1st Quarter Financial Results and Outline of 2023 Workplan
TORONTO, ON / ACCESSWIRE / May 26, 2023 / Amaroq Minerals Ltd. (AIM:AMRQ)(TSXV:AMRQ)(NASDAQ First North:AMRQ), an independent mine development company with a substantial land package of gold and strategic mineral assets covering an area of 7,866.85 km 2 in Southern Greenland, is pleased to present its Q1 2023 Financial Results and outline its current workplan for 2023.
Q1 2023 Corporate Highlights:
- Debt funding non-binding term sheets for a
$66.8 million (US$49.5 million ) senior secured financing package signed on March 28, 2023. - Gold business working capital of
$46.7 million as of March 31, 2023 ($49.5 million as of December 31, 2022), which together with the debt funding would represent available liquidity of$113.5 million as the Company approaches the trial mining stage at Nalunaq. - ACAM JV completed. ACAM, through its affiliate company GCAM, LP, has invested an initial amount of
$30.4 million (£18.0 million) under a subscription and shareholders' agreement in return for 490,000 ordinary shares in the subsidiary representing49% . Transaction completed and funds released on April 13, 2023. - Strategic minerals has available liquidity of
$30.4 million as we embark on the first year of the 3-year exploration program. - Announced intention to list on Iceland's Nasdaq Exchange main market, with listing preparation underway.
Q1 2023 Operational Highlights:
- Nalunaq: Environmental Impact Assessment (EIA) for Nalunaq approved for translation into Greenlandic and Danish ahead of the public consultation meetings later this year. Execution of development progressing with letters of Intent (LOIs) signed with Halyard and Thyssen Schachtbau and acquisition of underground mining equipment underway.
- Nanoq: Completion of 407.65 km2 high-resolution heli-borne geophysical survey across the Nanoq, Siku and Jokum's Shear gold projects with the aim of defining geological models to direct future drilling campaigns.
- Vagar Ridge: 2022 results provide further evidence of Intrusion Related gold potential and the presence of Orogenic gold mineralisation with some geological similarities with the Nalunaq deposit, enabling the team to leverage previous experience.
- Kobberminebugt: 2022 results confirm copper mineralisation to be skarn related with potential for significant tonnages at depth or along strike opening up the potential for numerous similar bodies across more than 40km of granite contact zone
- North Sava: Completed a 5,100 line-km aerial survey, the results of which are being processed and will be published in H2 2023.
Eldur Olafsson, CEO of Amaroq, commented:
"We enter the second quarter of the year very well-funded, and with a busy programme of exploration to add incremental resource to the Company and to bring Nalunaq onstream on time and on budget such that we can meet trial mining in 2024. At the same time, our plans for a main market listing in Iceland move forward. I would like to thank the entire team for their dedication and hard work as we grow the Company at pace."
2023 Exploration and Development Workplan:
Gold Projects
- Nalunaq
In preparation for the 2023 field season and enabled by the debt financing, Amaroq is finalizing mine design and schedule for the up-dip portion of the Mountain Block, thus laying the groundwork for a trial mining area. In order to realise this the Nalunaq project team is working on:
- Site Preparation - June to August, the site will undergo logistical planning, detailed engineering design, procurement and mobilization of equipment and project teams in preparation for underground development as well as construction of associated infrastructure.
- Mine Preparation - August to January, following the mobilization of equipment and personnel, the existing developments in the Mountain Block will be re-opened and rehabilitated with all required mining services installed.
- Trial Mine Operation - January 2024 onwards, Amaroq intends to commence a new operation within the Mountain Block with trial mining and ore production feeding an initial stage (gravity circuit) trial processing facility constructed on the valley floor.
In addition to this and to facilitate progressive resource growth in this trial mining area, the Company is conducting a programme of mountain drilling in the trial mining area and further up-dip
- Nanoq
- The 2022 season saw the completion of a 407.65 km2 high-resolution heli-borne geophysical survey across the Nanoq, Siku and Jokum's Shear gold projects with the aim of defining geological models to direct future drilling campaigns.
