GETTY COPPER INC.
UNAUDITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
MARCH 31, 2012 and 2011
(Stated in Canadian dollars)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.
Judgements made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in Notes 3(b), 3(g), 3(h), 3(i), 3(j) and 3(k).
All amounts are presented in Canadian dollars, unless otherwise indicated, as a significant amount of the Company’s business is conducted in this currency
Adoption of new and revised standards and interpretations
The IASB issued a number of new and revised International Accounting Standards, International Financial Reporting Standards, amendments and related interpretations which are effective for the Company’s financial year beginning on or after January 1, 2011. For the purpose of preparing and presenting the financial statements for the relevant periods, the Company has consistently adopted all these new standards.
At the date of authorization of these interim financial statements, the IASB and IFRIC have issued the following new and revised Standards and Interpretations which are not yet effective for the relevant reporting periods.
IAS 1 Presentation of Financial Statements
In June 2011, the IASB issued amendments to IAS 1 Presentation of Financial Statements (IAS 1), which are effective for annual periods beginning on or after January 1, 2012, with earlier application permitted. The amendments may result in changes in the way other comprehensive (“OCI”) is presented in the statement of operations. Management is currently evaluating the potential impact that the adoption of IAS 1 will have on the presentation of Company’s financial statements.
IAS 12 Income Taxes
The IASB issued limited scope amendments to IAS12 Income Taxes, which are effective for annual periods beginning on or after January 1, 2012, with earlier application permitted.
IAS 32 Financial Instruments: Presentation
In December 2011, the IASB issued amendments to IAS 32 Financial Instruments: Presentation (IAS 32), which are effective for annual periods beginning on or after January 1, 2014, with earlier adoption permitted. The amendment clarifies that an entity that has a legally enforceable right to offset financial assets and financial liabilities if that right is not contingent on a future event and it is enforceable, both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all counterparties. Management is currently evaluating the potential impact that the adoption of IAS 32 will have on the presentation of the Company’s financial statements.
. . . 8
GETTY COPPER INC.
UNAUDITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
MARCH 31, 2012 and 2011
(Stated in Canadian dollars)
Basis of Presentation (Continued):
IFRS 7 Financial Instruments: Disclosures
In October 2010, the IASB issued amendments to IFRS 7 regarding Disclosures – Transfers of Financial Assets, which are effective for annual periods beginning on or after July 1, 2011, with earlier application permitted. The amendments comprise additional disclosures on financial asset transfer transactions. These amendments will not have an impact on the results of operations or financial position of the Company as they are disclosure requirements only.
IFRS 9 Financial Instruments
In November 2009, the IASB issued, and subsequently revised in October 2010, IFRS 9 Financial Instruments (IFRS 9) as a first phase in its ongoing project to replace IAS 39. IFRS 9, which is to be applied retrospectively, is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted. In August 2011, the IASB issued an exposure draft proposing to change this effective date to January 1, 2015 (a final decision is still pending). IFRS 9 provides new requirements as to how an entity should classify and measure financial assets and liabilities that are in the scope of IAS 39. The standard requires all financial assets to be classified on the basis of the entity’s business model for managing such financial assets and the contractual cash flow characteristics of the financial assets.
IFRS 13 Fair Value Measurement
In May 2011, the IASB issued IFRS 13 Fair Value Measurement (IFRS 13) which is effective for annual periods beginning on or after January 1, 2013, with earlier adoption permitted. IFRS 13 establishes a single source of guidance for fair value measurements when fair value is required or permitted by IFRS and provides for enhanced disclosures when fair value is applied. Management is currently evaluating the potential impact that the adoption of IFRS 13 will have on the Company’s financial statements.
| |
| 2. | Significant Accounting Policies: |
The significant accounting policies used in the preparation of these financial statements are described below:
| | |
| a) | Critical accounting policies, key judgements and estimates |
The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual outcomes could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying accounting policies
The following are the critical judgments, apart from those involving estimations (see note below), that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements.
. . . 9
GETTY COPPER INC.
UNAUDITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
MARCH 31, 2012 and 2011
(Stated in Canadian dollars)
Significant Accounting Policies (Continued):
Impairments
Exploration and evaluation assets, and property, building and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable. If an asset’s recoverable amount is less than the asset’s carrying amount, an impairment loss is recognized. Future cash flow estimates which are used to calculate the asset’s fair value are based on expectations about future operations primarily comprising estimates about production and sales volumes, commodity prices, reserves, operating, rehabilitation and restoration costs and capital expenditures. Changes in such estimates could impact recoverable values of these assets. Estimates are reviewed regularly by management. Refer to notes 6 and 7.
Key sources of measurement uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Depreciation of mineral property, building and equipment
Property, plant and equipment are depreciated using the declining balance method which approximates the useful life and reserve estimate of the asset. Depreciation and depletion of property, building and equipment are dependent upon estimates of useful life and reserve, both of which are determined by management. These estimates impact the useful lives of assets depreciated on a declining balance basis and therefore the annual depreciation charge to income.
Doubtful accounts receivable
Management regularly reviews its accounts receivable amounts for items that might not be collectible.
