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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month ofAugust 2013
Commission File Number:0-31100
KISKA METALS CORPORATION |
Suite 575, 510 Burrard Street Vancouver, B.C. V6C 3A8 |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-Fþ Form 40-F ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No þ
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
![[kskfs2013q2001.jpg]](https://capedge.com/proxy/6-K/0001176256-13-000492/kskfs2013q2001.jpg)
Consolidated Financial Statements
For the three and six months ended
June 30, 2013 and 2012
(Unaudited – Prepared by Management)
NOTICE OF NO AUDITOR REVIEW OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.
The accompanying unaudited consolidated condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
General Information
Directors
Geoffrey Chater
Bipin A. Ghelani
George R. Ireland
John A. Kanellitsas
Jack Miller
Mark T.H. Selby
Jason S. Weber
Company Secretary
Alan Hutchison
Registered Office
Suite 575
510 Burrard Street
Vancouver, British Columbia
V6C 3A8
Solicitor
Dentons Canada LLP
20th Floor
250 Howe Street
Vancouver, British Columbia
V6C 3R8
Auditor
Hay & Watson
Suite 900
1450 Creekside Drive
Vancouver, British Columbia
3
Kiska Metals Corporation
Consolidated Statements of Comprehensive Loss
For the three and six month periods ended June 30, 2013 and 2012
(Expressed in Canadian dollars)
The accompanying notes form an integral part of these consolidated financial statements
4
Kiska Metals Corporation
Consolidated Statements of Financial Position
As at June 30, 2013 and December 31, 2012
(Expressed in Canadian dollars)
| Notes | June 30, 2013 | December 31, 2012 | |
|
| $ | $ | |
Current assets |
|
|
| |
Cash and cash equivalents |
| $ 3,146,721 | $ 3,377,446 | |
Restricted cash | 4 | 71,382 | 61,248 | |
Trade and other receivables |
| 215,051 | 230,738 | |
Prepaid expenses and deposits |
| 107,822 | 153,673 | |
Other financial assets | 5 | 1,490,933 | 868,146 | |
|
| 5,031,909 | 4,691,251 | |
Non-current assets |
|
|
| |
Property and equipment | 7 | 609,046 | 708,209 | |
Restricted cash | 4 | 68,606 | 78,740 | |
|
| 677,652 | 786,949 | |
Total assets |
| 5,709,561 | 5,478,200 | |
Current liabilities |
|
|
| |
Accounts payable and accrued liabilities | 8 | 266,474 | 541,780 | |
Due to related parties | 9 | - | 19,992 | |
Rehabilitation provisions |
| 48,000 | 48,000 | |
|
| 314,474 | 609,772 | |
Non-current liabilities |
|
|
| |
Rehabilitation provisions |
| 260,032 | 246,802 | |
|
| 260,032 | 246,802 | |
Total liabilities |
| 574,506 | 856,574 | |
Shareholders’ equity |
|
|
| |
Share capital | 11 | 96,124,498 | 96,124,498 | |
Share warrant reserve | 12 | 8,368,728 | 8,368,728 | |
Share option reserve | 13 | 9,274,078 | 9,192,457 | |
Other comprehensive loss |
| (1,099,097) | (461,885) | |
Deficit |
| (107,533,152) | (108,602,172) | |
|
| 5,135,055 | 4,621,626 | |
Total liabilities and shareholders’ equity |
| 5,709,561 | 5,478,200 | |
Approved by the Board: |
|
|
| |
“Jason Weber” |
| “Bipin Ghelani” |
| |
Director |
|
| Director |
|
The accompanying notes form an integral part of these consolidated financial statements
5
Kiska Metals Corporation
Consolidated Statements of Changes in Equity
For the six-month periods ended June 30, 2013 and 2012
(Expressed in Canadian dollars)
| Note | Shares | Share Capital | Share Option Reserve | Share Warrant Reserve | Other Comprehensive Income | Deficit | Total Equity |
Balance at January 1, 2012 |
| 99,253,559 | $ 96,124,498 | $ 8,596,685 | $ 8,368,728 | $ (375,770) | $ (103,695,418) | $ 9,018,723 |
Loss and comprehensive loss |
| - | - | - | - | (160,589) | (3,206,074) | (3,366,663) |
Share-based compensation |
| - | - | 427,550 | - | - | - | 427,550 |
Balance at June 30, 2012 |
| 99,253,559 | $ 96,124,498 | $ 9,024,235 | $ 8,368,728 | $ (536,359) | $ (106,901,492) | $ 6,079,610 |
Loss and comprehensive loss |
| - | - | - | - | 74,474 | (1,700,679) | (1,626,204) |
Share-based compensation |
| - | - | 168,222 | - | - | - | 168,222 |
Balance at January 1, 2013 |
| 99,253,559 | $ 96,124,498 | $ 9,192,457 | $ 8,368,728 | $ (461,885) | $ (108,602,171) | $ 4,621,628 |
Loss and comprehensive loss |
| - | - | - | - | (637,213) | 1,069,019 | 431,806 |
Share-based compensation |
| - | - | 81,621 | - | - | - | 81,621 |
Balance at June 30, 2013 | 11 | 99,253,559 | $ 96,124,498 | $ 9,274,078 | $ 8,368,728 | $ (1,099,097) | $(107,533,152) | $ 5,135,055 |
