The following discussion and analysis should be read in conjunction with our
consolidated financial statements for the two years ended
Results of Operations
Twelve Months Ended
Twelve Months Ended 12/31/22 12/31/21 Operating expenses General and administrative$ 5,087,128 $ 4,664,565 Lease expense 21,000 16,000 Exploration, evaluation and project expense 5,739,534 7,909,333 Accretion expense 77,941 24,749 Depreciation expense 44,057 44,057 Total operating expenses 10,969,660 12,658,704 Net operating loss (10,969,660 ) (12,658,704 ) Revaluation of warrant liability (7,852,349 ) 15,857,500 Interest expense (721,924 ) 0 Foreign currency exchange gain (loss) (176,279 ) 253,236 Net income (loss)$ (19,720,212 ) $ 3,452,032 33
For the twelve months ending
Twelve months ending 12/31/2022 12/31/2021 Variance Accounting fees$ 309,000 $ 257,000 $ 52,000 Legal and other professional fees 1,397,000 500,000 897,000 Marketing expense 50,000 87,000 (37,000 ) Payroll 677,000 1,548,000 (871,000 ) Corporate expenses & rent 176,000 273,000 (97,000 ) Share based compensation 2,164,000 1,560,000 604,000 Insurance 162,000 121,000 41,000 Stock exchange fees 132,000 239,000 (107,000 ) Other general expenses 20,000 80,000 (60,000 ) Total$ 5,087,000 $ 4,665,000 $ 422,000
? Accounting fees increase resulted from higher costs for review procedures along
with additional consulting fees needed for required regulatory filings and tax
compliance. Management believes these increased costs will continue in future
fiscal periods.
? Legal fees and professional fees increased due to a legal agreement that was
finalized in
in franchise tax fees and other expenses. Management does believe that legal
costs will be higher than prior periods moving forward due to the Company's
increased compliance costs and the implementation of regulatory changes in
relation to property disclosure requirements in our filings with the
? Marketing expense was lower as 2021 had additional amounts that were used for
company and shareholder awareness projects.
? The majority of payroll and corporate expenses was from the Company's agreement
to share office space, equipment, personnel, consultants and various
administrative services for the Company's head office located in
personnel and consultants added in the prior six months that will be retained
moving forward.
? The Company granted options to officers, directors and employees of the Company
pursuant to the terms of the Company's Stock Option Plan; 4,041,667 in the
first quarter 2021 (adjusted for 1,783,333 canceled options); 500,000 in the
third quarter 2021; 350,000 in the second quarter 2022; and 100,000 in the
third quarter 2022.
? Stock exchange fee variance is a result of the initial listing fee paid to the
TSX in
For the twelve months ending
Twelve months ending
$ 1,572,000 $ 3,992,000 $ (2,420,000 ) Consultants/Contractors 2,607,000 1,670,000 937,000 Supplies and equipment 382,000 743,000 (361,000 ) Assay 84,000 543,000 (459,000 ) Water haulage 0 389,000 (389,000 ) Overhead and payroll 778,000 298,000 480,000 Permits and fees 291,000 268,000 23,000 Other 26,000 6,000 20,000 Total$ 5,740,000 $ 7,909,000 $ (2,169,000 )
In the fourth quarter of 2022, the Company continued with test work on metallurgical drill core samples from the Bullfrog deposit. Preparation of a technical report for the Reward project continued.
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The revaluation of the warrant liability is based on the following warrants issued:
Issue Date Expiration Date Warrants Issued Exercise Price October 2020 October 2024 18,333,333C$1.80 March 2021 March 2024 3,777,784C$2.80
Liquidity and Capital Resources
The Company has no revenue generating operations from which it can internally generate funds. To date, the Company's ongoing operations have been financed by the sale of its equity securities by way of public offerings, private placements and the exercise of incentive stock options and share purchase warrants. The Company believes that it will be able to secure additional private placements and public financings in the future, although it cannot predict the size or pricing of any such financings. This situation is unlikely to change until such time as the Company can develop a bankable feasibility study on one of its projects.
On
On
Liquidity
As of
As of
The Company expects that it will operate at a loss for the foreseeable future and believes the current cash and cash equivalents and working capital will be sufficient for it to maintain its currently held properties, fund its planned exploration, and fund its currently anticipated general and administrative costs for at least the next 12 months from the date of this report. However, the Company does expect that it will be required to raise additional funds through public or private equity financings in the future in order to continue in business in the future past the immediate 12-month period. Should such financing not be available in that time-frame, the Company will be required to reduce its activities and will not be able to carry out all of its presently planned exploration and, if warranted, development activities on its currently anticipated scheduling.
Capital Management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development and exploration of its mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital to an acceptable risk.
As of
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Contractual obligations and commitments
The Company's contractual obligations and commitments as of
<1 year 1 - 3 years 4 - 5 years >5 years Total Leases$ 116,557 $ 150,594 $ 50,000 $ 650,000 $ 967,151 Capital Expenditure 30,000 - - - 30,000$ 146,557 $ 150,594 $ 50,000 $ 650,000 $ 997,151
Off Balance Sheet Arrangements
We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.
Critical Accounting Policies and Use of Estimates
Stock based compensation is measured at grant date, based on the fair value of
the award, and is recognized as an expense over the employee's requisite service
period. We estimate the fair value of each stock option as of the date of grant
using the Black-Scholes pricing model. The Company determines the expected life
based on historical experience with similar awards, giving consideration to the
contractual terms, vesting schedules and post-vesting forfeitures. The Company
uses the risk-free interest rate on the implied yield currently available on
Mineral property exploration costs are expensed as incurred until such time as
economic reserves are quantified. To date, the Company has not established any
proven or probable reserves on its mineral properties. Costs of lease,
exploration, carrying and retaining unproven mineral lease properties are
expensed as incurred. The Company has chosen to expense all mineral exploration
costs as incurred given that it is still in the exploration stage. Once the
Company has identified proven and probable reserves in its investigation of its
properties and upon development of a plan for operating a mine, it would enter
the development stage and capitalize future costs until production is
established. When a property reaches the production stage, the related
capitalized costs will be amortized over the estimated life of the
probable-proven reserves. When the Company has capitalized mineral properties,
these properties will be periodically assessed for impairment of value and any
diminution in value. To date, the Company has not established the commercial
feasibility of any exploration prospects; therefore, all exploration costs are
being expensed. Costs of property acquisitions are being capitalized, and a
required payment of
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