GOLDCORP INC. Certain statements in this Management's Discussion and Analysis ("MD&A"), other
than purely historical information, including estimates, projections, statements
relating to our business plans, objectives and expected operating results, and
the assumptions upon which those statements are based, are "forward-looking
statements". Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "would," "expect," "intend,"
"could," "estimate," "should," "anticipate," or "believe," and similar
expressions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. We undertake
no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events, or otherwise, except as
may be required under applicable law. Readers should carefully review the risk
factors and related notes included under Item 1A of our Annual Report on Form
10-K for the year ended
The following MD&A is intended to help readers understand the results of our operation and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Interim Unaudited Financial Statements and the accompanying Notes to Interim Unaudited Financial Statements under Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Unless otherwise indicated or unless the context otherwise requires, all
references in this document to "we," "us," "our," the "Company," and similar
expressions refer to
Company History and Recent Events
General Corporate Overview
The Company is an exploration stage gold company focused on building a long-term business that delivers stakeholder value through developing the Company's Bullfrog and Reward gold projects and pursuing accretive merger and acquisition opportunities. We are focused on exploration and advancement of gold exploration and potential development projects, which may lead to gold production or strategic transactions such as joint venture arrangements with other mining companies or sales of assets for cash and/or other consideration. At present, our properties are in the exploration stage and we do not mine, produce or sell any mineral products and we do not currently generate cash flows from mining operations.
The Company is led by a management team and board of directors with a proven track record of success in financing, exploring and developing mining assets and delivering shareholder value.
On
The CR Interests were acquired for the following consideration:
?
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? Issuance of 7,800,000 shares of common stock of the Company ("Common Shares")
on the closing date ("Initial Payment Shares") with an estimated fair value of
exchange rate of
? Cash of
equal to
exchange rate for the conversion of Canadian dollars to
(the "Currency Exchange Rate") on the business day immediately preceding the
closing date) of
paid
?
On
Results of Operations
Three Months Ended
Three Months Ended
3/31/23 3/31/22
Operating expenses
General and administrative $ 1,315,572 $ 1,067,879
Lease expense 0 0
Exploration, evaluation and project expense 724,270 338,639
Accretion expense 27,907 7,099
Depreciation expense 11,014 11,014
Total operating expenses 2,078,763 1,424,631
Net operating loss (2,078,763 ) (1,424,631 )
Revaluation of warrant liability 8,223,387 (206,193 )
Interest expense (626,715 ) 0
Foreign currency exchange gain (loss) (71,951 ) 209,611
Net income (loss) $ 5,445,958 ($ 1,421,213 )
For the three months ending
Three months ending 3/31/2023 3/31/2022 Variance Accounting fees$ 107,000 $ 89,000 $ 18,000 Legal and other professional fees 352,000 276,000 76,000 Marketing expense 8,000 14,000 (6,000 ) Payroll 216,000 150,000 66,000 Corporate expenses & rent 77,000 19,000 58,000 Share based compensation 473,000 439,000 34,000 Insurance 38,000 42,000 (4,000 ) Stock exchange fees 21,000 39,000 (18,000 ) Other general expenses 24,000 0 24,000 Total$ 1,316,000 $ 1,068,000 $ 248,000
? Accounting fees increase resulted from additional consulting fees needed for
required regulatory filings and compliance in 2023.
? Legal fees and professional fees increased due to costs associated with the
? Marketing expenses were lower as 2022 had additional amounts that were used for
company and shareholder awareness projects.
? The payroll and corporate expenses result from the Company having an agreement
to share office space, equipment, personnel, consultants and various
administrative services for the Company's head office located in
periods due to increased personnel and consultants used in the quarter.
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? The Company granted options to officers, directors and employees of the Company
pursuant to the terms of the Company's Stock Option Plan. In
options were repriced resulting in an increase in share based compensation.
? There were
10Q that were reclassified to payroll for this presentation.
For the three months ending
Three months ending 3/31/2023 3/31/2022 Variance Drilling$ 0 $ 1,000 $ (1,000 ) Consultants/Contractors 234,000 120,000 114,000 Supplies and equipment 68,000 57,000 11,000 Overhead and payroll 373,000 14,000 359,000 Permits and fees 21,000 7,000 14,000 Other 28,000 140,000 (112,000 ) Total$ 724,000 $ 339,000 $ 385,000
In the first quarter of 2023, the Company continued with test work on the metallurgical drill samples, hydrogeologic modelling and geochemical characterization of the Bullfrog deposit. Preparation of technical reports for the CR Reward and Bullfrog projects continued. In addition, core drilling continued, focused on completing necessary geotechnical and hydro holes in support of permitting efforts.
The revaluation of the warrant liability is based on the following outstanding warrants: Issue Date Expiration Date Outstanding Warrants Exercise Price October 2020 October 2024 18,125,001C$1.80 March 2021 March 2024 3,777,784C$2.80 January 2023 January 2026 3,362,573C$2.30
There are an additional 9,436,257 warrants outstanding which are not warrant liabilities and therefore have no effect on the revaluation of warrant liability.
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
In connection with the closing of the Offering, the Company entered into a
Warrant Indenture dated
As compensation in connection to the Offering, the Company paid the Underwriters
cash compensation equal to 5.0% of the aggregate gross proceeds of the Offering
and issued to the Underwriters 336,257 common stock purchase warrants (the
"Compensation Warrants"). Each Compensation Warrant is exercisable for one share
of common stock (each, a "Compensation Warrant Share") for a period of 12 months
following the closing of the Offering at a price of
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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 financing 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 timeframe, 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
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
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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.
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