Exhibit 99.1
GREAT PANTHER MINING LIMITED
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2021, and 2020
Expressed in US Dollars
(Unaudited)
Great Panther MINING Limited
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands of US dollars - Unaudited)
| | | September 30,
2021 | | December 31,
2020 |
| ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 35,856 | | | $ | 63,396 | |
| Restricted cash | | | 1,025 | | | | 1,024 | |
| Trade and other receivables (note 4) | | | 16,014 | | | | 15,644 | |
| Inventories (note 5) | | | 27,306 | | | | 33,743 | |
| Other current assets (note 6) | | | 10,432 | | | | 5,675 | |
| | | | 90,633 | | | | 119,482 | |
| Other receivables (note 4) | | | 7,717 | | | | 11,836 | |
| Mineral properties, plant and equipment (note 7) | | | 117,537 | | | | 110,559 | |
| Exploration and evaluation assets | | | 26,765 | | | | 26,334 | |
| Other assets (note 8) | | | 9,331 | | | | 12,209 | |
| | | $ | 251,983 | | | $ | 280,420 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Trade payables and accrued liabilities (note 9(a)) | | $ | 48,771 | | | $ | 53,221 | |
| Current portion of borrowings (note 10) | | | 33,670 | | | | 30,933 | |
| Derivative liabilities (note 11) | | | — | | | | 2,974 | |
| Reclamation and remediation provisions - current | | | 4,369 | | | | 958 | |
| | | | 86,810 | | | | 88,086 | |
| Other liabilities (note 9(b)) | | | 4,846 | | | | 6,117 | |
| Borrowings (note 10) | | | 10,405 | | | | 2,465 | |
| Reclamation and remediation provisions | | | 62,973 | | | | 67,367 | |
| Deferred tax liabilities | | | 4,576 | | | | 4,682 | |
| | | | 169,610 | | | | 168,717 | |
| Shareholders’ equity: | | | | | | | | |
| Share capital (note 13) | | | 270,139 | | | | 268,872 | |
| Reserves | | | 9,442 | | | | 11,604 | |
| Deficit | | | (197,208 | ) | | | (168,773 | ) |
| | | | 82,373 | | | | 111,703 | |
| | | $ | 251,983 | | | $ | 280,420 | |
The accompanying notes are an integral part of these consolidated financial statements.
Commitments and contingencies (note 19)
Subsequent events (note 23)
Approved by the Board of Directors
| “David Garofalo” | | “Elise Rees” |
| David Garofalo, Director | | Elise Rees, Director |
Great Panther MINING Limited
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Expressed in thousands of US dollars, except per share amounts - Unaudited)
For the three and nine months ended September 30, 2021 and 2020
| | | Three months ended | | Nine months ended |
| | | September 30, | | September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Revenue (note 14) | | $ | 38,351 | | | $ | 77,019 | | | $ | 143,018 | | | $ | 192,097 | |
| | | | | | | | | | | | | | | | | |
| Cost of sales | | | | | | | | | | | | | | | | |
| Production costs (note 15) | | | 38,849 | | | | 35,028 | | | | 116,574 | | | | 100,249 | |
| Amortization and depletion | | | 6,615 | | | | 10,099 | | | | 23,166 | | | | 30,125 | |
| | | | 45,464 | | | | 45,127 | | | | 139,740 | | | | 130,374 | |
| | | | | | | | | | | | | | | | | |
| Mine operating earnings (loss) | | | (7,113 | ) | | | 31,892 | | | | 3,278 | | | | 61,723 | |
| | | | | | | | | | | | | | | | | |
| General and administrative expenses (note 16) | | | 3,688 | | | | 3,456 | | | | 11,650 | | | | 10,639 | |
| | | | | | | | | | | | | | | | | |
| Exploration, evaluation, and development expenses | | | | | | | | | | | | | | | | |
| Exploration and evaluation expenses (note 17) | | | 3,622 | | | | 3,012 | | | | 9,077 | | | | 8,137 | |
| Mine development costs | | | 1,065 | | | | 1,010 | | | | 3,098 | | | | 1,887 | |
| Change in reclamation and remediation provisions | | | (6 | ) | | | 22 | | | | (6 | ) | | | 57 | |
| | | | 4,681 | | | | 4,044 | | | | 12,169 | | | | 10,081 | |
| | | | | | | | | | | | | | | | | |
| Care and maintenance costs | | | — | | | | 142 | | | | — | | | | 693 | |
| | | | | | | | | | | | | | | | | |
| Operating earnings (loss) | | | (15,482 | ) | | | 24,250 | | | | (20,541 | ) | | | 40,310 | |
| | | | | | | | | | | | | | | | | |
| Finance and other income (expense) | | | | | | | | | | | | | | | | |
| Finance income | | | 70 | | | | 54 | | | | 207 | | | | 234 | |
| Finance expense | | | (694 | ) | | | (1,019 | ) | | | (2,091 | ) | | | (2,496 | ) |
| Other expense (note 18) | | | (1,941 | ) | | | (2,484 | ) | | | (5,789 | ) | | | (48,835 | ) |
| | | | (2,565 | ) | | | (3,449 | ) | | | (7,673 | ) | | | (51,097 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (18,047 | ) | | | 20,801 | | | | (28,214 | ) | | | (10,787 | ) |
| | | | | | | | | | | | | | | | | |
| Income tax expense (recovery) | | | — | | | | 2,166 | | | | 221 | | | | 2,490 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) for the period | | $ | (18,047 | ) | | $ | 18,635 | | | $ | (28,435 | ) | | $ | (13,277 | ) |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) per share - basic (note 13(d)) | | $ | (0.05 | ) | | $ | 0.05 | | | $ | (0.08 | ) | | $ | (0.04 | ) |
| Earnings (loss) per share - diluted (note 13(d)) | | $ | (0.05 | ) | | $ | 0.05 | | | $ | (0.08 | ) | | $ | (0.04 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Great Panther MINING Limited
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Expressed in thousands of US dollars - Unaudited)
For the three and nine months ended September 30, 2021 and 2020
| | | Three months ended | | Nine months ended |
| | | September 30, | | September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| | | | | | | | | |
| Net income (loss) for the period | | $ | (18,047 | ) | | $ | 18,635 | | | $ | (28,435 | ) | | $ | (13,277 | ) |
| | | | | | | | | | | | | | | | | |
| Other comprehensive income (loss) (“OCI”), net of tax | | | | | | | | | | | | | | | | |
| Foreign currency translation | | | (7,199 | ) | | | (1,335 | ) | | | (2,916 | ) | | | (12,208 | ) |
| Change in fair value of financial assets designated as fair value through OCI, net of tax | | | 1 | | | | — | | | | 2 | | | | 1 | |
| | | | (7,198 | ) | | | (1,335 | ) | | | (2,914 | ) | | | (12,207 | ) |
| | | | | | | | | | | | | | | | | |