They will provide an allowance for accounts which may not be collectible based on their estimate of collectability.
Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event; it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision, is the best estimate of the consideration required to settle the related liability, including any related interest charges, taking into account the risks and uncertainties surrounding the obligation. The Company assesses its liabilities and contingencies based upon the best information available, relevant tax laws and other appropriate requirements. Refer to note 9.
Income tax expense represents the sum of tax currently payable and changes to deferred tax assets and liabilities as a result of operations during the period.
Current income taxes
Current income tax assets and liabilities for the current and prior periods 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 by the date of the statement of financial position.
. . . 10
GETTY COPPER INC.
UNAUDITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
MARCH 31, 2012 and 2011
(Stated in Canadian dollars)
| |
| 3. | Significant Accounting Policies (Continued): |
The classification is determined at initial recognition and depends on the nature and purpose of the financial asset.
Financial assets are classified as FVTPL when the financial asset is held-for-trading or is designated as FVTPL. Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through earnings. The Company has classified cash and cash equivalents as held-for-trading
Financial assets classified as loans and receivables and held-to-maturity are measured at amortized cost using the effective interest method. The Company’s receivables are classified as loans and receivables. The Company has not designated any financial assets as held-to-maturity.
Financial assets classified as available-for-sale are measured at fair value with unrealized gains and losses recognized in other comprehensive income except for losses in value that are considered other than temporary. The Company has not classified any financial assets as available-for-sale.
Transactions costs associated with FVTPL financial assets are expensed as incurred, while transaction costs associated with all other financial assets are included in the initial carrying amount of the asset.
Effective interest method
The effective interest method calculates the amortized cost of a financial asset and allocates interest income over the corresponding period. The effective interest rate is the rate that discounts estimated future cash receipts over the expected life of the financial asset or, where appropriate, a shorter period. Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.
Impairment of financial assets
The Company assesses at each date of the statement of financial position whether a financial asset is impaired. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.
Assets carried at amortized cost
If there is objective evidence that an impairment loss on assets carried at amortized cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is then reduced by the amount of the impairment. The amount of the loss is recognized in income.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed to the extent that the carrying value of the asset does not exceed what the amortized cost would have been had the impairment not been recognized. Any subsequent reversal of an impairment loss is recognized in income.
In relation to receivables, a provision for impairment is made and an impairment loss is recognized in income when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the Company will not be able to collect all of the amounts due under the original terms of the invoice. The carrying amount of the receivable is reduced through use of an allowance account. Impaired debts
. . . 12
GETTY COPPER INC.
UNAUDITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
MARCH 31, 2012 and 2011
(Stated in Canadian dollars)
are written off against the allowance account when they are assessed as uncollectible. Changes in the carrying amount of the allowance account are recognized in profit or loss.
| |
| 3. | Significant Accounting Policies (Continued): |
Available-for-sale
If an available for sale asset is impaired, an amount comprising the difference between its cost and its current fair value, less any impairment loss previously recognized in income, is transferred from equity to income. Reversals in respect of equity instruments classified as available for sale are not recognized in income.
Derecognition of Financial Assets
A financial asset is derecognized when:
All financial liabilities are initially recorded at fair value and designated upon inception as FVTPL or other financial liabilities. Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
The Company has classified accounts payable and accrued liabilities, indemnity and mortgage payable as other financial liabilities.
Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Fair value changes on financial liabilities classified as FVTPL are recognized through the statement of operations before other comprehensive income.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.
| | |
| f) | Cash and cash equivalents |
Cash consists of funds held in the Company's chequing and savings account that do not have any restrictions placed on them. Cash equivalents include highly liquid investments having terms to maturity of 90 days or less when acquired.
. . . 13
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 3. | Significant Accounting Policies (Continued): |
| |
| g) | Property, building and equipment |
Property, building and equipment are recorded at cost less accumulated depreciation and amortization and any accumulated impairment write-downs.
Depreciation is charged to the statement of operations so as to write-off the cost of assets less their residual values using the declining balance basis at the following annual rates:
| | | |
| Automotive equipment | 30% | |
| Building | 4% | |
| Computer equipment | 45% | |
| Computer software | 100% | |
| Office equipment | 20% | |
| Portable buildings | 30% | |
When parts of an item of property, building and equipment have different useful lives, they are accounted for as separate items (major components) of property, building and equipment.
The Company assesses at each reporting period date, whether there is an indication that property, building and equipment may be impaired. If any indication of impairment exists, the Company performs an impairment test to determine whether an impairment loss is required to be recognized. Impairment tests are performed in accordance with the steps discussed in the accounting policy note entitled “Impairment of non-financial assets”.
| h) | Exploration and evaluation assets |
All direct costs relating to the exploration and evaluation assets that meet the generally accepted criteria for deferral are capitalized as incurred. These criteria include having a clearly defined process with identifiable associated costs, establishment of technical feasibility, an intention to process and sell the recovered minerals to a clearly defined market, and adequate resources exist or are expected to be available to complete the project to commercial production. Acquisition, option payments and direct exploration costs are deferred until the properties are placed into production, sold or abandoned or management has determined there to be impairment, at which time these deferred costs will either be amortized on a unit-of-production basis, charged to operations, if sold, or written-off.
