2,662
|
|
|
|
6,083
|
|
|
|
5,325
|
|
Investor relations
|
|
|
1,079
|
|
|
|
871
|
|
|
|
2,509
|
|
|
|
7,672
|
|
Legal services
|
|
|
31,754
|
|
|
|
24,498
|
|
|
|
84,165
|
|
|
|
61,105
|
|
Management fees
|
|
|
44,619
|
|
|
|
52,334
|
|
|
|
91,385
|
|
|
|
91,687
|
|
Share-based payments
|
|
|
12,461
|
|
|
|
11,496
|
|
|
|
24,922
|
|
|
|
154,562
|
|
Transfer agent and filing fees
|
|
|
2,061
|
|
|
|
6,518
|
|
|
|
6,204
|
|
|
|
31,522
|
|
Travel, promotion and board meetings
|
|
|
4,540
|
|
|
|
8,594
|
|
|
|
6,709
|
|
|
|
9,821
|
|
|
|
|
(125,851
|
)
|
|
|
(139,574
|
)
|
|
|
(277,433
|
)
|
|
|
(432,429
|
)
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
564
|
|
|
-
|
|
|
|
3,662
|
|
|
|
58
|
|
Interest expense
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(4,723
|
)
|
Foreign exchange gain / (loss)
|
|
|
(2,194
|
)
|
|
|
963
|
|
|
|
10,166
|
|
|
|
12,708
|
|
Net loss for period
|
|
|
(127,481
|
)
|
|
|
(138,611
|
)
|
|
|
(263,605
|
)
|
|
|
(424,386
|
)
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign
operations
|
|
|
523,381
|
|
|
|
347,389
|
|
|
|
1,361,225
|
|
|
|
775,237
|
|
Total comprehensive income
|
|
$
|
395,900
|
|
|
$
|
208,778
|
|
|
$
|
1,097,620
|
|
|
$
|
350,851
|
|
Loss per share – basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
Weighted average number of common shares
outstanding
|
|
|
102,445,845
|
|
|
|
76,301,751
|
|
|
|
102,445,845
|
|
|
|
69,533,245
|
|
See accompanying notes to the condensed consolidated interim unaudited financial statements
Calico Resources Corp.
Condensed consolidated interim unaudited statements of changes in shareholders’ equity
(Expressed in Canadian dollars)
|
|
Share Capital
|
|
|
Subscriptions Received
|
|
|
Reserves
|
|
|
Accumulated other comprehensive income
|
|
|
Deficit
|
|
|
Total
|
|
|
|
Number
of shares
|
|
|
Amount
|
|
|
Amount
|
|
|
Warrant and stock option reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2014
|
|
|
54,137,036
|
|
|
$
|
13,721,608
|
|
|
$
|
54,000
|
|
|
$
|
2,399,598
|
|
|
$
|
260,233
|
|
|
$
|
(8,766,103
|
)
|
|
$
|
7,669,336
|
|
Shares issued for cash - private placements
|
|
|
17,886,665
|
|
|
|
2,508,000
|
|
|
|
(54,000
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
2,454,000
|
|
Fair value of share purchase warrants
|
|
|
|
|
|
|
(421,197
|
)
|
|
-
|
|
|
|
421,197
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Shares issued for debt
|
|
|
2,526,144
|
|
|
|
303,137
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
303,137
|
|
Share issue costs
|
|
-
|
|
|
|
(30,395
|
)
|
|
-
|
|
|
|
(5,799
|
)
|
|
-
|
|
|
-
|
|
|
|
(36,194
|
)
|
Shares issued non-cash
|
|
|
2,896,000
|
|
|
|
550,240
|
|
|
-
|
|
|
|
(550,240
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
Share-based payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154,562
|
|
|
|
|
|
|
|
|
|
|
|
154,562
|
|
Currency translation adjustment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
775,237
|
|
|
-
|
|
|
|
775,237
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(458,600
|
)
|
|
|
(458,600
|
)
|
Balance at December 31, 2014
|
|
|
77,445,845
|
|
|
$
|
16,631,393
|
|
|
$
|
-
|
|
|
$
|
2,419,318
|
|
|
$
|
1,035,470
|
|
|
$
|
(9,224,703
|
)
|
|
$
|
10,861,478
|
|
Balance at June 30, 2015
|
|
|
102,445,845
|
|
|
$
|
18,613,384
|
|
|
$
|
-
|
|
|
$
|
2,463,604
|
|
|
$
|
1,841,170
|
|
|
$
|
(9,577,023
|
)
|
|
$
|
13,341,135
|
|
Shares issued for cash - private placements
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Fair value of share purchase warrants
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Shares issued for debt
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Share issue cost recovery
|
|
-
|
|
|
|
1,977
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
1,977
|
|
Shares issued non-cash
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Share-based payment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
24,922
|
|
|
-
|
|
|
-
|
|
|
|
24,922
|
|