| Total comprehensive income (loss) for the period | | $ | (25,245 | ) | | $ | 17,300 | | | $ | (31,349 | ) | | $ | (25,484 | ) |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Great Panther MINING Limited
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in thousands of US dollars, except number of common shares - Unaudited)
For the nine months ended September 30, 2021 and 2020
| | | Share capital | | Reserves | | | | |
| | | Number of common shares (000s) | | Amount | | Share options and warrants | | Foreign currency translation | | Fair value | | Total reserves | | Deficit | | Total shareholders’equity |
| Balance, January 1, 2020 | | | 311,941 | | | $ | 252,186 | | | $ | 20,575 | | | $ | (2,972 | ) | | $ | (183 | ) | | $ | 17,420 | | | $ | (169,107 | ) | | $ | 100,499 | |
| Shares issued for bought deal financing (note 13(e)) | | | 40,250 | | | | 14,705 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,705 | |
| Restricted and deferred share units settled | | | 1,390 | | | | 531 | | | | (531 | ) | | | — | | | | — | | | | (531 | ) | | | — | | | | — | |
| Shares issued upon settlement of obligation | | | 88 | | | | 39 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 39 | |
| Share options exercised | | | 1,009 | | | | 1,117 | | | | (551 | ) | | | — | | | | — | | | | (551 | ) | | | — | | | | 566 | |
| Share-based compensation | | | — | | | | — | | | | 1,863 | | | | — | | | | — | | | | 1,863 | | | | — | | | | 1,863 | |
| Comprehensive income (loss) | | | — | | | | — | | | | — | | | | (12,208 | ) | | | 1 | | | | (12,207 | ) | | | (13,277 | ) | | | (25,484 | ) |
| Balance, September 30, 2020 | | | 354,678 | | | $ | 268,578 | | | $ | 21,356 | | | $ | (15,180 | ) | | $ | (182 | ) | | $ | 5,994 | | | $ | (182,384 | ) | | $ | 92,188 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2021 | | | 355,033 | | | $ | 268,872 | | | $ | 21,815 | | | $ | (10,029 | ) | | $ | (182 | ) | | $ | 11,604 | | | $ | (168,773 | ) | | $ | 111,703 | |
| Shares issued upon settlement of obligation | | | 87 | | | | 53 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 53 | |
| Restricted and deferred share units settled | | | 901 | | | | 683 | | | | (683 | ) | | | — | | | | — | | | | (683 | ) | | | — | | | | — | |
| Share options exercised | | | 775 | | | | 531 | | | | (154 | ) | | | — | | | | — | | | | (154 | ) | | | — | | | | 377 | |
| Share-based compensation | | | — | | | | — | | | | 1,589 | | | | — | | | | — | | | | 1,589 | | | | — | | | | 1,589 | |
| Comprehensive income (loss) | | | — | | | | — | | | | — | | | | (2,916 | ) | | | 2 | | | | (2,914 | ) | | | (28,435 | ) | | | (31,349 | ) |
| Balance, September 30, 2021 | | | 356,796 | | | $ | 270,139 | | | $ | 22,567 | | | $ | (12,945 | ) | | $ | (180 | ) | | $ | 9,442 | | | $ | (197,208 | ) | | $ | 82,373 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Great Panther MINING Limited
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of US dollars - Unaudited)
For the three and nine months ended September 30, 2021 and 2020
| | | Three months ended | | Nine months ended |
| | | September 30, | | September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Cash flows from operating activities: | | | | | | | | | | | | | | | | |
| Net income (loss) for the period | | $ | (18,047 | ) | | $ | 18,635 | | | $ | (28,435 | ) | | $ | (13,277 | ) |
| Items not involving cash: | | | | | | | | | | | | | | | | |
| Amortization and depletion | | | 6,756 | | | | 10,213 | | | | 23,548 | | | | 30,466 | |
| Change in reclamation and remediation provision | | | (6 | ) | | | 22 | | | | (6 | ) | | | 57 | |
| Loss on derivative instruments | | | — | | | | 776 | | | | 572 | | | | 30,563 | |
| Unrealized foreign exchange loss (gain) | | | 945 | | | | (1,235 | ) | | | 503 | | | | 12,753 | |
| Income tax expense (recovery) | | | — | | | | 2,166 | | | | 221 | | | | 2,490 | |
| Share-based compensation | | | 358 | | | | 455 | | | | 1,589 | | | | 1,863 | |
| Other non-cash items (note 21(a)) | | | 1,449 | | | | 1,475 | | | | 4,135 | | | | 4,250 | |
| Interest received | | | 70 | | | | 61 | | | | 207 | | | | 233 | |
| Interest paid | | | (181 | ) | | | (191 | ) | | | (952 | ) | | | (2,000 | ) |
| Settlement of derivative instruments | | | — | | | | (6,091 | ) | | | (3,546 | ) | | | (15,479 | ) |
| Income taxes paid | | | (39 | ) | | | (47 | ) | | | (174 | ) | | | (678 | ) |
| | | | (8,695 | ) | | | 26,239 | | | | (2,338 | ) | | | 51,241 | |
| Net change in operating assets and liabilities: | | | | | | | | | | | | | | | | |
| Trade and other receivables | | | 153 | | | | (542 | ) | | | 2,559 | | | | (693 | ) |
| Inventories | | | 545 | | | | (1,773 | ) | | | 4,895 | | | | (1,446 | ) |
| Other current assets | | | 831 | | | | 1,735 | | | | (1,329 | ) | | | (3,349 | ) |
| Trade payables and accrued liabilities | | | (792 | ) | | | (5,998 | ) | | | (2,912 | ) | | | 5,164 | |
| Net cash provided by (used in) operating activities | | | (7,958 | ) | | | 19,661 | | | | 875 | | | | 50,917 | |
| | | | | | | | | | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | | | | | | | | | |
| Cash restricted for Coricancha environmental bond | | | — | | | | (39 | ) | | | (400 | ) | | | (13 | ) |
| Additions to mineral properties, plant and equipment | | | (6,412 | ) | | | (8,677 | ) | | | (33,890 | ) | | | (33,033 | ) |
| Net cash provided by (used in) investing activities | | | (6,412 | ) | | | (8,716 | ) | | | (34,290 | ) | | | (33,046 | ) |
| | | | | | | | | | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | | | | | | | | | |
| Proceeds from bought deal financing, net (note 13(e)) | | | — | | | | — | | | | — | | | | 14,705 | |
| Payment of lease liabilities | | | (1,602 | ) | | | (1,358 | ) | | | (4,571 | ) | | | (4,401 | ) |
| Proceeds from borrowings | | | 24,926 | | | | 1,000 | | | | 34,476 | | | | 21,569 | |
| Repayment of borrowings | | | (7,400 | ) | | | (3,913 | ) | | | (24,116 | ) | | | (18,494 | ) |
| Proceeds from exercise of share options | | | 53 | | | | 559 | | | | 377 | | | | 566 | |
| Net cash provided by (used in) financing activities | | | 15,977 | | | | (3,712 | ) | | | 6,166 | | | | 13,945 | |
| | | | | | | | | | | | | | | | | |