- These results have highlight a number of additional targets which will be assessed during field investigations in 2023 as well as site preparation ahead of initial drilling in 2024.
- Vagar Ridge
- While Amaroq will focus its efforts on the development of the Nalunaq deposit during 2023, Amaroq will aim to construct a robust geological and mineralisation model to inform future exploration at Vagar. Ground preparation and drill readiness preparations will also occur ahead of the 2024 season.
Strategic Minerals Projects (Amaroq
- Sava
- The 2022 field season saw the completion of a two drillhole scout drilling programme across two target areas along with associated mapping and sampling across the licence.
- Amaroq has proposed a 2023 season incorporating further scout drilling on at least two separate IOCG targets along with further ground exploration in the form of geological and alteration mapping guided by external IOCG specialists.
- North Sava
- An airborne geophysical survey of approximately 5,100 line-km was completed across the North Sava sub area targeting the continuation of the mineralisation and mineral potential already identified at Sava.
- Results are currently being interpreted by the Amaroq geology team and external consultants with conclusions are expected to be announced in H2-23.
- Kobberminebugt Licence
- Samples of the main Josva vein returned up to 11.6 % Cu over 0.5 m. Minor gold and silver grades were also reported.
- The 2023 fieldwork plan revolves around a detailed airborne geophysical survey across the whole licence area aimed at signaturing the mineralisation at Josva and Lilian and using this as a proxy for further discoveries.
- Saqqaa Dyke
- Amaroq is planning on conducting a targeted surface core drilling programme into the potential strike extension of Saqqaa Dyke below the Nalunaq Valley floor and previously signatured from ground geophysical surveys.
- Saqqaa peridotite dyke is known to host semi-massive and disseminated magmatic sulphide mineralisation, with elevated concentrations of Nickel (up to >
1% ), Copper (up to6% in float samples), and Platinum Group Elements (up to 10 g/t Pd in channel samples).
- Stendalen Licence
- A Detailed geophysical survey will be conducted across the Stendalen layered intrusion in order to assess its potential to host Ni sulphides at depth and on its flanks.
- The Titanium/Vanadium hosting intrusion will also undergo ground reconnaissance and initial stratigraphic drilling to signature this mineralisation as well as assess the Ni sulphide hosting potential.
- The Paatusoq syenite intrusion will be visited and sampled in 2023, with the main objectives being to follow up on historic radiometric anomalies and identify areas of mineralisation. Drone surveys may be carried out to improve geological maps of the intrusion.
- A virtually unexplored layered gabbro intrusion in contact with the Paatusoq syenites may also be visited and assessed for its similarities to the Stendalen gabbro intrusion.
Amaroq Financial Results
The following selected financial data is extracted from the Financial Statements for the three months ended March 31, 2023.
Financial Results
Three months ended March 31 | ||
2023 | 2022 | |
Exploration and evaluation expenses | 1,181,653 | 1,010,330 |
General and administrative | 2,577,035 | 2,988,769 |
Net loss and comprehensive loss | 3,376,893 | 4,135,498 |
Basic and diluted loss per common share | (0.01) | (0.02) |
Financial Position
As at March 31 | As at December 31 | |
2023 | 2022 | |
Cash on hand | 46,784,407 | 50,137,569 |
Total assets | 62,010,593 | 65,096,061 |
Total current liabilities | 1,729,851 | 1,868,198 |
Shareholders' equity | 60,280,742 | 63,227,863 |
Working capital | 46,738,567 | 49,472,991 |
Iceland Investor Event
Amaroq will be holding a Capital Markets Day for the Icelandic market at the new headquarters of Landsbankinn at Reykjastræti 6, 101 Reykjavík, from 9.00am to 11.00am Iceland time, GMT on Friday June 2, 2023.
