AMARC RESOURCES LTD.
CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
SEPTEMBER 30, 2016 and 2015
(Expressed in Canadian Dollars)
(Unaudited)
Notice to Reader |
In accordance with subsection 4.3(3) of National Instrument 51-102, management of the Company advises that the Company's auditors have not performed a review of these interim financial statements.
Amarc Resources Ltd.
Condensed Interim Statements of Financial Position
(Expressed in Canadian Dollars)
September 30, | March 31, | ||||||
2016 | 2016 | ||||||
Note | (unaudited) | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash | 3 | $ | 821,970 | $ | 747,408 | ||
Amounts receivable and other assets | 5 | 117,468 | 117,406 | ||||
Marketable securities | 16,748 | 26,404 | |||||
956,186 | 891,218 | ||||||
Non-current assets | |||||||
Restricted cash | 4 | 103,354 | 205,028 | ||||
Total assets | $ | 1,059,540 | $ | 1,096,246 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Amounts payable and accrued liabilities | 7 | $ | 56,319 | $ | 22,357 | ||
Balance due to a related party | 10 (b) | 103,663 | 180,476 | ||||
Director's loan | 8 | 1,298,730 | 1,000,000 | ||||
Advance contributions received | 6 | 212,500 | – | ||||
1,671,212 | 1,202,833 | ||||||
Non-current liabilities | |||||||
Director's loan | 8 | – | 234,849 | ||||
Total liabilities | 1,671,212 | 1,437,682 | |||||
Shareholders' deficiency | |||||||
Share capital | 9 | 58,967,910 | 58,967,910 | ||||
Reserves | 5,352,748 | 5,357,405 | |||||
Accumulated deficit | (64,932,330 | ) | (64,666,751 | ) | |||
(611,672 | ) | (341,436 | ) | ||||
Total liabilities and shareholders' deficiency | $ | 1,059,540 | $ | 1,096,246 |
Nature of operations and going concern (note 1)
The accompanying notes are an integral part of these condensed interim financial statements.
/s/ Robert A. Dickinson | /s/ Rene G. Carrier |
Robert A. Dickinson | Rene G. Carrier |
Director | Director |
Amarc Resources Ltd.
Condensed Interim Statements of Loss
(Unaudited - Expressed in Canadian Dollars, except for weighted average number of common shares outstanding)
Three months ended | Six months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Note | (note 2(b)) | (note 2(b)) | ||||||||||||||
Expenses | ||||||||||||||||
Exploration and evaluation | 10,11 | $ | 2,024,918 | $ | 1,695,433 | $ | 2,288,851 | $ | 1,975,792 | |||||||
Assays and analysis | 81,232 | 11,662 | 88,852 | 13,362 | ||||||||||||
Drilling | 263,705 | 647,859 | 263,705 | 647,859 | ||||||||||||
Equipment rental | 20,914 | 9,247 | 22,923 | 9,247 | ||||||||||||
Geological | 519,708 | 162,941 | 595,500 | 232,103 | ||||||||||||
Helicopter | 568,658 | 617,426 | 568,658 | 617,426 | ||||||||||||
Property costs and assessments | 240,000 | – | 240,198 | 52,698 | ||||||||||||
Site activities | 235,531 | 114,643 | 341,772 | 118,118 | ||||||||||||
Socioeconomic | 82,920 | 57,626 | 144,332 | 209,829 | ||||||||||||
Travel and accommodation | 12,250 | 74,029 | 22,911 | 75,150 | ||||||||||||
Administration | 10,11 | 231,892 | 347,388 | 391,575 | 684,985 | |||||||||||
Legal, accounting and audit | 18,568 | 2,962 | 21,518 | 6,220 | ||||||||||||
Office and administration | 11 (b) | 194,274 | 326,510 | 335,450 | 623,940 | |||||||||||
Shareholder communication | 13,269 | 9,481 | 13,944 | 29,738 | ||||||||||||
Travel and accommodation | – | 99 | 414 | 6,432 | ||||||||||||
Trust and regulatory | 5,781 | 8,336 | 20,249 | 18,655 | ||||||||||||
Cost recoveries | (2,163,097 | ) | (549,658 | ) | (2,518,297 | ) | (564,658 | ) | ||||||||
Pursuant to IKE Option Agreement | 6 | (2,163,097 | ) | – | (2,518,297 | ) | – | |||||||||
Mineral exploration tax credit | – | (549,658 | ) | – | (564,658 | ) | ||||||||||
93,713 | 1,493,163 | 162,129 | 2,096,119 | |||||||||||||
Other items | ||||||||||||||||
Finance income | (3,813 | ) | (759 | ) | (5,239 | ) | (2,187 | ) | ||||||||
Finance expenses - director's loans | 8 | 67,920 | 519,230 | 123,538 | 532,827 | |||||||||||
Foreign exchange loss | (43 | ) | 2,182 | (43 | ) | 2,206 | ||||||||||
Gain on disposition of marketable securities | (9,893 | ) | (4,707 | ) | (14,806 | ) | (5,037 | ) | ||||||||
Loss for the period | $ | 147,884 | $ | 2,009,109 | $ | 265,579 | $ | 2,623,928 | ||||||||
Basic and diluted loss per common share | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.02 | ||||||||
Weighted average number of common shares outstanding | 141,424,061 | 141,424,061 | 141,424,061 | 141,388,542 |
The accompanying notes are an integral part of these condensed interim financial statements.