| Effect of foreign currency translation on cash and cash equivalents | | | (980 | ) | | | (790 | ) | | | (291 | ) | | | (2,138 | ) |
| | | | | | | | | | | | | | | | | |
| Increase (decrease) in cash and cash equivalents | | | 627 | | | | 6,443 | | | | (27,540 | ) | | | 29,678 | |
| Cash and cash equivalents, beginning of period | | | 35,229 | | | | 60,205 | | | | 63,396 | | | | 36,970 | |
| Cash and cash equivalents, end of period | | $ | 35,856 | | | $ | 66,648 | | | $ | 35,856 | | | $ | 66,648 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Supplemental cash flow information (note 21)
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
Great Panther Mining Limited (“Great Panther” or the “Company”) is a public company listed on the Toronto Stock Exchange (“TSX”) trading under the symbol GPR, and on the NYSE American trading under the symbol GPL and is incorporated and domiciled in Canada. The Company’s registered and records office is located at 1330 - 200 Granville Street, Vancouver, BC.
The Company has three wholly owned mining operations including the Tucano gold mine (“Tucano”), which produces gold doré and is located in Amapá State in northern Brazil. In Mexico, Great Panther operates the Topia mine (“Topia”) in the state of Durango, which produces concentrates containing silver, gold, lead and zinc, and the Guanajuato Mine Complex (the “GMC”) in the state of Guanajuato. The GMC comprises the Guanajuato mine (“Guanajuato”), the San Ignacio mine (“San Ignacio”) and the Cata processing plant, which produces silver and gold concentrates.
The Company also wholly owns the Coricancha Mine Complex (“Coricancha”), a gold-silver-copper-lead-zinc mine and processing facility in the central Andes of Peru, approximately 90 kilometres east of Lima. Coricancha was acquired by the Company in June 2017, having been placed on care and maintenance by its previous owner in August 2013. The Company continues to evaluate a restart of Coricancha.
The Company has a portfolio of exploration projects. The El Horcón property is located 100 kilometres by road northwest of Guanajuato, Santa Rosa is located 15 kilometres northeast of Guanajuato, and the Plomo property is located in Sonora, Mexico.
These condensed interim consolidated financial statements (“consolidated financial statements”) have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realization of assets and the settlement of liabilities in the normal course of business. The Company’s objectives in the management of capital are described in note 12.
In March 2020, the World Health Organization declared a global pandemic following the emergence and rapid spread of a novel strain of the coronavirus respiratory disease (“COVID-19”). The Company continues to closely monitor the developments of COVID-19, and its variants, with a focus on the jurisdictions in which the Company operates and its head office location in Canada. The worldwide spread of COVID-19 is prompting governments to implement different measures to curb the spread of COVID-19 regularly. During this period of uncertainty, the Company’s priority is to continue to safeguard the health and safety of personnel and host communities, support and enforce government actions to slow the spread of COVID-19 and assess and mitigate the risks to the business continuity. As the extent and duration of the impacts from COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. Actual results could differ significantly from those estimates.
These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These should be read in conjunction with the Company’s most recent annual consolidated financial statements as at and for the year ended December 31, 2020. The accounting policies and critical estimates applied by the Company in these condensed interim consolidated financial statements are the same as those applied in the most recent annual consolidated financial statements. These condensed interim consolidated financial statements do not include all the information required for full annual financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of changes in the Company’s financial position and performance since the most recent annual consolidated financial statements.
These condensed interim consolidated financial statements were approved by the Company’s Board of Directors on November 3, 2021.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| 3. | Accounting standards issued and adopted on January 1, 2021 |
| (a) | New and amended IFRS standards not yet effective |
There are no IFRS standards or International Financial Reporting Interpretations Committee interpretations that are not yet effective or early adopted that are expected to have a material impact on the Company.
| 4. | TRADE AND OTHER RECEIVABLES |
| | | September 30,
2021 | | December 31,
2020 |
| Current | | | | | | | | |
| Trade receivables | | $ | 3,153 | | | $ | 2,011 | |
| Value-added tax receivable | | | 3,286 | | | | 3,839 | |
| PIS / COFINS - Brazil (a) | | | 9,082 | | | | 8,732 | |
| Judicial deposits - Brazil | | | 288 | | | | 302 | |
| Other | | | 205 | | | | 760 | |
| | | | 16,014 | | | | 15,644 | |
| Non-Current | | | | | | | | |
| PIS / COFINS - Brazil (a) | | | 4,752 | | | | 9,058 | |
| Income taxes recoverable - Brazil | | | 2,773 | | | | 2,764 | |
| Other | | | 192 | | | | 14 | |
| | | $ | 7,717 | | | $ | 11,836 | |
The PIS (Program of Social Integration) and COFINS (Contribution for the Financing of Social Security) are Brazilian federal taxes that apply to all companies in the private sector. PIS is a mandatory employer contribution to an employee savings initiative, and COFINS is a contribution to finance the social security system. Companies are required to calculate and remit PIS and COFINS based on monthly gross revenues. The Company’s Brazilian gold sales are zero-rated for PIS/COFINS purposes; however, the current legislation allows for input tax credits to offset the amounts due by applying rates of 1.65% for PIS and 7.65% for COFINS, respectively, to some of the purchases in Brazil. As such, the Company has PIS/COFINS credits recorded as receivables.
