Cover
Cover | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information Line Items | |
Entity Registrant Name | NORTHERN DYNASTY MINERALS LTD |
Entity Central Index Key | 0001164771 |
Document Type | 40-F |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Emerging Growth Company | false |
Entity Current Reporting Status | Yes |
Document Period End Date | Dec. 31, 2023 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2023 |
Entity Common Stock Shares Outstanding | 0 |
Document Annual Report | true |
Document Transition Report | false |
Entity File Number | 001-32210 |
Entity Incorporation State Country Code | Z4 |
Entity Address Address Line 1 | 14th Floor |
Entity Address Address Line 2 | 1040 West Georgia Street |
Entity Address City Or Town | Vancouver |
Entity Address Country | CA |
Entity Address Postal Zip Code | V6E 4H1 |
City Area Code | 604 |
Icfr Auditor Attestation Flag | true |
Local Phone Number | 684-6365 |
Security 12b Title | Common Shares, no par value |
Security Exchange Name | NYSE |
No Trading Symbol Flag | true |
Entity Interactive Data Current | No |
Document Registration Statement | false |
Annual Information Form | true |
Audited Annual Financial Statements | true |
Auditor Firm Id | 1208 |
Auditor Name | Deloitte LLP |
Auditor Location | Vancouver, Canada |
Business Contact [Member] | |
Document Information Line Items | |
Entity Address Address Line 1 | Suite 400 |
Entity Address Address Line 2 | 2711 Centerville Road |
Entity Address City Or Town | Wilmington |
Entity Address State Or Province | DE |
Entity Address Postal Zip Code | 19808 |
City Area Code | 800 |
Local Phone Number | 927-9800 |
Contact Personnel Name | Corporation Service Company |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Non-current assets | ||
Restricted Cash | $ 872 | $ 852 |
Mineral property, plant and equipment | 121,851 | 127,531 |
Total non-current assets | 122,723 | 128,383 |
Current assets | ||
Receivable from related party | 17 | 0 |
Amounts receivable and prepaid expenses | 2,908 | 2,662 |
Cash and cash equivalents | 18,200 | 14,173 |
Total current assets | 21,125 | 16,835 |
Total Assets | 143,848 | 145,218 |
Capital and reserves | ||
Share capital | 702,950 | 700,278 |
Reserves | 117,292 | 118,369 |
Deficit | (696,958) | (675,962) |
Total equity | 123,284 | 142,685 |
Non-current liabilities | ||
Trade and other payables | 338 | 463 |
Total non-current liabilities | 338 | 463 |
Current liabilities | ||
Convertible notes liability | 2,197 | 0 |
Derivative on convertible notes | 16,687 | 0 |
Payables to related parties | 287 | 237 |
Trade and other payables | 1,055 | 1,833 |
Total current liabilities | 20,226 | 2,070 |
Total liabilities | 20,564 | 2,533 |
Total Equity and Liabilities | $ 143,848 | $ 145,218 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Expenses | ||
Exploration and evaluation expenses | $ 7,729 | $ 9,269 |
General and administrative expenses | 10,161 | 9,026 |
Legal, accounting and audit | 3,389 | 4,010 |
Share-based compensation | 1,068 | 2,301 |
Loss from operating activities | 22,347 | 24,606 |
Foreign exchange loss (income) | 149 | (55) |
Interest income | (270) | (279) |
Finance expense | 81 | 67 |
Other income | (22) | (3) |
(Gain) loss on disposal of plant and equipment | 0 | (1) |
Gain on change in fair value of convertible notes derivative | (1,179) | 0 |
Net loss before tax | 21,106 | 24,335 |
Income tax (recovery) expense | (110) | 107 |
Net loss | 20,996 | 24,442 |
Items that may be subsequently reclassified to net loss | ||
Foreign exchange translation difference | 2,858 | (9,333) |
Other comprehensive loss (income) | 2,858 | (9,333) |
Total comprehensive loss | $ 23,854 | $ 15,109 |
Basic and diluted loss per share | $ 0.04 | $ 0.05 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating activities | ||
Net loss | $ (20,996) | $ (24,442) |
Non-cash or non operating items | ||
Depreciation | 164 | 259 |
Interest income | (270) | (279) |
Gain on disposal of plant and equipment | 0 | (1) |
Gain on change in fair value of convertible notes derivative | (1,179) | 0 |
Share-based compensation | 1,068 | 2,301 |
Unrealized exchange (gain) loss | (58) | 31 |
Changes in working capital items | ||
Amounts receivable and prepaid expenses | (242) | (565) |
Amounts receivable from related party | (17) | 0 |
Trade and other payables | (799) | (1,120) |
Payables to related parties | 52 | (141) |
Net cash used in operating activities | (22,110) | (23,957) |
Investing activities | ||
Acquisition of plant and equipment | 0 | (31) |
Disposal of plant and equipment | 1 | 1 |
Proceeds from royalty transactions on mineral property interest | 2,761 | 15,463 |
Interest received on cash and cash equivalents | 186 | 238 |
Net cash from investing activities | 2,948 | 15,671 |
Financing activities | ||
Proceeds from private placement of units | 3,422 | 0 |
Transaction costs on private placement of units | (37) | 0 |
Payments of principal portion of lease liabilities | (153) | (129) |
Proceeds on issue of convertible notes | 20,100 | 0 |
Transaction costs on issue of convertible notes | (22) | 0 |
Net cash from (used in) financing activities | 23,310 | (129) |
Net increase (decrease) in cash and cash equivalents | 4,148 | (8,415) |
Effect of exchange rate fluctuations on cash and cash equivalents | (121) | 297 |
Cash and cash equivalents - beginning balance | 14,173 | 22,291 |
Cash and cash equivalents - ending balance | $ 18,200 | $ 14,173 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity $ in Thousands, $ in Thousands | CAD ($) | Share capital [member] CAD ($) shares | Share capital [member] USD ($) shares | Deficit CAD ($) | Equity Settled Share Based Compensation Reserve CAD ($) | Investment Revaluation Reserve CAD ($) | Share Purchase Warrants CAD ($) | Foreign Currency Translation Reserve CAD ($) |
Balance, amount at Dec. 31, 2021 | $ 155,493 | $ 700,278 | $ (651,520) | $ 77,723 | $ (17) | $ 271 | $ 28,758 | |
Balance, share at Dec. 31, 2021 | shares | 529,779,388 | 529,779,388 | ||||||
Statement [Line Items] | ||||||||
Share-based compensation | 2,301 | 2,301 | 0 | 0 | 0 | |||
Net loss | (24,442) | $ 0 | (24,442) | 0 | 0 | 0 | 0 | |
Other comprehensive income net of tax | 9,333 | 0 | 0 | 0 | 0 | 0 | 9,333 | |
Total comprehensive loss | 15,109 | 0 | 0 | 0 | 0 | 0 | 0 | |
Balance, amount at Dec. 31, 2022 | 142,685 | $ 700,278 | (675,962) | 80,024 | (17) | 271 | 38,091 | |
Balance, share at Dec. 31, 2022 | shares | 529,779,388 | 529,779,388 | ||||||
Statement [Line Items] | ||||||||
Share-based compensation | 1,068 | $ 0 | 0 | 1,068 | 0 | 0 | 0 | |
Net loss | (20,996) | (20,996) | 0 | |||||
Other comprehensive income net of tax | (2,858) | 0 | 0 | 0 | 0 | (2,858) | ||
Total comprehensive loss | (23,854) | $ 0 | 0 | 0 | 0 | 0 | 0 | |
Private placement of units comprising of one share and one warrant, net of transactions costs, share | shares | 8,555,000 | 8,555,000 | ||||||
Private placement of units comprising of one share and one warrant, net of transactions costs, amount | 3,385 | $ 2,573 | 0 | 0 | 0 | 812 | 0 | |
Shares issued upon redemption of Deferred Share Units, amount | 0 | $ 99 | 0 | (99) | 0 | 0 | 0 | |
Shares issued upon redemption of Deferred Share Units, share | shares | 143,622 | 143,622 | ||||||
Balance, amount at Dec. 31, 2023 | $ 123,284 | $ 702,950 | $ (696,958) | $ 80,993 | $ (17) | $ 1,083 | $ 35,233 | |
Balance, share at Dec. 31, 2023 | shares | 538,478,010 | 538,478,010 |
NATURE AND CONTINUANCE OF OPERA
NATURE AND CONTINUANCE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
NATURE AND CONTINUANCE OF OPERATIONS | |
NATURE AND CONTINUANCE OF OPERATIONS | 1. NATURE AND CONTINUANCE OF OPERATIONS Northern Dynasty Minerals Ltd. (the “Company”) is incorporated under the laws of the Province of British Columbia, Canada, and its principal business activity is the exploration of mineral properties. The Company is listed on the Toronto Stock Exchange (“TSX”) under the symbol “NDM” and on the NYSE American Exchange (“NYSE American”) under the symbol “NAK”. The Company’s corporate office is located at 1040 West Georgia Street, 14 th The consolidated financial statements (“Financial Statements”) of the Company as at and for the year ended December 31, 2023, include financial information for the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Company is the ultimate parent. The Group’s core mineral property interest is the Pebble Copper-Gold-Molybdenum-Silver-Rhenium Project (the “Pebble Project”) located in Alaska, United States of America (“USA” or “US”). All US dollar amounts when presented are denoted “US$” and expressed in thousands, unless otherwise stated. The Group is in the process of exploring and evaluating the Pebble Project and has not yet determined whether the Pebble Project contains mineral reserves that are economically recoverable. The Group’s continuing operations and the underlying value and recoverability of the amounts shown for the Group’s mineral property interests is entirely dependent upon the existence of economically recoverable mineral reserves; the ability of the Group to obtain financing to complete the exploration and development of the Pebble Project; the Group obtaining the necessary permits to mine; and future profitable production or proceeds from the disposition of the Pebble Project. During the quarter ended December 31, 2023, the Group raised aggregate gross proceeds of $26,283. Proceeds were raised through (i) a US$2,000 ($2,761) investment towards the second tranche pursuant to the royalty agreement (see below), (ii) the private placement of equity units for $3,422 (note 6(b)), and (iii) the issue in aggregate of US$15,000 ($20,100) in convertible notes (note 7). As of December 31, 2023, the Group had $18,200 (2022 – $14,173) in cash and cash equivalents for its operating requirements and working capital (current assets minus current liabilities) of $899 (2022 – $14,765). These Financial Statements have been prepared based on a going concern, which assumes that the Group will be able to raise sufficient funds to continue its exploration and development activities and satisfy its obligations as they come due. For the year ended December 31, 2023, the Group incurred a net loss of $20,996 (2022 – $24,442), and had a deficit of $696,958 as of December 31, 2023 (2022 – $675,962). The Group has prioritized the allocation of its financial resources to meet key corporate and Pebble Project expenditure requirements in the near term, including funding the ongoing activities relating to the appeal and remand of the Record of Decision (the “ROD”) and the Group’s response to the US Environmental Protection Agency (“EPA”)’s final determination (both discussed below). Additional financing will be required to progress any material expenditures relating to the permitting of the Pebble Project. Additional financing may include any of or a combination of debt, equity (subject to terms of the convertible notes (note 7)), royalties and/or contributions from possible new Pebble Project participants. The Group received a US$2,000 investment towards the second US$12,000 tranche on execution of an amendment to the royalty agreement. The amendment provides the royalty holder with the right to fund the remainder of the second trance in five US$2,000 investments (note 3). There can be no assurances that the Group will be successful in obtaining additional financing or funding when required. If the Group is unable to raise the necessary capital resources and generate sufficient cash flows to meet obligations as they come due, the Group may, at some point, consider reducing or curtailing its operations. As such, there is material uncertainty that raises substantial doubt about the Group’s ability to continue as a going concern. These Financial Statements do not reflect adjustments to the carrying values and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern, and such adjustments could be material. The Group, through the Pebble Limited Partnership (“Pebble Partnership”), initiated federal and state permitting for the Pebble Project under the National Environmental Protection Act (“NEPA”) by filing documentation for a Clean Water Act (“CWA”) 404 permit with the US Army Corps of Engineers (“USACE”) in December 2017. The USACE published a draft Environmental Impact Statement (“EIS”) in February 2019 and completed a 120-day public comment period thereon on July 2, 2019. In late July 2019, the EPA withdrew the determination initiated under Section 404(c) of the CWA in 2014 for the waters of Bristol Bay (“Proposed Determination”), which attempted to pre-emptively veto the Pebble Project before it received an objective, scientific regulatory review under NEPA. On July 24, 2020, the USACE published the final EIS. On November 25, 2020, the USACE issued a ROD rejecting the Pebble Partnership’s permit application, finding concerns with the proposed compensatory mitigation plan and determining the project would be contrary to the public interest. The ROD rejected the compensatory mitigation plan as “non-compliant” and determined the project would cause “significant degradation” and was contrary to the public interest. Based on this finding, the USACE rejected Pebble Partnership’s permit application under the CWA. On January 19, 2021, the Pebble Partnership submitted its request for appeal of the ROD with the USACE Pacific Ocean Division (“USACE POD”) (the “RFA”). On February 24, 2021, the USACE POD notified the Pebble Partnership that the RFA was complete and met the criteria for appeal and assigned a review officer (“RO”) to oversee the administrative appeal process at that time but subsequently assigned a new RO. The USACE POD also indicated that due to the complexity of issues and volume of materials associated with the Pebble Project case, the review would take additional time than what federal regulations suggest, which was that the appeal should conclude within 90 days, and no case extend beyond one year. In June 2021, the USACE POD completed the ‘administrative record’ for the appeal and provided a copy to the Pebble Partnership, following which the Pebble Partnership and its legal counsel reviewed the voluminous record for completeness and relevance to the USACE’s permitting decision, and its sufficiency to support a fair, transparent and efficient review. An appeal conference was held in July 2022. On April 24, 2023, the USACE POD issued its decision to remand the permit application denial to the USACE Alaska District (the “District”) so the District can re-evaluate specific issues. As a result of the remand decision and in light of the EPA’s Final Determination (discussed below), the District was instructed to review the appeal decision and had 45 days to notify the parties how it plans to proceed. Six extensions have been requested and granted. The District’s current deadline was until the US Supreme Court acted on the State of Alaska’s bill of complaint challenging the EPA’s exercise of its CWA, Section 404(c) authority. The State of Alaska had filed a Motion for Leave to File a Bill of Complaint with the US Supreme Court challenging the Final Determination on July 26, 2023, but subsequent to the reporting date on January 8, 2024, the Supreme Court announced they would not hear the State’s complaint directly and it would have to go through the normal US federal court process. The District has not acted on this decision, but the Division Commander has informed the Company that it will provide an update on its decision, with no specific timeline for that response. As a result, the outcome from the remand remains uncertain. On October 29, 2021, the court granted the EPA’s motion for remand, and vacated the EPA’s 2019 withdrawal of the Proposed Determination decision, thus reinstating the Proposed Determination. The court declined to impose a schedule on the EPA’s proceedings on remand. On May 25, 2022, the EPA announced that it intended to advance its pre-emptive veto of the Pebble Project and issued a Revised Proposed Determination. Public comments on the revised Proposed Determination closed on September 6, 2022. The Pebble Partnership submitted extensive comments on the Revised Proposed Determination, objecting to the EPA’s pre-emptive veto of the Pebble Project and stating its concerns about legal and factual flaws therein. On January 30, 2023, the EPA issued a Final Determination under Section 404(c) of the CWA, imposing limitations on the use of certain waters in the Bristol Bay watershed as disposal sites for certain discharges of dredged or fill material associated with development of a mine at the Pebble deposit. This Final Determination is the concluding step in the administrative process set forth in 40 C.F.R. Part 231, which governs the EPA’s authority under Section 404(c) to veto permit decisions. The Administrative Procedure Act (“APA”), 5 USC §551 et seq., which governs judicial review of agency decisions, provides that individuals aggrieved by agency action may seek judicial review of any “final agency action.” The EPA’s administrative determination can be challenged by filing a lawsuit in US federal district court seeking reversal of that decision. The Company and the Pebble Partnership are seeking judicial review of the Final Determination. Subsequent to the reporting date, on March 15, 2024, the Company announced that it and the Pebble Partnership had filed two separate actions in the US federal courts challenging the federal government’s actions to prevent it and the Pebble Partnership from building a mine at the Pebble Project. |
MATERIAL ACCOUNTING POLICIES
MATERIAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
MATERIAL ACCOUNTING POLICIES | |