Exploration and evaluation assets are recorded at cost less accumulated impairment losses. Direct costs include any cash consideration and fair market value of shares issued, if any, on the acquisition of mineral property interest. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are recorded in the accounts when payments are made.
Carrying values of exploration and evaluation assets as reported on the statement of financial position do not necessarily reflect the actual present or future value. Recovery of carrying values is dependent upon the future commercial success of operations.
Upon establishment of commercial production, carrying values of mineral interests are amortized over the estimated life of the mines, using the unit-of-production basis, based upon the current estimated recoverable reserves and resources.
The Company reviews capitalized costs on its property interests at each statement of financial position date for impairment in value based upon current exploration results and upon management’s assessment of the future profitability of profitable revenues from the property or from the sale of the property. Management’s assessment of the property’s estimated current market value may also be based upon a review of other property transactions that have occurred in the same geographical area as that of the property under review.
. . . 14
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 3. | Significant Accounting Policies (Continued): |
Administrative costs are expensed as incurred.
| i) | Impairment of non-financial assets |
At each date of the statement of financial position, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is an indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the assets belong.
Recoverable amount is the higher of fair value less costs to sell and 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 current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset, or cash-generating unit, is estimated to be less than its carrying amount, the carrying amount of the asset, or cash-generating unit, is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset, or cash-generating unit, is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset, or cash-generating unit, in prior years.
| j) | Asset retirement and environmental provisions |
The Company recognizes liabilities for statutory, contractual, constructive or legal obligations, including those associated with the reclamation of exploration and evaluation assets and property, building and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. Initially, a liability for an asset retirement and environmental provision is recognized as its fair value in the period in which it is incurred. Upon initial recognition of the liability, the corresponding asset retirement and environmental provision is added to the carrying amount of the related asset and the cost is amortized in a manner consistent with the depreciation of the related asset. Following the initial recognition of the asset retirement and environmental provision, the carrying amount of the liability is increased for the passage of time and adjusted for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation and accreted over time to its present value. The accretion charge is included in the statement of income within amortization expense. At March 31, 2012 and 2011, the Company cannot reasonably estimate the fair value of the resource properties site restoration costs, if any.
Provisions are recognized when the Company has a present legal or constructive obligation that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risk specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.
. . . 15
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 3. | Significant Accounting Policies (Continued): |
| |
| l) | Related Party Transactions |
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount. Refer to Note 17.
| m) | Share-based compensation |
The Company grants stock options and warrants to buy common shares of the Company to Directors, officers, employees and service providers. The Directors, officers, employees receive a portion of their remuneration in the form of share-based payment transactions, whereby employees and service providers render services as consideration for equity transactions (“equity-settled transactions”).
The Board of Directors grants such options and warrants for periods up to five years, with vesting periods determined at its sole discretion and at prices equal to or greater than the closing market price on the day preceding the date the options were granted.
The Company recognizes the fair value of share-based compensation over the vesting period of the options and warrants. The fair value of the options and warrants granted is calculated using the Black-Scholes option pricing model that takes into account the exercise price, expected life of the option, expected volatility of the underlying shares, expected dividend yield, and the risk free interest rate for the term of the option. The fair value excludes the effect of non-market based vesting conditions.
| n) | Equity-settled transactions |
The costs of equity-settled transactions with employees and service providers are measured by reference to the fair value at the date on which they are granted.
The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to income for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in contributed surplus.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied. Share options granted to employees and service providers are treated as forfeited when such employees cease employment before the end of the vesting period. Such forfeitures result in a reversal of the expense previously recognized, with a corresponding adjustment to the contributed surplus.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement.
. . . 16
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 3. | Significant Accounting Policies (Continued): |
| | |
| o) | Exploration tax credits |
Exploration tax credits are recorded as a reduction in exploration costs once there is reasonable assurance that they will be received.
| 4. | Financial Instruments: |
Categories of financial instruments
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| | | $ | | | $ | |
| Financial Assets | | | | | | |
| Cash | | 30,968 | | | 262,524 | |
| Accounts receivable | | 8,801 | | | 52,298 | |
| | | 39,769 | | | 314,822 | |
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| | | $ | | | $ | |
| Financial Liabilities | | | | | | |
| Accounts payable and accrued liabilities | | 113,329 | | | 645,428 | |
| Indemnity | | 592,674 | | | 559,584 | |
| Mortgage payable | | 78,780 | | | 81,911 | |
| | | 784,783 | | | 1,286,923 | |
Fair Value
The Company estimates that the fair value of these financial instruments approximates the carrying values at March 31, 2012 and March 31, 2011, respectively.