The accompanying notes form an integral part of these consolidated financial statements
6
Kiska Metals Corporation
Consolidated Statements of Cash Flows
For the three and six month periods ended June 30, 2013 and 2012
(Expressed in Canadian dollars)
The accompanying notes form an integral part of these consolidated condensed interim financial statements
7
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
1.
Nature of Operations
Kiska Metals Corporation (formerly Geoinformatics Exploration Inc. or "Geoinformatics”) and its wholly-owned subsidiaries (collectively the “Company or “Kiska”) is a global resources company in the business of mineral exploration. Geoinformatics was incorporated on March 21, 1980 under the laws of the Province of British Columbia. On August 29, 1996, Geoinformatics was continued in the Yukon Territory from the Province of British Columbia. On August 5, 2009, the Company completed the 100% acquisition of Rimfire Minerals Corporation (“Rimfire”) and changed its name to Kiska Metals Corporation. On July 30, 2010, Kiska continued in the Province of British Columbia and discontinued in the Yukon Territory.
The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. Some of the Company’s mineral property interests are located outside of Canada and are subject to the risks associated with foreign investment, including increases in taxes and royalties, renegotiations of contracts, currency exchange fluctuations and political uncertainty. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements.
Kiska is a limited company incorporated and domiciled in Vancouver, British Columbia. Kiska’s shares are traded on the Toronto Stock Exchange’s Venture exchange under the symbol “KSK”.
2.
Basis of preparation
Statement of compliance
These condensed consolidated interim financial statements of Kiska and all its subsidiaries are unaudited and have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting (“IAS 34”), using accounting policies which are consistent with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and are in effect at June 30, 2013.
These condensed consolidated interim financial statements should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2012. These condensed consolidated interim financial statements do not include all the information required for full annual financial statements and were approved and authorized for issue by the Audit Committee of the Board of Directors on August 28, 2013.
Going concern
These consolidated condensed interim financial statements have been prepared on the basis that the Company is a going concern, which contemplates the realization of its assets and the settlement of its liabilities in the normal course of operations. However, the Company currently has no significant sources of revenue and has experienced recurring losses. The Company’s ability to continue as a going concern is dependent on the Company’s ability to obtain additional debt or equity financing to successfully advance the exploration and development of mineral property interests in its exploration portfolio and/or to be able to derive material proceeds from the sale or divesture of those properties and/or other assets such as royalty rights and equity interests. There is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These consolidated condensed interim financial statements do not include any adjustments to the amounts and classification of assets and liabilities that
8
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
may be necessary should the Company be unable to continue as a going concern. Such adjustments and classifications could be material.
Basis of consolidation
The condensed consolidated interim financial statements comprise the financial statements of the Company as at June 30, 2013. Subsidiaries are fully consolidated from the date of acquisition, the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.
All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions and dividends are fully eliminated.
Comparative changes
To conform to the presentation used in the current year, the Company reclassified $59,055 and $ 115,277 of depreciation and amortization expenses on the Statement of Loss and Comprehensive loss for the periods ended March 31, 2012 and June 30, 2012 respectively from Operating Expenses to Mineral Property Operations. This change in presentation did not affect the reported loss or comprehensive loss for the years ended December 31, 2011 or December 31, 2010.
9
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
3.