The Company continues to pursue the refund of its PIS/COFINS receivables. To the extent the Company is unable to receive refunds for all its PIS/COFINS assets, the PIS/COFINS assets are expected to be recoverable through the Company generating future Brazilian federal tax liabilities. At the Company’s election, these federal tax liabilities can be offset against the Company’s PIS/COFINS assets.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| | | September 30,
2021 | | December 31,
2020 |
| Concentrate | | $ | 1,206 | | | $ | 578 | |
| Ore stockpiles | | | 1,151 | | | | 11,562 | |
| Materials and supplies | | | 21,705 | | | | 18,538 | |
| Gold in circuit | | | 1,051 | | | | 1,266 | |
| Gold bullion | | | 2,189 | | | | 1,794 | |
| Silver bullion | | | 4 | | | | 5 | |
| | | $ | 27,306 | | | $ | 33,743 | |
| | | | | | | | | |
During the three and nine months ended September 30, 2021, the inventory recognized as cost of sales was $44.5 million and $136.4 million, respectively (three and nine months ended September 30, 2020 - $30.4 million and $94.4 million, respectively), which includes production costs and amortization and depletion directly attributable to the inventory production process.
| | | September 30,
2021 | | December 31,
2020 |
| Prepaid expenses and deposits | | $ | 5,399 | | | $ | 3,569 | |
| Reimbursement rights (note 8(a)) | | | 4,943 | | | | 1,918 | |
| Other current assets | | | 90 | | | | 188 | |
| | | $ | 10,432 | | | $ | 5,675 | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| 7. | MINERAL PROPERTIES, PLANT AND EQUIPMENT |
| | | Mineral properties - depletable | | Mineral properties - non depletable | | Plant and equipment | | Land and buildings | | Furniture, fixtures and equipment | | Right-of-use assets | | Total |
| Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2021 | | $ | 88,162 | | | $ | 33,869 | | | $ | 76,081 | | | $ | 23,797 | | | $ | 5,507 | | | $ | 18,905 | | | $ | 246,321 | |
| Additions | | | 29,343 | | | | — | | | | 2,942 | | | | 1,467 | | | | 138 | | | | 2,839 | | | | 36,729 | |
| Change in remediation provision | | | (1,847 | ) | | | — | | | | (208 | ) | | | — | | | | — | | | | — | | | | (2,055 | ) |
| Disposals | | | — | | | | — | | | | — | | | | — | | | | (35 | ) | | | — | | | | (35 | ) |
| Foreign exchange translation difference | | | (2,659 | ) | | | (1,511 | ) | | | (1,671 | ) | | | (947 | ) | | | (31 | ) | | | (750 | ) | | | (7,569 | ) |
| Balance, September 30, 2021 | | $ | 112,999 | | | $ | 32,358 | | | $ | 77,144 | | | $ | 24,317 | | | $ | 5,579 | | | $ | 20,994 | | | $ | 273,391 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2021 | | $ | 53,625 | | | $ | — | | | $ | 56,918 | | | $ | 9,343 | | | $ | 4,933 | | | $ | 10,943 | | | $ | 135,762 | |
| Amortization and depletion | | | 13,158 | | | | — | | | | 3,668 | | | | 2,033 | | | | 184 | | | | 3,951 | | | | 22,994 | |
| Disposals | | | — | | | | — | | | | — | | | | — | | | | (35 | ) | | | — | | | | (35 | ) |
| Foreign exchange translation difference | | | (900 | ) | | | — | | | | (1,073 | ) | | | (343 | ) | | | (28 | ) | | | (523 | ) | | | (2,867 | ) |
| Balance, September 30, 2021 | | $ | 65,883 | | | $ | — | | | $ | 59,513 | | | $ | 11,033 | | | $ | 5,054 | | | $ | 14,371 | | | $ | 155,854 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Carrying value, September 30, 2021 | | $ | 47,116 | | | $ | 32,358 | | | $ | 17,631 | | | $ | 13,284 | | | $ | 525 | | | $ | 6,623 | | | $ | 117,537 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| | | Mineral properties - depletable | | Mineral properties - non depletable | | Plant and equipment | | Land and buildings | | Furniture, fixtures and equipment | | Right-of-use assets | | Total |
| Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2020 | | $ | 58,237 | | | $ | 43,186 | | | $ | 83,335 | | | $ | 22,548 | | | $ | 5,636 | | | $ | 22,685 | | | $ | 235,627 | |
| Additions | | | 32,754 | | | | — | | | | 3,499 | | | | 5,692 | | | | 3 | | | | 890 | | | | 42,838 | |
| Change in remediation provision | | | 3,546 | | | | — | | | | (342 | ) | | | — | | | | — | | | | — | | | | 3,204 | |
| Foreign exchange translation difference | | | (6,375 | ) | | | (9,317 | ) | | | (10,411 | ) | | | (4,443 | ) | | | (132 | ) | | | (4,670 | ) | | | (35,348 | ) |
| Balance, December 31, 2020 | | $ | 88,162 | | | $ | 33,869 | | | $ | 76,081 | | | $ | 23,797 | | | $ | 5,507 | | | $ | 18,905 | | | $ | 246,321 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, January 1, 2020 | | $ | 38,964 | | | $ | — | | | $ | 44,769 | | | $ | 5,726 | | | $ | 4,549 | | | $ | 7,809 | | | $ | 101,817 | |
| Amortization and depletion | | | 15,790 | | | | — | | | | 15,435 | | | | 4,508 | | | | 430 | | | | 4,881 | | | | 41,044 | |
| Foreign exchange translation difference | | | (1,129 | ) | | | — | | | | (3,286 | ) | | | (891 | ) | | | (46 | ) | | | (1,747 | ) | | | (7,099 | ) |
| Balance, December 31, 2020 | | $ | 53,625 | | | $ | — | | | $ | 56,918 | | | $ | 9,343 | | | $ | 4,933 | | | $ | 10,943 | | | $ | 135,762 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Carrying value, December 31, 2020 | | $ | 34,537 | | | $ | 33,869 | | | $ | 19,163 | | | $ | 14,454 | | | $ | 574 | | | $ | 7,962 | | | $ | 110,559 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Mining equipment | | Power generators | | Vehicles | | Office & communication | | Land easements | | Total |
| Balance, January 1, 2021 | | $ | 3,925 | | | $ | 2,508 | | | $ | 476 | | | $ | 478 | | | $ | 575 | | | $ | 7,962 | |
| Additions | | | 1,961 | | | | 6 | | | | 182 | | | | — | | | | 690 | | | | 2,839 | |