Currency translation adjustment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
1,361,225
|
|
|
-
|
|
|
|
1,361,225
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(263,605
|
)
|
|
|
(263,605
|
)
|
Balance at December 31, 2015
|
|
|
102,445,845
|
|
|
$
|
18,615,361
|
|
|
$
|
-
|
|
|
$
|
2,488,526
|
|
|
$
|
3,202,395
|
|
|
$
|
(9,840,628
|
)
|
|
$
|
14,465,654
|
|
See accompanying notes to the condensed consolidated interim unaudited financial statements
|
|
Three month period ended
|
|
|
Six month period ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for period
|
|
$
|
(127,481
|
)
|
|
$
|
(138,611
|
)
|
|
$
|
(263,605
|
)
|
|
$
|
(424,386
|
)
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
-
|
|
|
|
101
|
|
|
-
|
|
|
|
202
|
|
Share-based payments
|
|
|
12,461
|
|
|
|
11,496
|
|
|
|
24,922
|
|
|
|
154,562
|
|
Changes in non-cash working capital items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivable and prepaid expenses
|
|
|
6,561
|
|
|
|
5,236
|
|
|
|
3,587
|
|
|
|
26,308
|
|
Trade payables and accrued liabilities
|
|
|
(10,955
|
)
|
|
|
(85,474
|
)
|
|
|
(16,030
|
)
|
|
|
(258,988
|
)
|
Net cash flows used in operating activities
|
|
|
(119,414
|
)
|
|
|
(207,252
|
)
|
|
|
(251,126
|
)
|
|
|
(502,302
|
)
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures on exploration and evaluation assets
|
|
|
(430,667
|
)
|
|
|
(651,407
|
)
|
|
|
(1,066,529
|
)
|
|
|
(931,259
|
)
|
Net cash flows used in investing activities
|
|
|
(430,667
|
)
|
|
|
(651,407
|
)
|
|
|
(1,066,529
|
)
|
|
|
(931,259
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds on issuance of common shares
|
|
-
|
|
|
|
1,787,154
|
|
|
-
|
|
|
|
2,417,806
|
|
Subscriptions received
|
|
-
|
|
|
|
(816,796
|
)
|
|
-
|
|
|
-
|
|
Share issue cost recovery
|
|
-
|
|
|
-
|
|
|
|
1,977
|
|
|
-
|
|
Net cash flows from investing activities
|
|
-
|
|
|
|
970,358
|
|
|
|
1,977
|
|
|
|
2,417,806
|
|
Currency translation adjustment
|
|
|
30,620
|
|
|
|
17,684
|
|
|
|
17,331
|
|
|
|
14,183
|
|
Increase / (decrease) in cash and cash equivalents
|
|
|
(519,461
|
)
|
|
|
129,383
|
|
|
|
(1,298,347
|
)
|
|
|
998,428
|
|
Cash and cash equivalents, beginning of the period
|
|
|
1,012,613
|
|
|
|
876,734
|
|
|
|
1,791,499
|
|
|
|
7,689
|
|
Cash and cash equivalents, end of the period
|
|
$
|
493,152
|
|
|
$
|
1,006,117
|
|
|
$
|
493,152
|
|
|
$
|
1,006,117
|
|
Note 11 – Non-cash transactions
See accompanying notes to the condensed consolidated interim unaudited financial statements
1.
Nature of operations
Calico Resources Corp. (the “Company”) and its wholly owned subsidiary, Calico Resources USA Corp. are focused on advancing its 100% owned Grassy Mountain Gold Project (“Grassy Mountain”) located in Oregon, U.S.A. The Company’s shares are traded on the TSX Venture Exchange (“TSX-V”) under the symbol “CKB”. The head office and principal address of the Company is located at Suite 615, 800 West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6. The Company’s registered and records office address is Suite 2600, 1066 West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X1.
2.
Statement of compliance and basis of preparation
These condensed consolidated interim unaudited financial statements were authorized for issue on February 26, 2016 by the directors of the Company.
Statement of compliance
These condensed consolidated interim unaudited financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The accounting policies and methods of computation applied by the Company in these condensed consolidated interim unaudited financial statements are the same as those applied in the Company’s annual financial statements as at and for the year ended June 30, 2015.
The condensed consolidated interim unaudited financial statements do not include all of the information and note disclosures required for full annual financial statements and should be read in conjunction with the Company’s annual financial statements as at and for the year ended June 30, 2015.