Mineral property expenditures
The Company’s expenditures on mineral property operations can be characterized as follows:
| Three months ended June 30 | Six months ended June 30 | |||
| 2013 | 2012 | 2013 | 2012 | |
| $ | $ | $ | $ | |
Mineral Property Operations |
|
|
|
| |
Acquisition expenditures | 4,020 | 29,332 | 63,172 | 87,129 | |
Depreciation and amortization | 53,947 | 56,222 | 103,457 | 115,277 | |
Exploration Expenditures |
|
|
|
| |
Assays and analysis | 2,725 | (1,666) | 9,262 | (153) | |
Camp and support | 1,175 | 11,419 | 3,837 | 19,386 | |
Communications | 1,814 | 7,521 | 7,733 | 17,485 |
|
Community CSR | 3,670 | 6,833 | 34,635 | 38,921 | |
Consultants - Geological | 49,784 | 151,737 | 84,580 | 238,052 | |
Consultants - Geophysical | 33,905 | 36,688 | 204,676 | 87,481 | |
Consultants – Engineering | 7,416 | - | 22,546 | - | |
Data management and maps | - | 5 | 64 | 2,740 | |
Drilling and trenching | - | 68,052 | - | 114,607 | |
Equipment | 82 | 1,727 | 219 | 2,593 | |
Filing fees, licences and permits | - | 4,836 | - | 36,463 | |
Fixed wing aircraft | 5,448 | 8,193 | 10,805 | 17,233 | |
Fuel | - | 24 | 58 | 6,638 | |
Helicopter | 11,421 | - | 11,421 | 9,536 | |
Materials and supplies | 436 | 7,844 | 1,498 | 13,776 | |
Property tenure and holding costs | 960 | - | 960 | - | |
Rent | 6,883 | 6,890 | 13,636 | 17,515 | |
Repairs and maintenance | - | 584 | 613 | 11,289 | |
Salaries and employee benefits | 285,924 | 442,128 | 564,748 | 847,637 | |
Share-based compensation | 10,339 | 83,132 | 30,896 | 195,134 | |
Travel | 15,232 | 27,172 | 16,797 | 54,554 | |
Utilities | 401 | - | 706 | - | |
| 437,615 | 863,121 | 1,019,692 | $ 1,730,888 | |
Rehabilitation obligation |
| (61,424) | - | (61,424) | |
Exploration reimbursements | (70,456) | - | (220,514) | (5,711) | |
Environmental costs and site preparation | 12,626 | 2,235 | 16,158 | 11,078 | |
Total Exploration Expenditures | $ 379,787 | $ 803,932 | $ 815,336 | 1,674,831 | |
Total Mineral Property Expenditures | $ 437,754 | $ 889,486 | $ 981,965 | 1,877,237 | |
10
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
4.
Restricted cash
Restricted cash of $139,986 (December 31, 2012 - $139,988) represents project reclamation deposits in favour of regulatory authorities held as site restoration deposits.
| June 30 2013 | December 31 2012 |
Current - within one year | $ 71,382 | $ 61,248 |
Non-Current – greater than one year | 68,606 | 78,740 |
Total | $ 139,988 | $ 139,988 |
5.
Other Financial Assets
Other financial assets consist of marketable securities classified as available-for-sale since their initial recognition. Unrealized gains or losses are recorded in other comprehensive income.
On February 26, 2013 the Company received seven million shares of Brixton Metals Corporation (“Brixton”) (Refer to Note 14). These shares were recorded at the trading value of Brixton on the TSX Venture Exchange on the date they were issued. As at June 30, 2013, 1,750,000 of these shares are available to the company for trading while the remainder are restricted based on the following schedule:
1,750,000 – August 26, 2013
1,750,000 – November 26, 2013
1,750,000 – February 26, 2014
6.
Interests in joint ventures
Kiska, jointly with other participants, owns certain mineral property exploration assets. Kiska’s share is detailed below:
British Columbia
Redton Project
Kiska owns an 85% interest in the Alkali Gold Project (“Redton”). Redton Resources Inc. holds the other 15% interest and holds a 3% net smelter Royalty (“NSR”) of which 1.5% can be purchased for $6,000,000 (1% for $1,000,000; 0.5% for $5,000,000). The Takla-Rainbow property option, which formed part of the Redton Project and required the Company to make annual advanced royalty payments of $20,000, was terminated in 2012.