| Amortization and depletion | | | (2,265 | ) | | | (1,029 | ) | | | (361 | ) | | | (168 | ) | | | (128 | ) | | | (3,951 | ) |
| Foreign exchange translation difference | | | (132 | ) | | | (59 | ) | | | (36 | ) | | | — | | | | — | | | | (227 | ) |
| Balance, September 30, 2021 | | $ | 3,489 | | | $ | 1,426 | | | $ | 261 | | | $ | 310 | | | $ | 1,137 | | | $ | 6,623 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Mining equipment | | | | Power generators | | | | Vehicles | | | | Office & communication | | | | Land easements | | | | Total | |
| Balance, January 1, 2020 | | $ | 7,376 | | | $ | 5,035 | | | $ | 1,095 | | | $ | 658 | | | $ | 712 | | | $ | 14,876 | |
| Additions | | | 801 | | | | — | | | | — | | | | 89 | | | | — | | | | 890 | |
| Amortization and depletion | | | (2,663 | ) | | | (1,437 | ) | | | (378 | ) | | | (266 | ) | | | (137 | ) | | | (4,881 | ) |
| Foreign exchange translation difference | | | (1,589 | ) | | | (1,090 | ) | | | (241 | ) | | | (3 | ) | | | — | | | | (2,923 | ) |
| Balance, December 31, 2020 | | $ | 3,925 | | | $ | 2,508 | | | $ | 476 | | | $ | 478 | | | $ | 575 | | | $ | 7,962 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| | | September 30,
2021 | | December 31, 2020 |
| Maturity analysis - contractual undiscounted cash flows | | | | | | | | |
| Less than one year | | $ | 5,333 | | | $ | 5,855 | |
| One to five years | | | 5,039 | | | | 5,475 | |
| More than five years | | | 234 | | | | 98 | |
| Total undiscounted lease liabilities | | | 10,606 | | | | 11,428 | |
| Lease liabilities in the Consolidated Statement of Financial Position | | | 9,602 | | | | 11,221 | |
| Current (note 9 (a)) | | | 4,948 | | | | 5,296 | |
| Non-current (note 9 (b)) | | $ | 4,654 | | | $ | 5,925 | |
| | | | | | | | | |
| iii) | Amount recognized in the Consolidated Statements of Comprehensive Income |
| | | Three months ended
September 30, | | Nine months ended
September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Interest on lease liabilities | | $ | 228 | | | $ | 249 | | | $ | 700 | | | $ | 879 | |
| Variable lease payments not included in the measurement of lease liabilities | | | 9,394 | | | | 11,061 | | | | 33,997 | | | | 37,662 | |
| Expenses relating to short-term leases | | | 3,943 | | | | 4,546 | | | | 15,651 | | | | 11,090 | |
| | | | | | | | | | | | | | | | | |
The Company has elected not to separate the lease component from the non-lease component for short-term leases that have a lease term of less than one year.
| | | September 30,
2021 | | December 31,
2020 |
| Reimbursement rights (a) | | $ | 9,301 | | | $ | 12,178 | |
| Restricted cash | | | 30 | | | | 31 | |
| | | $ | 9,331 | | | $ | 12,209 | |
Pursuant to the acquisition of Coricancha, the vendors, Nyrstar International B.V. and Nyrstar Netherlands (Holdings) B.V. (together “Nyrstar”) and their parent company (at the time of the acquisition, Nyrstar N.V. and subsequently replaced by NN2 Newco Limited), agreed to reimburse the Company for:
| • | the cost of movement and reclamation of certain legacy tailings facilities should the regulatory authorities require these to be moved, up to a maximum of $20.0 million; and |
| • | all fines or sanctions that arise before or after closing resulting from activities or ownership of Coricancha prior to June 30, 2017, up to a maximum of $4.0 million. |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| 9. | TRADE PAYABLES AND ACCRUED LIABILITIES AND OTHER LIABILITIES |
| (a) | Trade payables and accrued liabilities |
| | | September 30,
2021 | | December 31,
2020 |
| Trade payables | | $ | 19,478 | | | $ | 27,478 | |
| Accrued liabilities | | | 18,138 | | | | 14,758 | |
| Taxes payable | | | 3,250 | | | | 3,306 | |
| Lease liabilities | | | 4,948 | | | | 5,296 | |
| Other payables | | | 2,957 | | | | 2,383 | |
| | | $ | 48,771 | | | $ | 53,221 | |
| | | | | | | | | |
| | | September 30,
2021 | | December 31,
2020 |
| Lease liabilities | | $ | 4,654 | | | $ | 5,925 | |
| Accrued liabilities | | | 192 | | | | 192 | |
| | | $ | 4,846 | | | $ | 6,117 | |
| | | MACA | | Unsecured bank facilities | | Bradesco | | Samsung | | Asahi | | Total |
| Balance, January 1, 2021 | | $ | 3,010 | | | $ | 17,516 | | | $ | 2,404 | | | $ | 10,468 | | | $ | — | | | $ | 33,398 | |
| Borrowings | | | — | | | | 14,630 | | | | — | | | | — | | | | 19,846 | | | | 34,476 | |
| Interest accrued | | | 18 | | | | 742 | | | | 142 | | | | 260 | | | | 28 | | | | 1,190 | |
| Principal repayments | | | (2,937 | ) | | | (9,900 | ) | | | (834 | ) | | | (10,446 | ) | | | — | | | | (24,117 | ) |
| Interest payments | | | (59 | ) | | | (293 | ) | | | (206 | ) | | | (282 | ) | | | — | | | | (840 | ) |
| Foreign exchange | | | (32 | ) | | | — | | | | — | | | | — | | | | — | | | | (32 | ) |
| Balance, September 30, 2021 | | $ | — | | | $ | 22,695 | | | $ | 1,506 | | | $ | — | | | $ | 19,874 | | | $ | 44,075 | |
| Current | | $ | — | | | $ | 22,695 | | | $ | 951 | | | $ | — | | | $ | 10,024 | | | $ | 33,670 | |
| Non-current | | $ | — | | | $ | — | | | $ | 555 | | | $ | — | | | $ | 9,850 | | | $ | 10,405 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Unsecured bank facilities |
The Company has unsecured, revolving, interest-bearing bank facilities totalling $22.7 million. The unsecured bank facilities are denominated in US dollars (“USD”) and are interest bearing at a weighted average fixed interest rate of 5.3% per annum and are repayable through August 2022.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