MATERIAL ACCOUNTING POLICIES | 2. MATERIAL ACCOUNTING POLICIES (a) Statement of Compliance These Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) (b) Basis of Preparation These Financial Statements have been prepared on a historical cost basis using the accrual basis of accounting, except for cash flow information and financial instruments carried at fair value. The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements unless otherwise stated. (c) Basis of Consolidation These Financial Statements incorporate the financial statements of the Company, the Company’s subsidiaries, and entities controlled by the Company and its subsidiaries listed below: Name of Subsidiary Place of Incorporation Principal Activity Percent owned 3537137 Canada Inc. 1 Canada Holding Company. Wholly-owned subsidiary of the Company. 100% Pebble Services Inc. Nevada, USA Management and services company. Wholly-owned subsidiary of the Company. 100% Northern Dynasty Partnership Alaska, USA Holds 99.9% interest in the Pebble Partnership and 100% of Pebble Mines. 100% (indirect) Pebble Limited Partnership (“Pebble Partnership”) Alaska, USA Limited Partnership. Ownership and Exploration of the Pebble Project. 100% (indirect) Pebble Mines Corp. (“Pebble Mines”) Delaware, USA General Partner. Holds 0.1% interest in the Pebble Partnership. 100% (indirect) Pebble West Claims Corporation 2 Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble East Claims Corporation 2 Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble Pipeline Corporation Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble Performance Dividend LLC Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) U5 Resources Inc. Nevada, USA Holding Company. Wholly-owned subsidiary of the Company. 100% Cannon Point Resources Ltd. British Columbia, Canada Not active. Wholly-owned subsidiary of the Company. 100% Name of Subsidiary Place of Incorporation Principal Activity Percent owned MGL Subco Ltd. (“MGL”) British Columbia, Canada Not active. Wholly-owned subsidiary of the Company. 100% Delta Minerals Inc. (“Delta”) British Columbia, Canada Not active. Wholly-owned subsidiary of MGL. 100% (indirect) Imperial Gold Corporation (“Imperial Gold”) British Columbia, Canada Not active. Wholly-owned subsidiary of Delta. 100% (indirect) Yuma Gold Inc. Nevada, USA Not active. Wholly-owned subsidiary of Imperial Gold. 100% (indirect) Notes: 1. Holds a 20% interest in the Northern Dynasty Partnership. The Company holds the remaining 80% interest. 2. Both entities together hold 1,840 claims comprising the Pebble Project. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Company has power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect its returns. Intra-Group balances and transactions, including any unrealized income and expenses arising from intra-Group transactions, are eliminated in preparing the Financial Statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. (d) Foreign Currencies The functional currency is the currency of the primary economic environment in which the entity operates and has been determined for each entity within the Group. The functional currency of U5 Resources Inc., Pebble Services Inc., Pebble Mines Corp., the Pebble Partnership and its subsidiaries, and Yuma Gold Inc. is the US dollar and for all other entities within the Group, the functional currency is the Canadian dollar. The functional currency determinations were conducted through an analysis of the factors for consideration identified in IAS 21, The Effects of Changes in Foreign Exchange Rates Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. The results and financial position of entities within the Group which have a functional currency that differs from that of the Group are translated into Canadian dollars as follows: (i) assets and liabilities for each statement of financial position are translated at the closing exchange rate at that date; (ii) income and expenses for each income statement are translated at average exchange rates for the period; and (iii) the resulting exchange differences are included in the foreign currency translation reserve within equity. (e) Financial Instruments On initial recognition, a financial asset is classified as measured at amortized cost; fair value through other comprehensive income (“FVTOCI”) (debt / equity investment); or fair value through profit or loss (“FVTPL”). A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. Classification of financial assets Amortized cost For a financial asset to be measured at amortized cost, it needs to meet both of the following conditions and not · it is held within a business model whose objective is to hold assets to collect contractual cash flows; and · its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Group’s financial assets at amortized cost consist of restricted cash, amounts receivable, and cash and cash equivalents. Fair value through other comprehensive income (“FVTOCI”) For a debt investment to be measured at FVTOCI, it needs to meet both of the following conditions and not · it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and · its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Equity instruments at FVTOCI On initial recognition, the Group may irrevocably elect to present subsequent changes in the instrument’s fair value in other comprehensive income (“OCI”) provided it is not held for trading. This election is made on an investment-by-investment basis. Fair Value through profit or loss (“FVTPL”) All financial assets not class ified as measured at amortised cost or FVTOCI are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. The following accounting policies apply to the subsequent measurement of financial assets: Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. Financial assets at amortized cost These assets are subsequently measured at amortised cost using the effective interest method. The amortized cost is reduced by impairment losses (see below). Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Debt investments at FVTOCI These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss. Equity investments at FVTOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss. 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 assets, the estimated future cash flows of the investments have been impacted. For marketable securities classified as FVTOCI, a significant or prolonged decline in the fair value of the securities below their cost is considered to be objective evidence of impairment. Financial liabilities Derivative financial liabilities: The Group has a derivative financial liability which relates to the derivative on the US denominated convertible notes (note 7). Derivative financial liabilities are stated at fair value, with any gains or losses on re-measurement after initial recognition recognized in the Statement of Loss. Any attributable transactions costs are expensed as incurred. Fair value is determined in the manner described in the policy note (i) below and further discussed in Note 7. Non-derivative financial liabilities: The Group has non-derivative financial liabilities which consist of trade and other payables and payables to related parties. All financial liabilities that are not held for trading or designated as at FVTPL are recognized initially at fair value net of any directly attributable transaction costs. After initial recognition these financial liabilities are measured at amortized cost using the effective interest method. (f) Exploration and Evaluation Expenditure Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the acquisition date fair value of exploration and evaluation assets acquired in a business combination or an asset acquisition. Exploration and evaluation expenditures are expensed as incurred except for expenditures associated with the acquisition of exploration and evaluation assets through a business combination or an asset acquisition. Costs incurred before the Group has obtained the legal rights to explore an area are expensed. Acquisition costs, including general and administrative costs, are only capitalized to the extent that these costs can be related directly to operational activities in the relevant area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. Exploration and evaluation (“E&E”) assets are assessed for impairment only when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount or when the Group has sufficient information to reach a conclusion about technical feasibility and commercial viability. Industry-specific indicators for an impairment review arise typically when one of the following circumstances applies: · Substantive expenditure on further exploration and evaluation activities is neither budgeted nor planned; · title to the asset is compromised; · adverse changes in the taxation and regulatory environment; · adverse changes in variations in commodity prices and markets; and · variations in the exchange rate for the currency of operation. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment. (g) Mineral Property, Plant and Equipment Mineral property, plant and equipment are carried at cost, less accumulated depreciation, and accumulated impairment losses. The cost of mineral property, plant and equipment consists of the acquisition costs transferred from E&E assets, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, including costs to further delineate the ore body, development and construction costs, removal of overburden to initially expose the ore body, an initial estimate of the costs of dismantling, removing the item and restoring the site on which it is located and, if applicable, borrowing costs. Mineral property acquisition and development costs are not currently depreciated as the Pebble Project is still in the development stage and no saleable minerals are being produced. Amounts received pursuant to the royalty arrangement (note 3), and which will be in set amounts, are recognized as sales of mineral property interests. No gain or loss is recognized until the consideration received is in excess of the carrying amount. Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective assets such as through sales pursuant to the royalty arrangement as noted above. The cost of an item of plant and equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Depreciation is provided at rates calculated to write off the cost of plant and equipment, less their estimated residual value, using the straight-line method at various rates ranging from 10% to 50% per annum. An item of equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss. Where an item of equipment consists of major components with different useful lives, the components are accounted for as separate items of equipment. Expenditures incurred to replace a component of an item of equipment that is accounted for separately, including major inspection and overhaul expenditures, are capitalized. Residual values and estimated useful lives are reviewed at least annually. (h) Impairment of Non-Financial Assets At the end of each reporting period the carrying amounts of the Group’s non-financial assets are reviewed to determine whether there is any indication that these assets are impaired. 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs of disposal and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. 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 is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. 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. This increase in the carrying amount is limited to the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. The Group has not recorded any impairment charges in the years presented. (i) Convertible Notes Convertible Notes issued by the Group represent a compound financial instrument that includes the host debt component and a foreign exchange equity conversion component, with the proceeds received allocated between the two components at the date of issue. The Group assesses whether the convertible component qualifies as equity or is considered a derivative liability. The debt liability component is initially recognized at the difference between the fair value of the convertible notes as a whole and the fair value of the derivative liability component, using a Binomial Option Pricing Model with formulae based on the Cox-Ross-Rubenstein approach. The debt liability component is subsequently remeasured at amortized cost, with the proportionate share of the transaction costs offset against the balance. The transaction costs allocated to the derivative liability component are recognized in the consolidated statement of loss at the initial recognition date. The debt liability component is subsequently accreted to the face value of the debt liability component of the convertible notes at the effective interest rate. The derivative liability component is re-measured at fair value at each reporting period with fair value gains or losses recognized in the Statement of Comprehensive Loss. (j) Leases At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, and leases of low-value assets. For these leases, the Group recognizes the lease payments as an expense in loss on a straight-line basis over the term of the lease. The Group recognizes a lease liability and a right-of-use asset (“ROU Asset”) at the lease commencement date. The lease liability is initially measured as the present value of future lease payments discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The incremental borrowing rate is the rate which the Group would have to pay to borrow, over a similar term and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. Lease payments included in the measurement of the lease liability comprise the following: · fixed payments, including in-substance fixed payments, less any lease incentives receivable; · variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; · amounts expected to be payable by the Group under residual value guarantees; · the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and · payments of penalties for terminating the lease, if the Group expects to exercise an option to terminate the lease. The lease liability is subsequently measured by: · increasing the carrying amount to reflect interest on the lease liability; · reducing the carrying amount to reflect the lease payments made; and · remeasuring the carrying amount to reflect any reassessment or lease modifications. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. The ROU Asset is initially measured at cost, which comprises the following: · the amount of the initial measurement of the lease liability; · any lease payments made at or before the commencement date, less any lease incentives received; · any initial direct costs incurred by the Group; and · an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The ROU Asset is subsequently measured at cost, less any accumulated depreciation and any accumulated impairment losses, and adjusted for any remeasurement of the lease liability. It is depreciated from the commencement date to the earlier of the end of its useful life or the end of the lease term using either the straight-line or units-of-production method depending on which method more accurately reflects the expected pattern of consumption of the future economic benefits. Each lease payment is allocated between the lease liability and finance cost. The finance cost is charged to the Statement of Comprehensive Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. On the balance sheet, the ROU Assets are presented in “ Mineral property, plant and equipment Trade and other payables (k) Share Capital, Special Warrants, Warrants and Subscriptions for Shares Common shares (“shares”), special warrants, warrants and subscriptions received for shares are classified as equity. Transaction costs directly attributable to the issue of these instruments are recognized as a deduction from equity, net of any tax effects. Where units comprising of shares and warrants are issued the proceeds and any transaction costs are apportioned between the shares and warrants according to their relative fair values. Upon conversion of special warrants and warrants into shares and the issue of shares for subscriptions received, the carrying amount, net of a pro rata share of the transaction costs, is transferred to share capital. (l) Insurance Recoveries Insurance recoveries received from the Group’s insurance carriers are recognized when the proceeds have been received, including after the reporting period before the Financial Statements are authorized for issue. The proceeds are recorded as reduction in the costs incurred in the Statement of Comprehensive Loss. (m) Share-based Payment Transactions Equity-settled Share-based Option Plan The Group operates an equity-settled share-based option plan for its employees and service providers (note 6(d)). The fair value of share purchase options granted is recognized as an employee or consultant expense with a corresponding increase in the equity-settled share-based payments reserve The fair value is measured at grant date for each tranche and is expensed on a straight-line basis over the vesting period, with a corresponding increase in the Equity Reserve. The fair value is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the share purchase options were granted and forfeiture rates as appropriate. At the end of each reporting period, the amount recognized as an expense is adjusted to reflect the actual number of share purchase options that are expected to vest. Equity-settled share-based payment transactions with non-employees are measured at the fair value of the goods or services received. However, if the fair value cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the Group obtains the goods or the counterparty renders the service. Deferred Share Unit (“DSU”) Plan The Group has a DSU plan for its non-executive directors (note 6(e)). The Group determines whether to account for DSUs as equity-settled or cash-settled based on who determines settlement and past practice. The fair value is recognized at grant date as an employee expense with a corresponding increase in the Equity Reserve if deemed equity-settled or a liability if deemed cash-settled. The fair value is estimated by multiplying the number of DSUs with the TSX quoted market price of the Company’s shares at grant date and expensed over the vesting period as share-based compensation in the Statement of Loss until the DSUs are fully vested. If the DSUs are cash-settled, the expense and liability are adjusted each reporting period for changes in the TSX quoted market price of the Company’s shares. Restricted Share Unit (“RSU”) Plan The Group has a RSU plan for its employees, executive directors and eligible consultants of the Group. The Group determines whether to account for the RSUs as equity-settled or cash-settled based who determines settlement and past practice. The fair value of RSUs is recognized as an employee expense with a corresponding increase in the Equity Reserve if deemed equity–settled or a liability if deemed cash-settled at grant date. The fair value is estimated by multiplying the number of RSUs with the TSX quoted market price of the Company’s common shares at the grant date. It is then expensed over the vesting period with the credit recognized in equity in the Equity Reserve. If cash-settled, the expense and liability are adjusted each reporting period for changes in the TSX quoted market price of the Company’s common shares. No RSUs have been issued or are outstanding in the years presented. (n) Income Taxes Income tax on the profit or loss for the years presented consists of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized in other comprehensive income or loss or directly in equity, in which case it is recognized in other comprehensive income or loss or equity. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regard to previous years. Deferred tax is provided using the balance sheet liability method, providing for unused tax loss carry forwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences relating to investments in subsidiaries, associates, and joint ventures to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period applicable to the period of expected realization or settlement. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. (o) Restoration, Rehabilitation, and Environmental Obligations An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration or development of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset, along with a corresponding liability as soon as the obligation to incur such costs arises. The timing of the actual rehabilitation expenditure is dependent on a number of factors such as the life and nature of the asset, the operating license conditions and, when applicable, the environment in which the mine operates. Discount rates using a pre-tax rate that reflects the time value of money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the unit-of-production or the straight-line method. The corresponding liability is progressively increased as the effect of discounting unwinds, creating an expense recognized in loss. Decommissioning costs are also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalized cost, except where a reduction in costs is greater than the unamortized capitalized cost of the related assets, in which case the capitalized cost is reduced to nil and the remaining adjustment is recognized in profit or loss. The operations of the Group have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for site restoration costs. Both the likelihood of new regulations and their overall effect upon the Group are not predictable. The Group has no material restoration, rehabilitation and environmental obligations as the disturbance to date is not significant. The Group has posted two bonds with the Alaskan regulatory authorities as performance guarantees for any potential reclamation liability incurred as a condition for: (i) the issue of the Miscellaneous Land Use Permit at the Pebble Project (note 5(b)), and (ii) the granting of a pipeline right-of-way (note 15(b)). (p) Loss per Share The Group presents basic and diluted loss per share information for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares and any fully prepaid special warrants outstanding during the year. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. (q) Segment Reporting The Group operates in a single reportable operating segment – the acquisition, exploration and development of mineral properties. The Group’s core asset, the Pebble Project, is in Alaska, USA. (r) Significant Accounting Estimates and Judgements The preparation of these Financial Statements requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These Financial Statements include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the Financial Statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. Th |