Amarc Resources Ltd.
Condensed Interim Statements of Comprehensive Loss
(Unaudited - Expressed in Canadian Dollars)
Three months ended | Six months ended | |||||||||||
September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Loss for the period | $ | 147,884 | $ | 2,009,109 | $ | 265,579 | $ | 2,623,928 | ||||
Other comprehensive loss (income): | ||||||||||||
Items that may be reclassified subsequently to profit and loss: | ||||||||||||
Revaluation of marketable securities | 12,893 | 14,792 | (10,149 | ) | 19,596 | |||||||
Reallocation of the fair value of marketable securities upon disposition | 9,893 | 4,780 | 14,806 | 5,110 | ||||||||
Total other comprehensive loss for the period | 22,786 | 19,572 | 4,657 | 24,706 | ||||||||
Comprehensive loss for the period | $ | 170,670 | $ | 2,028,681 | $ | 270,236 | $ | 2,648,634 |
The accompanying notes are an integral part of these condensed interim financial statements.
Amarc Resources Ltd.
CondensedInterimStatements ofChanges inDeficiency
(Unaudited - Expressed in Canadian Dollars, except for share information)
Share capital | Reserves | |||||||||||||||||||||
Share- | ||||||||||||||||||||||
based | Investment | Share | ||||||||||||||||||||
Number | payments | revaluation | warrants | |||||||||||||||||||
Note | of shares | Amount | reserve | reserve | reserve | Deficit | Total | |||||||||||||||
Balance at April 1, 2015 | 141,324,061 | $ | 58,955,410 | $ | 2,202,640 | $ | 54,840 | $ | 2,811,220 | $ | (63,547,972 | ) | $ | 476,138 | ||||||||
Common shares issued - property payment | 6 | 100,000 | 12,500 | – | – | – | – | 12,500 | ||||||||||||||
Issuance of share purchase warrants | 9 (c) | – | – | – | – | 500,000 | – | 500,000 | ||||||||||||||
Total other comprehensive loss | – | – | – | (24,706 | ) | – | – | (24,706 | ) | |||||||||||||
Loss for the period | – | – | – | – | – | (2,623,928 | ) | (2,623,928 | ) | |||||||||||||
Balance at September 30, 2015 | 141,424,061 | $ | 58,967,910 | $ | 2,202,640 | $ | 30,134 | $ | 3,311,220 | $ | (66,171,900 | ) | $ | (1,659,996 | ) | |||||||
Balance at April 1, 2016 | 141,424,061 | $ | 58,967,910 | $ | 2,202,640 | $ | 21,402 | $ | 3,133,363 | $ | (64,666,751 | ) | $ | (341,436 | ) | |||||||
Total other comprehensive income | – | – | – | (4,657 | ) | – | – | (4,657 | ) | |||||||||||||
Loss for the period | – | – | – | – | – | (265,579 | ) | (265,579 | ) | |||||||||||||
Balance at September 30, 2016 | 141,424,061 | $ | 58,967,910 | $ | 2,202,640 | $ | 16,745 | $ | 3,133,363 | $ | (64,932,330 | ) | $ | (611,672 | ) |
Theaccompanying notes are anintegral part of thesecondensed interimfinancialstatements.
Amarc Resources Ltd.