On March 11, 2020, the Company received a USD denominated loan from Bradesco in the amount of $10.0 million, with net loan proceeds of $2.5 million as $7.5 million is required to be retained as cash collateral. The loan matures on February 24, 2023 and is required to be repaid in nine quarterly repayments of $1.1 million commencing March 5, 2021. The return of the cash collateral will be proportionate to the quarterly loan repayments, resulting in net quarterly repayments of $0.3 million commencing March 5, 2021. The loan principal bears interest at 3.7% per annum, and the cash collateral earns interest at rates from 1.55% to 2.40% per annum. At September 30, 2021, the principal balance outstanding is $6.7 million (December 31, 2020 - $10 million). Cash collateral of $5.2 million (December 31, 2020 $7.6 - million) has been netted against the outstanding principal balance.
On January 6, 2020, the Company entered an $11.3 million gold doré prepayment agreement with Samsung (the “Agreement”). In consideration of delivery and sale of approximately 3,000 ounces of gold contained in doré per month over a two-year period commencing January 2020 from Tucano, Samsung has agreed to advance $11.3 million (the “Samsung Advance”) to Great Panther. Gold deliveries are sold at a 0.65% discount to the benchmark price of gold at the time of delivery. The Advance is repayable in equal monthly instalments of $0.8 million which commenced December 2020 and continue to January 2022 such that all amounts outstanding to Samsung will be repaid in full. The Advance bears interest at an annual rate of 3-month USD LIBOR plus 5% and is secured by a pledge of all equity interests in Great Panther’s Brazilian subsidiary that owns Tucano. On September 21, 2021, the Company repaid the outstanding balance of $3.2 million on the Samsung Advance, incurring a 3% penalty for early repayment, and releasing the shares held for security. The Agreement also provides Samsung with a right of offer for concentrates produced from Coricancha in certain circumstances.
On September 21, 2021, the Company entered into a $20 million gold doré prepayment agreement with Asahi (the “Asahi Advance”). The Asahi Advance is repayable in twelve equal monthly instalments of $1.7 million commencing in April 2022. The Advance bears interest at an annual rate of 1-month USD LIBOR plus 4.75% and is secured by a pledge of all equity interests in Great Panther’s Brazilian subsidiary that owns Tucano. Great Panther has a full option for early repayment of the Advance, subject to a 3% penalty applied to the outstanding balance. Asahi is provided exclusivity on refining and will purchase 100% of Tucano gold production during the term of the agreement. Tucano will sell the equivalent volume of gold equal to the $1.7 million principal repayment at a 0.5% discount to the spot price at the time of sale and the remainder of the production will be sold at spot prices.
At September 30, 2021, the fair value of the Company’s long-term borrowings approximates their carrying values measured based on the level 2 of the fair value hierarchy.
The fair value of other financial instruments approximates their carrying values due to their short-term nature.
The Company had no outstanding non-deliverable forward foreign exchange contracts for Brazilian real (“BRL”) against USD at September 30, 2021. At December 31, 2020, the Company had BRL 88.2 million of non-deliverable forward foreign exchange contracts for which the fair value of these contracts resulted in a liability of $3.0 million.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
The Company’s objectives when managing capital are to:
• ensure there are adequate capital resources to support the Company’s ability to continue as a going concern;
• maintain adequate levels of cash to support the acquisition, exploration and development of mineral properties, exploration and evaluation assets, and the operation of producing mines;
• maintain investor, creditor and market confidence to sustain future development of the business; and
• provide returns to shareholders and benefits for other stakeholders.
In assessing the capital structure of the Company, management includes in its assessment the components of shareholders’ equity and debt, net of cash and cash equivalents and short-term deposits. The Company plans to use existing cash, including cash raised through debt financing during the year ended December 31, 2021, as well as funds from future sales of precious metals to fund operations, development and exploration activities, and capital expenditures. The Company manages its capital in a manner that provides sufficient funding for operational activities. Annual capital and operating expenditure budgets, and rolling forecasts, are used to determine the necessary capital requirements. These budgets are approved by management and the Board and updated for changes in the underlying assumptions, economic conditions and risk characteristics of the underlying assets, as necessary. The Company will continue to focus on internally generating operating cash flow to minimize its future reliance on equity and debt financing. However, the Company has determined that it will require further financing through the offering of its share capital via the ATM Facility and will consider other equity and debt financing if necessary, in order to meet long-term objectives. The Company’s capital structure is dependent on expected business growth and changes in the business environment. As at September 30, 2021, the Company was not subject to externally imposed capital requirements.