The Company reduced the Redton claim package during the year. A total of 103 claims were returned back to Redton Resources including the Twin Creeks claims owned by Lorne Warren. Also, the Takla-Rainbow property option, which formed part of the Redton Project, was terminated by the Company in 2012. Management is seeking a partner to advance Redton in 2013.
11
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
Yukon
Boulevard Property
Kiska owns 50% of the Boulevard Property with the other 50% belonging to AuRico Gold (formerly Northgate Minerals).
The Company signed an option agreement in 2009 with Silver Quest Resources Ltd., now Independence Gold Corp (“Independence”) whereby Independence can acquire the Company’s interest in the property by making staged cash payments totalling $80,000 (received), issuing an aggregate of 400,000 shares (issued) and completing exploration expenditures of $3,000,000 (completed) over a five year period. The Company received notification that Independence earned-in in July, 2013 and is currently working on formalizing the royalty agreement and transferring claims to Independence.
The Company retains a 1% NSR on the property, with Independence having the right to buy back 0.25% of the NSR for $375,000. If additional claims are staked within certain nearby areas of interest, Independence will issue additional shares and the 1% NSR will be extended to the new claims with the right to Independence to buy back 0.5% of the NSR for $500,000. To date, the Company has received an additional 100,000 common shares of Independence upon staking new claims within this project area.
In addition, should Independence complete a 43-101 compliant resource estimate on the property in excess of 1,000,000 ounces of gold in an indicated category within 5 years of exercising the option, they will be required to make a one-time bonus payment of an additional 500,000 common shares of its capital stock to Kiska.
Wernecke Breccias
The Company signed an agreement with Newmont Mining Corp (“Newmont”) (formerly Fronteer Development Company Inc.) to acquire 700 mineral claims covering a large region of the northern Yukon known as the “Wernecke Breccias”, from Newmont Exploration Canada Limited and NVI Mining Ltd., a subsidiary of Breakwater Resources Ltd. Newmont is the operator of the project, with the Company owning the remaining 20% interest. Newmont and NVI retain a total 2% NSR. Additionally, there is a 7.5% to 15% Net Profits Interest (“NPI”) payable to the underlying vendors on some of the claims. A joint venture has been formed between Newmont and the Company, and on-going exploration expenses will be shared pro-rata subject to dilution for non-participation. Should either party’s interest fall below 5%, their interest will be converted to a 3% NPI after payback of capital.
The Company has not incurred any contingent liabilities or other commitments relating to these jointly controlled assets.
12
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
7.
Property and Equipment
| Exploration equipment | Computer equipment & Software | Office equipment & leaseholds | Total |
Cost |
|
|
|
|
As at January 1, 2012 | $ 1,284,209 | $ 392,335 | $ 154,219 | $ 1,830,763 |
Additions | 5,556 | 27,177 | - | 32,733 |
Written off | - | (219,114) | (2,729) | (221,843) |
As at December 31, 2012 | $ 1,289,765 | $ 200,398 | $ 151,490 | $ 1,641,653 |
Additions | 11,091 | 15,787 | - | 26,878 |
Written off | (26,711) | - | - | (26,711) |
As at June 30, 2013 | 1,274,145 | 216,185 | 151,490 | 1,641,820 |
Accumulated Depreciation |
|
|
|
|
As at January 1, 2012 | $ (480,592) | $ (324,537) | $ (85,890) | $ (891,019) |
Depreciation | (194,128) | (59,021) | (11,119) | (264,268) |
Written off | - | 219,114 | 2,729 | 221,843 |
As at December 31, 2012 | $ (674,720) | $ (164,444) | $ (94,280) | $ (933,444) |
Depreciation | (97,847) | (21,458) | (5,499) | (124,804) |
Written off | 25,474 | - | - | 25,474 |
As at June 30, 2013 | (747,093) | (185,902) | (99,779) | (1,032,774) |
Net book value: |
|
|
|
|
As January 1, 2012 | $ 803,617 | $ 67,798 | $ 68,329 | $ 939,744 |
At December 31, 2012 | $ 615,045 | $ 35,954 | $ 57,210 | $ 708,209 |
At June 30, 2013 | $ 527,052 | $ 30,283 | $ 51,711 | $ 609,046 |
8.
Accounts payable and accrued liabilities
| June 30, 2013 | June 30, 2012 |
Trade payables | $ 81,630 | $ 321,911 |
Accrued liabilities | 179,850 | 179,840 |
Vacation Payable | 4,994 | 40,029 |
| $ 266,474 | $ 541,780 |
13
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
9.