Going concern
These condensed consolidated interim unaudited financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. A different basis of measurement may be appropriate if the Company was not expected to continue operations for the foreseeable future. At December 31, 2015, the Company had not achieved profitable operations, had a net loss of $263,605 for the six month period ended December 31, 2015 and accumulated losses of $9,840,628 since inception, had not advanced its mineral properties to commercial production and expects to incur further losses in the development of its business, all of which indicate a material uncertainty that may cast significant doubt upon the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon successful results from its mineral property exploration activities and its ability to attain profitable operations to generate funds and/or its ability to raise equity capital or borrowings sufficient to meet its current and future obligations. Although the Company has been successful in the past in raising funds to continue operations, there is no assurance it will be able to do so in the future.
Basis of preparation
The condensed consolidated interim unaudited financial statements have been prepared on a historical cost basis. The condensed consolidated interim unaudited financial statements are presented in Canadian dollars.
2.
Statement of compliance and basis of preparation (cont’d)
Significant accounting judgments and estimates
These condensed consolidated interim unaudited financial statements are unaudited and prepared on a condensed basis in accordance with the International Accounting Standards (“IAS”) 34, Interim Financial Reporting issued by the International Accounting Standard Board (“IASB”). These condensed consolidated interim unaudited financial statements have been prepared in accordance with the accounting policies described in Note 3 of the Company’s Annual Financial Statements as at and for the year ended June 30, 2015. Accordingly, these condensed consolidated interim unaudited financial statements for the six month period ended December 31, 2015 and 2014 should be read together with the Annual Financial Statements as at, and for the year ended, June 30, 2015.
The following standards and interpretations have been issued but are not yet effective:
The following standards, interpretations and amendments, which have not been applied in these condensed consolidated interim unaudited financial statements, may have an effect on the Company’s future condensed consolidated interim unaudited financial statements. The Company is in the process of evaluating these new standards.
IFRS 9 — Financial instruments, classification and measurement
IFRS 9 Financial Instruments is part of the IASB's wider project to replace IAS 39 Financial Instruments:
Recognition and Measurement. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. The standard is effective for annual periods beginning on or after January 1, 2018. The Company is in the process of evaluating the impact of the new standard.
3.
|
Cash and cash equivalents
|
Cash and cash equivalents include guaranteed investment certificates with a term to maturity of up to three months from date of acquisition and which can be redeemed at any time without penalty.
4.
|
Exploration and evaluation assets
|
The following is a description of the Company’s Grassy Mountain exploration and evaluation assets and the related spending commitments.
Period ended December 31, 2015
|
|
Property acquisition costs
|
|
|
|
|
Balance, June 30, 2015
|
|
$
|
3,627,985
|
|
Additions
|
|
|
147,266
|
|
Balance, December 31, 2015
|
|
$
|
3,775,251
|
|
Exploration and evaluation costs
|
|
|
|
|
Balance, June 30, 2015
|
|
$
|
8,805,524
|
|
Costs incurred during period:
|
|
|
|
|
Consulting (Note 8)
|
|
|
268,884
|
|
Engineering
|
|
|
18,535
|
|
Environmental
|
|
|
405,106
|
|
Field supplies
|
|
|
562
|
|
Other costs
|
|
|
51,386
|
|
Permits and fees
|
|
|
146,009
|
|
Travel and accommodations
|
|
|
41,450
|
|
|
|
|
931,932
|
|
Balance, December 31, 2015
|
|
|
9,737,456
|
|
Currency translation adjustment
|
|
|
1,343,894
|
|
Balance, December 31, 2015
|
|
$
|
14,856,601
|
|
4.
Exploration and evaluation assets (cont’d)
USA – Oregon
On February 5, 2013, the Company exercised its option to acquire a 100% interest in the Grassy Mountain Project from Seabridge Gold Inc. (“Seabridge”) by issuing 6,433,000 common shares (the “Issued Shares”) and 4,567,000 Special Warrants to Seabridge. The shares and Special Warrants were valued at $0.19 each which was based on the trading price of the shares at the date of issuance. Each Special Warrant is exercisable to acquire one additional common share of the Company (a “Special Warrant Share”) for no additional consideration. The Special Warrants can only be exercised to the extent that, after exercise, Seabridge holds less than 20% of the outstanding shares of the Company. Calico has agreed to ask its shareholders to approve the exercise of those outstanding Special Warrants and approve Seabridge then holding more than 20% of the issued shares in Calico. Pursuant to the agreement, the Company agreed to guarantee the obligations of Calico Resources USA Corp., including those guaranteed to Seabridge.
On September 26, 2013, Seabridge acquired, on behalf of its wholly owned subsidiary, Seabridge Gold Corp., 1,671,000 common shares upon exercise of 1,671,000 Special Warrants. Including the initial 2,000,000 common shares issued under the original definitive option agreement dated April 18, 2011, at that time, Seabridge then owned and controlled 10,104,000 common shares and 2,896,000 Special Warrants of the Company, representing 19.55% of the outstanding common shares and 100% of the Special Warrants of the Company.