| | | Nine months ended
September 30, 2021 | | Nine months ended
September 30, 2020 |
| | | Options
(000’s) | | Weighted average exercise price | | Options (000’s) | | Weighted average exercise price |
| | Outstanding, January 1 | | | | 9,709 | | | C$ | 1.00 | | | | 8,316 | | | C$ | 1.20 | |
| | Granted | | | | 2,341 | | | | 1.04 | | | | 6,255 | | | | 0.56 | |
| | Forfeited/Expired | | | | (2,721 | ) | | | 1.41 | | | | (2,418 | ) | | | 0.80 | |
| | Exercised | | | | (775 | ) | | | 0.60 | | | | (1,009 | ) | | | 0.75 | |
| | Outstanding, September 30 | | | | 8,554 | | | C$ | 0.92 | | | | 11,144 | | | C$ | 0.97 | |
| | Exercisable, September 30 | | | | 3,077 | | | C$ | 1.16 | | | | 3,435 | | | C$ | 1.97 | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| Range of exercise prices | | Options
outstanding
(000’s) | | Weighted
average
remaining
contractual life
(years) | | Options
exercisable (000’s) | | Weighted average exercise price |
| | C$0.54 to $0.62 | | | | 3,222 | | | | 3.52 | | | | 630 | | | C$ | 0.54 | |
| | C$0.63 to $1.10 | | | | 3,807 | | | | 3.77 | | | | 1,037 | | | | 0.92 | |
| | C$1.11 to $1.62 | | | | 978 | | | | 1.83 | | | | 863 | | | | 1.50 | |
| | C$1.63 to $2.19 | | | | 547 | | | | 0.54 | | | | 547 | | | | 1.81 | |
| | | | | | 8,554 | | | | 3.25 | | | | 3,077 | | | C$ | 1.16 | |
During the three and nine months ended September 30, 2021, the Company recorded share-based compensation expense relating to share options of $0.2 million and $0.5 million, respectively (three and nine months ended September 30, 2020 - $0.2 million and $0.5 million, respectively).
The weighted average fair value of options granted during the nine months ended September 30, 2021, was C$0.49 (nine months ended September 30, 2020 - C$0.23). The grant date fair value of share options granted was determined using a Black Scholes option pricing model using the following weighted average assumptions:
| | | 2021 | | 2020 |
| Risk-free interest rate | | | 0.54% | | | | 0.45% | |
| Expected life (years) | | | 3.14 | | | | 3.11 | |
| Annualized volatility | | | 71% | | | | 62% | |
| Forfeiture rate | | | 20% | | | | 17% | |
The annualized volatility assumption is based on the historical volatility of the Company’s common share price on the Toronto Stock Exchange. The risk-free interest rate assumption is based on government bonds with a remaining term equal to the expected life of the options.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| (b) | Restricted share units ("RSUs"), Performance based restricted share unit (“PSUs”) and Deferred share units ("DSUs") |
The following table summarizes information about the RSUs outstanding at September 30, 2021 and 2020:
| | | Nine months ended
September 30, 2021 | | Nine months ended
September 30, 2020 |
| | | Number of units | | Weighted
average grant date fair value ($/unit) | | Number of
units | | Weighted
average grant
date fair value
($/unit) |
| | Balance at January 1 | | | | 1,911,434 | | | C$ | 0.70 | | | | 1,243,530 | | | C$ | 1.19 | |
| | Granted | | | | 822,144 | | | | 1.01 | | | | 1,636,000 | | | | 0.56 | |
| | Settled | | | | (564,103 | ) | | | 0.76 | | | | (695,736 | ) | | | 1.06 | |
| | Cancelled | | | | (441,495 | ) | | | 0.75 | | | | (116,299 | ) | | | 1.13 | |
| | Outstanding at September 30 | | | | 1,727,980 | | | C$ | 0.82 | | | | 2,067,495 | | | C$ | 0.74 | |
| | | | | | | | | | | | | | | | | | | |
The following table summarizes information about the PSUs outstanding at September 30, 2021, and 2020:
| | | Nine months ended
September 30, 2021 | | Nine months ended
September 30, 2020 |
| | | Number of units | | Weighted average grant date fair value ($/unit) | | Number of units | | Weighted average grant date fair value ($/unit) |
| | Balance at January 1 | | | | 1,904,500 | | | C$ | 0.70 | | | | 531,000 | | | C$ | 1.14 | |
| | Granted | | | | 780,968 | | | | 1.04 | | | | 1,510,700 | | | | 0.56 | |
| | Cancelled | | | | (515,727 | ) | | | 0.71 | | | | (71,100 | ) | | | 1.05 | |
| | Outstanding at September 30 | | | | 2,169,741 | | | C$ | 0.82 | | | | 1,970,600 | | | C$ | 0.70 | |
The fair value of PSU was measured based on the fair value at the grant date using the Monte Carlo simulation technique on stock prices.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
The following table summarizes information about the DSUs outstanding at September 30, 2021, and 2020:
| | | Nine months ended
September 30, 2021 | | Nine months ended
September 30, 2020 |
| | | Number of units | | Weighted average grant date fair value ($/unit) | | Number of units | | Weighted average grant date fair value ($/unit) |
| | Balance at January 1 | | | | 2,420,189 | | | C$ | 0.78 | | | | 946,150 | | | C$ | 1.19 | |
| | Granted | | | | 781,354 | | | | 0.91 | | | | 2,257,600 | | | | 0.58 | |
| | Settled | | | | (424,300 | ) | | | 1.15 | | | | (693,900 | ) | | | 0.69 | |
| | Cancelled | | | | (498,080 | ) | | | 0.66 | | | | — | | | | — | |
| | Outstanding at September 30 | | | | 2,279,163 | | | C$ | 0.78 | | | | 2,509,850 | | | C$ | 0.78 | |
| | | | | | | | | | | | | | | | | | | |
During the three and nine months ended September 30, 2021, the Company recorded share-based compensation expense relating to RSUs, PSUs, and DSUs of $0.2 million and $1.1 million, respectively (three and nine months ended September 30, 2020 - $0.2 million and $1.3 million, respectively).
| (c) | Share purchase warrants |
The Company has issued 9,749,727 share purchase warrants at an exercise price of $1.317 per share. 6,321,695 share purchase warrants have an expiry date of May 17, 2022, and 3,428,032 share purchase warrants have an expiry date of June 27, 2022.