All financial instruments revaluated at fair value must be classified according to a hierarchy containing 3 levels:
| i. �� | Level 1 – Fair values based on quoted prices (unadjusted) in active markets for identical assets or liabilities; |
| | |
| ii. | Level 2 – Fair value techniques based on inputs other than quoted prices included in Level 1 that are observable on the market for the assets and liabilities, which are directly (i.e. as prices) or indirectly (i.e. derived from prices); and |
| | |
| iii. | Level 3 – Fair values based on inputs for the assets and liabilities that are not based on observable market data. |
. . . 17
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 4. | Financial Instruments (Continued): |
The following table outlines the financial assets and liabilities measured at fair value in the financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above as at March 31, 2012 and March 31, 2011:
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| | | $ | | | $ | |
| Financial Assets | | | | | | |
| Cash | | 30,968 | | | 262,524 | |
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| HST/GST receivable | $ | 8,633 | | $ | 52,130 | |
| Other receivables | | 168 | | | 168 | |
| | $ | 8,801 | | $ | 52,298 | |
| 6. | Exploration and Evaluation Assets: |
The Getty mineral claims are contiguous and are located within the Kamloops Mining District of Highland Valley, British Columbia, covering an area of approximately 200 square kilometres. Building and equipment depreciation included in exploration costs during the three months ended March 31, 2012 amounted to $1,159 (2011 - $1,171).
During the three months ended March 31, 2012, the Company incurred $10,186 in deferred costs as follows:
| | | | | | | | | | | | | | | | | | | |
| | | Getty | | | Getty | | | Getty | | | Getty South | | | Getty | | | Total | |
| | | Northwest | | | Central | | | North | | | 50% interest | | | Southwest | | | Exploration & | |
| | | | | | | | | | | | | | | | | | Development | |
| Other | | 1,192 | | | 7 | | | 4,587 | | | 4,285 | | | 115 | | | 10,186 | |
| Total exploration & development costs | $ | 1,192 | | $ | 7 | | $ | 4,587 | | $ | 4,285 | | $ | 115 | | $ | 10,186 | |
. . . 18
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 6. | Exploration and Evaluation Assets: (Continued) |
As at March 31, 2012, the Company's historical deferred costs and the current carrying aggregate amount are derived as follows:
| | | | | | | | | | | | | | | | | | | |
| | | Getty | | | Getty | | | Getty | | | Getty South | | | Getty | | | Total | |
| | | Northwest | | | Central | | | North | | | 50% interest | | | Southwest | | | Exploration & | |
| | | | | | | | | | | | | | | | | | Development | |
| Assay | $ | 35,746 | | $ | 1,143 | | $ | 507,075 | | $ | 66,732 | | $ | 13,971 | | $ | 624,667 | |
| Drilling | | 13,770 | | | 625 | | | 4,181,817 | | | 453,304 | | | 65,810 | | | 4,715,326 | |
| Environmental | | 173,676 | | | 1,282 | | | 54,290 | | | 4,059 | | | 21,149 | | | 254,456 | |
| Pre-feasibility study | | - | | | - | | | 343,563 | | | 184,819 | | | - | | | 528,382 | |
| Geology | | 941,243 | | | 37,303 | | | 1,951,299 | | | 414,511 | | | 157,304 | | | 3,501,660 | |
| Metallurgy | | 525 | | | - | | | 972,884 | | | 15,324 | | | - | | | 988,733 | |
| Other | | 829,028 | | | 17,678 | | | 1,016,857 | | | 265,168 | | | 142,978 | | | 2,271,709 | |
| Total exploration & development costs | $ | 1,993,988 | | $ | 58,031 | | $ | 9,027,785 | | $ | 1,403,917 | | $ | 401,212 | | $ | 12,884,933 | |
| Mineral rights acquisition costs | | 33,210 | | | 111,846 | | | 352,397 | | | 1,069,134 | | | 113,883 | | | 1,680,470 | |
| | | 2,027,198 | | | 169,877 | | | 9,380,182 | | | 2,473,051 | | | 515,095 | | | 14,565,403 | |
| Write-offs | | (1,730,130 | ) | | (56,635 | ) | | (6,541,306 | ) | | (800,706 | ) | | (386,066 | ) | | (9,514,843 | ) |
| | $ | 297,068 | | $ | 113,242 | | $ | 2,838,876 | | $ | 1,672,345 | | $ | 129,029 | | $ | 5,050,560 | |
As at December 31, 2011, the Company's historical deferred costs and the current carrying aggregate amount are derived as follows:
| | | | | | | | | | | | | | | | | | | |
| | | Getty | | | Getty | | | Getty | | | Getty South | | | Getty | | | Total | |
| | | Northwest | | | Central | | | North | | | 50% interest | | | Southwest | | | Exploration & | |
| | | | | | | | | | | | | | | | | | Development | |
| Assay | $ | 35,746 | | $ | 1,143 | | $ | 507,075 | | $ | 66,732 | | $ | 13,971 | | $ | 624,667 | |
| Drilling | | 13,770 | | | 625 | | | 4,181,817 | | | 453,304 | | | 65,810 | | | 4,715,326 | |
| Environmental | | 173,676 | | | 1,282 | | | 54,290 | | | 4,059 | | | 21,149 | | | 254,456 | |
| Pre-feasibility study | | - | | | - | | | 343,563 | | | 184,819 | | | - | | | 528,382 | |
| Geology | | 941,243 | | | 37,303 | | | 1,951,299 | | | 414,511 | | | 157,304 | | | 3,501,660 | |
| Metallurgy | | 525 | | | - | | | 972,884 | | | 15,324 | | | - | | | 988,733 | |
| Other | | 827,836 | | | 17,671 | | | 1,012,270 | | | 260,883 | | | 142,863 | | | 2,261,523 | |