Related party disclosures
The consolidated financial statements include the financial statements of Kiska and the controlled subsidiaries listed in the following table:
| Country of Incorporation | Equity Interest | |
2013 | 2012 | ||
Rimfire Australia Pty Ltd. | Australia | 100% | 100% |
Geoinformatics Exploration Canada Limited | Canada | 100% | 100% |
Rimfire Minerals Corporation | Canada | 100% | 100% |
Geoinformatics Explorations Ireland Limited | Ireland | 100% | 100% |
Geoinformatics Alaska Exploration Inc. | USA | 100% | 100% |
GXL USA, Inc. (Note 1) | USA | - | 100% |
Rimfire Alaska, Ltd. | USA | 100% | 100% |
Rimfire Nevada Ltd. | USA | 100% | 100% |
(1) On February 1, 2013 the Company was notified that it had completed all requirements under the Utah State Tax Commission to withdraw from the State of Utah allowing the Company to complete the dissolution of GXL USA Inc. | |||
Kiska Metals Corporation is the ultimate parent of the Company.
The Company’s related parties include its subsidiaries and key management personnel. Transactions with related parties for goods and services are made on normal commercial terms and are measured at the exchange amounts agreed to by the parties.
The remuneration of the Company’s directors and other key management personnel is as follows:
| Three months ended June 30 | Six months ended June 30 | ||
| 2013 | 2012 | 2013 | 2012 |
Short-term employee benefits | $ 158,123 | $ 189,700 | $ 311,246 | $ 402,819 |
Post-employment pension and medical benefits | 5,662 | 4,227 | 9,924 | 8,183 |
Canada Pension Plan | 1,936 | 896 | 9,425 | 9,227 |
Share-based payments | 27,965 | 39,907 | 81,621 | 291,998 |
Consulting services | 92,235 | 85,480 | 105,563 | 98,612 |
| $ 285,921 | $ 320,210 | $ 517,779 | $ 810,839 |
Short-term employee benefits include salaries payable within twelve months of the balance sheet date and other annual employee benefits. The company incurred the following expenses with other related parties:
| 2013 | 2012 |
Geological consulting and management services | $ - | $ 48,334 |
As at December 31, 2012 the company was indebted to related parties for the following expenses:
| 2013 | 2012 |
Consulting services | $ - | $ 19,992 |
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
Geological consulting and management service fees were paid to a company jointly controlled by an officer of the Company.
10.
Mineral Property Interests
One of the Company’s officers indirectly owns an interest in a 7.5% to 15% Net Profits Interest (“NPI”) in the Wernecke Breccia property.
11.
Share capital
The Company’s authorized share capital consists of an unlimited number of common shares without par value. Fully paid ordinary shares carry one vote per share and carry dividend rights. As at June 30, 2013 there were 99,253,559 issued and outstanding shares.
12.
Warrants
Share purchase options and weighted average exercise prices are as follows for the reporting periods presented:
| Number of warrants | Weighted average exercise price |
|
|
|
Outstanding, January 1, 2012 | 11,691,421 | $ 1.43 |
Expired | (11,691,421) | 1.43 |
Outstanding, December 31, 2012 and June 30, 2013 | - | $ - |
|
|
|
There were no warrants issued or exercised during the period ended June 30, 2013 or the year ended December 31, 2012. All of the company’s remaining outstanding warrants expired on March 23, 2013.
13.