Amaroq's Board and senior management will provide an overview of the Company's strategy and growth plans, in addition to an update on plans for the Company's Main Market listing in Iceland. Attendees will have the opportunity to address questions to the management team.
To attend the event in person, please click on the following link for registration: https://www.landsbankinn.is/amaroq-minerals
The event will be broadcast live to enable remote access to the meeting. Please register for the webcast at the following link: https://www.landsbankinn.is/amaroq-minerals
Ends
Enquiries:
Amaroq Minerals Ltd.
Eldur Olafsson, Executive Director and CEO
+354 665 2003
eo@amaroqminerals.com
Eddie Wyvill, Investor Relations
+44 (0)7713 126727
ew@amaroqminerals.com
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)
Callum Stewart
Varun Talwar
Simon Mensley
Ashton Clanfield
+44 (0) 20 7710 7600
Panmure Gordon (UK) Limited (Joint Broker)
John Prior
Hugh Rich
Dougie Mcleod
+44 (0) 20 7886 2500
Landsbankinn hf. (Listing Agent)
Ellert Arnarson
Ellert.Arnarson@landsbankinn.is
Camarco (Financial PR)
Billy Clegg
Elfie Kent
Charlie Dingwall
+44 (0) 20 3757 4980
For Company updates:
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Further Information:
About Amaroq Minerals
Amaroq Minerals' principal business objectives are the identification, acquisition, exploration, and development of gold and strategic metal properties in Greenland. The Company's principal asset is a
Glossary
Ag | silver |
Au | gold |
Bt | Billion tonnes |
Cu | copper |
g | grams |
g/t | grams per tonne |
km | kilometers |
Koz | thousand ounces |
m | meters |
Mo | molybdenum |
MRE | Mineral Resource Estimate |
Nb | niobium |
Ni | nickel |
oz | ounces |
REE | Rare Earth Elements |
t | tonnes |
Ti | Titanium |
t/m3 | tonne per cubic meter |
U | uranium |
USD/ozAu | US Dollar per ounce of gold |
V | Vanadium |
Zn | zinc |
Inside Information
This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, and Regulation (EU) No. 596/2014 on Market Abuse ("EU MAR").
Qualified Person Statement
The technical information presented in this press release has been approved by James Gilbertson CGeol, VP Exploration for Amaroq Minerals and a Chartered Geologist with the Geological Society of London, and as such a Qualified Person as defined by NI 43-101.
Amaroq Minerals Ltd.
UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2023
Amaroq Minerals Ltd.
Consolidated Statements of Financial Position
(Unaudited, in Canadian Dollars)
As at March 31, | As at December 31, | |||||||||||
Notes | 2023 | 2022 | ||||||||||
$ | $ | |||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | 46,784,407 | 50,137,569 | ||||||||||
Sales tax receivable | 79,813 | 95,890 | ||||||||||
Prepaid expenses and others | 965,534 | 450,290 | ||||||||||
Total current assets | 47,829,754 | 50,683,749 | ||||||||||
Non-current assets | ||||||||||||
Deposit | 27,944 | 27,944 | ||||||||||
Escrow account for environmental monitoring | 433,223 | 427,120 | ||||||||||
Mineral properties | 3 | 85,579 | 85,579 | |||||||||
Capital assets | 4 | 13,634,093 | 13,871,669 | |||||||||
Total non-current assets | 14,180,839 | 14,412,312 | ||||||||||
TOTAL ASSETS | 62,010,593 | 65,096,061 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Trade and other payables | 1,018,351 | 1,138,961 | ||||||||||
Lease liabilities - current portion | 5 | 72,836 | 71,797 | |||||||||
Total current liabilities | 1,091,187 | 1,210,758 | ||||||||||
Non-current liabilities | ||||||||||||
Lease liabilities | 5 | 638,664 | 657,440 | |||||||||
Total non-current liabilities | 638,664 | 657,440 | ||||||||||
Total liabilities | 1,729,851 | 1,868,198 | ||||||||||
Equity | ||||||||||||
Capital stock | 131,837,145 | 131,708,387 | ||||||||||
Contributed surplus | 5,551,879 | 5,250,865 | ||||||||||
Accumulated other comprehensive loss | (36,772 | ) | (36,772 | ) | ||||||||
Deficit | (77,071,510 | ) | (73,694,617 | ) | ||||||||
Total equity | 60,280,742 | 63,227,863 | ||||||||||
TOTAL LIABILITIES AND EQUITY | 62,010,593 | 65,096,061 | ||||||||||
Subsequent events | 9 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Amaroq Minerals Ltd.