MINERAL PROPERTY, PLANT AND EQU
MINERAL PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
MINERAL PROPERTY, PLANT AND EQUIPMENT | |
MINERAL PROPERTY, PLANT AND EQUIPMENT | 3. MINERAL PROPERTY, PLANT AND EQUIPMENT The Group’s exploration and evaluation assets are comprised of the following: Year ended December 31, 2023 Mineral Property Interest 1 Plant and Equipment 3 Total Cost Beginning Balance $ 97,078 $ 2,435 $ 99,513 Additions – 16 16 Disposal of plant and equipment – (6 ) (6 ) Disposal of mineral property interest 2 (2,761 ) – (2,761 ) Derecognition of right-of-use asset – (196 ) (196 ) Ending balance 94,317 2,249 96,566 Accumulated depreciation Beginning Balance – (2,129 ) (2,129 ) Depreciation charge for the period 3 – (164 ) (164 ) Derecognition on disposal of plant and equipment – 6 6 Derecognition of right-of-use asset – 191 191 Ending balance – (2,096 ) (2,096 ) Foreign currency translation difference Beginning Balance 29,922 225 30,147 Movement from derecognition of right-of-use asset – (3 ) (3 ) Movement for the period (2,764 ) 1 (2,763 ) Ending balance 27,158 223 27,381 Net carrying value – December 31, 2023 $ 121,475 $ 376 $ 121,851 Year ended December 31, 2022 Mineral Property Interest 1 Plant and Equipment 3 Total Cost Beginning Balance $ 112,541 $ 2,412 $ 114,953 Addition – 31 31 Disposal of plant and equipment – (8 ) (8 ) Disposal of mineral property interest 2 (15,463 ) – (15,463 ) Ending balance 97,078 2,435 99,513 Accumulated depreciation Beginning Balance – (1,877 ) (1,877 ) Depreciation charge for the year 4 – (260 ) (260 ) Derecognition on disposal of plant and equipment – 8 8 Ending balance – (2,129 ) (2,129 ) Foreign currency translation difference Beginning Balance 21,079 184 21,263 Movement for the year 8,843 41 8,884 Ending balance 29,922 225 30,147 Net carrying value – December 31, 2022 $ 127,000 $ 531 $ 127,531 Notes to table: 1. Mineral Property Interest Comprises the Pebble Project, a contiguous block of 1,840 mineral claims covering approximately 274 square miles located in southwest Alaska, 17 miles (30 kilometers) from the villages of Iliamna and Newhalen, and approximately 200 miles (320 kilometers) southwest of the city of Anchorage. 2. Disposal of Mineral Property Interest - Royalty Agreement In July 2022, the Group entered into an agreement (the “Agreement”) with an investor (the “Royalty Holder”) to receive up to US$60 million over the next two years until July 2024, in return for the right to receive a portion of the future gold and silver production from the Pebble Project for the life of the mine (see further below). The Royalty Holder made the initial payment of US$12 million in exchange for the right to receive 2% of the payable gold production and 6% of the payable silver production from the Pebble Project, in each case after accounting for a notional payment by the Royalty Holder of US$1,500.00 per ounce of gold and US$10.00 per ounce of silver, respectively, for the life of the mine. If, in the future, spot prices exceed US$4,000.00 per ounce of gold or US$50.00 per ounce of silver, then the Group will share in 20% of the excess price for either metal. Additionally, the Company will retain a portion of the metal produced for recovery rates greater than 60% for gold and 65% for silver, and so is incentivized to continually improve operations over the life of the mine. Pursuant to the terms of the Agreement, the Royalty Holder has the right but is under no obligation to invest additional non-refundable funds, in US$12 million increments, to an aggregate total of US$60 million, within two years of the date of the Agreement, in return for the right to receive up to 10% of the payable gold and up to 30% of the payable silver (in each case, in the aggregate) on the same terms as the first tranche. In November 2023, the Group and the Royalty Holder amended the terms of the Agreement (the “Amendment”). Under the revised agreement, the Royalty Holder received the right to fund the second US$12 million tranche in six equal installments of US$2 million each (“Additional Payment Installment”), with the right to receive approximately 0.33% of the payable gold production and 1% of the payable silver production from the Pebble Project per Additional Payment Installment made (representing 1/6 of the aggregate royalty under the second tranche). The Company received the first US$2 million upon execution of the Amendment. The Amendment also extends the original expiry date by another year to July 26, 2025, in the event the Royalty Holder completes all six installments (for a total of US$12 million) on or before July 26, 2024. Based on the contractual terms of the Agreement, as well as the Group’s specific facts and circumstances, the Group accounted for both investments of US$2 million ($2.8 million) and US$12 million ($15.5 million) as a partial sale of mineral property interest. The Agreement provides the Royalty Holder with rights akin to ownership of an undivided interest in the Pebble Project. The consideration received has been recorded as a recovery of mineral property costs. Accordingly, no gain or loss was recognized on the transactions. 3. Plant and Equipment include Right-of-Use Assets (“ROU Assets”) ROU Assets , Year ended December 31, 2023 Land and Buildings Equipment Total Cost Beginning $ 1,024 $ 32 $ 1,056 Addition – 16 16 Derecognition of ROU Asset (196 ) – (196 ) Ending balance 828 48 876 Accumulated depreciation Beginning balance (510 ) (30 ) (540 ) Depreciation charge for the period 4 (147 ) (4 ) (151 ) Derecognition of ROU Asset 191 – 191 Ending balance (466 ) (34 ) (500 ) Foreign currency translation difference Beginning balance 2 (1 ) 1 Movement from derecognition of ROU Asset 5 – 5 Movement for the period (9 ) (1 ) (10 ) Ending balance (2 ) (2 ) (4 ) Net carrying value – December 31, 2023 $ 360 $ 12 $ 372 4. For the year ended December 31, 2023, total depreciation was $164 (2022 – $260) of which ROU Asset depreciation was $151 (2022 – $150). ROU Asset depreciation of $101 (2022 – $104) is included in general and administrative expenses (note 10(b)). The remainder of the depreciation is included in exploration and evaluation expenses. |
AMOUNTS RECEIVABLE AND PREPAID
AMOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
AMOUNTS RECEIVABLE AND PREPAID EXPENSES | |
AMOUNTS RECEIVABLE AND PREPAID EXPENSES | 4. AMOUNTS RECEIVABLE AND PREPAID EXPENSES December 31 December 31 2023 2022 Sales tax receivable $ 63 $ 66 Interest, refundable deposits, and other receivables 1 595 64 Prepaid expenses 2 2,250 2,532 Total $ 2,908 $ 2,662 Notes to table: 1. Includes the Group’s insurance carrier’s reimbursement of $532 of legal costs incurred on class actions and the Alaska Grand Jury investigation (note 15(a)). 2. Includes prepaid insurance, which is amortized over the insurance term. |
CASH AND CASH EQUIVALENTS AND R
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2023 | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 5. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (a) Cash and Cash Equivalents The Group’s cash and cash equivalents on December 31, 2023, and 2022, consisted of cash on hand and was invested in business and savings accounts. (b) Restricted Cash The Group has cash deposited with a United States financial institution that has been pledged as collateral to the surety provider for a US$2,000 surety bond that was placed with the Alaskan regulatory authorities for a performance guarantee related to any potential reclamation liability as a condition of the Miscellaneous Land Use Permit granted to the Pebble Partnership for its ongoing activities on the Pebble Project. The cash deposit will be released once any reclamation work required has been performed and assessed by the Alaskan regulatory authorities. The cash is invested in a money market fund. For the year ended December 31, 2023, the Group earned income of $40 (2022 – $10) which was re-invested. |
CAPITAL AND RESERVES
CAPITAL AND RESERVES | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL AND RESERVES | |
CAPITAL AND RESERVES | 6. CAPITAL AND RESERVES (a) Authorized Share Capital At December 31, 2023, and 2022, authorized share capital consisted of an unlimited number of common shares (“Shares”) with no par value, of which 538,478,010 (2022 – 529,779,388) Shares were issued and fully paid. (b) Unit Private Placement In December 2023, the Group completed a non-brokered private placement of 8,555,000 units in the capital of the Company (the “Units”) at a price of $0.40 per unit for gross proceeds of $3,422. Each Unit consisted of one Share and one Share purchase warrant (a “Warrant”), which entitles the holder to purchase an additional Share at a price of $0.45 per Share until December 14, 2025. The Warrants are subject to an accelerated expiry upon 30 calendar days’ notice from the Group in the event the Company’s Shares trade for 20 consecutive trading days any time after December 21, 2023, at a volume weighted average price of at least $0.90 on either the TSX or the NYSE American. No commission or finders’ fees were payable. The Shares and Warrants are subject to resale restrictions under applicable securities laws in Canada and the United States. As of the reporting date, the Group incurred a total of $37 in issuance costs related to regulatory and legal fees. The Group apportioned the gross proceeds and issuance costs between share capital and Warrants based on their relative fair values on date of issue; share capital at the TSX quoted market price for Shares on date of issue, Warrants estimated based on the Black Scholes option pricing model using the following inputs: exercise price - $0.45, valuation date share price – $0.41, expected volatility – 58.4%, risk free rate – 3.91%, expected term – 2 years, and dividend –nil%. Accordingly, net proceeds of $2,573 were allocated to share capital and $812 to Warrants. (c) Options not Issued under the Group’s Incentive Plan The following reconciles outstanding non-employee options (options that were not issued under the Group’s incentive plan (see (c) below)), each exercisable to acquire one share, for the year ended December 31, 2023, and 2022 respectively: Continuity Number of options 1 Weighted average exercise price ($/options) Balance January 1, 2022 94,000 0.36 Expired (56,400 ) 0.40 Balance December 31, 2022, and December 31, 2023 37,600 0.29 Notes to table: 1. The Group issued options in exchange for those which were outstanding in Cannon Point Resources Ltd. on the acquisition of the company in October 2015. The remaining options expire on December 8, 2024. 2. As of December 31, 2023, the remaining life was 0.94 (2022 – 1.94) years. (d) Share Purchase Option Compensation Plan The Group has a share purchase option plan approved by the Group’s shareholders that allows the Board of Directors to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees, and service providers. The share purchase option plan (the “2021 Rolling Option Plan”) is based on the maximum number of eligible shares (including any issuances from the Group’s RSU and DSU plans ) equaling a rolling percentage of up to 8% of the Company’s outstanding Shares, calculated from time to time. Pursuant to the 2021 Rolling Option Plan, if outstanding share purchase options (“options”) are exercised and the number of issued and outstanding shares of the Company increases, then the options available to grant under the plan increase proportionately (assuming there are no issuances under the RSU and DSU plans). The exercise price of each option is set by the Board of Directors at the time of grant but cannot be less than the market price, being the 5-day volume weighted average trading price calculated the day before the grant. Options can have a maximum term of five years and typically terminate 90 days following the termination of the optionee’s employment or engagement. In the case of death or retirement, any outstanding vested options will expire the earlier of the expiry date or one year from date of death or retirement. The vesting period for options is at the discretion of the Board of Directors at the time the options are granted. The following reconciles the issued and outstanding options pursuant to the Group’s incentive plan for the years ended December 31, 2023, and 2022: Continuity of options Number of options Weighted average exercise price ($/option) Balance January 1, 2022 20,825,500 1.45 Expired (4,386,000 ) 1.75 Granted 1 11,254,000 0.41 Balance December 31, 2022 27,693,500 0.98 Expired (3,375,000 ) 0.80 Balance December 31, 2023 24,318,500 1.00 Note 1. The weighted average fair value was estimated at $0.29 per option, based on the Black-Scholes option pricing model using weighted average assumptions: risk free rate – 3.07%, expected life – 5 years, expected volatility – 99.02%, grant date share price – $0.39 and expected dividend yield – nil. Expected volatility was based on the historical and implied volatility of the Company’s share price on the TSX. For the year ended December 31, 2023, the Group recognized share-based compensation (“SBC”) for options of $1,043 (2022 – $2,277) in the Statement of Comprehensive Loss. The following table summarizes information on options outstanding as at the reported dates: December 31, 2023 December 31, 2022 Exercise prices ($) Number of options outstanding Number of options exercisable Weighted Average Remaining contractual life (years) Number of options outstanding Number of options exercisable Weighted Average Remaining contractual life (years) 0.41 11,254,000 11,254,000 3.63 11,254,000 5,627,000 4.63 0.76 – – – 3,300,000 3,300,000 0.61 0.99 6,368,500 6,368,500 0.74 6,368,500 6,368,500 1.74 2.01 6,696,000 6,696,000 1.55 6,696,000 6,696,000 2.55 2.34 – – – 75,000 75,000 0.58 Total 24,318,500 24,318,500 27,693,500 22,066,500 The weighted average contractual life for options outstanding and which were all exercisable, was 2.30 (2022 – 2.97) years per option. Options exercisable on December 31, 2022, had a weighted average contractual life of 2.55 years and an exercise price of $1.12 per option. (e) Deferred Share Units (“DSUs”) The Group has a DSU plan approved by the Group’s shareholders, which allows the Board, at its discretion, to award DSUs to non-executive directors for services rendered to the Group and provides that non-executive directors may elect to receive up to 100% of their annual compensation in DSUs. The aggregate number of DSUs outstanding pursuant to the DSU plan may not exceed 1% of the issued and outstanding shares from time to time provided the total does not result in the total shares issuable under all the Group’s share-based compensation plans (i.e. including the Group’s option and restricted share unit plans) exceeding 8% of the total number of issued outstanding shares. DSUs are payable when the non-executive director ceases to be a director including in the event of death. DSUs may be settled in shares issued from treasury, by the delivery to the former director of shares purchased by the Group in the open market, payment in cash, or any combination thereof, at the discretion of the Group. The following reconciles DSUs outstanding for the years ended December 31, 2023, and 2022: Continuity of DSUs Number of DSUs Weighted average fair value ($/DSU) Balance January 1, 2022 477,711 0.69 Granted 61,575 0.39 Balance December 31, 2022 539,286 0.65 Granted 74,683 0.34 Redeemed (143,622 ) 0.69 Balance December 31, 2023 470,347 0.59 For the year ended December 31, 2023, the Group recognized SBC of $25 (2022 – $24) for DSU grants in the Statement of Comprehensive Loss, based on the aggregate market value of Shares on grant date, with a corresponding increase in the equity-settled share payment reserve in equity. During the year ended December 31, 2023, 143,622 DSUs with a fair value of $0.69 on date of grant were redeemed and paid out in Shares. After the reporting period the Group issued 15,937 DSUs with a fair value of $0.34 per DSU on date of grant (note 8(a)). (f) Foreign Currency Translation Reserve Continuity Balance January 1, 2022 $ 28,758 Gain on translation of foreign subsidiaries 9,333 Balance December 31, 2022 38,091 Loss on translation of foreign subsidiaries (2,858 ) Balance December 31, 2023 $ 35,233 The foreign currency translation reserve represents accumulated exchange differences arising on the translation, into the Group’s presentation currency (the Canadian dollar), of the results of operations and net assets of the Group’s subsidiaries with a US dollar functional currency. |
CONVERTIBLE NOTES LIABILITY AND
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES | 12 Months Ended |
Dec. 31, 2023 | |
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES | |
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES | 7. CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES In December 2023, pursuant to an investment agreement, Kopernik Global Investors, LLC, on behalf of its clients (collectively the “Investor”), purchased convertible notes having an aggregate principal amount of US$15 million (the “Notes”). The Notes have a term of 10 years from the date of issuance, being December 18, 2023, and bear interest at a rate of 2.0% per annum, payable in cash semi-annually in arrears on December 31 and June 30 of each year, commencing on June 30, 2024. The principal amount of the Notes is convertible at any time at the option of the Investor at a per share conversion price of US$0.3557 (the “Conversion Price”), subject to adjustment in certain circumstances (i.e., including a change of control). If the Group proceeds with an equity financing in the future, the terms of the Notes require that the Group redeem the Notes at 150% of the principal amount of the Notes, in cash or convert at the Conversion Price (the “financing redemption option”), at the election of the Investor, and pay any accrued but unpaid interest in cash. This financing is subject to customary exclusions for non-financing issuances of the Company’s equity securities. In addition, the Notes include change of control provisions under which (i) the Investor may elect to convert the Notes concurrent with a change of control transaction at the lower of the fixed Conversion Price and the price per common share implied by the change of control transaction, and (ii) if the Investor does not elect to convert, the Group will be required to offer to repurchase the Notes at 101% of the principal amount ( the "CoC option"), plus accrued but unpaid interest. As the amount of the Notes to be settled is a fixed US Dollar amount which when converted back to the Company’s functional currency results in a variable amount of cash (i.e., a variable carrying amount for the financial liability that arise from changes in the USD/CAD exchange rate), the fixed-for-fixed criterion for equity classification is not met. The conversion option, financing redemption option and the CoC option are derivative liabilities, with their value dependent on the USD/CAD exchange rate and so are embedded derivatives. The Notes as a result include a debt host, which is accounted for at amortised cost, and the embedded derivatives, which are separated from the debt host and accounted for at fair value with changes in fair value recorded in the Statement of Comprehensive Loss. The debt host has been accounted for at amortised cost with a 30.14% effective interest rate. Transaction costs of $196 were incurred on the issue of the Notes of which $22 has been allocated to the debt host with the balance recorded in the Statement of Comprehensive Loss. The following reconcile the movement: Continuity Debt Host Derivative on Notes Total Recognition on issue date $ 2,234 $ 17,866 $ 20,100 Transaction costs (22 ) – (22 ) Interest accretion 26 – 26 Interest accrued (15 ) – (15 ) Gain on change in fair value – (1,179 ) (1,179 ) Exchange difference (26 ) - (26 ) As at December 31, 2023 $ 2,197 $ 16,687 $ 18,884 The fair value of the conversion option was estimated using the Binomial Option Pricing Model with formulae based on the Cox-Ross-Rubenstein approach with the following inputs and assumptions on each date : Input/Assumption Issue Date December 31, 2023 Share price on valuation date US$0.34 US$0.32 Volatility 95.8232 % 95.4459 % Strike price on conversion US$0.3557 US$0.3557 Time to expiration 3653 days 3640 days Risk free interest rate 5.221 % 5.153 % Dividend Yield Nil% Nil% The estimated value for the conversion option under the model was US $12,876 ($17,253) on date of issue and US $12,048 ($15,960) on December 31, 2023. For the financing redemption and CoC options, the Group estimated the discounted cash flow ("DCF") value of the options assuming the events that trigger these options occur mid-point between the Notes issuance and maturity. The Group determined from the DCF analysis that there was additional value over and above the conversion option. As such, the Group estimated at both the issue date and at December 31, 2023, a 10% probability for either option occurring with an 80% probability of conversion at the Conversion Price. Accordingly, the estimated value for the embedded derivative was estimated at US$13,333 ($17,866) on issue date, and US$12,597 ($16,687) on December 31, 2023, and as a result the Group recorded a gain in the change in fair value of $1,179 for the embedded derivative. The valuation of the embedded derivative is sensitive to changes in the Company’s share price and assumed volatility of the Company’s share price. If the assumed volatility decreases by 10%, the fair value of the embedded derivative decreases by approximately 4%. If the share price is reduced/increased by 10%, the fair value of the embedded derivative reduces/increases by approximately 10%. As the conversion feature may be exercised by the holder at any time, the Group does not have the right to defer its settlement for at least twelve months. Accordingly, debt host and derivative on notes is classified as a current liability. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 8. RELATED PARTY BALANCES AND TRANSACTIONS The components of transactions to related parties is as follows: December 31 December 31 Receivable from related party 2023 2022 Hunter Dickinson Services Inc. (“HDSI”) (b) $ 17 $ – Total $ 17 $ – December 31 December 31 Payables to related parties 2023 2022 Key management personnel (“KMP”) (a) $ 34 $ 35 Hunter Dickinson Services Inc. (b) 253 202 Total $ 287 $ 237 Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation. Details between the Group and other related parties are disclosed below. (a) Transactions and Balances with Key Management Personnel The aggregate value of transactions with KMP, which are the Group’s directors that includes the Chief Executive Officer (“CEO”) and senior management: the Chief Financial Officer (“CFO”), Company Secretary and General Counsel, Executive Vice President (“EVP”), Environment and Sustainability, EVP, Corporate Development, Vice President (“VP”), Investor Relations, VP, Engineering, and the Pebble Partnership’s CEO, VP, Public Affairs and Senior Permitting Advisor, was as follows for the years ended December 31, 2023 and 2022: Transaction 2023 2022 Compensation Amounts paid and payable to HDSI for services of KMP employed by HDSI 1 $ 2,441 $ 2,499 Amounts paid and payable to KMP 2 1,768 1,913 4,209 4,412 Share-based compensation 3 661 1,441 Total compensation $ 4,870 $ 5,853 Notes to table: 1. The Group’s CEO, CFO, Board Chair and senior management, other than disclosed in note 2 below, are employed by the Group through HDSI (refer (b) below). 2. Represents short-term employee benefits, including cash director’s fees paid to the Group’s independent directors, and salaries paid and payable to the Pebble Partnership’s CEO, VP, Public Affairs and Senior Permitting Advisor. 3. SBC relates to options issued and/or vesting and DSUs granted during the respective periods (notes 6(d)-(e)). After the reporting period, 15,937 DSUs were issued to a director (note 6(e)). (b) Transactions and Balances with other Related Parties HDSI is a private company that provides geological, engineering, environmental, corporate development, financial, administrative and management services to the Group and its subsidiaries at annually set rates pursuant to a management services agreement. The annually set rates also include a component of overhead costs such as office rent, information technology services and general administrative support services. HDSI also incurs third party costs on behalf of the Group, which are reimbursed by the Group at cost. Several directors and other key management personnel of HDSI, who are close business associates, are also key management personnel of the Group. For the years ended December 31, 2023 and 2022, transactions with HDSI were as follows: Transactions 2023 2022 Services rendered by HDSI Technical 1 Engineering $ 363 $ 372 Environmental 321 508 Other technical services 125 44 809 924 General and administrative Management, consulting, corporate communications, secretarial, financial and administration 2,450 2,223 Shareholder communication 695 727 3,145 2,950 Total for services rendered 3,954 3,874 Reimbursement (refund) of third-party expenses Conferences and travel 246 124 Insurance 87 48 Office supplies and information technology 2 575 532 Total reimbursed 908 704 Total $ 4,862 $ 4,578 Notes to table: 1. Included in exploration and evaluation expenses. 2. Includes payments made for the use of offices and shared space of $166 (2022 – $151). The Company signed an office use agreement effective May 1, 2021, for a five-year term ending April 29, 2026. As of December 31, 2023, the remaining undiscounted commitment was $238 (note 15(d)). Pursuant to the management services agreement between HDSI and the Company, following a change of control, the Company is subject to termination payments if the management services agreement is terminated. The Company will be required to pay HDSI $2,800 and an aggregate amount equal to six months of annual salaries payable to certain individual service providers under the management services agreement and their respective employment agreements with HDSI. |
TRADE AND OTHER PAYABLES
TRADE AND OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2023 | |
TRADE AND OTHER PAYABLES | |
TRADE AND OTHER PAYABLES | 9. TRADE AND OTHER PAYABLES December 31 December 31 Current liabilities 2023 2022 Falling due within the year Trade $ 929 $ 1,683 Lease liabilities 1 126 150 Total $ 1,055 $ 1,833 December 31 December 31 Non-current liabilities 2023 2022 Lease liabilities 1 $ 338 $ 463 Total $ 338 $ 463 Notes to tables: 1. Lease liabilities relate to leases of offices, office equipment and for yard storage, which have remaining lease terms of 7 to 77 months and interest rates of 9.5% – 12% over the term of the leases. During the year ended December 31, 2023, the Group recognized interest expense on lease liabilities of $55 (2022 – $67) respectively. The following summarizes lease liabilities for the reporting periods indicated: December 31 December 31 Lease liabilities 2023 2022 Beginning balance $ 613 $ 687 Interest expense 55 67 Lease payments (208 ) (196 ) Lease recognition 16 10 Foreign currency translation difference (12 ) 45 Ending balance 464 613 Current portion 126 150 Non-current portion 338 463 Total $ 464 $ 613 The following table provides the schedule of undiscounted lease liabilities as at December 31, 2023: Total Less than one year $ 164 One to five years 399 Later than 5 years 34 Total undiscounted lease liabilities $ 597 The Group had short-term lease commitments of less than a year relating to a property lease totaling $55 as of January 1, 2023. During the year ended December 31, 2023, the Group incurred $nil in short-term lease commitments (2022 – $157) and expensed $55 (2022 - $158). |
EXPLORATION AND EVALUATION, GEN
EXPLORATION AND EVALUATION, GENERAL AND ADMINISTRATIVE, LEGAL ACCOUNTING AND AUDIT EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
EXPLORATION AND EVALUATION, GENERAL AND ADMINISTRATIVE, LEGAL ACCOUNTING AND AUDIT EXPENSES | |
EXPLORATION AND EVALUATION, GENERAL AND ADMINISTRATIVE, LEGAL ACCOUNTING AND AUDIT EXPENSES | 10. EXPLORATION AND EVALUATION, GENERAL AND ADMINISTRATIVE, LEGAL ACCOUNTING AND AUDIT EXPENSES (a) Exploration and Evaluation Expenses (“E&E”) For the years ended December 31, 2023 and 2022, E&E consisted of the following: E&E 2023 2022 Engineering $ 2,140 $ 1,390 Environmental 974 2,187 Property fees 1,252 1,194 Site activities 937 1,565 Socio-economic 2,386 2,242 Transportation (71 ) 620 Other activities and travel 111 71 Total $ 7,729 $ 9,269 (b) General and Administrative Expenses (“G&A”) For the years ended December 31, 2023 and 2022, G&A consisted of the following: G&A 2023 2022 Conference and travel $ 477 $ 248 Consulting 855 651 Depreciation of right-of-use assets 101 104 Insurance 3,227 2,422 Office costs, including information technology 765 769 Management and administration 3,172 3,130 Shareholder communication 1,229 1,276 Trust and filing 335 426 Total $ 10,161 $ 9,026 (c) Legal, Accounting and Audit Expenses For the years ended December 31, 2023 and 2022, the following table provides further details: 2023 2022 Legal $ 6,459 $ 4,212 Insurance cost recoveries (3,617 ) (710 ) Accounting 130 119 Audit and reviews 417 389 Total $ 3,389 $ 4,010 |
EMPLOYMENT COSTS
EMPLOYMENT COSTS | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYMENT COSTS | |
EMPLOYMENT COSTS | 11. EMPLOYMENT COSTS For the years ended December 31, 2023 and 2022, the Group recorded the following: 2023 2022 Exploration and evaluation Salaries and benefits $ 1,701 $ 2,267 Amounts paid for services by HDSI personnel (note 6(b)) 809 923 2,510 3,190 General and administrative Salaries and benefits 1,439 1,407 Amounts paid for services by HDSI personnel (note 6(b)) 2,544 2,433 3,983 3,840 Share-based payments 1,068 2,301 $ 7,561 $ 9,331 |
BASIC AND DILUTED LOSS PER SHAR
BASIC AND DILUTED LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
BASIC AND DILUTED LOSS PER SHARE | |
BASIC AND DILUTED LOSS PER SHARE | 12. BASIC AND DILUTED LOSS PER SHARE The calculation of basic and diluted loss per share for the year ended December 31, 2023 and 2022 was based on the following: 2023 2022 Loss attributable to shareholders $ 20,996 $ 24,442 Weighted average number of shares outstanding (000s) 530,272 529,779 For the years ended December 31, 2023 and 2022, basic and diluted loss per share does not include the effect of employee share purchase options outstanding (2023 –24,318,500, 2022 – 27,693,500), non-employee share purchase options (2023 – 37,600, 2022 – 37,600) and DSUs (2023 – 470,347, 2022 – 539,286), as they were anti-dilutive. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
INCOME TAX | 13. INCOME TAX Year ended December 31 Reconciliation of effective tax rate 2023 2022 Net loss $ (20,996 ) $ (24,442 ) Total income tax (recovery) expense (110 ) 107 Loss excluding income tax (21,106 ) (24,335 ) Income tax recovery using the Company's domestic tax rate (5,699 ) (6,570 ) Non-deductible expenses and other 318 631 Change in tax rates – – Deferred income tax assets not recognized 5,491 5,832 $ 110 $ (107 ) The Company's domestic tax rate for the year was 27% (2022 – 27%). Year ended December 31 Deferred income tax assets (liabilities) 2023 2022 Tax losses $ 2,262 $ 2,167 Net deferred income tax assets 2,262 2,167 Resource property/investment in Pebble Partnership (2,262 ) (2,167 ) Net deferred income tax liability $ – $ – The Group had the following temporary differences on December 31, 2023, in respect of which no deferred tax asset has been recognized: Resource Expiry Tax losses pools Other Within one year $ – $ – $ – One to five years – – 1,300 After five years 339,693 – – No expiry date 37,595 93,248 190 Total $ 377,288 $ 93,248 $ 1,490 The Group has net operating tax losses in the US totaling $37.6 million that can be only utilized to a maximum of 80% of taxable income. The Group has taxable temporary differences in relation to investments in foreign subsidiaries or branches of $8.0 million (2022 – $7.6 million) which has not been recognized because the Group controls the reversal of liabilities, and it is expected it will not reverse in the foreseeable future. |
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2023 | |
FINANCIAL RISK MANAGEMENT | |
FINANCIAL RISK MANAGEMENT | 14. FINANCIAL RISK MANAGEMENT The Group is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is as follows: Page | Northern Dynasty Minerals Ltd. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in thousands of Canadian Dollars, unless otherwise stated, and except per equity unit) (a) Credit Risk Credit risk is the risk of potential loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations. The Group’s credit risk is primarily attributable to its liquid financial assets, including cash and cash equivalents, restricted cash and amounts receivable. The Group limits the exposure to credit risk by only investing its cash and cash equivalents and restricted cash with high-credit quality financial institutions in business and saving accounts, guaranteed investment certificates, in government treasury bills, low risk corporate bonds and money market funds which are available on demand by the Group when required. Amounts receivable in the table below exclude receivable balances with government agencies (note 4). The Group’s maximum exposure was as follows: December 31 December 31 Exposure 2023 2022 Interest, refundable deposits, and other receivables $ 595 $ 64 Restricted cash 872 852 Cash and cash equivalents 18,200 14,173 Total exposure $ 19,667 $ 15,089 (b) Liquidity Risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations when they become due. The Group ensures, as far as reasonably possible, it will have sufficient capital to meet short to medium term business requirements, after considering cash flows from operations and the Group’s holdings of cash and cash equivalents and restricted cash, where applicable. However, the Group has noted material uncertainty that raises substantial doubt about the Group’s ability to continue as a going concern (note 1). The Group though has been successful in the past in raising funds when needed. The Group’s cash and cash equivalents at the reporting date were invested in business and savings accounts (note 5(a)). The Group’s financial liabilities are comprised of current trade and other payables (note 8), payables to related parties (note 8), which are due for payment within 12 months from the reporting date, and non-current trade payables, which are due for payment more than 12 months from the reporting date. The convertible notes are convertible into common shares at a fixed conversion price at any time at the option of the Investor (note 7) until December 18, 2033. The carrying amounts of the Group’s financial liabilities represent the Group’s contractual obligations. (c) Foreign Exchange Risk The Company is subject to both currency transaction risk and currency translation risk: the Pebble Partnership, Pebble Services Inc. and U5 Resources Inc. have the US dollar as functional currency, and certain of the Company’s corporate expenses are incurred in US dollars. The operating results and financial position of the Group are reported in Canadian dollars in these Financial Statements. As a result, the fluctuation of the US dollar in relation to the Canadian dollar will have an impact upon the losses incurred by the Group as well as the value of the Group’s assets and the amount of shareholders’ equity. The Group has not entered into any agreements or purchased any instruments to hedge possible currency risks. The exposure of the Group's US dollar-denominated financial assets and liabilities to foreign exchange risk was as follows: December 31 December 31 2023 2022 Financial assets Amounts receivable $ 676 $ 108 Cash and cash equivalents and restricted cash 18,069 7,347 18,745 7,455 Financial liabilities Non-current trade payables (338 ) (463 ) Convertible notes (18,884 ) – Current trade and other payables (724 ) (1,383 ) Payables to related parties (134 ) (71 ) (20,080 ) (1,917 ) Net financial (liabilities) assets exposed to foreign currency risk $ (1,335 ) $ 5,538 Based on the above net exposures and assuming all other variables remain constant, a 10% change in the value of the Canadian dollar relative to the US dollar would result in a gain or loss of $133 (2022 – $554) in the reported period. This sensitivity analysis includes only outstanding foreign currency denominated monetary items. (d) Interest Rate Risk The Group is subject to interest rate cash flow risk with respect to its investments in cash and cash equivalents. The Group’s policy is to invest cash at fixed rates of interest and cash reserves are to be maintained in cash and cash equivalents or short-term low risk investments to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates when cash and cash equivalents mature impact interest income earned. Assuming all other variables remain constant; a 100 basis points change representing a 1% increase or decrease in interest rates would have resulted in a decrease or increase in loss of $82 (2022 – $182). (e) Capital Management The Group's policy is to maintain a strong capital base to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Group consists of equity, comprising share capital and reserves, net of accumulated deficit. There were no changes in the Group's approach to capital management during the period. The Group is not subject to any externally imposed capital requirements. (f) Fair Value The fair value of the Group’s financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: · Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; · Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and · Level 3 – Inputs that are not based on observable market data. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Fair value measurements, which are determined by using valuation techniques, are classified in their entirety as either Level 2 or Level 3 based on the lowest level input that is significant to the measurement. The Group has categorized the fair value measurement of the derivative on the convertible notes within Level 2 of the hierarchy as it is exposed to market risk; it employs the quoted market price of the Company’s shares, and foreign exchange rates. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL AND RESERVES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES (a) Legal Proceedings Class Action Litigation following the USACE’s Record of Decision United States On December 4 and December 17, 2020, separate putative shareholder class action lawsuits were filed against the Company and certain of its current and former officers and directors in the U.S. District Court for the Eastern District of New York (Brooklyn) regarding the drop in the price of the Company’s stock following the ROD by the USACE regarding the Pebble Project. These cases are captioned Darish v. Northern Dynasty Minerals Ltd. et al Hymowitz v. Northern Dynasty Minerals Ltd. et al. On September 22, 2023, the settlement amount of US$6,375 ($8,445) was paid by the Company’s insurance carriers to the plaintiff’s firm on counsel’s instructions. Canada On December 3, 2020, a putative shareholder class action lawsuit was filed against the Company, certain of its current and former officers and directors, and one of its underwriters in the Supreme Court of British Columbia regarding the decrease in the price of the Company’s stock following the USACE’s November 25, 2020, decision regarding the Pebble Project. The case is captioned Haddad v. Northern Dynasty Minerals Ltd. et al., On February 17, 2021, a putative shareholder class action lawsuit was filed against the Company, certain of its current and former officers and directors, and certain of its underwriters in the Supreme Court of British Columbia regarding the decrease in the price of the Company’s stock following (i) the USACE’s August 24, 2020 announcement that the Pebble Project could not be permitted as proposed, and (ii) the USACE’s November 25, 2020 decision regarding the Pebble Project. The case is captioned Woo v. Northern Dynasty Minerals Ltd. et al. In April 2023, an agreement-in-principle was reached to settle the Haddad and Woo actions following mediation between the parties and the insurance carriers. The parties subsequently executed a settlement agreement which (a) provides for a settlement amount within insurance policy limits, and (b) makes clear that the defendants deny any liability whatsoever and makes no admission of wrongdoing. A copy of the settlement agreement has been shared with the Court. On October 8, 2023, the settlement amount of US$2,125 ($2,886) was paid by the Company’s insurance carriers to the plaintiff’s firm on counsel’s instructions. On November 3, 2023, the Court discontinued the Woo On March 5, 2021, a putative shareholder class action lawsuit was filed against the Company, certain of its current and former officers and directors, and certain of its underwriters in the Ontario Superior Court of Justice regarding the decrease in the price of the Company’s stock following the USACE’s November 25, 2020, decision regarding the Pebble Project. The case is captioned Pirzada v. Northern Dynasty Minerals Ltd. et al. Grand Jury Subpoena On February 5, Indemnification Obligations The Company is subject to certain indemnification obligations to both present and former officers and directors, including the Pebble Partnership’s former CEO, in respect to the legal proceedings described above. These indemnification obligations will be subject to limitations prescribed by law and the articles of the Company and may also be subject to contractual limitations. (b) Pipeline Right-of-Way Bond Commitment The Group has a bond of US$300 with the Alaskan regulatory authorities for a performance guarantee related to any potential reclamation liability as a condition for a pipeline right-of-way to a subsidiary of the Pebble Partnership, the Pebble Pipeline Corporation. The Group is liable to the surety provider for any funds drawn by the Alaskan regulatory authorities. (c) Pebble Performance Dividend Commitment The Group has a future commitment beginning at the outset of project construction at the Pebble Project to distribute cash generated from a 3% net profits royalty interest in the Pebble Project to adult residents of Bristol Bay villages that have subscribed as participants, with a guaranteed minimum aggregate annual payment of US$3,000 each year the Pebble mine operates. (d) Office Use Commitment The Company has an office use agreement with HDSI ending April 29, 2026 (note 7(b)). The commitment is a flow through cost at market rates. At December 31, 2023, the remaining undiscounted commitment was $238, and is summarized as follows: Total Less than one year $ 104 One to five years 134 Total $ 238 (e) Contingent Legal Fees Payable The Group has legal fees totalling US$635 payable to certain legal counsel on completion of a transaction that secures a partner for the Pebble Partnership. |
MATERIAL ACCOUNTING POLICIES (P
MATERIAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
MATERIAL ACCOUNTING POLICIES | |
Statement of Compliance | These Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) |
Basis of Preparation | These Financial Statements have been prepared on a historical cost basis using the accrual basis of accounting, except for cash flow information and financial instruments carried at fair value. The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements unless otherwise stated. |
Basis of Consolidation | These Financial Statements incorporate the financial statements of the Company, the Company’s subsidiaries, and entities controlled by the Company and its subsidiaries listed below: Name of Subsidiary Place of Incorporation Principal Activity Percent owned 3537137 Canada Inc. 1 Canada Holding Company. Wholly-owned subsidiary of the Company. 100% Pebble Services Inc. Nevada, USA Management and services company. Wholly-owned subsidiary of the Company. 100% Northern Dynasty Partnership Alaska, USA Holds 99.9% interest in the Pebble Partnership and 100% of Pebble Mines. 100% (indirect) Pebble Limited Partnership (“Pebble Partnership”) Alaska, USA Limited Partnership. Ownership and Exploration of the Pebble Project. 100% (indirect) Pebble Mines Corp. (“Pebble Mines”) Delaware, USA General Partner. Holds 0.1% interest in the Pebble Partnership. 100% (indirect) Pebble West Claims Corporation 2 Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble East Claims Corporation 2 Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble Pipeline Corporation Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble Performance Dividend LLC Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) U5 Resources Inc. Nevada, USA Holding Company. Wholly-owned subsidiary of the Company. 100% Cannon Point Resources Ltd. British Columbia, Canada Not active. Wholly-owned subsidiary of the Company. 100% Name of Subsidiary Place of Incorporation Principal Activity Percent owned MGL Subco Ltd. (“MGL”) British Columbia, Canada Not active. Wholly-owned subsidiary of the Company. 100% Delta Minerals Inc. (“Delta”) British Columbia, Canada Not active. Wholly-owned subsidiary of MGL. 100% (indirect) Imperial Gold Corporation (“Imperial Gold”) British Columbia, Canada Not active. Wholly-owned subsidiary of Delta. 100% (indirect) Yuma Gold Inc. Nevada, USA Not active. Wholly-owned subsidiary of Imperial Gold. 100% (indirect) Notes: 1. Holds a 20% interest in the Northern Dynasty Partnership. The Company holds the remaining 80% interest. 2. Both entities together hold 1,840 claims comprising the Pebble Project. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Company has power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect its returns. Intra-Group balances and transactions, including any unrealized income and expenses arising from intra-Group transactions, are eliminated in preparing the Financial Statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. |
Foreign Currencies | The functional currency is the currency of the primary economic environment in which the entity operates and has been determined for each entity within the Group. The functional currency of U5 Resources Inc., Pebble Services Inc., Pebble Mines Corp., the Pebble Partnership and its subsidiaries, and Yuma Gold Inc. is the US dollar and for all other entities within the Group, the functional currency is the Canadian dollar. The functional currency determinations were conducted through an analysis of the factors for consideration identified in IAS 21, The Effects of Changes in Foreign Exchange Rates Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. The results and financial position of entities within the Group which have a functional currency that differs from that of the Group are translated into Canadian dollars as follows: (i) assets and liabilities for each statement of financial position are translated at the closing exchange rate at that date; (ii) income and expenses for each income statement are translated at average exchange rates for the period; and (iii) the resulting exchange differences are included in the foreign currency translation reserve within equity. |
Financial Instruments | On initial recognition, a financial asset is classified as measured at amortized cost; fair value through other comprehensive income (“FVTOCI”) (debt / equity investment); or fair value through profit or loss (“FVTPL”). A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. Classification of financial assets Amortized cost For a financial asset to be measured at amortized cost, it needs to meet both of the following conditions and not · it is held within a business model whose objective is to hold assets to collect contractual cash flows; and · its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Group’s financial assets at amortized cost consist of restricted cash, amounts receivable, and cash and cash equivalents. Fair value through other comprehensive income (“FVTOCI”) For a debt investment to be measured at FVTOCI, it needs to meet both of the following conditions and not · it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and · its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Equity instruments at FVTOCI On initial recognition, the Group may irrevocably elect to present subsequent changes in the instrument’s fair value in other comprehensive income (“OCI”) provided it is not held for trading. This election is made on an investment-by-investment basis. Fair Value through profit or loss (“FVTPL”) All financial assets not class ified as measured at amortised cost or FVTOCI are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. The following accounting policies apply to the subsequent measurement of financial assets: Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. Financial assets at amortized cost These assets are subsequently measured at amortised cost using the effective interest method. The amortized cost is reduced by impairment losses (see below). Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Debt investments at FVTOCI These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss. Equity investments at FVTOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss. 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 assets, the estimated future cash flows of the investments have been impacted. For marketable securities classified as FVTOCI, a significant or prolonged decline in the fair value of the securities below their cost is considered to be objective evidence of impairment. Financial liabilities Derivative financial liabilities: The Group has a derivative financial liability which relates to the derivative on the US denominated convertible notes (note 7). Derivative financial liabilities are stated at fair value, with any gains or losses on re-measurement after initial recognition recognized in the Statement of Loss. Any attributable transactions costs are expensed as incurred. Fair value is determined in the manner described in the policy note (i) below and further discussed in Note 7. Non-derivative financial liabilities: The Group has non-derivative financial liabilities which consist of trade and other payables and payables to related parties. All financial liabilities that are not held for trading or designated as at FVTPL are recognized initially at fair value net of any directly attributable transaction costs. After initial recognition these financial liabilities are measured at amortized cost using the effective interest method. |
Exploration and Evaluation Expenditure | Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the acquisition date fair value of exploration and evaluation assets acquired in a business combination or an asset acquisition. Exploration and evaluation expenditures are expensed as incurred except for expenditures associated with the acquisition of exploration and evaluation assets through a business combination or an asset acquisition. Costs incurred before the Group has obtained the legal rights to explore an area are expensed. Acquisition costs, including general and administrative costs, are only capitalized to the extent that these costs can be related directly to operational activities in the relevant area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. Exploration and evaluation (“E&E”) assets are assessed for impairment only when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount or when the Group has sufficient information to reach a conclusion about technical feasibility and commercial viability. Industry-specific indicators for an impairment review arise typically when one of the following circumstances applies: · Substantive expenditure on further exploration and evaluation activities is neither budgeted nor planned; · title to the asset is compromised; · adverse changes in the taxation and regulatory environment; · adverse changes in variations in commodity prices and markets; and · variations in the exchange rate for the currency of operation. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment. |
Mineral Property, Plant and Equipment | Mineral property, plant and equipment are carried at cost, less accumulated depreciation, and accumulated impairment losses. The cost of mineral property, plant and equipment consists of the acquisition costs transferred from E&E assets, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, including costs to further delineate the ore body, development and construction costs, removal of overburden to initially expose the ore body, an initial estimate of the costs of dismantling, removing the item and restoring the site on which it is located and, if applicable, borrowing costs. Mineral property acquisition and development costs are not currently depreciated as the Pebble Project is still in the development stage and no saleable minerals are being produced. Amounts received pursuant to the royalty arrangement (note 3), and which will be in set amounts, are recognized as sales of mineral property interests. No gain or loss is recognized until the consideration received is in excess of the carrying amount. Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective assets such as through sales pursuant to the royalty arrangement as noted above. The cost of an item of plant and equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Depreciation is provided at rates calculated to write off the cost of plant and equipment, less their estimated residual value, using the straight-line method at various rates ranging from 10% to 50% per annum. An item of equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss. Where an item of equipment consists of major components with different useful lives, the components are accounted for as separate items of equipment. Expenditures incurred to replace a component of an item of equipment that is accounted for separately, including major inspection and overhaul expenditures, are capitalized. Residual values and estimated useful lives are reviewed at least annually. |
Impairment of Non-Financial Assets | At the end of each reporting period the carrying amounts of the Group’s non-financial assets are reviewed to determine whether there is any indication that these assets are impaired. 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs of disposal and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. 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 is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. 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. This increase in the carrying amount is limited to the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. The Group has not recorded any impairment charges in the years presented. |
Convertible Notes | Convertible Notes issued by the Group represent a compound financial instrument that includes the host debt component and a foreign exchange equity conversion component, with the proceeds received allocated between the two components at the date of issue. The Group assesses whether the convertible component qualifies as equity or is considered a derivative liability. The debt liability component is initially recognized at the difference between the fair value of the convertible notes as a whole and the fair value of the derivative liability component, using a Binomial Option Pricing Model with formulae based on the Cox-Ross-Rubenstein approach. The debt liability component is subsequently remeasured at amortized cost, with the proportionate share of the transaction costs offset against the balance. The transaction costs allocated to the derivative liability component are recognized in the consolidated statement of loss at the initial recognition date. The debt liability component is subsequently accreted to the face value of the debt liability component of the convertible notes at the effective interest rate. The derivative liability component is re-measured at fair value at each reporting period with fair value gains or losses recognized in the Statement of Comprehensive Loss. |
Leases | At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, and leases of low-value assets. For these leases, the Group recognizes the lease payments as an expense in loss on a straight-line basis over the term of the lease. The Group recognizes a lease liability and a right-of-use asset (“ROU Asset”) at the lease commencement date. The lease liability is initially measured as the present value of future lease payments discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The incremental borrowing rate is the rate which the Group would have to pay to borrow, over a similar term and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. Lease payments included in the measurement of the lease liability comprise the following: · fixed payments, including in-substance fixed payments, less any lease incentives receivable; · variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; · amounts expected to be payable by the Group under residual value guarantees; · the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and · payments of penalties for terminating the lease, if the Group expects to exercise an option to terminate the lease. The lease liability is subsequently measured by: · increasing the carrying amount to reflect interest on the lease liability; · reducing the carrying amount to reflect the lease payments made; and · remeasuring the carrying amount to reflect any reassessment or lease modifications. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. The ROU Asset is initially measured at cost, which comprises the following: · the amount of the initial measurement of the lease liability; · any lease payments made at or before the commencement date, less any lease incentives received; · any initial direct costs incurred by the Group; and · an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The ROU Asset is subsequently measured at cost, less any accumulated depreciation and any accumulated impairment losses, and adjusted for any remeasurement of the lease liability. It is depreciated from the commencement date to the earlier of the end of its useful life or the end of the lease term using either the straight-line or units-of-production method depending on which method more accurately reflects the expected pattern of consumption of the future economic benefits. Each lease payment is allocated between the lease liability and finance cost. The finance cost is charged to the Statement of Comprehensive Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. On the balance sheet, the ROU Assets are presented in “ Mineral property, plant and equipment Trade and other payables |