Condensed Interim Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Six months ended June 30, | |||||||
Note | 2016 | 2015 | |||||
Operating activities | |||||||
Loss for the period | $ | (265,579 | ) | $ | (2,623,928 | ) | |
Adjustments for: | |||||||
Finance income | (5,239 | ) | (2,187 | ) | |||
Finance expenses - director's loans | 8 | 123,538 | 532,827 | ||||
Common shares issued, included in exploration expenses | – | 12,500 | |||||
Gain on disposition of marketable securities | (14,806 | ) | (5,037 | ) | |||
Changes in working capital items | |||||||
Amounts receivable and other assets | (61 | ) | (633,731 | ) | |||
Restricted cash | 101,674 | (448 | ) | ||||
Accounts payable and accrued liabilities | 33,962 | 1,207,137 | |||||
Balances due to related parties | (76,813 | ) | 115,483 | ||||
Advance contributions received | 7 (a) | 212,500 | 3,000,000 | ||||
Net cash provided by (used in) operating activities | 109,176 | 1,602,616 | |||||
Investing activities | |||||||
Interest received | 5,239 | 2,187 | |||||
Proceeds from disposition of marketable securities | 19,805 | 5,037 | |||||
Net cash provided by investing activities | 25,044 | 7,224 | |||||
Financing activities | |||||||
Proceed from director's loan | 8 | - | 1,050,000 | ||||
Repayment of loans payable to director | 8 | – | (550,000 | ) | |||
Interest paid on director's loans | 8 | (59,658 | ) | (32,827 | ) | ||
Net cash provided by financing activities | (59,658 | ) | 467,173 | ||||
Net increase (decrease) in cash | 74,562 | 2,077,013 | |||||
Cash, beginning of the period | 747,408 | 489,150 | |||||
Cash, end of the period | $ | 821,970 | $ | 2,566,163 | |||
– | |||||||
Supplementary cash flow information: | |||||||
Other non-cash investing and financing activities: | |||||||
Issuance of the Company's equity instruments pursuant to mineral property agreements | $ | – | $ | 12,500 | |||
Issuance of share purchase warrants pursuant to loan agreement | $ | – | $ | 500,000 |
The accompanying notes are an integral part of these condensed interim financial statements.
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
1. | NATURE OF OPERATIONS AND GOING CONCERN |
Amarc Resources Ltd. (the "Company" or "Amarc") is incorporated under the laws of the province of British Columbia (“BC”), and its principal business activity is the acquisition and exploration of mineral properties. Its principal mineral property interests are located in BC. The address of the Company's corporate office is 15th Floor, 1040 West Georgia Street, Vancouver, BC, Canada V6E 4H1. | |
The Company is in the process of exploring its mineral property interests and has not yet determined whether its mineral property interests contain economically recoverable mineral reserves. The Company's continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to continue the exploration and development of its mineral property interests and to obtain the permits necessary to mine, and on future profitable production or proceeds from the disposition of its mineral property interests. | |
These condensed interim financial statements (the “Financial Statements”) have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. The Company has a history of losses with no operating revenue. As at September 30, 2016, the Company had a working capital deficit, and a shareholders’ deficiency. The working capital deficit was primarily due to directors loans classified as current liabilities. During the six month period ended September 30, 2016, the Company received project funding of $2.7 million in cash from Thompson Creek Metals Company Inc. (“Thompson Creek” now a wholly owned subsidiary of Centerra Gold Inc.) under the IKE Agreement (note 6). The Company will need to seek additional financing to meet its exploration and development objectives. These factors indicate the existence of a material uncertainty that raises significant doubt about the Company’s ability to continue as a going concern. The Company has a reasonable expectation that additional funds will be available when necessary to meet ongoing exploration and development costs. However, there can be no assurance that the Company will continue to be able to obtain additional financial resources or will achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to re-evaluate its planned expenditures until additional funds can be raised through financing activities. | |
These Financial Statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |
2. | SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these Financial Statements are described below. These policies have been consistently applied for all years presented, unless otherwise stated. |
(a) | Statement of compliance |
These Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board ("IASB"), and interpretations by the IFRS Interpretations Committee (IFRIC). These Financial Statements do not include all of the information and footnotes required by International Financial Reporting Standards ("IFRS") for complete financial statements for year-end reporting purposes. These Financial Statements should be read in conjunction with the Company’s financial statements as at and for the year ended March 31, 2016. Results for the reporting period ended September 30, 2016 are not necessarily indicative of future results. The accounting policies and methods of computation applied by the Company in these Financial Statements are the same as those applied by the Company in its most recent annual financial statements which are filed under the Company’s profile on SEDAR at www.sedar.com. |