Consolidated Statements of Comprehensive Loss
(Unaudited, in Canadian Dollars)
Three months ended March 31, | |||||||||||||
Notes | 2023 | 2022 | |||||||||||
$ | $ | ||||||||||||
Expenses | |||||||||||||
Exploration and evaluation expenses | 7 | 1,181,653 | 1,010,330 | ||||||||||
General and administrative | 8 | 2,577,035 | 2,988,769 | ||||||||||
Loss on disposal of capital assets | 37,791 | - | |||||||||||
Foreign exchange loss (gain) | (197,004 | ) | 147,188 | ||||||||||
Operating loss | 3,599,475 | 4,146,287 | |||||||||||
Other expenses (income) | |||||||||||||
Interest income | (231,319 | ) | (20,325 | ) | |||||||||
Finance costs | 8,737 | 9,536 | |||||||||||
Net loss and comprehensive loss | (3,376,893 | ) | (4,135,498 | ) | |||||||||
Weighted average number of common shares outstanding - basic and diluted | 263,203,347 | 177,098,737 | |||||||||||
Basic and diluted loss per common share | (0.01 | ) | (0.02 | ) |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Amaroq Minerals Ltd.
Consolidated Statements of Changes in Equity
(Unaudited, in Canadian Dollars)
Number of common shares outstanding | Capital Stock | Contributed surplus | Accumulated other comprehensive loss | Deficit | Total Equity | |||||||
$ | $ | $ | $ | $ | ||||||||
Balance at January 1, 2022 | 177,098,737 | 88,500,205 | 3,300,723 | (36,772) | (51,795,654) | 39,968,502 | ||||||
Net loss and comprehensive loss | - | - | - | - | (4,135,498) | (4,135,498) | ||||||
Stock-based compensation | - | - | 1,443,862 | - | - | 1,443,862 | ||||||
Balance at March 31, 2022 | 177,098,737 | 88,500,205 | 4,744,585 | (36,772) | (55,931,152) | 37,276,866 | ||||||
Balance at January 1, 2023 | 263,073,022 | 131,708,387 | 5,250,865 | (36,772) | (73,694,617) | 63,227,863 | ||||||
Net loss and comprehensive loss | - | - | - | - | (3,376,893) | (3,376,893) | ||||||
Options exercised | 208,275 | 128,758 | (150,000) | - | - | (21,242) | ||||||
Stock-based compensation | 6 | - | - | 451,014 | - | - | 451,014 | |||||
Balance at March 31, 2023 | 263,281,297 | 131,837,145 | 5,551,879 | (36,772) | (77,071,510) | 60,280,742 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Amaroq Minerals Ltd.