| Total exploration & development costs | $ | 1,992,796 | | $ | 58,024 | | $ | 9,023,198 | | $ | 1,399,632 | | $ | 401,097 | | $ | 12,874,747 | |
| Mineral rights acquisition costs | | 33,210 | | | 111,846 | | | 352,397 | | | 1,069,134 | | | 113,883 | | | 1,680,470 | |
| | | 2,026,006 | | | 169,870 | | | 9,375,595 | | | 2,468,766 | | | 514,980 | | | 14,555,217 | |
| Write-offs | | (1,730,130 | ) | | (56,635 | ) | | (6,541,306 | ) | | (800,706 | ) | | (386,066 | ) | | (9,514,843 | ) |
| | $ | 295,876 | | $ | 113,235 | | $ | 2,834,289 | | $ | 1,668,060 | | $ | 128,914 | | $ | 5,040,374 | |
The Company acquired a 100% interest in the Getty North Property in 1992 from Robak Industries Ltd. ("Robak") and Masco Capital Inc. ("Masco"), two private corporations controlled by the Company's then President. As consideration, the Company issued 4,608,492 common shares to each of the private corporations involved, subject to the Company obtaining a valuation on the property establishing a minimum value of $2,304,246 and the approval of the securities commission in existence at that time. The property is subject to a 1.5% net smelter return royalty in favour of Robak.
. . . 19
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 6. | Exploration and Evaluation Assets: (Continued) |
The Getty Northwest property claims were acquired by the Company through staking this property. This property is also subject to a 1.5% net smelter return royalty in favour of Robak.
The Company originally entered into an agreement to acquire a 50% interest in the Getty Central, Getty South and Getty Southwest mineral rights from Robak. Certain terms and conditions laid out on this original contract were not met and on November 8, 2002, the Company and Robak terminated the original agreement and entered into a subsequent agreement for the Company to acquire a 100% interest in the Getty Central and Getty Southwest mineral rights and a 50% interest in the Getty South mineral rights in exchange for 6,000,000 common shares of the Company at a deemed value of $1,200,000. The Company also agreed to pay 100% of the costs to place the Getty South mineral rights into production and granted a 1.5% net smelter royalty on all of these claims in favour of Robak.
During 2010, the Company entered into a Letter of Intent ("LOI") with Effisolar Energy Ltd. ("Effisolar") allowing it to earn up to 51% interest in Getty North, Getty South, and Getty West ("Property") and to form a joint venture for further exploration upon completion of the conditions listed in the LOI. Due to the length of time of negotiations for a formal agreement to be completed, the parties entered into a binding interim agreement, whereby Effisolar would fund a $420,000 work program on the properties. Within this agreement, the parties agreed that if a formal option and joint venture agreement was not signed by December 15, 2010, the Company would issue a total of 1,400,000 shares to Effisolar to pay for the work program. Since the deadline passed without a formal agreement being signed, the Company fulfilled its obligation in April 2011 and issued 1,400,000 shares upon receipt of data and relevant legal documentation.
Title to mining properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mining properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to its properties are in good standing.
| 7. | Property, Building and Equipment: |
| |
| | | | | | | | | | | | | | | | | | |
| | | Automotive | | Computer | | Computer | | Office | | Portable | | Building | | Land | | Totals | |
| | | equipment | | equipment | | software | | equipment | | buildings | | | | | | | |
| Cost | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2011 | $ | 29,318 | $ | 98,540 | $ | 74,359 | $ | 54,407 | $ | 12,112 | $ | 178,124 | $ | 22,322 | $ | 469,182 | |
| Additions | | - | | 2,301 | | - | | - | | - | | - | | - | | 2,301 | |
| Disposals | | - | | - | | - | | - | | - | | - | | - | | - | |
| Balance, December 31, 2011 | | 29,318 | | 100,841 | | 74,359 | | 54,407 | | 12,112 | | 178,124 | | 22,322 | | 471,483 | |
| Additions | | - | | - | | - | | - | | - | | - | | - | | - | |
| Disposals | | - | | - | | - | | - | | - | | - | | - | | - | |
| Balance, March 31, 2012 | $ | 29,318 | $ | 100,841 | $ | 74,359 | $ | 54,407 | $ | 12,112 | $ | 178,124 | $ | 22,322 | $ | 471,483 | |
| | | | | | | | | | | | | | | | | - | |
| Depreciation and impairment losses | | | | | | | | | | | | | | | | - | |
| Balance, January 1, 2011 | $ | 29,133 | $ | 97,865 | $ | 74,359 | $ | 50,869 | $ | 12,112 | $ | 75,525 | | - | $ | 339,863 | |
| Depreciation for the year | | 55 | | 821 | | - | | 708 | | - | | 4,104 | | - | | 5,688 | |
| Impairment loss | | - | | - | | - | | - | | - | | - | | - | | - | |
| Disposals | | - | | - | | - | | - | | - | | - | | - | | - | |
| Balance, December 31, 2011 | | 29,188 | | 98,686 | | 74,359 | | 51,577 | | 12,112 | | 79,629 | | - | | 345,551 | |
| Depreciation for the period | | 10 | | 242 | | - | | 142 | | - | | 985 | | - | | 1,379 | |
| Impairment loss | | - | | - | | - | | - | | - | | - | | - | | - | |
| Disposals | | - | | - | | - | | - | | - | | - | | - | | - | |