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
The Board of Directors of the Company authorized these Financial Statements for issuance on November 15, 2016. | |
(b) | Basis of presentation |
These Financial Statements have been prepared on a historical cost basis, except for financial instruments classified as marketable securities which are stated at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information. | |
Certain comparative amounts have been reclassified to conform to the presentation adopted in the current year. | |
(c) | Significant accounting estimates and judgements |
The critical judgements and estimates applied in the preparation of these Financial Statements are consistent with those applied in the Company’s audited financial statements as at and for the year ended March 31, 2016. | |
(d) | Accounting standards, interpretations and amendments to existing standards |
There were no new standards, interpretations, or amendment adopted by the Company during the period covered by these Financial Statements that may have a significant impact on these Financial Statements. | |
New standards and amendments to existing standards issued but not yet effective are listed below: | |
Effective for annual periods commencing on or after January 1, 2018 |
• | IFRS 9, Financial Instruments | |
• | IFRS 15, Revenue from Contracts with Customers |
Effective for annual periods commencing on or after January 1, 2019
• | IFRS 16, Leases and revised IAS 17, Leases |
The Company anticipates that the adoption of the above standards will not have a significant impact on its financial statements.
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
3. | CASH AND CASH EQUIVALENTS |
The Company's cash and cash equivalents are invested in business and savings accounts which are available on demand by the Company. | |
4. | RESTRICTED CASH |
Restricted cash represents guaranteed investment certificates held in support of exploration permits. The amounts are refundable subject to the consent of regulatory authorities upon the completion of any required reclamation work on the related projects. | |
5. | AMOUNTS RECEIVABLE AND OTHER ASSETS |
September 30, | March 31, | ||||||
2016 | 2016 | ||||||
Current | |||||||
Sales tax refundable | $ | 96,180 | $ | 15,991 | |||
Other amounts receivable | 21,288 | 101,415 | |||||
Total current | $ | 117,468 | $ | 117,406 |
6. | EXPLORATION AND EVALUATION EXPENSES AND COST RECOVERIES |
During the six months ended September 30, 2016, the Company’s mineral exploration and evaluation activities were primarily focused on its IKE Project, which comprises the IKE and also the Granite, Juno and Galore District Properties (collectively the “IKE Project”). At September 30, 2016, subject to certain third party royalty interests that are capped and can be acquired by the Company for fixed amounts, the Company had a 100% interest in the IKE (which was acquired under an option agreement (see below)), Granite and Juno Properties, and had the right to acquire a 70% interest in the Galore Property. By way of a new agreement negotiated during the reporting period, the Company can now acquire a 100% interest in the Galore Property. | |
In September 2015 the Company announced that it had entered into an agreement (the "IKE Agreement") with Thompson Creek pursuant to which Thompson Creek may acquire, through a staged investment process within five years, a 30% ownership interest (“Stage 1 Option”) in the mineral claims and crown grants covering the IKE copper-molybdenum-silver porphyry deposit and the surrounding district. Under the terms of the IKE Agreement, Thompson Creek also has an option to acquire an additional 20% interest in the IKE Project, subject to certain conditions, including the completion of a Feasibility Study. | |
Under the terms of the IKE Agreement, Thompson Creek can earn an initial 30% interest in the Project under a Stage 1 Option by funding, via the Company in its capacity as project operator, $15 million of expenditures before December 31, 2019 (of which approximately $5.7 million has been received to September 30, 2016). |
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
During the six month period ended September 30, 2016, the Company received approximately $2.7 million from Thompson Creek, of which approximately $2.5 million has been recognized during the reporting period, as a cost recovery, representing expenditures incurred during the period under the IKE Agreement, plus a management fee thereon at a fixed percentage of the expenditures. | |
For each $5 million of project expenditures funded (of which the first $5 million of funding was completed during the reporting period), Thompson Creek will incrementally earn a 10% ownership interest. Stage 1 Option expenditures can be accelerated by Thompson Creek at its discretion. Amarc will remain as operator during the Stage 1 Option earn-in period. | |
During the year ended March 31, 2015, the Company incurred sufficient mineral exploration and evaluation expenses to satisfy the minimum total expenditure requirement under a mineral property option agreement for the IKE property signed between the Company and Oxford Resources Inc. (“Oxford”) in December 2013, when Oxford’s interest in the IKE property was represented by an underlying option agreement between Oxford and two private third parties. In July 2014, Oxford assigned its rights in the underlying option agreement to Amarc for a cash consideration of $40,000. In June 2015, the Company satisfied all other earn-in conditions of the underlying options agreement, including issuance of common shares to the underlying optioners. | |
7. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
September | |||||||
30, | March 31, | ||||||
2016 | 2016 | ||||||
Accounts payable | $ | 56,319 | $ | 20,497 | |||
Accrued liabilities | – | 1,860 | |||||
Total | $ | 56,319 | $ | 22,357 |
8. | DIRECTOR’S LOANS |
Summary | ||||
Balance, March 31, 2014 | $ | – | ||
Loan advanced(i) | 1,000,000 | |||
Balance, March 31, 2015 | 1,000,000 | |||
Net amount advanced during the year(ii) | 500,000 | |||
Deferred financing cost(ii) | (322,143 | ) | ||
Amortisation of deferred financing cost during the year | 56,992 | |||
Balance, March 31, 2016 | $ | 1,234,849 | ||
Amortization of deferred financing cost during the period | 63,881 | |||
Balance, September 30, 2016 | $ | 1,298,730 |
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
September | |||||||
Unsecured loans payable to a director | 30, | March 31, | |||||
2016 | 2016 | ||||||
Director’s loan advanced in November 2014(i) | $ | 1,000,000 | $ | 1,000,000 | |||
Director’s loan advanced in September 2015(ii) | 298,730 | 234,849 | |||||
Total | $ | 1,298,730 | $ | 1,234,849 | |||
Current portion | $ | 1,298,730 | $ | 1,000,000 | |||
Non-current portion | – | 234,849 | |||||
Total | $ | 1,298,730 | $ | 1,234,849 |
(i) | This loan, when originally advanced in November 2014, was subject to interest at a rate of prime plus 2% per annum and had a due date of November 2015. Prior to the reporting date, the term of this this loan was extended twice, first to May 26, 2016 at a 7% per annum fixed interest rate and then to November 26, 2016 at a 9% per annum fixed interest rate for the additional terms. Pursuant to this loan, during the year ended March 31, 2015, the Company issued 2,500,000 of its common shares to the lender with the fair value of $187,500, determined with reference to the quoted market price of the shares on the date of issuance. | |
(ii) | This loan bears interest at 7% per annum and matures in September 2017. Pursuant to this loan, during the year ended March 31, 2016, the Company issued 5,555,555 share purchase warrants to the lender with the fair value of $322,143, determined using the Black Scholes option pricing model and based on the following assumptions: risk-free rate of 0.51%; expected volatility of 130%; expected life of 2 year; share price of Cdn$0.09 and dividend yield of nil. |
Three months ended | Six months ended | ||||||||||||
Finance costs | September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Interest on director’s loans | $ | 31,507 | $ | 19,230 | $ | 59,658 | $ | 32,827 | |||||
Amortization of deferred finance expenses | 36,413 | – | 63,880 | 500,000 | |||||||||
Total | $ | 67,920 | $ | 19,230 | $ | 123,538 | $ | 532,827 |
9. | CAPITAL AND RESERVES |
(a) | Authorized share capital |
The Company's authorized share capital consists of an unlimited number of common shares without par value and an unlimited number of preferred shares. All issued common shares are fully paid. No preferred shares have been issued. |
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
(b) | Share purchase option compensation plan |
The following table summarizes the changes in the Company's share purchase options: |
Share purchase options (exercise price – $0.32) | Six months ended September 30, | ||||||
2016 | 2015 | ||||||
Outstanding – beginning of period | 3,051,300 | 3,051,300 | |||||
Issued | – | – | |||||
Forfeited | – | – | |||||
Expired | (3,051,300 | ) | – | ||||
Outstanding – end of period | – | 3,051,300 | |||||
Exercisable – end of period | – | 3,051,300 |
(c) | Share Purchase Warrants |
At September 30, 2016 and March 31, 2016, there were 5,555,555 share purchase warrants of the Company outstanding; these warrants were issued as a loan bonus (note 8) and are exercisable into common shares at a price of $0.09 per share on or before September 24, 2017. The loan agreement provides that if the loan is reduced or repaid in full during the first year of its term, a pro-rata number of the total number of these warrants will have their term reduced to the later of one year from the date of issuance thereof and 30 days from the date of the reduction or repayment in full. |
10. | RELATED PARTY TRANSACTIONS |
(a) | Transactions with key management personnel |
Key management personnel (“KMP”) are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly, and by definition include all directors of the Company. | |
Transactions with key management personnel were as follows: |
Three months ended | Six months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Directors fees paid directly by the Company | $ | – | $ | 13,800 | $ | – | $ | 27,800 | |||||
Directors fees paid to HDSI (note 10(b)) | – | 62,000 | – | 125,000 | |||||||||
Total | $ | – | $ | 76,200 | $ | – | $ | 152,600 |
Note 8 includes the details of a director’s loans. | |
(b) | Balances and transactions with Hunter Dickinson Inc. |
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
Hunter Dickinson Inc. (“HDI”) and its wholly owned subsidiary Hunter Dickinson Services Inc. ("HDSI") are private companies established by a group of mining professionals engaged in advancing mineral properties for a number of publicly-listed exploration companies, one of which is the Company.