On February 19, 2014, the Company held its Annual and Special General Meeting of its shareholders. Shareholders approved the exercise by Seabridge of the balance of its 2,896,000 Special Warrants, then resulting in Seabridge holding 13 million common shares of the Company, representing 23.81% of Calico’s common shares at that time. With subsequent share issuances, this interest has fallen below 20%.
There are existing letters of credit posted with the State of Oregon – Department of Geology and Mineral Industries (DOGAMI) in the amount of $146,200 in respect of possible reclamation work required on the property. This existing security has been posted by Seabridge. The Company is required to use reasonable commercial efforts to arrange for the release of the existing security and replace this existing security with new letters of credit or reclamation bonds as soon as possible after registered title to the property has transferred to the Company. The intention of the Company is to replace the security; however this has not been completed.
On November 1, 2014, the Company entered into an amendment of the mining lease and agreement regarding Grassy Mountain with Sherry & Yates Inc., which originally provided the Company with an option to buy down the royalty to 1%, with a cash payment of $2.1 US million at any time up to February 16, 2015. The terms of the agreement as originally entered into on February 16, 2004 provided for production royalty payments to be based on the price of gold. The rates are as follows:
|
|
|
Production Royalty Rate on Gross Proceeds
|
|
Gold Price Per Ounce ($US)
|
4.0%
|
|
Less than $500
|
5.0%
|
|
$500-800
|
6.0%
|
|
Over $800
|
In addition, the original agreement provides for a 4% production royalty on any other metals, other than gold.
On November 1, 2014, Sherry & Yates Inc. agreed to amend the buy down option as follows:
from February 17, 2015 to February 16, 2016 the royalty can be bought down to 1% for $2.2 US million;
from February 17, 2016 to February 16, 2017 the royalty can be bought down to 1.25% for $2.3 US million; and
from February 17, 2017 to February 16, 2018 the royalty can be bought down to 1.5% for $2.4 US million.
The advance royalty payment remains the same at $100,000 US per year, due on February 15th of each year. (Subsequent to December 31, 2015, the payment of $100,000 US due on February 15, 2016, was made.)
5.
Trade payables and accrued liabilities
(cont’d)
|
|
December 31,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2015
|
|
Trade payables *
|
|
$
|
569,095
|
|
|
$
|
671,942
|
|
Amounts due to related parties (Note 8)
|
|
|
126,641
|
|
|
|
121,217
|
|
Accrued liabilities
|
|
208,465
|
|
|
|
114,404
|
|
|
|
$
|
904,201
|
|
|
$
|
907,563
|
|
*Included in trade payables at December 31, 2015 is the amount of $443,246 (June 30, 2015: $443,246) representing invoiced legal fees from the Company’s previous legal counsel. The Company is contesting the amount of these invoices, and an action was started in the Supreme Court of British Columbia for a review of all of these invoices to determine what amount for which the Company would then be liable. The review was completed on January 29, 2016, and the Company is currently waiting for the Court’s decision.
6.
|
Share capital and other components of equity
|
Authorized share capital
Unlimited number of common shares without par value.
Issued share capital
At December 31, 2015, there were 102,445,845 issued and fully paid common shares (June 30, 2015 – 102,445,845).
Warrants
The following table summarizes information about the issued and outstanding warrants for the period ended December 31, 2015 and the year ended June 30, 2015:
|
|
December 31, 2015
|
|
|
June 30, 2015
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
average
|
|
|
|
|
|
|
average
|
|
|
|
Number of
|
|
|
exercise
|
|
|
Number of
|
|
|
exercise
|
|
|
|
warrants
|
|
|
price
|
|
|
warrants
|
|
|
price
|
|
Warrants outstanding, beginning of period
|
|
|
9,776,663
|
|
|
$
|
0.18
|
|
|
|
5,753,683
|
|
|
$
|
0.29
|
|
Warrants issued
|
|
-
|
|
|
-
|
|
|
|
9,776,663
|
|
|
|
0.18
|
|
Warrants exercised
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Warrants expired
|
|
|
(9,776,663
|
)
|
|
|
0.18
|
|
|
|
(5,753,683
|
)
|
|
|
0.29
|
|
Warrants outstanding and exercisable, end of period
|
|
-
|
|
|
$
|
-
|
|
|
|
9,776,663
|
|
|
$
|
0.18
|
|
As at December 31, 2015 there were no warrants outstanding.
Stock options
The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX Venture Exchange requirements, grant to directors, officers, employees and technical consultants of the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance is a rolling plan of 10% of the issued and outstanding common shares. Such options will be exercisable for a period of up to 5 years from the date of grant. Subject to the Board of Directors discretion, options vest on date of grant.