Consolidated Statements of Cash Flows
(Unaudited, in Canadian Dollars)
Three months ended March 31, | ||||||||||||
Notes | 2023 | 2022 | ||||||||||
$ | $ | |||||||||||
Operating activities | ||||||||||||
Net loss for the period | (3,376,893 | ) | (4,135,498 | ) | ||||||||
Adjustments for: | ||||||||||||
Depreciation | 4 | 199,785 | 203,970 | |||||||||
Stock-based compensation | 6 | 451,014 | 1,443,862 | |||||||||
Loss on disposal of capital assets | 37,791 | - | ||||||||||
Other expenses | 8,737 | 9,048 | ||||||||||
Foreign exchange | (216,560 | ) | 145,361 | |||||||||
(2,896,126 | ) | (2,333,257 | ) | |||||||||
Changes in non-cash working capital items: | ||||||||||||
Sales tax receivable | 16,076 | 15,196 | ||||||||||
Prepaid expenses and others | (515,244 | ) | 106,984 | |||||||||
Trade and other payables | (127,977 | ) | (905,619 | ) | ||||||||
(627,145 | ) | (783,439 | ) | |||||||||
Cash flow used in operating activities | (3,523,271 | ) | (3,116,696 | ) | ||||||||
Investing activities | ||||||||||||
Acquisition of capital assets | 4 | - | (247,834 | ) | ||||||||
Cash flow used in investing activities | - | (247,834 | ) | |||||||||
Financing activities | ||||||||||||
Principal repayment - lease liabilities | 5 | (26,474 | ) | (5,550 | ) | |||||||
Cash flow from financing activities | (26,474 | ) | (5,550 | ) | ||||||||
Net change in cash before effects of exchange rate changes on cash during the period | (3,549,745) | (3,370,080) | ||||||||||
Effects of exchange rate changes on cash | 196,583 | (130,938 | ) | |||||||||
Net change in cash during the period | (3,353,162 | ) | (3,501,018 | ) | ||||||||
Cash, beginning of period | 50,137,569 | 27,324,459 | ||||||||||
Cash, end of period | 46,784,407 | 23,823,441 | ||||||||||
Supplemental cash flow information | ||||||||||||
Interest received | 231,319 | 20,325 | ||||||||||
Additions in capital assets included in trade and other payables | - | 48,290 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Amaroq Minerals Ltd.
Condensed Notes to the interim Consolidated Financial Statements
Three months ended March 31, 2023 and 2022
(Unaudited, in Canadian Dollars)
1. NATURE OF OPERATIONS, BASIS OF PRESENTATION
Amaroq Minerals Ltd. (the "Corporation") was incorporated on February 22, 2017 under the Canada Business Corporations Act. The Corporation's head office is situated at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario,M5X 1A4, Canada.The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. The Corporation's financial year ends on December 31. Since July 2017, the Corporation's shares are listed on the TSX Venture Exchange (the "TSX-V"), since July 2020, the Corporation's shares are also listed on the AIM market of the London Stock Exchange ("AIM") and from November 1, 2022, on Nasdaq First North Growth Market Iceland ("Nasdaq") under the AMRQ ticker.
These unaudited condensed interim consolidated financial statements for the three months ended March 31, 2023 ("Financial Statements") were approved by the Board of Directors on May 25, 2023.
1.1 Basis of presentation and consolidation
The Financial Statements include the accounts of the Corporation and those of its subsidiaries Nalunaq A/S and Gardaq A/S, corporations incorporated under the Greenland Public Companies Act , owned at
The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") including International Accounting Standard ("IAS") 34, Interim Financial Reporting. The Financial Statements have been prepared under the historical cost convention.
The Financial Statements should be read in conjunction with the annual financial statements for the year ended December 31, 2022 which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in these Financial Statements are consistent with those of the previous financial year ended December 31, 2022.
2. CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS
The preparation of the Financial Statements requires Management to make judgments and form assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. On an ongoing basis, Management evaluates its judgments in relation to assets, liabilities and expenses. Management uses past experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments. Actual outcomes may differ from these estimates under different assumptions and conditions.