Share Based Compensation
Share purchase options and weighted average exercise prices are as follows for the reporting periods presented:
| Number of shares | Weighted average exercise price |
|
|
|
Outstanding, January 1, 2012 | 8,152,807 | 0.95 |
Forfeited | (272,500) | 0.69 |
Expired-Naturally | (576,866) | 2.13 |
Expired-Vested | (897,500) | 0.83 |
Outstanding, December 31, 2012 and June 30, 2013 | 6,405,941 | $ 0.88 |
Options exercisable at June 30, 2013 | 6,397,191 | $ 0.89 |
|
|
|
15
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
The following is a summary of stock options outstanding as at the date of this report:
Number of optionsoutstanding | Numberexercisable | Exercise priceper option | Expiry date | Weighted average remaining life(years) |
|
|
|
|
|
60,900 | 60,900 | 0.98 | July 2013 | 0.04 |
163,125 | 163,125 | 0.17 | December 2013 | 0.47 |
65,250 | 65,250 | 0.25 | March 2014 | 0.67 |
366,666 | 366,666 | 0.45 | March 2014 | 0.72 |
970,000 | 970,000 | 0.90 | December 2014 | 1.46 |
250,000 | 250,000 | 1.00 | June 2015 | 1.99 |
1,785,000 | 1,785,000 | 0.87 | July 2015 | 2.03 |
1,180,000 | 1,180,000 | 1.35 | February 2016 | 2.64 |
1,530,000 | 1,530,000 | 0.70 | June 2016 | 2.99 |
35,000 | 26,250 | 0.29 | December 2016 | 3.48 |
6,405,941 | 6,397,191 |
|
| 2.14 |
Share-based compensation is limited to 10% of issued and outstanding shares.
14.
Revenue
Option payments have been received during the year in respect of the Company’s joint ventures, as follows:
| Three months ended June 30
| Six months ended June 30 | ||
| 2013 | 2012 | 2013 | 2012 |
Sale of property interests | - | - | 2,760,000 | - |
Other revenue | 62,297 | - | 72,386 | 16,673 |
| $ 62,297 | $ 90 | $ 2,832,386 | $ 16,673 |
On February 27, 2013 the Company completed the sale of its Thorn Property to Brixton Metals Corporation (“Brixton”), for a purchase price of CDN $1,500,000 in cash and seven million shares of Brixton. Kiska now holds 7.63 million shares, or 8.1% of Brixton's outstanding shares. The sale of the Thorn Property is part of the Company's ongoing strategy of generating capital and putting this funding to its portfolio of mineral projects.
16
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
15.
Operating segments
The Company operates in one industry segment, mineral exploration, within three geographic areas: Canada, United States, and Australia.
Management monitors the operating results of its operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However, the Company’s financing (including finance costs and finance income) and income taxes are managed on a Company basis and are not allocated to operating segments.
Three months ended June 30, 2013 | USA | Australia | Canada | Consolidated | 2012 Consolidated |
Revenue | $ | $ | $ | $ | $ |
Sale of property interest | - | - | - | - | - |
Other revenue | 35,298 | 26,999 | - | 62,297 | 90 |
Total Revenue | 35,298 | 26,999 | - | 62,297 | 90 |
June 30, 2013 |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property and equipment | 505,093 | - | 103,953 | 609,046 | 816,973 |
Restricted cash | 4,066 | 10,000 | 57,316 | 71,382 | 164,332 |
Total Non-Current Assets | 509,159 | 10,000 | 161,269 | 680,428 | 981,305 |
17
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
16.
Capital commitments and other contingencies
a)
Operating lease commitments – Company as lessee
The Company has an operating lease expiring August 31, 2015 for office space occupied by its head office as well as an operating lease for its Alaskan offices expiring on February 28, 2014. There are no restrictions placed on the lessee through entering into the leases. Future minimum payments under non-cancellable operating leases as at the end of the previous fiscal year are as follows:
December 31, 2012 | ||
Within one year |
| $ 285,461 |
After one year but no more than five years |
| 362,733 |
More than five years |
| - |
|
| $ 648,194 |
Included in the amounts above is an estimate of future operating costs of $100,020 per year. Total operating lease expense included in general and administrative expense for the six months ended June 30, 2013 was $60,338 (2012: $109,284).
b)
Mineral property commitments
The Company has mineral property commitments noted below. A liability has not been recorded for future option or royalty payments. All options are cancellable at the option of the Company without recourse.
British Columbia
i)
Kliyul Property
The Company owns a 100% interest in the property, subject to a 1.5% NSR in favour of Rio Tinto Exploration Canada Inc.
ii)
RDN and Grizzly Properties
The Company has acquired a 100% interest in the RDN mineral claims, subject to a 1.34% NSR. The Company may purchase one-half of the NSR for $666,666. The Company has 100% interest in the LL property (Grizzly), which is contiguous with the RDN property and is subject to an NSR of 2%. This royalty can be purchased at any time for $2,000,000.
iii)
Williams Property
The Company acquired a 100% interest in the Williams property, subject to a 1.25% NSR. The Company is required to issue an additional 43,500 common shares upon commencement of commercial production from the property. The Company can purchase 0.75% of the NSR for $1 million. Advance royalty payments of $5,000 per year are payable to the underlying vendor.