6.
|
Share capital and other components of equity (cont’d)
|
The changes in options during the period ended December 31, 2015 and the year ended June 30, 2015 are as follows:
|
|
December 31, 2015
|
|
|
June 30, 2015
|
|
|
|
Number of options
|
|
|
Weighted average exercise price
|
|
|
Number of options
|
|
|
Weighted average exercise price
|
|
Options outstanding and
exercisable, beginning of period
|
|
|
3,220,000
|
|
|
$
|
0.25
|
|
|
|
1,415,000
|
|
|
$
|
0.45
|
|
Options granted
|
|
|
-
|
|
|
|
-
|
|
|
|
2,375,000
|
|
|
|
0.16
|
|
Options cancelled/expired
|
|
|
(600,000
|
)
|
|
|
0.36
|
|
|
|
(570,000
|
)
|
|
|
0.40
|
|
Options outstanding and
exercisable, end of period
|
|
|
2,620,000
|
|
|
$
|
0.22
|
|
|
|
3,220,000
|
|
|
$
|
0.25
|
|
As at December 31, 2015 there were 2,620,000 stock options outstanding as follows:
Number of stock options outstanding
|
|
Exercise price
|
|
|
Expiry date
|
50,000
|
|
$
|
0.40
|
|
|
May 12, 2016
|
110,000
|
|
$
|
0.60
|
|
|
June 10, 2016
|
25,000
|
|
$
|
0.60
|
|
|
August 22, 2016
|
185,000
|
|
$
|
0.60
|
|
|
December 22, 2016
|
1,350,000
|
|
$
|
0.16
|
|
|
August 18, 2019
|
600,000
|
|
$
|
0.17
|
|
|
August 25, 2019
|
300,000
|
|
$
|
0.17
|
|
|
January 20, 2020
|
2,620,000
|
|
|
|
|
|
|
The weighted average expected life remaining of stock options outstanding at December 31, 2015 is 3.53 years (June 30, 2015 – 3.16 years).
Stock option reserves
The stock option reserve records items recognized as share-based payments until such time that the stock options are exercised, at which time the corresponding amount will be transferred to share capital.
Warrant reserves
The warrant reserve records items recognized as part of a unit financing, and for special warrants issued, until such time that the warrants are exercised, at which time the corresponding amount will be transferred to share capital.
Accumulated other comprehensive income
The accumulated other comprehensive income reserve records exchange differences arising on translation of a subsidiary of the Company that has a functional currency other than the Canadian dollar.
8.
|
Related party balances and key management personnel
|
The following amounts due to related parties are included in trade payables and accrued liabilities. These amounts are unsecured, non-interest bearing and have no fixed terms of payments. All related party amounts are to key management personnel.
|
|
December 31,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2015
|
|
Directors and officers of the Company
|
|
$
|
126,641
|
|
|
$
|
121,217
|
|
Transactions with related parties are summarized in the table below:
|
|
Six month period ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
Management fees and other (1)
|
|
$
|
125,215
|
|
|
$
|
158,464
|
|
Share-based payment
|
|
21,897
|
|
|
-
|
|
|
|
$
|
147,112
|
|
|
$
|
158,464
|
|
(1)
|
In 2015, $34,600 (2014: $80,499) of management fees were allocated to exploration and evaluation assets as warranted.
|
9.
|
Financial risk management
|
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash and cash equivalents held in bank accounts. The majority of cash and cash equivalents are deposited in bank accounts which are held with major banks in Canada and U.S.A. This risk is managed by using major banks that are high credit quality financial institutions as determined by rating agencies.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.
Historically, the Company’s main source of funding has been the issuance of equity securities for cash and cash equivalents, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.
Foreign exchange risk
Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company does not hedge its exposure to fluctuations in foreign exchange rates.
9.
|
Financi
al risk management (cont’d)
|
The following is an analysis of the Canadian dollar equivalent of financial assets and liabilities that are denominated in U.S. dollars:
|
|
December 31,
2015
|
|
|
June 30,
2015
|
|
Cash and cash equivalents
|
|
$
|
17,529
|
|
|
$
|
5,551
|
|
Accounts payable
|
|
|
(431,519
|
)
|
|
|
(478,185
|
)
|
|
|
$
|
413,990
|
|
|
$
|
(472,634
|
)
|
Based on the above net exposures, as at December 31, 2015, a 10% change in the U.S. dollar to Canadian dollar exchange rate would impact the Company’s net loss by $41,399.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risks.
Capital management
The Company’s policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Company consists of equity, comprising share capital, net of accumulated deficit.
There were no changes in the Company’s approach to capital management during the period. The Company is not subject to any externally imposed capital requirements.
Fair value
The Company’s financial instruments consist of cash and cash equivalents, trade payables and accrued liabilities and loans payable. The carrying value of these financial instruments approximates their fair values due to the short term nature of these instruments.
10.
|
Segmented information
|
Operating segments
The Company operates in a single reportable operating segment – the acquisition and exploration of mineral properties.