In preparing the Financial Statements, the significant judgements made by Management in applying the Corporation accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Corporation's audited annual financial statements for the year ended December 31, 2022. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
3. MINERAL PROPERTIES
As at December 31, 2022 | Additions | As at March 31, 2023 | ||||||||||
$ | $ | $ | ||||||||||
Nalunaq - Au | 1 | - | 1 | |||||||||
Tartoq - Au | 18,431 | - | 18,431 | |||||||||
Vagar - Au | 11,103 | - | 11,103 | |||||||||
Nuna Nutaaq - Au | 6,076 | - | 6,076 | |||||||||
Anoritooq - Au | 6,389 | - | 6,389 | |||||||||
Siku - Au | 6,821 | - | 6,821 | |||||||||
Naalagaaffiup Portornga - Strategic Minerals | 6,334 | - | 6,334 | |||||||||
Saarloq - Strategic Minerals | 7,348 | - | 7,348 | |||||||||
Sava - Strategic Minerals | 6,562 | - | 6,562 | |||||||||
Kobberminebugt - Strategic Minerals | 6,840 | - | 6,840 | |||||||||
Stendalen - Strategic Minerals | 4,837 | - | 4,837 | |||||||||
North Sava - Strategic Minerals | 4,837 | - | 4,837 | |||||||||
Total mineral properties | 85,579 | - | 85,579 |
As at December 31, 2021 | Additions | As at December 31, 2022 | ||||||||||
$ | $ | $ | ||||||||||
Nalunaq - Au | 1 | - | 1 | |||||||||
Tartoq - Au | 18,431 | - | 18,431 | |||||||||
Vagar - Au | 11,103 | - | 11,103 | |||||||||
Nuna Nutaaq - Au | 6,076 | - | 6,076 | |||||||||
Anoritooq - Au | 6,389 | - | 6,389 | |||||||||
Siku - Au | - | 6,821 | 6,821 | |||||||||
Naalagaaffiup Portornga - Strategic Minerals | 6,334 | - | 6,334 | |||||||||
Saarloq - Strategic Minerals | 7,348 | - | 7,348 | |||||||||
Sava - Strategic Minerals | 6,562 | - | 6,562 | |||||||||
Kobberminebugt - Strategic Minerals | - | 6,840 | 6,840 | |||||||||
Stendalen - Strategic Minerals | - | 4,837 | 4,837 | |||||||||
North Sava - Strategic Minerals | - | 4,837 | 4,837 | |||||||||
Total mineral properties | 62,244 | 23,335 | 85,579 |
4. CAPITAL ASSETS
Field equipment and infrastructure | Vehicles and rolling stock | Equipment (including software) | Construction In Progress | Right-of- use assets | Total | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Three months ended March 31, 2023 | ||||||||||||||||||||||||
Opening net book value | 1,735,752 | 3,742,384 | 216,385 | 7,522,085 | 655,063 | 13,871,669 | ||||||||||||||||||
Disposals | - | - | (37,791 | ) | - | - | (37,791 | ) | ||||||||||||||||
Depreciation | (49,594 | ) | (107,571 | ) | (22,843 | ) | - | (19,777 | ) | (199,785 | ) | |||||||||||||
Closing net book value | 1,686,158 | 3,634,813 | 155,751 | 7,522,085 | 635,286 | 13,634,093 |
4. CAPITAL ASSETS (CONT'D)
Field equipment and infrastructure | Vehicles and rolling stock | Equipment (including software) | Construction In Progress | Right-of- use assets | Total | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
As at March31, 2023 | ||||||||||||||||||||||||
Cost | 2,351,041 | 4,466,971 | 232,231 | 7,522,085 | 735,270 | 15,307,598 | ||||||||||||||||||
Accumulated depreciation | (664,883) | (832,158) | (76,480) | - | (99,984) | (1,673,505) | ||||||||||||||||||
Closing net book value | 1,686,158 | 3,634,813 | 155,751 | 7,522,085 | 635,286 | 13,634,093 |
Depreciation of capital assets related to exploration and evaluation properties is being recorded in exploration and evaluation expenses in the consolidated statement of comprehensive loss, under depreciation. Depreciation of
As of March 31, 2023, the amount of
5. LEASE LIABILITIES
As at | ||||
$ | ||||
Balance beginning | 729,237 | |||
Principal repayment | (17,737) | |||
Balance ending | 711,500 | |||
Non-current portion - lease liabilities | (638,664) | |||
Current portion - lease liabilities | 72,836 |
The Corporation has one lease for its office. In October 2020, the Corporation started the lease for five years and five months including five free rent months during this period. The monthly rent is