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Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
iv)
Quesnel Trough Property
The Company owns a 100% interest in the property and has an option agreement with Xstrata Canada Corporation to earn a 51% interest in the property by completing a preliminary assessment and spending $3,000,000 by December 31, 2013, spending no less than $250,000 in each calendar year commencing in 2010. Xstrata may earn an additional 24% (total 75%) by completing a feasibility study and incurring no less than $20 million in feasibility study expenditures which must be completed before the tenth anniversary of Xstrata earning its 51% interest.
Alaska
v)
Copper Joe Property
On August 31, 2010, the Company signed an option agreement with Kennecott Exploration Company (“Kennecott”) to acquire a 100% interest in the Copper Joe Property by incurring a total of US$5 million in exploration expenditures by December 31, 2015, including a commitment to US$170,000 in exploration by December 31, 2011 (completed). Upon completion of a positive National Instrument 43-101 compliant pre-feasibility study, the Company will pay Kennecott a one-time cash payment of US$10 million. Kennecott has a first right of refusal on property assignment or sale subject to a 90 day option exercise period, as well as a 2% NSR on the property. Prior to expending US$2.5 million, the Company will require Kennecott’s consent to divest its rights and interest to a third party.
vi)
Goodpaster Properties
The Company holds a 100% interest in the Goodpaster properties of which some properties are subject to underlying royalties. The California Surf property is subject to a 1.75% NSR to Capstone Mining Corporation of which 1% may be bought for $1,000,000. The Company must also issue 87,000 shares upon obtaining a positive feasibility study for placing any part of the California Surf property into commercial production. AngloGold Ashanti holds a 2% NSR on the Eagle-Hawk property, 1% of which can be purchased for US$1,000,000 and a 2% NSR on the Er-Ogo-Fire properties, 1% of which can be purchased for US$2,000,000.
vii)
Whistler Property
The Company owns 100% of the Whistler property, subject to a 2% NSR to MF2, LLC. Additionally, some of the claims are subject to a 1.5% NSR to the original owner, which can be brought down to 0.5% by a US$10 million buy-down. Moreover, Teck Resources Limited owns a 2% net profit interest (NPI) over some of the claims.
19
Kiska Metals Corporation
Notes to the Consolidated Financial Statements
June 30, 2013 and 2012
(Expressed in Canadian Dollars)
Australia
viii)
Lachlan Fold Belt Project
The Company owns 100% of the properties in the Lachlan Fold Belt project subject to an underlying agreement with BWG Mining which requires a cash payment of 5% of exploration expenditures until a decision to mine and includes a 2% NSR, of which 0.5% of this royalty may be purchased for US$1,000,000. The Company has a farm-in agreement with First Quantum Minerals Ltd. (“First Quantum”) (formerly Inmet Mining Australia Pty. Ltd.) giving First Quantum the option to earn a 60% interest in the project by funding exploration expenditures of Australian $5 million over a four year period ending December 12, 2012 and making cash payments to the Company of Australian $250,000 (received $50,000). The Company is currently negotiating new terms to this agreement with First Quantum.
ix)
Victoria Goldfields
Effective June 27, 2008, and amended February 2, 2011, the Company signed a letter of agreement for a farm-in and joint venture with Northgate Australian Ventures (now AuRico Gold – “AuRico”) for three mining tenements in the Stawell Corridor of the Victoria Goldfields. The Company can earn a 50% interest in one or all of the three properties by funding an additional A$500,000 per property by June 30, 2012 with a minimum expenditure of A$450,000 in aggregate per year. The property was sold by AuRico to Crocodile Gold Corp. (“Crocodile”) subsequent to the period end. The Company is currently working with Crocodile to update the option agreement.
Upon the Company earning a 50% interest in one or more properties, Crocodile will have the option to earn an additional 10% interest for a total of 60% interest in the property by funding an additional A$1.5 million in exploration expenditures within 3 years, to form a 50:50 joint venture with the Company or elect not to contribute and allow the Company to earn a 100% interest in the property by funding an additional A$2 million in exploration expenditures over 4 years. During the year the Company earned a 50% interest in one of the mining tenements and is now in the process of earning a 100% interest in that tenement. The Company withdrew from earning an interest on two other tenements.
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