10.
|
Segmented information (cont’d)
|
Geographic segments
The Company’s non-current assets are located in the following countries:
|
|
As at December 31, 2015
|
|
|
|
Canada
|
|
U.S.A.
|
|
|
Total
|
|
Exploration and evaluation assets
|
|
-
|
|
$
|
14,856,601
|
|
|
$
|
14,856,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30, 2015
|
|
|
|
Canada
|
|
U.S.A.
|
|
|
Total
|
|
Exploration and evaluation assets
|
|
-
|
|
$
|
12,433,509
|
|
|
$
|
12,433,509
|
|
11.
|
Supplemental disclosure with respect to cash flows
|
During the six month period ended December 31, 2015 and 2014, the Company incurred the following non-cash investing and financing activities that are not reflected in the statements of cash flows:
|
|
Six month period ended
|
|
|
|
December 31,
2015
|
|
|
December 31,
2014
|
|
Exploration and evaluation assets included in trade payables and accrued
liabilities
|
|
$
|
301,769
|
|
|
$
|
163,929
|
|
APPENDIX F
PARAMOUNT GOLD NEVADA CORP. CORPORATION
PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015
(Unaudited - Expressed in U.S. Dollars)
On March 14, 2016, Paramount Gold Nevada Corp. (“Paramount” or the “Company”) and Calico Resources Corp. (“Calico”) entered into a definitive arrangement agreement dated as of (the “Arrangement Agreement”) pursuant to which Paramount will acquire all of the issued and outstanding common shares of Calico (the “Transaction”) by way of a plan of arrangement (the “Plan of Arrangement”). Pursuant to the Plan of Arrangement, Paramount will acquire each common share of Calico from Calico’s shareholders in exchange for 0.07 of a share of Paramount common stock (the “Exchange Ratio”).
The unaudited
pro forma
condensed combined statement of operations for the year ended June 30, 2015 and the six month period ended December 31, 2015 combines the historical consolidated statements of operations of Paramount and Calico, giving effect to the acquisition as if it had occurred on July 1, 2014. The unaudited
pro forma
condensed combined balance sheet as of December 31, 2015 combines the historical consolidated balance sheets of Paramount and Calico, giving effect to the acquisition as if it had occurred on December 31, 2015. The historical consolidated financial information has been adjusted in the unaudited
pro forma
condensed combined financial statements to give effect to
pro forma
events that are (i) directly attributable to the acquisition, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results.
The unaudited
pro forma
condensed combined financial statements should be read in conjunction with (i) the accompanying notes to the unaudited
pro forma
condensed combined financial statements; (ii) the historical financial statements of Paramount and the accompanying notes in Paramount’s Annual Report on Form 10-K for the year ended June 30, 2015; (iii) the historical financial statements of Calico and the accompanying notes in Calico’s annual audited financial statements for the year ended June 30, 2015 ; and (iv) additional information contained in, or incorporated by reference into, proxy statement filed with the Securities and Exchange Commission on April [], 2016.
The unaudited
pro forma
condensed combined financial statements have been presented for informational purposes only. The
pro forma
information is not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the acquisition been completed as of the dates indicated. Since the unaudited
pro forma
condensed combined financial statements have been prepared based on preliminary estimates, the final amounts recorded at the date of the acquisition may differ materially from the information presented. These estimates are subject to change pending further review of the assets acquired and liabilities assumed. In addition, the unaudited
pro forma
condensed combined financial information does not intend to project the future financial position or operating results of the combined company.
PARAMOUNT GOLD NEVADA CORP.
UNADITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of December 31, 2015
Historical
|
|
Paramount As of
|
|
|
Calico As
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
of December 31,
|
|
|
Adjustments
|
|
|
|
Pro Forma
|
|
|
|
2015
|
|
|
2015
|
|
|
(Note 4)
|
|
|
|
Combined
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
7,906,761
|
|
|
$
|
356,302
|
|
|
|
|
|
|
|
$
|
8,263,063
|
|
Prepaid and deposits
|
|
|
329,329
|
|
|
|
5,011
|
|
|
|
|
|
|
|
|
334,340
|
|
Accounts receivable
|
|
|
-
|
|
|
|
9,513
|
|
|
|
|
|
|
|
|
9,513
|
|
Prepaid insurance, current portion
|
|
|
49,043
|
|
|
|
-
|
|
|
|
|
|
|
|
|
49,043
|
|
Marketable securities
|
|
|
80
|
|
|
|
-
|
|
|
|
|
|
|
|
$
|
80
|
|
Total Current Assets
|
|
|
8,285,213
|
|
|
|
370,826
|
|
|
|
|
|
|
|
|
8,656,039
|
|
Non-Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral properties
|
|
|
28,036,135
|
|
|
|
10,733,891
|
|
|
|
(7,702,938
|
)
|
(a)
|
|
|
36,995,757
|
|
|
|
|
|
|
|
|
|
|
|
|
5,928,669
|
|
(b)
|
|
|
|
|
Prepaid insurance, non-current portion
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
Property and equipment
|
|
|
13,957
|
|
|
|
-
|
|
|
|
|
|
|
|
|
13,957
|
|
Reclamation bond
|
|
|
2,383,039
|
|
|
|
-
|
|
|
|
|
|
|
|
|
2,383,039
|
|
Total Non-Current Assets
|
|
|
30,433,131
|
|
|
|
10,733,891
|
|
|
|
(1,774,269
|
)
|
|
|
|
39,392,753
|
|
Total Assets
|
|
$
|
38,718,344
|
|
|
$
|
11,104,717
|
|
|
$
|
(1,774,269
|
)
|
|
|
$
|
48,048,792
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
125,187
|
|
|
$
|
653,285
|
|
|
|
|
|
|
|
$
|
778,472
|
|
Total Current Liabilities
|
|
|
125,187
|
|
|
|
653,285
|
|
|
|
|
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclamation and environmental
obligation
|
|
|
1,243,271
|
|
|
|
-
|
|
|
|
|
|
|
|
|
1,243,271
|
|
Total Liabilities
|
|
|
1,368,458
|
|
|
|
653,285
|
|
|
|
|
|
|
|
|
2,021,743
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.01,
50,000,000 authorized shares,
8,518,791 issued and outstanding at
December 31, 2015 and at
June 30, 2015
|
|
|
85,188
|
|
|
|
13,449,598
|
|
|
|
(13,377,886
|
)
|
(b)
|
|
$
|
156,900
|
|
Additional paid in capital
|
|
|
64,851,640
|
|
|
|
1,797,960
|
|
|
|
6,807,491
|
|
(b)
|
|
|
73,457,091
|
|
Deficit
|
|
|
(27,517,172
|
)
|
|
|
(7,109,856
|
)
|
|
|
(7,702,938
|
)
|
(a)
|
|
|
(27,517,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
14,812,794
|
|
(b)
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(69,770
|
)
|
|
|
2,313,730
|
|
|
|
14,812,794
|
|
(b)
|
|
|
(69,770
|
)
|
Total Stockholders' Equity
|
|
|
37,349,886
|
|
|
|
10,451,432
|
|
|
|
(1,774,269
|
)
|
|
|
|
46,027,049
|
|
Total Liabilities and Stockholders'
Equity
|
|
$
|
38,718,344
|
|
|
$
|
11,104,717
|
|
|
$
|
(1,774,269
|
)
|
|
|
$
|
48,048,792
|
|
PARAMOUNT GOLD NEVADA CORP.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended June 30, 2015
|
|
Paramount
|
|
|
Calico
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Adjustments
|
|
|
Pro Forma
|
|
|
|
June 30, 2015
|
|
|
June 30, 2015
|
|
|
(Note 4)
|
|
|
Combined
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
136,437
|
|
|
$
|
3,411
|
|
|
|
|
|
|
$
|
139,848
|
|
Total Revenue
|
|
|
136,437
|
|
|
|
3,411
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
|
|
|
910,215
|
|
|
|
15,408
|
|
|
|
2,416,944
|
|
|
a
|
3,342,567
|
|
Land holding costs
|
|
|
444,756
|
|
|
|
-
|
|
|
|
|
|
|
|
444,756
|
|
Professional fees
|
|
|
508,711
|
|
|
|
185,814
|
|
|
|
|
|
|
|
694,525
|
|
Salaries and benefits
|
|
|
373,345
|
|
|
|
169,969
|
|
|
|
|
|
|
|
543,314
|
|
Directors compensation
|
|
|
123,149
|
|
|
|
444
|
|
|
|
|
|
|
|
123,593
|
|
General and administrative
|
|
|
211,277
|
|
|
|
314,228
|
|
|
|
|
|
|
|
525,505
|
|
Insurance
|
|
|
106,333
|
|
|
|
9,103
|
|
|
|
|
|
|
|
115,436
|
|
Depreciation
|
|
|
1,333
|
|
|
|
1,153
|
|
|
|
|
|
|
|
2,486
|
|
Accretion
|
|
|
134,768
|
|
|
|
-
|
|
|
|
|
|
|
|
134,768
|