| Balance, March 31, 2012 | $ | 29,198 | $ | 98,928 | $ | 74,359 | $ | 51,719 | $ | 12,112 | $ | 80,614 | $ | - | $ | 346,930 | |
| | | | | | | | | | | | | | | | | | |
| Carrying Amounts | | | | | | | | | | | | | | | | | |
| At January 1, 2011 | $ | 185 | $ | 675 | $ | - | $ | 3,538 | $ | - | $ | 102,599 | $ | 22,322 | $ | 129,319 | |
| At December 31, 2011 | $ | 130 | $ | 2,155 | $ | - | $ | 2,830 | $ | - | $ | 98,495 | $ | 22,322 | $ | 125,932 | |
| At March 31, 2012 | $ | 120 | $ | 1,913 | $ | - | $ | 2,688 | $ | - | $ | 97,510 | $ | 22,322 | $ | 124,553 | |
. . . 20
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 7. | Property, Building and Equipment (Continued): |
The Company owns land and office/storage building in Logan Lake. The premises are used for core storage, field offices and vehicle storage. The property is encumbered by a mortgage in the amount of $78,780 as of March 31, 2012 (see Note 11).
| 8. | Accounts Payables and Accrued Liabilities |
| |
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| Trade payables | $ | 21,078 | | $ | 199,295 | |
| Amounts due to related parties (Note 17) | | 54,251 | | | 8,133 | |
| | $ | 75,329 | | $ | 207,428 | |
The provision below represents accruals for professional fees.
| | | | |
| Balance, January 1, 2011 | $ | 18,000 | |
| Decrease | | (18,000 | ) |
| Increase | | 30,000 | |
| Balance, December 31, 2011 | | 30,000 | ) |
| Decrease | | (7,000 | ) |
| Increase | | 15,000 | ) |
| Balance, March 31, 2012 | $ | 38,000 | ) |
In April, 2009, the Company reached a settlement with one of its Directors to indemnify him for approximately 88% of legal expenses incurred during 2004 to 2007 in connection with his prosecution of legal actions against former Directors who were alleged to have improperly attempted to impugn for personal reasons a 2002 mineral property interest sale agreement ("MPISA") between the Director's company, Robak, and the Company. The settlement was premised on the fact that the Director's legal actions were of benefit to the Company in the conduct of its own litigation in defense of the MPISA. The settlement provides that the Director will be entitled to receive $650,000 by way of a secured debenture of $600,000 payable January 2, 2014 and bearing interest at 6%, plus $50,000 cash upon execution of a definitive agreement. The payment must be accelerated in the event the Company completes a financing of $2 million or more or in certain customary events of default (failure to maintain the properties, insolvency etc.).
The mortgage payable is associated with the Logan property (see Note 7).
The mortgage payable is secured by a first mortgage on land and building and requires monthly payments of $756 including interest at 7.5% per annum. Subsequent to December 31, 2011, the Company renegotiated the terms of its loan agreement. Effective October 1, 2012, the mortgage payable will require monthly payments of $852 including interest at 6.0% per annum and the mortgage payable will mature on October 1, 2017.
Principal repayments required are as follows:
. . . 21
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| | | | |
| | | March 31, | |
| | | 2012 | |
| Payable not later than one year | $ | 3,370 | |
| Payable later than one year and not later than five years | | 16,259 | |
| Payable later than five years | | 59,151 | |
| | $ | 78,780 | |
A reconciliation of Canadian income taxes at statutory rate is as follows:
| | | | | | | |
| | | Mar. 31, 2012 | | | Dec. 31, 2011 | |
| | | 25% | | | 26.5% | |
| Net and comprehensive loss for the year before income taxes | $ | 66,869 | | $ | 143,921 | |
| | | | | | | |
| Expected income tax recovery | $ | (16,717 | ) | $ | (38,139 | ) |
| Net adjustment for deductible and non-deductible amounts | | 602 | | | (2,398 | ) |
| Unrecognized benefit of tax pool assets | | 16,115 | | | 40,537 | |
| | $ | - | | $ | - | |
The significant components of the Company's deferred income tax assets are as follows:
| | | | | | | |
| | | Mar. 31, 2012 | | | Dec. 31, 2011 | |
| Deferred income tax assets: | | | | | | |
| | | | | | | | |
| Mineral properties | $ | 619,600 | | $ | 619,600 | |
| Non-capital loss carryforwards | | 1,521,400 | | | 1,505,300 | |
| Equipment | | 94,200 | | | 93,800 | |
| Share issue cost | | 5,200 | | | 5,700 | |
| | | 2,240,400 | | | 2,224,400 | |
| | | | | | | |
| Valuation allowance | | (2,240,400 | ) | | (2,224,400 | ) |
| | | | | | | |
| Net future tax assets | $ | - | | $ | - | |
At March 31, 2012, the Company has approximately $6,091,000 of loss carry forwards which may be available to reduce taxable income in future years. These losses expire as follows:
| | | | |
| 2014 | | 563,000 | |
| 2025 | | 622,000 | |
| 2026 | | 1,133,000 | |
| 2027 | | 2,120,000 | |
| 2028 | | 205,000 | |
| 2029 | | 924,000 | |
| 2030 | | 306,000 | |
| 2031 | | 153,000 | |
| 2032 | | 65,000 | |
| | $ | 6,091,000 | |
Subject to certain restrictions, the Company also has mineral property expenditures of approximately $7,528,800 available to reduce taxable income in future years.