Share Capital, Special Warrants, Warrants and Subscriptions for Shares | Common shares (“shares”), special warrants, warrants and subscriptions received for shares are classified as equity. Transaction costs directly attributable to the issue of these instruments are recognized as a deduction from equity, net of any tax effects. Where units comprising of shares and warrants are issued the proceeds and any transaction costs are apportioned between the shares and warrants according to their relative fair values. Upon conversion of special warrants and warrants into shares and the issue of shares for subscriptions received, the carrying amount, net of a pro rata share of the transaction costs, is transferred to share capital. |
Insurance Recoveries | Insurance recoveries received from the Group’s insurance carriers are recognized when the proceeds have been received, including after the reporting period before the Financial Statements are authorized for issue. The proceeds are recorded as reduction in the costs incurred in the Statement of Comprehensive Loss. |
Share-based Payment Transactions | Equity-settled Share-based Option Plan The Group operates an equity-settled share-based option plan for its employees and service providers (note 6(d)). The fair value of share purchase options granted is recognized as an employee or consultant expense with a corresponding increase in the equity-settled share-based payments reserve The fair value is measured at grant date for each tranche and is expensed on a straight-line basis over the vesting period, with a corresponding increase in the Equity Reserve. The fair value is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the share purchase options were granted and forfeiture rates as appropriate. At the end of each reporting period, the amount recognized as an expense is adjusted to reflect the actual number of share purchase options that are expected to vest. Equity-settled share-based payment transactions with non-employees are measured at the fair value of the goods or services received. However, if the fair value cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the Group obtains the goods or the counterparty renders the service. Deferred Share Unit (“DSU”) Plan The Group has a DSU plan for its non-executive directors (note 6(e)). The Group determines whether to account for DSUs as equity-settled or cash-settled based on who determines settlement and past practice. The fair value is recognized at grant date as an employee expense with a corresponding increase in the Equity Reserve if deemed equity-settled or a liability if deemed cash-settled. The fair value is estimated by multiplying the number of DSUs with the TSX quoted market price of the Company’s shares at grant date and expensed over the vesting period as share-based compensation in the Statement of Loss until the DSUs are fully vested. If the DSUs are cash-settled, the expense and liability are adjusted each reporting period for changes in the TSX quoted market price of the Company’s shares. Restricted Share Unit (“RSU”) Plan The Group has a RSU plan for its employees, executive directors and eligible consultants of the Group. The Group determines whether to account for the RSUs as equity-settled or cash-settled based who determines settlement and past practice. The fair value of RSUs is recognized as an employee expense with a corresponding increase in the Equity Reserve if deemed equity–settled or a liability if deemed cash-settled at grant date. The fair value is estimated by multiplying the number of RSUs with the TSX quoted market price of the Company’s common shares at the grant date. It is then expensed over the vesting period with the credit recognized in equity in the Equity Reserve. If cash-settled, the expense and liability are adjusted each reporting period for changes in the TSX quoted market price of the Company’s common shares. No RSUs have been issued or are outstanding in the years presented. |
Income Taxes | Income tax on the profit or loss for the years presented consists of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized in other comprehensive income or loss or directly in equity, in which case it is recognized in other comprehensive income or loss or equity. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regard to previous years. Deferred tax is provided using the balance sheet liability method, providing for unused tax loss carry forwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences relating to investments in subsidiaries, associates, and joint ventures to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period applicable to the period of expected realization or settlement. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. |
Restoration, Rehabilitation, and Environmental Obligations | An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration or development of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset, along with a corresponding liability as soon as the obligation to incur such costs arises. The timing of the actual rehabilitation expenditure is dependent on a number of factors such as the life and nature of the asset, the operating license conditions and, when applicable, the environment in which the mine operates. Discount rates using a pre-tax rate that reflects the time value of money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the unit-of-production or the straight-line method. The corresponding liability is progressively increased as the effect of discounting unwinds, creating an expense recognized in loss. Decommissioning costs are also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalized cost, except where a reduction in costs is greater than the unamortized capitalized cost of the related assets, in which case the capitalized cost is reduced to nil and the remaining adjustment is recognized in profit or loss. The operations of the Group have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for site restoration costs. Both the likelihood of new regulations and their overall effect upon the Group are not predictable. The Group has no material restoration, rehabilitation and environmental obligations as the disturbance to date is not significant. The Group has posted two bonds with the Alaskan regulatory authorities as performance guarantees for any potential reclamation liability incurred as a condition for: (i) the issue of the Miscellaneous Land Use Permit at the Pebble Project (note 5(b)), and (ii) the granting of a pipeline right-of-way (note 15(b)). |
Loss Per Share | The Group presents basic and diluted loss per share information for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares and any fully prepaid special warrants outstanding during the year. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. |
Segment Reporting | The Group operates in a single reportable operating segment – the acquisition, exploration and development of mineral properties. The Group’s core asset, the Pebble Project, is in Alaska, USA. |
Significant Accounting Estimates and Judgements | The preparation of these Financial Statements requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These Financial Statements include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the Financial Statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Sources of estimation uncertainty Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities, if actual results differ from assumptions made, relate to, but are not limited to, the following: 1. The Group uses the Black-Scholes option pricing model to calculate an estimate of the fair value of share purchase options granted during the year. The fair value calculated is used to determine share-based compensation that is included in the Statement of Loss for the year. Inputs used in this model require subjective assumptions, including the expected price volatility from less than one year to five years. Changes in the subjective input assumptions can affect the fair value estimate. 2. Estimates were used in determining the fair value of the derivative on the convertible notes including subjective assumptions on expected price volatility. Changes in these assumptions can materially affect the fair value estimate. The valuation method (note 2(i)) and underlying assumptions used in the measurement of the derivative on convertible notes is disclosed in Note 7. 3. Significant assumptions about the future and other sources of estimation uncertainty are made in determining the provision for any deferred income tax expense that is included in the loss for the year and the composition of any deferred income tax liabilities included in the Statement of Financial Position. Critical accounting judgements These include: 1. The Group used judgement in concluding that no impairment indicators exist in relation to the Pebble Project, notwithstanding the receipt of the ROD denial of the permit by the USACE for the Pebble Project and the Final Determination issued by the EPA that prohibits the disposal of dredged or fill material for the Pebble Project, both of which may be considered an indicator under IFRS 6, Exploration for and Evaluation of Mineral Resources · The Group submitted an administrative appeal with the USACE POD on the permit denial and the USACE POD has remanded the permit decision to the USACE Alaska District to re-evaluate specific issues. The Group is awaiting the USACE Alaska District’s next steps in this regard; · The Group has legal avenues to challenge the EPA’s Final Determination (see note 1); and · The Company’s market capitalization on December 31, 2023, and the date the Financial Statements were authorized for issuance, exceeded the carrying value of the Pebble Project and the Group’s net asset value. 2. The Group used judgement that going concern is an appropriate basis for the preparation of the Financial Statements, as the Group considered existing financial resources in determining that such financial resources can meet key corporate and Pebble Project expenditure requirements for at least the next twelve months (note 1). 3. The Group used judgement in assessing the appropriate accounting treatment for the transaction relating to a long-term royalty agreement linked to production at the Pebble Project (note 3). The Group considered the substance of the agreement to determine whether the Group has disposed of an interest in the reserves and resources of the Pebble Project. This assessment considered the stage of development of the Pebble Project, the legal rights the counterparty has in the event of bankruptcy, as well as what the counterparty is entitled to and the associated risks and rewards attributable to them over the life of the mine at the Pebble Project. The Group also determined that the proceeds received on each investment is a recovery of mineral property costs with no gain or loss being recorded. 4. Pursuant to IAS 21, The Effects of Changes in Foreign Exchange Rates 5. The Group used judgement in terms of accounting for leases in accordance with IFRS 16, Leases 6. The Group used judgement in concluding that the convertible notes are hybrid financial instruments as a result of the embedded derivative liability that is the foreign exchange equity conversion i.e., the Group can issue a fixed number of the Company’s shares for a variable amount depending on the US$/C$ exchange rate. |
Recent Accounting Pronouncements | Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB. The following was adopted by the Group on January 1, 2023: · IAS 1, Presentation of Financial Statements Making Materiality Judgements - Disclosure of Accounting Policies · IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors Definition of Accounting Estimates · IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction · IAS 1, Classification of Debt with Covenants as Current or Non-current Non-current Liabilities with Covenants Classification of Debt as Current or Non-current The following has not yet been adopted by the Group: · IFRS 16, Sale and Leaseback Transactions Leases |
MATERIAL ACCOUNTING POLICIES (T
MATERIAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
MATERIAL ACCOUNTING POLICIES | |
Schedule of Subsidiaries Consolidated Financial Statements | Name of Subsidiary Place of Incorporation Principal Activity Percent owned 3537137 Canada Inc. 1 Canada Holding Company. Wholly-owned subsidiary of the Company. 100% Pebble Services Inc. Nevada, USA Management and services company. Wholly-owned subsidiary of the Company. 100% Northern Dynasty Partnership Alaska, USA Holds 99.9% interest in the Pebble Partnership and 100% of Pebble Mines. 100% (indirect) Pebble Limited Partnership (“Pebble Partnership”) Alaska, USA Limited Partnership. Ownership and Exploration of the Pebble Project. 100% (indirect) Pebble Mines Corp. (“Pebble Mines”) Delaware, USA General Partner. Holds 0.1% interest in the Pebble Partnership. 100% (indirect) Pebble West Claims Corporation 2 Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble East Claims Corporation 2 Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble Pipeline Corporation Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) Pebble Performance Dividend LLC Alaska, USA Holding Company. Subsidiary of the Pebble Partnership. 100% (indirect) U5 Resources Inc. Nevada, USA Holding Company. Wholly-owned subsidiary of the Company. 100% Cannon Point Resources Ltd. British Columbia, Canada Not active. Wholly-owned subsidiary of the Company. 100% Name of Subsidiary Place of Incorporation Principal Activity Percent owned MGL Subco Ltd. (“MGL”) British Columbia, Canada Not active. Wholly-owned subsidiary of the Company. 100% Delta Minerals Inc. (“Delta”) British Columbia, Canada Not active. Wholly-owned subsidiary of MGL. 100% (indirect) Imperial Gold Corporation (“Imperial Gold”) British Columbia, Canada Not active. Wholly-owned subsidiary of Delta. 100% (indirect) Yuma Gold Inc. Nevada, USA Not active. Wholly-owned subsidiary of Imperial Gold. 100% (indirect) |
MINERAL PROPERTY, PLANT AND E_2
MINERAL PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
MINERAL PROPERTY, PLANT AND EQUIPMENT | |
Schedule of Exploration and Evaluation Assets | Year ended December 31, 2023 Mineral Property Interest 1 Plant and Equipment 3 Total Cost Beginning Balance $ 97,078 $ 2,435 $ 99,513 Additions – 16 16 Disposal of plant and equipment – (6 ) (6 ) Disposal of mineral property interest 2 (2,761 ) – (2,761 ) Derecognition of right-of-use asset – (196 ) (196 ) Ending balance 94,317 2,249 96,566 Accumulated depreciation Beginning Balance – (2,129 ) (2,129 ) Depreciation charge for the period 3 – (164 ) (164 ) Derecognition on disposal of plant and equipment – 6 6 Derecognition of right-of-use asset – 191 191 Ending balance – (2,096 ) (2,096 ) Foreign currency translation difference Beginning Balance 29,922 225 30,147 Movement from derecognition of right-of-use asset – (3 ) (3 ) Movement for the period (2,764 ) 1 (2,763 ) Ending balance 27,158 223 27,381 Net carrying value – December 31, 2023 $ 121,475 $ 376 $ 121,851 Year ended December 31, 2022 Mineral Property Interest 1 Plant and Equipment 3 Total Cost Beginning Balance $ 112,541 $ 2,412 $ 114,953 Addition – 31 31 Disposal of plant and equipment – (8 ) (8 ) Disposal of mineral property interest 2 (15,463 ) – (15,463 ) Ending balance 97,078 2,435 99,513 Accumulated depreciation Beginning Balance – (1,877 ) (1,877 ) Depreciation charge for the year 4 – (260 ) (260 ) Derecognition on disposal of plant and equipment – 8 8 Ending balance – (2,129 ) (2,129 ) Foreign currency translation difference Beginning Balance 21,079 184 21,263 Movement for the year 8,843 41 8,884 Ending balance 29,922 225 30,147 Net carrying value – December 31, 2022 $ 127,000 $ 531 $ 127,531 |
Schdule of right of use assets | Year ended December 31, 2023 Land and Buildings Equipment Total Cost Beginning $ 1,024 $ 32 $ 1,056 Addition – 16 16 Derecognition of ROU Asset (196 ) – (196 ) Ending balance 828 48 876 Accumulated depreciation Beginning balance (510 ) (30 ) (540 ) Depreciation charge for the period 4 (147 ) (4 ) (151 ) Derecognition of ROU Asset 191 – 191 Ending balance (466 ) (34 ) (500 ) Foreign currency translation difference Beginning balance 2 (1 ) 1 Movement from derecognition of ROU Asset 5 – 5 Movement for the period (9 ) (1 ) (10 ) Ending balance (2 ) (2 ) (4 ) Net carrying value – December 31, 2023 $ 360 $ 12 $ 372 |
AMOUNTS RECEIVABLE AND PREPAI_2
AMOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
AMOUNTS RECEIVABLE AND PREPAID EXPENSES | |
Schedule of Amounts Receivable and Prepaid Expenses | December 31 December 31 2023 2022 Sales tax receivable $ 63 $ 66 Interest, refundable deposits, and other receivables 1 595 64 Prepaid expenses 2 2,250 2,532 Total $ 2,908 $ 2,662 |
CAPITAL AND RESERVES (Tables)
CAPITAL AND RESERVES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL AND RESERVES | |
Schedule of Share Purchase Warrants and Options Not Issued Under the Group's Incentive Plan | Continuity Number of options 1 Weighted average exercise price ($/options) Balance January 1, 2022 94,000 0.36 Expired (56,400 ) 0.40 Balance December 31, 2022, and December 31, 2023 37,600 0.29 |
Summary of Options Outstanding | Continuity of options Number of options Weighted average exercise price ($/option) Balance January 1, 2022 20,825,500 1.45 Expired (4,386,000 ) 1.75 Granted 1 11,254,000 0.41 Balance December 31, 2022 27,693,500 0.98 Expired (3,375,000 ) 0.80 Balance December 31, 2023 24,318,500 1.00 |
Schedule of Options Outstanding and Exercisable | December 31, 2023 December 31, 2022 Exercise prices ($) Number of options outstanding Number of options exercisable Weighted Average Remaining contractual life (years) Number of options outstanding Number of options exercisable Weighted Average Remaining contractual life (years) 0.41 11,254,000 11,254,000 3.63 11,254,000 5,627,000 4.63 0.76 – – – 3,300,000 3,300,000 0.61 0.99 6,368,500 6,368,500 0.74 6,368,500 6,368,500 1.74 2.01 6,696,000 6,696,000 1.55 6,696,000 6,696,000 2.55 2.34 – – – 75,000 75,000 0.58 Total 24,318,500 24,318,500 27,693,500 22,066,500 |
Schedule of Restricted Share Units Outstanding | Continuity of DSUs Number of DSUs Weighted average fair value ($/DSU) Balance January 1, 2022 477,711 0.69 Granted 61,575 0.39 Balance December 31, 2022 539,286 0.65 Granted 74,683 0.34 Redeemed (143,622 ) 0.69 Balance December 31, 2023 470,347 0.59 |
Schedule of Foreign Currency Translation Reserve | Continuity Balance January 1, 2022 $ 28,758 Gain on translation of foreign subsidiaries 9,333 Balance December 31, 2022 38,091 Loss on translation of foreign subsidiaries (2,858 ) Balance December 31, 2023 $ 35,233 |
