| Significant Accounting Policies | 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 International Financial Reporting Standards (“IFRS”), as issued by the International
Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”),
effective for the Company’s reporting year ended March 31, 2019. The Board of Directors of
the Company authorized these Financial Statements for issuance on July 10, 2019.
(b) Basis of presentation and consolidation These Financial Statements
have been prepared on a historical cost basis, except for certain financial instruments classified as fair value through other
comprehensive income, which are reported at fair value. In addition, these Financial Statements have been prepared using the accrual
basis of accounting, except for cash flow information. These Financial Statements
include the financial statements of the Company and its wholly-owned subsidiary, 1130346 B.C. Ltd. (the “Subco”), incorporated
under the laws of BC. The Subco was incorporated for the purposes of entering into an option agreement (note 6(b)). As at March
31, 2019 and 2018, the Subco did not have any assets, liabilities, income or expenses. Intercompany balances and transactions are
eliminated in full on consolidation.
(c) Significant accounting estimates and judgements The preparation of financial
statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets and liabilities, and income and expenses. Actual results may differ from these estimates.
The impact of such estimates is 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. Changes in the subjective inputs and assumptions can materially affect fair value estimates. The following estimates
and judgements have been used in these Financial Statements:
· assessment of the Company’s ability to continue as a going concern;
· the determination of categories of financial assets and financial liabilities; and,
· the carrying value and recoverability of the Company’s marketable securities.
(d) Foreign currency The functional and presentational
currency of the Company is the Canadian Dollar (“CAD”). Transactions in currencies
other than the functional currency of the Company are recorded at the rates of exchange prevailing on the dates of transactions.
At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated
at the rates of exchange 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 re-translated. Gains and losses arising on translation are included in profit
or loss for the year.
(e) Financial instruments Financial assets and liabilities
are recognized when the Company becomes party to the contracts that give rise to them. The Company determines the classification
of its financial assets and liabilities at initial recognition, and, where allowed and appropriate, re-evaluates such classification
at each financial year end. The Company does not have any derivative financial instruments. On April 1, 2018, the Company
adopted IFRS 9, Financial Instruments (“IFRS 9”), which replaces IAS 39, Financial Instruments: Recognition and Measurement
(“IAS 39”) in its entirety. IFRS 9 provides a revised model for the recognition and measurement of financial instruments,
and a single, forward-looking ‘expected loss’ impairment model. The Company has applied the changes in accounting policy
retrospectively, however, in accordance with the transitional provisions in IFRS 9, comparative information has not been restated.
The adoption of IFRS 9 has not had a significant effect on the Company’s accounting policies related to financial liabilities.
The impact of IFRS 9 on the classification and measurement of financial assets is set out below. IFRS 9 largely retains the
existing requirements of IAS 39 for the classification and measurement of financial liabilities. IFRS 9 eliminates the previous
IAS 39 categories for financial assets of held to maturity, loans and receivables, and available-for-sale. Under IFRS 9, 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”). The classification of financial assets under
IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. 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 measured at FVTPL, transaction costs that are directly attributable to its acquisition.
The directly attributable transaction costs of a financial asset classified at FVTPL are expensed in the period in which they are
incurred. Financial assets measured
at amortized cost A financial asset is measured
at amortized cost if it meets both the following conditions and is not designated as at FVTPL:
· 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. These financial assets are
subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Any gain or loss on
the derecognition of the financial asset is recognized in profit or loss. Financial assets measured
at fair value through other comprehensive income A debt investment is measured
at FVTOCI if it meets bot the following conditions and is not designated as at FVTPL:
· 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. On the initial recognition
of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s
fair value in other comprehensive income (“OCI”). This election is made on an investment-by-investment basis. Debt investments measured
at FVTOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange
gains and losses, and impairment are recognized in profit or loss. Other net gains and losses are measured in OCI. On de-recognition,
gains and losses accumulated in OCI are reclassified to profit or loss. Equity investments measured
at FVTOCI are subsequently measured at fair value. Dividends are recognized 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 recognized in OCI and are never reclassified
to profit or loss. Financial assets measured
at fair value through profit or loss All financial assets not
classified as measured at amortized cost or measured at FVTOCI, as described above, are measured at FVTPL; this includes all derivative
financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements
to be measured at amortized cost or measured at FVTOCI as FVTPL if doing so eliminates, or significantly reduces, an accounting
mismatch that would otherwise arise. These financial assets are
subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit
or loss. On the date of initial application,
April 1, 2018, the financial instruments of the Company are detailed as follows, with any reclassification noted:
Measurement basis Carrying amount
Original New Original New Difference
Current financial assets
Cash Amortized cost Amortized cost $ 3,308,469 $ 3,308,469 $ –
Amounts receivable Amortized cost Amortized cost 85,574 85,574 –
Marketable securities Available-for-sale FVTOCI 1 57,461 57,461 –
Non-current financial assets
Restricted cash Amortized cost Amortized cost $ 173,143 $ 173,143 $ –
Current financial liabilities
Accounts payable and accrued liabilities Amortized cost Amortized cost $ 364,099 $ 364,099 $ –
Advanced contributions received Amortized cost Amortized cost 1,102,714 1,102,714 –
Balance due to a related party Amortized cost Amortized cost 148,877 148,877 –
Non-current financial liabilities
Directors’ loan Amortized cost Amortized cost $ 763,544 $ 763,544 $ –
$ –
1 Upon initial adoption of IFRS 9 on April 1, 2018, the Company has designated its marketable securities as measured at FVTOCI.