Future tax benefits which may arise as a result of these losses and resource deductions have not been recognized in these financial statements and have been offset by a valuation allowance.
. . . 22
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| a) | Authorized: Unlimited number of common shares |
| | | | | | | | |
| b) | Issued: | | Shares | | | Amount | |
| | | | | | | | |
| | Balance, January 1, 2011 | | 86,892,537 | | $ | 22,064,202 | |
| | Shares issued | | 1,400,000 | | | 420,000 | |
| | Share issue costs | | - | | | - | |
| | Balance December 31, 2011 | | 88,292,537 | | | 22,484,202 | |
| | | | | | | | |
| | Balance March 31, 2012 | | 88,292,537 | | $ | 22,484,202 | |
In April 2011, the Company issued 1,400,000 shares to settle its obligation with Effisolar. See Note 6.
The following is a summary of changes in warrants from January 1, 2011 to December 31, 2011:
| | | | | | | |
| | | Number of | | | | Number of |
| Expiry Date | Exercise | Warrants | Issued | Exercised | Cancelled | Warrants |
| | Price | January 1, | | | | Dec. 31, |
| | | 2011 | | | | 2011 |
| June 13, 2012 | 0.12 | 325,000 | - | - | - | 325,000 |
| | | | | | | |
| Wt. Average price | | $0.00 | $0.12 | $0.00 | $0.00 | $0.12 |
| Wt. Average remaining life (yrs) | - | - | - | - | 0.50 |
The following is a summary of changes in warrants from January 1, 2012 to March 31, 2012:
| | | | | | | |
| | | Number of | | | | Number of |
| Expiry Date | Exercise | Warrants | Issued | Exercised | Cancelled | Warrants |
| | Price | January 1, | | | | March. 31, |
| | | 2012 | | | | 2012 |
| June 13, 2012 | 0.12 | 325,000 | - | - | - | 325,000 |
| | | | | | | |
| Wt. Average price | | $0.00 | $0.12 | $0.00 | $0.00 | $0.12 |
| Wt. Average remaining life (yrs) | - | - | - | - | 0.25 |
. . . 23
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 13. | Share Capital (Continued): |
| |
| d) | Share purchase options |
The following is a summary of changes in share purchase options from January 1, 2011 to December 31, 2011:
| | | | | | |
| | | Number of | | | Number of |
| Expiry | Exercise | Options | Issued | Cancelled | Options |
| Date | Price | January 1, 2011 | | | December 31, 2011 |
| | $ | | | | |
| Aug. 14, 2014 | 0.10 | 3,325,000 | - | - | 3,325,000 |
| Aug. 31, 2013 | 0.10 | | 500,000 | - | 500,000 |
| | | 3,325,000 | 500,000 | - | 3,825,000 |
| Wt. Average price | | 0.10 | 0.10 | - | 0.10 |
| Wt. Average remaining life (yrs) | 3.62 | - | - | 2.25 |
The following is a summary of changes in share purchase options from January 1, 2012 to March 31, 2012:
| | | | | | |
| | | Number of | | | Number of |
| Expiry | Exercise | Options | Issued | Cancelled | Options |
| Date | Price | January 1, 2012 | | | March 31, 2012 |
| | $ | | | | |
| Aug. 14, 2014 | 0.10 | 3,325,000 | - | 250,000 | 3,075,000 |
| Aug. 31, 2013 | 0.10 | 500,000 | | | 500,000 |
| | | 3,825,000 | - | 250,000 | 3,575,000 |
At the Company's 2007 Annual General Meeting, the shareholders approved an amendment to the Incentive Stock Option Plan to allow the issuance of up to a maximum 6,700,000 incentive stock options. During 2009, 2,675,000 options were cancelled and 3,325,000 options were issued at $0.10, expiring August 14, 2014.
During 2011, the Company entered into consulting agreements which called for the Company to grant 500,000 options on August 31, 2011 at $0.10, exercisable for a two year period and vesting 12.5% quarterly. Accordingly, using the Black-Scholes option pricing model, the stock options are recorded at fair value in the statement of operations. Total share-based compensation recognized in the statement of operations for options granted was $3,885 and the weighted average fair value of each option granted was $0.10. This amount was also recorded as contributed surplus on the balance sheet.