CONVERTIBLE NOTES LIABILITY A_2
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES | |
Schedule of balance recorded in Statement of Loss | Continuity Debt Host Derivative on Notes Total Recognition on issue date $ 2,234 $ 17,866 $ 20,100 Transaction costs (22 ) – (22 ) Interest accretion 26 – 26 Interest accrued (15 ) – (15 ) Gain on change in fair value – (1,179 ) (1,179 ) Exchange difference (26 ) - (26 ) As at December 31, 2023 $ 2,197 $ 16,687 $ 18,884 |
Summary of fair value of conversion option | Input/Assumption Issue Date December 31, 2023 Share price on valuation date US$0.34 US$0.32 Volatility 95.8232 % 95.4459 % Strike price on conversion US$0.3557 US$0.3557 Time to expiration 3653 days 3640 days Risk free interest rate 5.221 % 5.153 % Dividend Yield Nil% Nil% |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Statement [Line Items] | |
Schedule of Related Party Balances and Transactions | December 31 December 31 Receivable from related party 2023 2022 Hunter Dickinson Services Inc. (“HDSI”) (b) $ 17 $ – Total $ 17 $ – December 31 December 31 Payables to related parties 2023 2022 Key management personnel (“KMP”) (a) $ 34 $ 35 Hunter Dickinson Services Inc. (b) 253 202 Total $ 287 $ 237 |
Key Management Personnel | |
Statement [Line Items] | |
Schedule of Outstanding Balances | Transactions 2023 2022 Services rendered by HDSI Technical 1 Engineering $ 363 $ 372 Environmental 321 508 Other technical services 125 44 809 924 General and administrative Management, consulting, corporate communications, secretarial, financial and administration 2,450 2,223 Shareholder communication 695 727 3,145 2,950 Total for services rendered 3,954 3,874 Reimbursement (refund) of third-party expenses Conferences and travel 246 124 Insurance 87 48 Office supplies and information technology 2 575 532 Total reimbursed 908 704 Total $ 4,862 $ 4,578 |
Schedule of Total compensation | Transaction 2023 2022 Compensation Amounts paid and payable to HDSI for services of KMP employed by HDSI 1 $ 2,441 $ 2,499 Amounts paid and payable to KMP 2 1,768 1,913 4,209 4,412 Share-based compensation 3 661 1,441 Total compensation $ 4,870 $ 5,853 |
TRADE AND OTHER PAYABLES (Table
TRADE AND OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
TRADE AND OTHER PAYABLES | |
Schedule of Trade and Other Payables | December 31 December 31 Current liabilities 2023 2022 Falling due within the year Trade $ 929 $ 1,683 Lease liabilities 1 126 150 Total $ 1,055 $ 1,833 December 31 December 31 Non-current liabilities 2023 2022 Lease liabilities 1 $ 338 $ 463 Total $ 338 $ 463 |
Summary of lease liabilities | December 31 December 31 Lease liabilities 2023 2022 Beginning balance $ 613 $ 687 Interest expense 55 67 Lease payments (208 ) (196 ) Lease recognition 16 10 Foreign currency translation difference (12 ) 45 Ending balance 464 613 Current portion 126 150 Non-current portion 338 463 Total $ 464 $ 613 |
Schedule of Undiscounted Lease Liabilities | Total Less than one year $ 164 One to five years 399 Later than 5 years 34 Total undiscounted lease liabilities $ 597 |
EXPLORATION AND EVALUATION, G_2
EXPLORATION AND EVALUATION, GENERAL AND ADMINISTRATIVE, LEGAL ACCOUNTING AND AUDIT EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EXPLORATION AND EVALUATION, GENERAL AND ADMINISTRATIVE, LEGAL ACCOUNTING AND AUDIT EXPENSES | |
Schedule of Exploration and Evaluation Expenses | E&E 2023 2022 Engineering $ 2,140 $ 1,390 Environmental 974 2,187 Property fees 1,252 1,194 Site activities 937 1,565 Socio-economic 2,386 2,242 Transportation (71 ) 620 Other activities and travel 111 71 Total $ 7,729 $ 9,269 |
Schedule of General and Administrative Expenses | G&A 2023 2022 Conference and travel $ 477 $ 248 Consulting 855 651 Depreciation of right-of-use assets 101 104 Insurance 3,227 2,422 Office costs, including information technology 765 769 Management and administration 3,172 3,130 Shareholder communication 1,229 1,276 Trust and filing 335 426 Total $ 10,161 $ 9,026 |
Schedule of Legal, Accounting and Audit Expenses | 2023 2022 Legal $ 6,459 $ 4,212 Insurance cost recoveries (3,617 ) (710 ) Accounting 130 119 Audit and reviews 417 389 Total $ 3,389 $ 4,010 |
EMPLOYMENT COSTS (Tables)
EMPLOYMENT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYMENT COSTS | |
Schedule of employement cost | 2023 2022 Exploration and evaluation Salaries and benefits $ 1,701 $ 2,267 Amounts paid for services by HDSI personnel (note 6(b)) 809 923 2,510 3,190 General and administrative Salaries and benefits 1,439 1,407 Amounts paid for services by HDSI personnel (note 6(b)) 2,544 2,433 3,983 3,840 Share-based payments 1,068 2,301 $ 7,561 $ 9,331 |
BASIC AND DILUTED LOSS PER SH_2
BASIC AND DILUTED LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
BASIC AND DILUTED LOSS PER SHARE | |
Schedule of Basic and Diluted Loss Per Share | 2023 2022 Loss attributable to shareholders $ 20,996 $ 24,442 Weighted average number of shares outstanding (000s) 530,272 529,779 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
Schedule of Reconciliation of Effective Tax Rate | Year ended December 31 Reconciliation of effective tax rate 2023 2022 Net loss $ (20,996 ) $ (24,442 ) Total income tax (recovery) expense (110 ) 107 Loss excluding income tax (21,106 ) (24,335 ) Income tax recovery using the Company's domestic tax rate (5,699 ) (6,570 ) Non-deductible expenses and other 318 631 Change in tax rates – – Deferred income tax assets not recognized 5,491 5,832 $ 110 $ (107 ) |
Schedule of Deferred Income Tax Assets (Liabilities) | Year ended December 31 Deferred income tax assets (liabilities) 2023 2022 Tax losses $ 2,262 $ 2,167 Net deferred income tax assets 2,262 2,167 Resource property/investment in Pebble Partnership (2,262 ) (2,167 ) Net deferred income tax liability $ – $ – |
Schedule of Taxable Temporary Differences | Resource Expiry Tax losses pools Other Within one year $ – $ – $ – One to five years – – 1,300 After five years 339,693 – – No expiry date 37,595 93,248 190 Total $ 377,288 $ 93,248 $ 1,490 |
FINANCIAL RISK MANAGEMENT (Tabl
FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
FINANCIAL RISK MANAGEMENT | |
Schedule of Exposure | December 31 December 31 Exposure 2023 2022 Interest, refundable deposits, and other receivables $ 595 $ 64 Restricted cash 872 852 Cash and cash equivalents 18,200 14,173 Total exposure $ 19,667 $ 15,089 |
Schedule of Financial Assets and Liabilities | December 31 December 31 2023 2022 Financial assets Amounts receivable $ 676 $ 108 Cash and cash equivalents and restricted cash 18,069 7,347 18,745 7,455 Financial liabilities Non-current trade payables (338 ) (463 ) Convertible notes (18,884 ) – Current trade and other payables (724 ) (1,383 ) Payables to related parties (134 ) (71 ) (20,080 ) (1,917 ) Net financial (liabilities) assets exposed to foreign currency risk $ (1,335 ) $ 5,538 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL AND RESERVES | |
Schedule of Commitments | Total Less than one year $ 104 One to five years 134 Total $ 238 |
NATURE AND CONTINUANCE OF OPE_2
NATURE AND CONTINUANCE OF OPERATIONS (Details Narrative) - CAD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
NATURE AND CONTINUANCE OF OPERATIONS | ||
Description of Raised Proceed Investment | (i) a US$2,000 ($2,761) investment towards the second tranche pursuant to the royalty agreement (see below), (ii) the private placement of equity units for $3,422 (note 6(b)), and (iii) the issue in aggregate of US$15,000 ($20,100) in convertible notes | |
Description of Amendment of royalty agreement | The Group received a US$2,000 investment towards the second US$12,000 tranche on execution of an amendment to the royalty agreement. The amendment provides the royalty holder with the right to fund the remainder of the second trance in five US$2,000 investments | |
Cash and cash equivalents | $ 18,200,000 | $ 14,173,000 |
Working capital (deficiency) | (899,000) | (14,765,000) |
Net loss | (20,996,000) | (24,442,000) |
Deficit | (696,958,000) | $ (675,962,000) |
Aggregate gross proceeds | $ 26,283 |
MATERIAL ACCOUNTING POLICIES (D
MATERIAL ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Statement [Line Items] | |
Percent Owned | 20% |
Northern Dynasty Partnership | |
Statement [Line Items] | |
Place of Incorporation | Alaska, USA |
Principal Activity | Holds 99.9% interest in the Pebble Partnership and 100% of Pebble Mines |
Percent Owned | 100% |
Pebble Limited Partnership | |
Statement [Line Items] | |
Place of Incorporation | Alaska, USA |
Principal Activity | Limited Partnership. Ownership and Exploration of the Pebble Project |
Percent Owned | 100% |
Pebble Mines Corp. | |
Statement [Line Items] | |
Place of Incorporation | Delaware, USA |
Principal Activity | General Partner. Holds 0.1% interest in the Pebble Partnership |
Percent Owned | 100% |
Pebble West Claims Corporation | |
Statement [Line Items] | |
Place of Incorporation | Alaska, USA |
Principal Activity | Holding Company. Subsidiary of the Pebble Partnership |
Percent Owned | 100% |
U5 Resources Inc. | |
Statement [Line Items] | |
Place of Incorporation | Nevada, USA |
Principal Activity | Holding Company. Wholly-owned subsidiary of the Company |
Percent Owned | 100% |
Cannon Point Resources Ltd. | |
Statement [Line Items] | |
Place of Incorporation | British Columbia, Canada |
Principal Activity | Not active. Wholly-owned subsidiary of the Company |
Percent Owned | 100% |
MGL Subco Ltd. (" MGL") | |
Statement [Line Items] | |
Place of Incorporation | British Columbia, Canada |
Principal Activity | Not active. Wholly-owned subsidiary of the Company |
Percent Owned | 100% |
Delta Minerals Inc. ("Delta") | |
Statement [Line Items] | |
Place of Incorporation | British Columbia, Canada |
Principal Activity | Not active. Wholly-owned subsidiary of MGL |
Percent Owned | 100% |
Imperial Gold Corporation ("Imperial Gold") | |
Statement [Line Items] | |
Place of Incorporation | British Columbia, Canada |
Principal Activity | Not active. Wholly-owned subsidiary of Delta |
Percent Owned | 100% |
Yuma Gold Inc. | |
Statement [Line Items] | |
Place of Incorporation | Nevada, USA |
Principal Activity | Not active. Wholly-owned subsidiary of Imperial Gold |
Percent Owned | 100% |
Canada Inc | |
Statement [Line Items] | |
Place of Incorporation | Canada |
Principal Activity | Holding Company. Wholly-owned subsidiary of the Company |
Percent Owned | 100% |
Pebble East Claims Corporation | |
Statement [Line Items] | |
Place of Incorporation | Alaska, USA |
Principal Activity | Holding Company. Subsidiary of the Pebble Partnership |
Percent Owned | 100% |
Pebble Pipeline Corporation | |
Statement [Line Items] | |
Place of Incorporation | Alaska, USA |
Principal Activity | Holding Company. Subsidiary of the Pebble Partnership |
Percent Owned | 100% |
Pebble Performance Dividend LLC | |
Statement [Line Items] | |
Place of Incorporation | Alaska, USA |
Principal Activity | Holding Company. Subsidiary of the Pebble Partnership |
Percent Owned | 100% |
Pebble Services Inc. | |
Statement [Line Items] | |
Place of Incorporation | Nevada, USA |
Principal Activity | Management and services company. Wholly-owned subsidiary of the Company |
Percent Owned | 100% |
MATERIAL ACCOUNTING POLICIES _2
MATERIAL ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 | |
MATERIAL ACCOUNTING POLICIES | |
Description of lease | lease term of 12 months or less |
Description of claims | Both entities together hold 1,840 claims comprising the Pebble Project |
Remaining interest | 80% |
Percent Owned | 20% |
MINERAL PROPERTY, PLANT AND E_3
MINERAL PROPERTY, PLANT AND EQUIPMENT (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Property, plant, and equipment, beginning | $ 127,531 | |
Disposal of plant and equipment | 1 | $ 1 |
Property, plant, and equipment, ending | 121,851 | 127,531 |
Net carrying value of mineral property interest | 121,475 | 127,000 |
Net carrying value of plant and equipment | 376 | 531 |
Net carrying value | 121,851 | 127,531 |
Cost | ||
Statement [Line Items] | ||
Property, plant, and equipment, beginning | 99,513 | 114,953 |
Additions | 16 | 31 |
Disposal of plant and equipment | (6) | (8) |
Disposal of mineral property interest | (2,761) | (15,463) |
Property, plant, and equipment, ending | 96,566 | 99,513 |
Derecognition of ROU Assets | (196) | |
Cost | Plant and Equipment | ||
Statement [Line Items] | ||
Property, plant, and equipment, beginning | 2,435 | 2,412 |
Additions | 16 | 31 |
Disposal of plant and equipment | (6) | (8) |
Disposal of mineral property interest | 0 | 0 |
Derecognition | (196) | |
Property, plant, and equipment, ending | 2,249 | 2,435 |
Cost | Mineral Property Interest | ||
Statement [Line Items] | ||
Property, plant, and equipment, beginning | 97,078 | 112,541 |
Additions | 0 | 0 |
Disposal of plant and equipment | 0 | 0 |
Disposal of mineral property interest | (2,761) | (15,463) |
Property, plant, and equipment, ending | 94,317 | 97,078 |
Derecognition of ROU Assets | 0 | |
Accumulated Depreciation | ||
Statement [Line Items] | ||
Accumulated depreciation, beginning | (2,129) | (1,877) |
Depreciation charge for the year | (164) | (260) |
Derecognition on disposal of plant and equipment | 6 | 8 |
Accumulated depreciation, ending | (2,096) | (2,129) |
Depreciation charge for the year | 164 | 260 |
Derecognition of ROU Assets | 191 | |
Accumulated Depreciation | Plant and Equipment | ||
Statement [Line Items] | ||
Accumulated depreciation, beginning | (2,129) | (1,877) |
Depreciation charge for the year | (164) | 260 |
Derecognition on disposal of plant and equipment | 6 | 8 |
Accumulated depreciation, ending | (2,096) | (2,129) |
Depreciation charge for the year | 164 | (260) |
Derecognition of ROU Assets | 191 | |
Accumulated Depreciation | Mineral Property Interest | ||
Statement [Line Items] | ||
Derecognition of ROU Assets | 0 | |
Accumulated depreciation, beginning | 0 | 0 |
Depreciation charge for the year | 0 | 0 |
Derecognition on disposal of plant and equipment | 0 | 0 |
Accumulated depreciation, ending | 0 | 0 |
Depreciation charge for the year | 0 | 0 |
Foreign Currency Translation Difference | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | 1 | |
Foreign currency translation difference ending balacne | (4) | 1 |
Movement from derecognition of ROU Assets | 5 | |
Foreign Currency Translation Difference | Plant and Equipment | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | 225 | 184 |
Movement for the year | 1 | 41 |
Foreign currency translation difference ending balacne | 223 | 225 |
Movement from derecognition of ROU Assets | (3) | |
Foreign Currency Translation Difference | Mineral Property Interest | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | 29,922 | 21,079 |
Movement for the year | 0 | 8,843 |
Foreign currency translation difference ending balacne | 27,158 | 29,922 |
Movement from derecognition of ROU Assets | (2,764) | |
Foreign Currency Translation Difference | Total | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | 30,147 | 21,263 |
Movement for the year | (2,763) | 8,884 |
Foreign currency translation difference ending balacne | 27,381 | $ 30,147 |
Movement from derecognition of ROU Assets | $ (3) |
MINERAL PROPERTY, PLANT AND E_4
MINERAL PROPERTY, PLANT AND EQUIPMENT (Details 1) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Net carrying value of Land & building | $ 360 | |
Net carrying value of equipment | 12 | |
Net carrying value | 372 | |
Cost | ||
Statement [Line Items] | ||
Property, plant, and equipment, beginning | 1,056 | |
Additions | 16 | $ 31 |
Property, plant, and equipment, ending | 876 | 1,056 |
Derecognition of ROU Assets | (196) | |
Cost | Equipment | ||
Statement [Line Items] | ||
Property, plant, and equipment, beginning | 32 | |
Additions | 16 | |
Property, plant, and equipment, ending | 48 | 32 |
Derecognition of ROU Assets | 0 | |
Cost | Lands and Buildings | ||
Statement [Line Items] | ||
Property, plant, and equipment, beginning | 1,024 | |
Additions | 0 | |
Property, plant, and equipment, ending | 828 | 1,024 |
Derecognition of ROU Assets | (196) | |
Accumulated Depreciation | ||
Statement [Line Items] | ||
Accumulated depreciation, beginning | (540) | |
Depreciation charge for the year | (151) | |
Accumulated depreciation, ending | (500) | (540) |
Derecognition of ROU Assets | 191 | |
Accumulated Depreciation | Equipment | ||
Statement [Line Items] | ||
Derecognition of ROU Assets | 0 | |
Accumulated depreciation, beginning | (30) | |
Depreciation charge for the year | (4) | |
Accumulated depreciation, ending | 34 | (30) |
Accumulated Depreciation | Lands and Buildings | ||
Statement [Line Items] | ||
Accumulated depreciation, beginning | (510) | |
Depreciation charge for the year | (147) | |
Accumulated depreciation, ending | (466) | (510) |
Derecognition of ROU Assets | 191 | |
Foreign Currency Translation Difference | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | 1 | |
Foreign currency translation difference ending balacne | (4) | 1 |
Movement from derecognition of ROU Assets | 5 | |
Movement for the year | (10) | |
Foreign Currency Translation Difference | Equipment | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | (1) | |
Foreign currency translation difference ending balacne | (2) | (1) |
Movement for the year | (1) | |
Movement from derecognition | 0 | |
Foreign Currency Translation Difference | Lands and Buildings | ||
Statement [Line Items] | ||
Foreign currency translation difference beginning balance | 2 | |
Movement for the year | (9) | |
Foreign currency translation difference ending balacne | (2) | $ 2 |
Movement from derecognition of ROU Assets | $ 5 |
MINERAL PROPERTY, PLANT AND E_5
MINERAL PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - CAD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jul. 26, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | |||
Non refundable amount | $ 12,000 | ||
Royalty Agreements | |||
Statement [Line Items] | |||
Non refundable amount | 12,000 | ||
Receiving from investor | $ 60,000 | ||
Aggregate amount | $ 60,000 | ||
Description of royalty | Royalty Holder of US$1,500.00 per ounce of gold and US$10.00 per ounce of silver, respectively, for the life of the mine. If, in the future, spot prices exceed US$4,000.00 per ounce of gold or US$50.00 per ounce of silver, then the Group will share in 20% of the excess price for either metal. Additionally, the Company will retain a portion of the metal produced for recovery rates greater than 60% for gold and 65% for silver | ||
Sale of mineral property interest | $ 12,000 | $ 15,500 | |
ROU Assets | |||
Statement [Line Items] | |||
Depreciation | $ 164 | $ 260 |
AMOUNTS RECEIVABLE AND PREPAI_3
AMOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
AMOUNTS RECEIVABLE AND PREPAID EXPENSES | ||
Sales tax receivable | $ 63 | $ 66 |
Interest, refundable deposits and other receivables | 595 | 64 |
Prepaid expenses | 2,250 | 2,532 |
Total | $ 2,908 | $ 2,662 |
AMOUNTS RECEIVABLE AND PREPAI_4
AMOUNTS RECEIVABLE AND PREPAID EXPENSES (Details Narrative) $ in Thousands | Dec. 31, 2023 CAD ($) |
AMOUNTS RECEIVABLE AND PREPAID EXPENSES | |
Carrier's reimbursement | $ 532 |
CASH AND CASH EQUIVALENTS AND_2
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (Details Narrative) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | ||
Nominal income | $ 40 | $ 10 |
Surety bond | $ 2,000 |
CAPITAL AND RESERVES (Details)
CAPITAL AND RESERVES (Details) - Option Not Issued Under The Groups Incentive Plan | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Statement [Line Items] | |