6. STOCK-BASED COMPENSATION
6.1 Stock options
An incentive stock option plan (the "Plan") was approved initially in 2017 and renewed by shareholders on June 16, 2022. The Plan is a "rolling" plan whereby a maximum of
Changes in stock options are as follows:
Three months ended March 31, 2023 | ||||||||
Number of options | Weighted average exercise price | |||||||
$ | ||||||||
Balance, beginning | 10,717,395 | 0.57 | ||||||
Exercised | (600,000) | 0.43 | ||||||
Balance, end | 10,117,395 | 0.58 | ||||||
Balance, end exercisable | 10,084,062 | 0.58 |
Stock options outstanding and exercisable as at March 31, 2023 are as follows:
Number of options outstanding | Number of options exercisable | Exercise price | Expiry date |
$ | |||
910,000 | 910,000 | 0.45 | August 22, 2023 |
1,670,000 | 1,670,000 | 0.38 | December 31, 2025 |
100,000 | 66,667 | 0.50 | September 13, 2026 |
1,495,000 | 1,495,000 | 0.70 | December 31, 2026 |
3,600,000 | 3,600,000 | 0.60 | January 17, 2027 |
73,333 | 73,333 | 0.75 | April 20, 2027 |
39,062 | 39,062 | 0.64 | July 14, 2027 |
1,330,000 | 1,330,000 | 0.70 | December 30, 2027 |
900,000 | 900,000 | 0.59 | December 31, 2027 |
10,117,395 | 10,084,062 |
6.2 Restricted Share Unit
Conditional awards under the RSU
6.2.1 Description
Conditional awards were made in 2022 that give participants the opportunity to earn restricted share unit awards under the Corporation's Restricted Share Unit Plan ("RSU Plan")subject to the generation of shareholder value over a four year performance period.
6. STOCK-BASED COMPENSATION (CONT'D)
The awards are designed to align the interests of the Corporation's employees and shareholders, by incentivizing the delivery of exceptional shareholder returns over the long-term. Participants receive a
The awards comprise three tranches, based on performance measured from January 1, 2022, to the following three measurement dates:
- First Measurement Date: December 31, 2023;
- Second Measurement Date: December 31, 2024; and
- Third Measurement Date: December 31, 2025.
Restricted share unit awards granted under the RSU Plan as a result of achievement of the total shareholder return performance conditions are subject to continued service, with vesting as follows:
- Awards granted after the First Measurement Date -
50% vest after one year,50% vest after three years. - Awards granted after the Second Measurement Date -
50% vest after one year,50% vest after two years. - RSUs granted after the Third Measurement Date -
100% vest after one year.
The maximum term of the awards is therefore four years from grant.
The Corporation's starting market capitalization is based on a fixed share price of
- After December 31, 2023,
100% of the pool value at the First Measurement Date is delivered as restricted share units under the RSU Plan, subject to the maximum number of shares that can be allotted not being exceeded. - After December 31, 2024, the pool value at the Second Measurement Date is reduced by the pool value from the First Measurement Date (increased in line with share price movements between the First and Second Measurement Dates).
100% of the remaining pool value, if any, is delivered as restricted share units under the RSU Plan. - After December 31, 2025, the pool value at the Third Measurement Date is reduced by the pool value from the Second Measurement Date (increased in line with share price movements between the Second and Third Measurement Dates), and then further reduced by the pool value from the First Measurement Date (increased in line with share price movements between the First Measurement Date and the Third Measurement Date).
100% of the remaining pool value, if any, is delivered as restricted share units under the RSU Plan.