|
Write down of mineral properties
|
|
|
337,400
|
|
|
|
-
|
|
|
|
|
|
|
|
337,400
|
|
Total Expenses
|
|
|
3,151,287
|
|
|
|
696,119
|
|
|
|
2,416,944
|
|
|
|
6,264,350
|
|
Net Loss before other items
|
|
|
3,014,850
|
|
|
|
692,708
|
|
|
|
2,416,944
|
|
|
|
6,264,350
|
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(4,195
|
)
|
|
|
(3,591
|
)
|
|
|
|
|
|
|
(7,786
|
)
|
Interest and service charges
|
|
|
2,252,527
|
|
|
|
4,037
|
|
|
|
|
|
|
|
2,256,564
|
|
Gain on sale of marketable securities
|
|
|
(31,975
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(31,975
|
)
|
Net Loss
|
|
|
5,231,207
|
|
|
|
693,154
|
|
|
|
2,416,944
|
|
|
|
8,481,153
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on available-for-sale-securities
|
|
|
115,342
|
|
|
|
-
|
|
|
|
|
|
|
|
115,342
|
|
Total Comprehensive Loss for the Period
|
|
$
|
5,346,549
|
|
|
$
|
693,154
|
|
|
$
|
2,416,944
|
|
|
$
|
8,596,495
|
|
Loss per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.64
|
|
|
$
|
0.01
|
|
|
|
|
|
|
$
|
0.55
|
|
Diluted
|
|
$
|
0.64
|
|
|
$
|
0.01
|
|
|
|
|
|
|
$
|
0.55
|
|
Weighted Average Number of Common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Used in Per Share Calculations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8,185,999
|
|
|
|
75,785,794
|
|
|
|
7,171,209
|
|
|
|
15,357,208
|
|
Diluted
|
|
|
8,185,999
|
|
|
|
75,785,794
|
|
|
|
7,171,209
|
|
|
|
15,357,208
|
|
PARAMOUNT GOLD NEVADA CORP.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 2015
|
|
Paramount
|
|
|
Calico
|
|
|
|
|
|
|
|
|
|
|
|
Six Month
|
|
|
Six Month
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
Period Ended
|
|
|
Period Ended
|
|
|
Adjustments
|
|
|
Pro Forma
|
|
|
|
December 31, 2015
|
|
|
December 31, 2015
|
|
|
(Note 4)
|
|
|
Combined
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
$
|
130,924
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
130,924
|
|
Total Revenue
|
|
|
130,924
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
|
|
|
446,171
|
|
|
|
(7,693
|
)
|
|
|
1,618,531
|
|
|
a
|
2,057,009
|
|
Land holding costs
|
|
|
195,237
|
|
|
|
-
|
|
|
|
-
|
|
|
|
195,237
|
|
Professional fees
|
|
|
150,286
|
|
|
|
74,402
|
|
|
|
|
|
|
|
224,688
|
|
Salaries and benefits
|
|
|
434,966
|
|
|
|
18,860
|
|
|
|
-
|
|
|
|
453,826
|
|
Directors compensation
|
|
|
109,448
|
|
|
|
-
|
|
|
|
|
|
|
|
109,448
|
|
General and administrative
|
|
|
167,954
|
|
|
|
112,087
|
|
|
|
-
|
|
|
|
280,041
|
|
Insurance
|
|
|
90,020
|
|
|
|
4,603
|
|
|
|
|
|
|
|
94,623
|
|
Depreciation
|
|
|
2,404
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,404
|
|
Accretion
|
|
|
73,996
|
|
|
|
-
|
|
|
|
-
|
|
|
|
73,996
|
|
Total Expenses
|
|
|
1,670,482
|
|
|
|
202,259
|
|
|
|
1,618,531
|
|
|
|
3,491,272
|
|
Net Loss before other items
|
|
|
1,539,558
|
|
|
|
202,259
|
|
|
|
1,618,531
|
|
|
|
3,491,272
|
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(2,711
|
)
|
|
|
(2,771
|
)
|
|
|
-
|
|
|
|
(5,482
|
)
|
Interest and service charges
|
|
|
113
|
|
|
|
-
|
|
|
|
|
|
|
|
113
|
|
Net Loss
|
|
|
1,536,960
|
|
|
|
199,488
|
|
|
|
1,618,531
|
|
|
|
3,485,903
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on
available-for-sale-securities
|
|
|
14,577
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14,577
|
|
Total Comprehensive Loss for the
Period
|
|
$
|
1,551,537
|
|
|
$
|
199,488
|
|
|
$
|
1,618,531
|
|
|
$
|
3,500,480
|
|
Loss per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
|
$
|
0.0
|
|
|
|
|
|
|
$
|
0.22
|
|
Diluted
|
|
$
|
0.18
|
|
|
$
|
0.0
|
|
|
|
|
|
|
$
|
0.22
|
|
Weighted Average Number of
Common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Used in Per Share
Calculations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8,518,791
|
|
|
|
102,445,848
|
|
|
|
7,171,209
|
|
|
|
15,690,000
|
|
Diluted
|
|
|
8,518,791
|
|
|
|
102,445,848
|
|
|
|
7,171,209
|
|
|
|
15,690,000
|
|