Number of options, Beginning Balance | shares | 94,000 |
Number of options, Expired | shares | (56,400) |
Number of options, Ending Balance | shares | 37,600 |
Weighted average exercise price, Beginning Balance | $ / shares | $ 0.36 |
Weighted average exercise price, Expired | $ / shares | 0.40 |
Weighted average exercise price, Ending Balance | $ / shares | $ 0.29 |
CAPITAL AND RESERVES (Details 1
CAPITAL AND RESERVES (Details 1) - Share Purchase Option Compensation Plan - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Number of options, Beginning Balance | 27,693,500 | 20,825,500 |
Number of options, Expired | (3,375,000) | (4,386,000) |
Number of options, Granted | 0 | 11,254,000 |
Number of options, Ending Balance | 24,318,500 | 27,693,500 |
Weighted average exercise price, Beginning Balance | $ 0.98 | $ 1.45 |
Weighted average exercise price, Expired | 0.80 | 1.75 |
Weighted average exercise price, Granted | 0 | 0.41 |
Weighted average exercise price, Ending Balance | $ 1 | $ 0.98 |
CAPITAL AND RESERVES (Details 2
CAPITAL AND RESERVES (Details 2) | 12 Months Ended | |
Dec. 31, 2023 $ / shares shares | Dec. 31, 2022 shares | |
Statement [Line Items] | ||
Options outstanding, Number outstanding | 24,318,500 | 27,693,500 |
Options outstanding, Options exercisable | 24,318,500 | 22,066,500 |
Exercise Price Range 1 | ||
Statement [Line Items] | ||
Options outstanding, Exercise prices | $ / shares | $ 0.41 | |
Options outstanding, Number outstanding | 11,254,000 | 11,254,000 |
Options outstanding, Options exercisable | 11,254,000 | 5,627,000 |
Options outstanding, Weighted average remaining contractual life (years) | 3 years 7 months 17 days | 4 years 7 months 17 days |
Exercise Price Range 2 | ||
Statement [Line Items] | ||
Options outstanding, Exercise prices | $ / shares | $ 0.76 | |
Options outstanding, Number outstanding | 3,300,000 | |
Options outstanding, Options exercisable | 0 | 3,300,000 |
Options outstanding, Weighted average remaining contractual life (years) | 7 months 9 days | |
Exercise Price Range 3 | ||
Statement [Line Items] | ||
Options outstanding, Exercise prices | $ / shares | $ 0.99 | |
Options outstanding, Number outstanding | 6,368,500 | 6,368,500 |
Options outstanding, Options exercisable | 6,368,500 | 6,368,500 |
Options outstanding, Weighted average remaining contractual life (years) | 8 months 26 days | 1 year 8 months 26 days |
Exercise Price Range 4 | ||
Statement [Line Items] | ||
Options outstanding, Exercise prices | $ / shares | $ 2.01 | |
Options outstanding, Number outstanding | 6,696,000 | 6,696,000 |
Options outstanding, Options exercisable | 6,696,000 | 6,696,000 |
Options outstanding, Weighted average remaining contractual life (years) | 1 year 6 months 18 days | 2 years 6 months 18 days |
Exercise Price Range 5 | ||
Statement [Line Items] | ||
Options outstanding, Exercise prices | $ / shares | $ 2.34 | |
Options outstanding, Number outstanding | 75,000 | |
Options outstanding, Options exercisable | 0 | 75,000 |
Options outstanding, Weighted average remaining contractual life (years) | 6 months 29 days |
CAPITAL AND RESERVES (Details 3
CAPITAL AND RESERVES (Details 3) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CAPITAL AND RESERVES | ||
Number of DSUs, Beginning Balance | 539,286 | 477,711 |
Number of DSUs, Granted | 74,683 | 61,575 |
Number of DSUs, Redeemed | (143,622) | 0 |
Number of DSUs, Ending Balance | 470,347 | 539,286 |
Weighted average fair value (DSUs), Beginning Balance | $ 0.65 | $ 0.69 |
Weighted average fair value (DSUs), Granted | 0.34 | 0.39 |
Weighted average fair value (DSUs), Redeemed | 0.69 | 0 |
Weighted average fair value (DSUs), Ending Balance | $ 0.59 | $ 0.65 |
CAPITAL AND RESERVES (Details 4
CAPITAL AND RESERVES (Details 4) - CAD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CAPITAL AND RESERVES | ||
Beginning balance | $ 38,091,000 | $ 28,758,000 |
Gain Loss on translation of foreign subsidiaries | (2,858,000) | 9,333,000 |
Ending Balance | $ 35,233,000 | $ 38,091,000 |
CAPITAL AND RESERVES (Details N
CAPITAL AND RESERVES (Details Narrative) - CAD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Number of shares issued and fully paid | 538,478,010 | 529,779,388 |
Issuance costs related to regulatory and legal fees | $ (22) | $ 0 |
Issued options outstanding remaining life | 11 months 8 days | 1 year 11 months 8 days |
Share-based compensation expense | $ 1,068 | $ 2,301 |
Share Purchase Option Compensation Plan | ||
Statement [Line Items] | ||
Expected volatility | 99.02% | |
Risk-free rate | 3.07% | |
Expected term | 5 years | |
Dividend | 0% | |
Rolling percentage of outstanding shares | 8% | |
Options granted in period, weighted-average fair value per share | $ 0.29 | |
Share-based compensation expense | $ 1,043 | $ 2,277 |
Share price | $ 0.39 | |
Options exercisable, weighted-average contractual life | 2 years 6 months 18 days | 2 years 11 months 19 days |
Options outstanding, weighted-average contractual life | 2 years 3 months 18 days | |
Options exercisable, weighted-average exercise price | $ 1.12 | |
Deferred Share Units | ||
Statement [Line Items] | ||
Share-based compensation expense | $ 25 | $ 24 |
Deferred share units fair value | 143,622,000 | |
Issued of deferred share units fair value after reporting period | 15,937,000 | |
Issued of deferred share units fair value per share after reporting period | $ 0.34 | |
Deferred share units fair value per share | $ 0.69 | |
Unit Private Placement | ||
Statement [Line Items] | ||
Non-brokered share capital units | 8,555,000 | |
Gross proceeds for Non-brokered share capital | $ 3,422 | |
Non-brokered share capital price per units | $ 0.40 | |
Purchase additional share price per unit | $ 0.45 | |
Additional share capital purchase date | Dec. 14, 2025 | |
Weighted average price | $ 0.90 | |
Issuance costs related to regulatory and legal fees | $ 37 | |
Exercise price | $ 0.45 | |
Valuation date share price | $ 0.41 | |
Expected volatility | 58.40% | |
Risk-free rate | 3.91% | |
Expected term | 2 years | |
Dividend | 0% | |
Net proceeds allocated share capital | $ 2,573 | |
Net proceeds allocated warrants | $ 812 |
CONVERTIBLE NOTES LIABILITY A_3
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES (Details) $ in Thousands | Dec. 31, 2023 CAD ($) |
Statement [Line Items] | |
Recognition on issue date | $ 20,100 |
Transaction costs | (22) |
Interest accretion | 26 |
Interest accrued | (15) |
Gain on change in fair value | (1,179) |
Exchange difference | (26) |
Debt Instruments | 18,884 |
Derivative on Notes | |
Statement [Line Items] | |
Recognition on issue date | 17,866 |
Transaction costs | 0 |
Interest accretion | 0 |
Interest accrued | 0 |
Gain on change in fair value | (1,179) |
Exchange difference | 0 |
Debt Instruments | 16,687 |
Debt Host | |
Statement [Line Items] | |
Recognition on issue date | 2,234 |
Transaction costs | (22) |
Interest accretion | 26 |
Interest accrued | (15) |
Gain on change in fair value | 0 |
Exchange difference | (26) |
Debt Instruments | $ 2,197 |
CONVERTIBLE NOTES LIABILITY A_4
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES (Details 1) - Cox-Ross-Rubenstein | 12 Months Ended |
Dec. 31, 2023 integer $ / shares | |
Statement [Line Items] | |
Time to expiration | 3640 years |
Risk free interest rate | 5.153% |
Dividend Yield | 0% |
Model Steps | integer | 120 |
Share price on valuation date | $ 0.34 |
Strike price on conversion | $ 0.3557 |
Volatility | 95.44% |
Issue Date | |
Statement [Line Items] | |
Time to expiration | 3653 years |
Risk free interest rate | 5.221% |
Dividend Yield | 0% |
Model Steps | integer | 120 |
Share price on valuation date | $ 0.34 |
Strike price on conversion | $ 0.3557 |
Volatility | 95.82% |
CONVERTIBLE NOTES LIABILITY A_5
CONVERTIBLE NOTES LIABILITY AND DERIVATIVE ON CONVERTIBLE NOTES (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 CAD ($) $ / shares | |
Statement [Line Items] | |
Estimated value for conversion option | $ 17,253 |
Debt instrument Estimated fair value | 17,866 |
Derivative on note gain | 15,960 |
Debt instrument change in fair value | $ 1,179 |
Interest rate | 30.14% |
Percentage of Conversion price | 80% |
Kopernik Global Investors, LLC | |
Statement [Line Items] | |
Aggregate principal amount | $ 15,000,000 |
Debt instrument term | 10 years |
Interest rate | 2% |
Conversion price | $ / shares | $ 0.3557 |
Description of debt instrument convertible | If the Group proceeds with an equity financing in the future, the terms of the Notes require that the Group redeem the Notes at 150% of the principal amount of the Notes, in cash or convert at the Conversion Price (the “financing redemption option”), at the election of the Investor, and pay any accrued but unpaid interest in cash. This financing is subject to customary exclusions for non-financing issuances of the Company’s equity securities. In addition, the Notes include change of control provisions under which (i) the Investor may elect to convert the Notes concurrent with a change of control transaction at the lower of the fixed Conversion Price and the price per common share implied by the change of control transaction, and (ii) if the Investor does not elect to convert, the Group will be required to offer to repurchase the Notes at 101% of the principal amount |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement [Line Items] | ||
Receivable from related party | $ 17 | $ 0 |
Hunter Dickinson Services Inc. | ||
Statement [Line Items] | ||
Receivable from related party | $ 17 | $ 0 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS (Details 1) - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement [Line Items] | ||
Payables to related parties | $ 287 | $ 237 |
Key Management Personnel | ||
Statement [Line Items] | ||
Payables to related parties | 34 | 35 |
Hunter Dickinson Services Inc. | ||
Statement [Line Items] | ||
Payables to related parties | $ 253 | $ 202 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS (Details 2) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||
Amounts paid and payable to HDSI for services of KMP employed by HDSI | $ 2,441 | $ 2,499 |
Amounts paid and payable to KMP | 1,768 | 1,913 |
Compensation gross | 4,209 | 4,412 |
Share-based compensation | 661 | 1,441 |
Total compensation | 4,870 | 5,853 |
Total for services rendered | 3,954 | 3,874 |
Engineering | 363 | 372 |
Environmental | 321 | 508 |
Other technical services | 125 | 44 |
Services rendered by HDSI | 809 | 924 |
Management, corporate communications, secretarial, financial and administration | 2,450 | 2,223 |
Shareholder communication | 695 | 727 |
Total General and administrative | 3,145 | 2,950 |
Conferences and travel | 246 | 124 |
Insurance | 87 | 48 |
Office supplies and information technology | 575 | 532 |
Total reimbursed | 908 | 704 |
Total value of transactions with HDSI | $ 4,862 | $ 4,578 |
RELATED PARTY BALANCES AND TR_6
RELATED PARTY BALANCES AND TRANSACTIONS (Details Narrative) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Offices expenses | $ 166 | $ 151 |
Description of agreement term | The Company signed an office use agreement effective May 1, 2021, for a five-year term ending April 29, 2026 | |
DSU shares Issued | 15,937 | |
Undiscounted commitment | $ 238 | |
HDSI | ||
Statement [Line Items] | ||
Annual salary | $ 2,800 |
TRADE AND OTHER PAYABLES (Detai
TRADE AND OTHER PAYABLES (Details) - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
TRADE AND OTHER PAYABLES | ||
Trade, current | $ 929 | $ 1,683 |
Lease liabilities, current | 126 | 150 |
Trade and other payables | 1,055 | 1,833 |
Lease liabilities, noncurrent | 338 | 463 |
Total, noncurrent | $ 338 | $ 463 |
TRADE AND OTHER PAYABLES (Det_2
TRADE AND OTHER PAYABLES (Details 1) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
TRADE AND OTHER PAYABLES | ||
Beginning balance | $ 613 | $ 687 |
Interest expense | 55 | 67 |
Lease payments | (208) | (196) |
Lease recognition | 16 | 10 |
Foreign currency translation difference | (12) | 45 |
Ending balance | 464 | 613 |
Current portion | 126 | 150 |
Non-current portion | 338 | 463 |
Total | $ 464 | $ 613 |
TRADE AND OTHER PAYABLES (Det_3
TRADE AND OTHER PAYABLES (Details 2) $ in Thousands | Dec. 31, 2023 CAD ($) |
TRADE AND OTHER PAYABLES | |
Less than one year | $ 164 |
One to five years | 399 |
Later than 5 years | 34 |
Total undiscounted lease liabilities | $ 597 |
TRADE AND OTHER PAYABLES (Det_4
TRADE AND OTHER PAYABLES (Details Narrative) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Interest rates | 80% | |
Short-term lease commitments | $ 55 | $ 157 |
Interest expense on lease liabilities | 55 | 67 |
Lease expense | $ 55 | $ 158 |
Bottom [Member] | ||
Statement [Line Items] | ||
Lease terms | 7 months | |
Interest rates | 9.50% | |
Up [Member] | ||
Statement [Line Items] | ||
Lease terms | 77 months | |
Interest rates | 12% |
EXPLORATION AND EVALUATION AND
EXPLORATION AND EVALUATION AND GENERAL AND ADMINISTRATIVE EXPENSES (Details) - E & E - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Engineering | $ 2,140 | $ 1,390 |
Environmental | 974 | 2,187 |
Property fees | 1,252 | 1,194 |
Site activities | 937 | 1,565 |
Socio-economic | 2,386 | 2,242 |
Transportation | (71) | 620 |
Other activities and travel | 111 | 71 |
Total | $ 7,729 | $ 9,269 |
EXPLORATION AND EVALUATION AN_2
EXPLORATION AND EVALUATION AND GENERAL AND ADMINISTRATIVE EXPENSES (Details 1) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Insurance | $ 87 | $ 48 |
Shareholder communication | 695 | 727 |
G & A | ||
Statement [Line Items] | ||
Conference and travel | 477 | 248 |
Consulting | 855 | 651 |
Depreciation of right-of-use assets | 101 | 104 |
Insurance | 3,227 | 2,422 |
Office costs, including information technology | 765 | 769 |
Management and administration | 3,172 | 3,130 |
Shareholder communication | 1,229 | 1,276 |
Trust and filing | 335 | 426 |
Total | $ 10,161 | $ 9,026 |
EXPLORATION AND EVALUATION AN_3
EXPLORATION AND EVALUATION AND GENERAL AND ADMINISTRATIVE EXPENSES (Details 2) - Legal Accounting And Audit Expenses - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
legal expenses | $ 6,459 | $ 4,212 |
Insurance cost recoveries | (3,617) | (710) |
Accounting Expenses | 130 | 119 |
Audit and reviews | 417 | 389 |
Total | $ 3,389 | $ 4,010 |
EMPLOYMENT COSTS (Details)
EMPLOYMENT COSTS (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement [Line Items] | ||
General and administrative | $ 3,983 | $ 3,840 |
Exploration and evaluation | 2,510 | 3,190 |
Share-based payments | 1,068 | 2,301 |
Total employement cost | 7,561 | 9,331 |
General and administrative | ||
Statement [Line Items] | ||
Salaries and benefits | 1,439 | 1,407 |
Amounts paid for services by HDSI personnel | 2,544 | 2,433 |
Exploration and evaluation | ||
Statement [Line Items] | ||
Salaries and benefits | 1,701 | 2,267 |
Amounts paid for services by HDSI personnel | $ 809 | $ 923 |
BASIC AND DILUTED LOSS PER SH_3
BASIC AND DILUTED LOSS PER SHARE (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
BASIC AND DILUTED LOSS PER SHARE | ||
Loss attributable to common shareholders | $ 20,996 | $ 24,442 |
Weighted average number of common shares outstanding | 530,272 | 529,779 |
BASIC AND DILUTED LOSS PER SH_4
BASIC AND DILUTED LOSS PER SHARE (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Share Units | ||
Statement [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted loss per share | 470,347 | 539,286 |
Employee Share Purchase Options | ||
Statement [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted loss per share | 24,318,500 | 27,693,500 |
Non-Employee Share Purchase Options | ||
Statement [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted loss per share | 37,600 | 37,600 |
INCOME TAX (Details)
INCOME TAX (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAX | ||
Net loss | $ (20,996) | $ (24,442) |
Total income tax (recovery) expense | (110) | 107 |
Loss excluding income tax | (21,106) | (24,335) |
Income tax recovery using the Company's domestic tax rate | (5,699) | (6,570) |
Non-deductible expenses and other | 318 | 631 |
Change in tax rates | 0 | 0 |
Deferred income tax assets not recognized | 5,491 | 5,832 |
Deferred income tax (recovery) expense | $ 110 | $ (107) |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
INCOME TAX | ||
Tax losses | $ 2,262 | $ 2,167 |
Net deferred income tax assets | 2,262 | 2,167 |
Resource property/investment in Pebble Partnership | (2,262) | (2,167) |
Net deferred income tax liability | $ 0 | $ 0 |
INCOME TAX (Details 2)
INCOME TAX (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 CAD ($) | |
Statement [Line Items] | |
Tax losses | $ 377,288 |
Resource pools | 93,248 |
Other | 1,490 |
Within one year | |
Statement [Line Items] | |
Tax losses | 0 |
Resource pools | 0 |
Other | 0 |
One to Five Years | |
Statement [Line Items] | |
Tax losses | 0 |
Resource pools | 0 |
Other | 1,300 |
After Five Years | |
Statement [Line Items] | |
Tax losses | 339,693 |
Resource pools | 0 |
Other | 0 |
No Expiry Date | |
Statement [Line Items] | |
Tax losses | 37,595 |
Resource pools | 93,248 |
Other | $ 190 |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAX | ||
Domestic tax rate, percent | 27% | 27% |
taxable income, Maximum | 80% | |
Investments in foreign subsidiaries | $ 8 | $ 7.6 |
Net operating tax losses | $ 37.6 |
FINANCIAL RISK MANAGEMENT (Deta
FINANCIAL RISK MANAGEMENT (Details) - CAD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement [Line Items] | ||
Interest, refundable deposits, and other receivables | $ 17 | $ 0 |
Restricted cash | 872 | 852 |
Cash and cash equivalents | 18,200 | 14,173 |
Non-current trade payables | 338 | 463 |
Trade and other payables | 1,055 | 1,833 |
Payables to related parties | 287 | 237 |
Credit risk | ||
Statement [Line Items] | ||
Interest, refundable deposits, and other receivables | 595 | 64 |
Restricted cash | 872 | 852 |
Cash and cash equivalents | 18,200 | 14,173 |
Total exposure | 19,667 | 15,089 |
Foreign Exchange Risk | ||
Statement [Line Items] | ||
Amounts receivable | 676 | 108 |
Cash and cash equivalents and restricted cash | 18,069 | 7,347 |
Total Financial assets | 18,745 | 7,455 |
Non-current trade payables | (338) | (463) |
Convertible notes | (18,884) | 0 |
Trade and other payables | (724) | (1,383) |
Payables to related parties | (134) | (71) |
Total Financial liabilities | (20,080) | (1,917) |
Net financial assets exposed to foreign currency risk | $ (1,335) | $ 5,538 |
FINANCIAL RISK MANAGEMENT (De_2
FINANCIAL RISK MANAGEMENT (Details Narrative) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
FINANCIAL RISK MANAGEMENT | ||
Foreign exchange risk, percent | 10% | 10% |
Increase or decrease in interest rates | 1% | 1% |
Expected gain (loss) on foreign exchange movement | $ 133 | $ 554 |
Decrease or increase in loss | $ 82 | $ 182 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2023 CAD ($) |
Statement [Line Items] | |
Less than one year | $ 164 |
One to five years | 399 |
Commitments And Contingencies | |
Statement [Line Items] | |
Less than one year | 104 |
One to five years | 134 |
Total commitment | $ 238 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrative) - CAD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Oct. 08, 2023 | Sep. 22, 2023 | Dec. 31, 2023 | |
Statement [Line Items] | |||
Settlement amount paid | $ 2,886 | $ 8,445 | |
Net profits royalty interest | 3% | ||
Aggregate annual payment | $ 3,000 | ||
Undiscounted commitment | 238 | ||
Total legal fees | $ 635 | ||
Office Use Commitment | |||
Statement [Line Items] | |||
Agreement end date | April 29, 2026 | ||
Pipeline Right Of Way Bond Commitment | |||
Statement [Line Items] | |||
Bond | $ 300 |