(f) Revenue On April 1, 2018, the Company
adopted IFRS 15, Revenue from Contracts with Customers Construction
Contracts Revenue Customer Loyalty Programs Agreements for the
Construction of Real Estate Transfer of Assets from Customers Revenue –
Barter Transactions Involving Advertising Services IFRS 15 establishes a single,
five-step model framework for determining the nature, amount, timing and certainty of revenue and cash flows arising from a contract
with a customer. The adoption of IFRS 15,
applied retrospectively, did not have a material impact on the Company’s financial statements.
(g) Exploration and evaluation expenditures Exploration and evaluation
costs are costs incurred to discover mineral resources, and to assess the technical feasibility and commercial viability of the
mineral resources found. Exploration and evaluation
expenditures include:
· costs associated with the acquisition of licences;
· costs associated with the acquisition of exploration and evaluation assets, including mineral properties; and,
· costs associated with exploration and evaluation activities. Exploration and evaluation
costs are generally expensed as incurred until the technical feasibility and commercial viability of extracting a mineral resource
has been determined and a positive decision to proceed to development has been made. However, if management concludes that future
economic benefits are more likely than not to be realized, the costs of property, plant and equipment for use in the exploration
and evaluation of mineral resources are capitalized. Costs incurred before the
Company has obtained the legal rights to explore an area are expensed. Costs incurred after the technical feasibility and commercial
viability of extracting a mineral resource has been determined and a positive decision to proceed to development has been made
are considered development costs and are capitalized. Costs applicable to established
mineral property interests where no further work is planned by the Company may, for presentation purposes only, be carried at nominal
amounts.
(h) Equipment Equipment is carried at cost,
less accumulated depreciation and accumulated impairment losses. The cost of equipment consists
of the purchase price, any costs directly attributable to bringing the asset to the location and the condition necessary for its
intended use, and an initial estimate of the costs of dismantling and removing the asset and restoring the site on which it is
located. Depreciation is provided
at rates calculated to expense the cost of the equipment, less its estimated residual value, using the declining balance method
at various rates ranging from 20% to 30% per annum. An item of equipment is derecognized
upon disposal or when no material 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 account for separately, including major inspection and overhaul
expenditures, are capitalized. As at March 31, 2019, all
equipment had been fully depreciated. The Company did not purchase any equipment during the year ended March 31, 2019.
(i) Share capital Common shares of the Company
are classified as equity. Transaction costs directly attributable to the issuance of common shares and share purchase options are
recognized as a deduction from equity, net of any tax effects. When the Company issues common
shares for consideration other than cash, the transaction is measured at fair value based on the quoted market price of the Company’s
common shares on the date of issuance.
(j) Loss per share Loss per share is computed
by dividing the losses attributable to common shareholders by the weighted average number of common shares outstanding during the
reporting period. Diluted loss per share is determined by adjusting the losses attributable to common shareholders and the weighted
average number of common shares outstanding for the effects of all dilutive potential common shares, such as options granted to
employees. The dilutive effect of options assumes that the proceeds to be received on the exercise of share purchase options are
applied to repurchase common shares at the average market price for the reporting period. Share purchase options are included in
the calculation of dilutive earnings per share only to the extent that the market price of the common shares exceeds the exercise
price of the share purchase options. The effect of anti-dilutive factors is not considered when computed diluted loss per share.
(k) Share based payments The share purchase option
plan allows employees and consultants of the Company to acquire shares of the Company. The fair value of share purchase options
granted is recognized as an employee or consultant expense with a corresponding increase in the share based payment reserve in
equity. An individual is classified as an employee when the individual is an employee for legal and tax purposes (direct employee)
or provides services similar to those performed by a direct employee. For employees, fair value
is measured at the grant date and each tranche is recognized on a straight-line basis over the period during which the share purchase
options vest. The fair value of the share purchase options granted is measured using the Black-Scholes option pricing model taking
into account the terms and conditions upon which the share purchase options were granted. At the end of each financial reporting
period, the amount recognized as an expense is adjusted to reflect the actual number of share purchase options that are expected
to vest. Share based payment transactions
with non-employees are measured at the fair value of the goods and 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 instrument granted at the date the entity
obtains the goods or the counterparty renders the service.
(l) Income taxes Income tax on the profit
or loss for the years presented comprises of current and deferred tax. Income tax is recognized in profit or loss except to the
extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax expense is the
expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for
amendments to tax payable with regards to previous years. Deferred tax is provided
using the balance sheet liability method, providing for 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 financial position reporting date 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, when they relate
to income taxes levied by the same taxation authority, and the Company intends to settle its current tax assets and liabilities
on a net basis.
(m) 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 at the time 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 project or asset, the conditions imposed by the relevant
permits, and, when applicable, the jurisdiction in which the project or asset is located. Discount rates using a pre-tax
rate that reflects the time value of money are used to calculate the net present value, where applicable. These costs are charged
against profit or loss over the economic life of the related asset, through amortization using either the unit-of-production method
or the straight-line method. The corresponding liability is progressively increased as the effect of discounting unwinds, creating
an expense recognized in profit or loss. The operations of the Company
have been, and may in the future be, affected from time to time in varying degrees by changes in environmental regulations, including
those for site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company are not predictable. The Company has no material
restoration, rehabilitation and environmental obligations as at March 31, 2019.
(n) Operating segments The Company operates as a
single reportable segment—the acquisition, exploration and development of mineral properties. All assets are held in Canada.
(o) Government assistance When the Company is entitled
to receive the BC Mineral Exploration Tax Credit (“BCMETC”) and other government grants, this government assistance
is recognized as a cost recovery when there is reasonable assurance of recovery.
(p) Accounting standards, interpretations and amendments to existing standards Effective for annual periods
beginning on or after January 1, 2019:
· IFRS 16, Leases
· IFRIC 23, Uncertainty over Income Tax Treatments The Company has not early
adopted these new standards or amendments to existing standards and does not expect the impact of these standards to be material
on the Company’s financial statements. |