The Company has 3 directors in common with HDSI, namely: Scott Cousens, Robert Dickinson, and Ronald Thiessen. Also, the Company’s President, Chief Financial Officer, and Corporate Secretary are employees of HDSI and work for the Company under an employee secondment arrangement between the Company and HDSI.
HDSI provides technical, geological, corporate communications, regulatory compliance, and administrative and management services to the Company, on an as-needed and as-requested basis from the Company. As a result of this relationship, the Company has ready access to a range of diverse and specialized expertise on a regular basis, without having to engage or hire full-time experts. Services from HDSI are provided on a non-exclusive basis. The Company is not obligated to acquire any minimum amount of services from HDSI. The value of services received from HDSI is determined based on a charge-out rate for each employee performing the service and for the time spent by the employee. Such charge-out rates are agreed and set annually in advance.
HDSI also incurs third party costs on behalf of the Company; such third party costs are reimbursed by the Company to HDSI at cost without any markup and such costs include, for example, directors and officers insurance, travel, conferences, and communication services.
September 30, | March 31, | ||||||
2016 | 2016 | ||||||
Balance due to HDSI | $ | 103,663 | $ | 180,476 |
The following is a summary of transactions with related entities that occurred during the reporting period:
Three months ended | Six months ended | ||||||||||||
Transactions with HDSI | September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Services received from HDSI and as requested by the Company | $ | 330,000 | $ | 404,000 | $ | 563,000 | $ | 752,000 | |||||
Directors fees paid to HDSI (note 10(a)) | – | 62,000 | – | 125,000 | |||||||||
Information technology – infrastructure and support services | 15,000 | 30,000 | 30,000 | 66,000 | |||||||||
Reimbursement, at cost, of third party expenses incurred by HDSI on behalf of the Company | $ | 18,000 | $ | 17,000 | $ | 24,000 | $ | 29,000 |
11. | EMPLOYEE BENEFITS EXPENSES |
(a) | Employee salaries and benefits |
The employees’ salaries and benefits included in exploration and evaluation expenses and administration expenses are as follows: |
Amarc Resources Ltd. |
Notes to the Condensed Interim Financial Statements |
For the three and six months ended September 30, 2016 and 2015 |
(Unaudited – Expressed in Canadian Dollars, unless otherwise stated) |
Three months ended | Six months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Exploration and evaluation expenses | $ | 304,000 | $ | 222,000 | $ | 438,000 | $ | 396,000 | |||||
General and administration expenses | 99,000 | 267,000 | 223,000 | 498,000 | |||||||||
Total | $ | 403,000 | $ | 489,000 | $ | 662,000 | $ | 894,000 |
(b) | Office and administration expenses |
Office and administration expenses include the following: |
Three months ended | Six months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Salaries and benefits | $ | 99,000 | $ | 267,000 | $ | 223,000 | $ | 496,000 | |||||
Data processing and retention | 15,000 | 30,000 | 30,000 | 66,000 | |||||||||
Insurance Other office expenses | 80,000 | 30,000 | 82,000 | 62,000 | |||||||||
Total | $ | 194,000 | $ | 327,000 | $ | 335,000 | $ | 624,000 |