The following is a summary of stock options outstanding as at March 31, 2012:
| | | | |
| Exercise Price | Options Outstanding | Remaining Contractual | Options Vested |
| | | Life | |
| | | (months) | |
| | | | |
| 0.10 | 3,075,000 | 29 | 3,075,000 |
| 0.10 | 500,000 | 17 | 146,000 |
| | 3,575,000 | | 3,221,000 |
. . . 24
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 13. | Share Capital (Continued): |
The fair value of the stock options is estimated using Black-Scholes model with weighted average assumption as follows:
| | | | |
| | 2012 | 2011 | |
| Risk free interest rate | 1.15% | 0.97% | |
| Expected life of options in years | 2 years | 2 years | |
| Expected volatility | 156% | 144% | |
| Dividend per share | $0.00 | $0.00 | |
| Share-based compensation | $3,885 | $3,064 | |
For the three months ending March 31, 2012, total share-based compensation recognized in the statement of operations for options granted was $3,885 and weighted average fair value for each option granted was $0.03969.
The continuity is as follows:
| | | | | | |
| | | 2012 | | 2011 | |
| Balance at beginning of January 1 | $ | 1,235,494 | $ | 1,232,430 | |
| Share-based compensation | | 3,885 | | - | |
| Fair value of the agents warrants issued | | - | | - | |
| Balance at March 31, 2012 | $ | 1,239,379 | $ | 1,232,430 | |
The Company manages its capital structure and makes adjustments to it based on available funds in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital to include its working capital position and capital stock, warrant, and option components of its shareholders' equity.
The Company manages its capital structure in a manner that provides sufficient funding for mine development and operational activities. Funds are primarily secured through a combination of equity capital raised by way of issuing equity instruments and external debt. In order to maintain or adjust the capital structure, the Company may attempt to raise additional financing through the issuance of new equity instruments, the exercise of outstanding common share purchase warrants and stock options. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
There were no changes in the Company's approach to capital management during three months ending March 31, 2012. The Company is not subject to externally imposed capital requirements.
. . . 25
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 16. | Financial Risk Factors: |
The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. The Company does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.
Credit is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligation.
Financial instruments that are potentially subject to credit risk are accounts receivables from unrelated parties. While economic factors can affect credit risk, the Company manages risk by providing credit terms on a case-by-case basis.
Customers are primarily quasi-governmental agencies. As a result, the Company has not experienced any instances of non-payment.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages its liquidity by ensuring there is sufficient capital to meet short and long-term business requirements, after taking into account cash flows from operations and the Company's holdings of cash and cash equivalents. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances.
Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements are met through a combination of committed credit facilities to access to capital markets.
Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. The Company currently has no assets or liabilities subject to fluctuating rates of interest and consequently, the Company is of the opinion that interest rate risk is currently nominal
. . . 26
|
| GETTY COPPER INC. |
| UNAUDITED |
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
| MARCH 31, 2012 and 2011 |
| (Stated in Canadian dollars) |
| 17. | Related Party Transactions: |
In addition to transactions described elsewhere in these financial statements, the Company had the following balances with officers and directors of the Company and companies or professional firms with which officers or Directors are associated:
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| Companies controlled by key management personnel | $ | 37,451 | | $ | 8,133 | |
| Companies controlled by directors | | 16,800 | | | - | |
| Companies controlled by directors - indemnity (Note 10) | | 592,674 | | | 559,584 | |
| | $ | 646,925 | | $ | 567,717 | |
These amounts, except those related to the indemnity, are unsecured, non-interest bearing and have no fixed terms of repayment.
The Company incurred the following transactions with directors of the Company and companies or professional firms with which directors are associated:
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| Management fees | $ | 7,500 | | $ | 7,500 | |
| Professional fees | | - | | | 3,210 | |
| Rent | | 1,500 | | | 1,500 | |
| Interest expense on indemnity | | 8,227 | | | 8,137 | |
| | $ | 17,227 | | $ | 20,347 | |
The Company incurred the following transactions with officers of the Company and companies or professional firms with which officers are associated:
| | | | | | | |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| Exploration and development costs | $ | 7,500 | | $ | 7,582 | |
| Professional fees | | - | | | 3,210 | |
| | $ | 7,500 | | $ | 10,792 | |
These transactions are in the normal course of operations and are measured at fair value as determined by management.
| 18. | Non-cash Transactions |
During the three months ended March 31, 2012, the Company incurred the following non-cash transactions that are not reflected in the statement of cash flows:
| | | | | | | |
| | Three Months Ended |
| | | March 31, | | | March 31, | |
| | | 2012 | | | 2011 | |
| | | | | | | |
| Exploration and evaluation asset costs included within accounts payable and accrual liabilities | | 1,159 | | | 1,171 | |
| Interest on indemnity | | 8,227 | | | 8,137 | |
| | $ | 9,386 | | $ | 9,308 | |
. . . 27