6.2.2 Valuation
The fair value of the award granted in December 2022 is
7. EXPLORATION AND EVALUATION EXPENSES
Three months ended March 31, | |||||||||
2023 | 2022 | ||||||||
$ | $ | ||||||||
Geology | 113,105 | 154,421 | |||||||
Drilling | - | 40,462 | |||||||
Analysis | - | 141,382 | |||||||
Transport | 304,200 | 89,139 | |||||||
Helicopter charter | 79,868 | - | |||||||
Logistic support | - | 11,752 | |||||||
Insurance | - | 13,200 | |||||||
Maintenance infrastructure | 294,119 | 370,247 | |||||||
Supplies and equipment | 170,558 | - | |||||||
Project Engineering | 55,792 | - | |||||||
Government fees | - | 7,894 | |||||||
Exploration and evaluation expenses before depreciation | 1,017,642 | 828,497 | |||||||
Depreciation | 164,011 | 181,833 | |||||||
Exploration and evaluation expenses | 1,181,653 | 1,010,330 |
8. GENERAL AND ADMINISTRATION
Three months ended March31, | |||||||||
2023 | 2022 | ||||||||
$ | $ | ||||||||
Salaries and benefits | 617,589 | 639,999 | |||||||
Director's fees | 157,000 | 157,000 | |||||||
Professional fees | 611,878 | 275,708 | |||||||
Marketing and investor relations | 141,968 | 168,867 | |||||||
Insurance | 67,602 | 101,019 | |||||||
Travel and other expenses | 301,269 | 145,913 | |||||||
Regulatory fees | 192,941 | 34,264 | |||||||
General and administration before following elements | 2,090,247 | 1,522,770 | |||||||
Stock-based compensation | 451,014 | 1,443,862 | |||||||
Depreciation | 35,774 | 22,137 | |||||||
General and administration | 2,577,035 | 2,988,769 |
9. SUBSEQUENT EVENTS
9.1 ACAM LP Joint Venture
On June 10, 2022, the Corporation announced that it had signed a non-binding head of terms with ACAM to establish a special purpose vehicle (the "SPV") and created a joint venture (the "JV") for the exploration and development of its Strategic Mineral assets for a combined contribution of
9. SUBSEQUENT EVENTS (CONT'D)
The final documentation of the deal was executed on October 19, 2022. Written approval by the Government of Greenland pursuant to section 88(1) of the Mineral Resources Act for the transfer of the Initial JV Company Licences by Nalunaq A/S to the Gardaq A/S has been received and the resolution of the final administrative matters, to satisfy the remaining conditions needed to complete the ACAM Transaction have been completed on April 13, 2023.
9.2 US
On March 28, 2023, the Corporation has signed non-binding term sheets for a US
- US
$18.5 million Senior Debt Revolving Credit Facility ("RCF") with Icelandic banks Landsbanki and Fossar Investment Bank, with a two-year term and interest at the Secured Overnight Financing Rate (SOFR) plus 950bps. The RCF has a2% arrangement fee and a0.4% commitment fee on unutilized amounts. - Up to US
$21 million Syndicated Convertible Notes ("Convertible Note") with an affiliate of ACAM LP, JLE Property Ltd, Livermore Partners and First Pecos with a four-year term, payment-in-kind interest of5% per annum and a conversion price of 42 pence/share. - ACAM LP's main investors are the majority ultimate beneficial owners of GCAM LP.
- US
$10 million , two-year Cost Overrun loan by JLE Property Limited on the same terms as the Convertible Note, plus a2.5% commitment fee on unutilized amounts, to insure against any potential unexpected cost increases.
The Financing, together with existing capital, is expected to enable the transition from bulk sample stage to trial mining, processing and production of gold doré on site at Nalunaq in a staged approach, ahead of full-scale production. The Corporation will finalize the Financing's legally binding documentation and expects to be in a position to sign binding documents within the next three months.
Alongside the Financing, the Corporation intends to explore the possibility of a main market listing on Iceland's Nasdaq Exchange and will update on progress and timing in due course.
SOURCE: Amaroq Minerals Ltd.
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