| (d) | Earnings (loss) per share |
| | | Three months ended
September 30, | | Nine months ended
September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Income (loss) attributable to equity owners | | $ | (18,047 | ) | | $ | 18,635 | | | $ | (28,435 | ) | | $ | (13,277 | ) |
| Weighted average number of shares (000's) | | | 356,696 | | | | 353,768 | | | | 355,827 | | | | 332,150 | |
| Earnings (loss) per share ‒ basic | | $ | (0.05) | | | $ | 0.05 | | | $ | (0.08) | | | $ | (0.04) | |
| | | | | | | | | | | | | | | | | |
| | | Three months ended
September 30, | | Nine months ended
September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Income (loss) attributable to equity owners | | $ | (18,047) | | | $ | 18,635 | | | $ | (28,435) | | | $ | (13,277) | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares (000's) | | | 356,696 | | | | 353,768 | | | | 355,827 | | | | 332,150 | |
| Incremental shares from RSUs, PSUs and DSUs | | | — | | | | 9,306 | | | | — | | | | — | |
| Weighted average diluted number of shares (000’s) | | | 356,696 | | | | 363,074 | | | | 355,827 | | | | 332,150 | |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) per share ‒ diluted | | $ | (0.05) | | | $ | 0.05 | | | $ | (0.08) | | | $ | (0.04) | |
Anti-dilutive share purchase options, warrants, deferred share units, restricted share units and performance share units have not been included in the diluted earnings per share calculation.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
On May 20, 2020, the Company closed a bought deal financing for aggregate gross proceeds of $16.1 million, pursuant to which the Company issued 40,250,000 common shares of the Company at the price of $0.40 per share. The Company paid a cash commission to the underwriters equal to 6% of the gross proceeds of the financing and recognized net proceeds of $14.7 million after deducting share issuance costs.
The Company generates revenue primarily from the sale of precious metals, consisting of metal concentrates and refined gold.
In the following table, revenue is disaggregated by the geographic location of the Company’s mines and major products.
| | | Three months ended September 30, |
| | | 2021 | | 2020 |
| | | Brazil | | Mexico | | Total | | Brazil | | Mexico | | Total |
| Gold | | $ | 28,532 | | | $ | 3,409 | | | $ | 31,941 | | | $ | 63,083 | | | $ | 4,003 | | | $ | 67,086 | |
| Silver | | | 72 | | | | 6,087 | | | | 6,159 | | | | 158 | | | | 8,905 | | | | 9,063 | |
| Lead | | | — | | | | 531 | | | | 531 | | | | — | | | | 811 | | | | 811 | |
| Zinc | | | — | | | | 758 | | | | 758 | | | | — | | | | 996 | | | | 996 | |
| Ore processing revenue | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Smelting and refining charges | | | (9 | ) | | | (757 | ) | | | (766 | ) | | | (24 | ) | | | (1,300 | ) | | | (1,324 | ) |
| Revenue from contracts with customers | | $ | 28,595 | | | $ | 10,028 | | | $ | 38,623 | | | $ | 63,217 | | | $ | 13,415 | | | $ | 76,632 | |
| Changes in fair value from provisional pricing | | | — | | | | (272 | ) | | | (272 | ) | | | — | | | | 387 | | | | 387 | |
| Total revenue | | $ | 28,595 | | | $ | 9,756 | | | $ | 38,351 | | | $ | 63,217 | | | $ | 13,802 | | | $ | 77,019 | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| | | Nine months ended September 30, |
| | | 2021 | | 2020 |
| | | Brazil | | Mexico | | Total | | Brazil | | Mexico | | Total |
| Gold | | $ | 107,939 | | | $ | 10,065 | | | $ | 118,004 | | | $ | 163,353 | | | $ | 9,903 | | | $ | 173,256 | |
| Silver | | | 255 | | | | 22,740 | | | | 22,995 | | | | 335 | | | | 17,251 | | | | 17,586 | |
| Lead | | | — | | | | 2,150 | | | | 2,150 | | | | — | | | | 1,795 | | | | 1,795 | |
| Zinc | | | — | | | | 3,006 | | | | 3,006 | | | | — | | | | 2,425 | | | | 2,425 | |
| Ore processing revenue | | | — | | | | — | | | | — | | | | — | | | | 34 | | | | 34 | |
| Smelting and refining charges | | | (33 | ) | | | (2,935 | ) | | | (2,968 | ) | | | (68 | ) | | | (3,084 | ) | | | (3,152 | ) |
| Revenue from contracts with customers | | $ | 108,161 | | | $ | 35,026 | | | $ | 143,187 | | | $ | 163,620 | | | $ | 28,324 | | | $ | 191,944 | |
| Changes in fair value from provisional pricing | | | — | | | | (169 | ) | | | (169 | ) | | | — | | | | 153 | | | | 153 | |
| Total revenue | | $ | 108,161 | | | $ | 34,857 | | | $ | 143,018 | | | $ | 163,620 | | | $ | 28,477 | | | $ | 192,097 | |
The amount of revenue recognized in the three and nine months ended September 30, 2021, from performance obligations satisfied (or partially satisfied) in the previous period, due to the current period settlement of metal concentrate revenue recognized in the prior periods were $nil million and $0.2 million, respectively. At September 30, 2021, the Company had $4.0 million in revenue subject to provisional pricing in relation to the sale of concentrates.
| | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Raw materials and consumables | | $ | 14,615 | | | $ | 12,715 | | | $ | 41,878 | | | $ | 37,186 | |
| Salaries and employee benefits | | | 5,525 | | | | 4,140 | | | | 14,919 | | | | 11,780 | |
| Contractors | | | 14,955 | | | | 12,932 | | | | 43,786 | | | | 37,488 | |
| Repairs and maintenance | | | 485 | | | | 188 | | | | 1,161 | | | | 783 | |
| Site administration | | | 740 | | | | 1,007 | | | | 2,897 | | | | 2,855 | |
| Royalties | | | 809 | | | | 1,654 | | | | 2,993 | | | | 4,338 | |
| Mining duties | | | 46 | | | | 62 | | | | 155 | | | | 130 | |
| Share-based compensation | | | 121 | | | | 80 | | | | 354 | | | | 227 | |
| | | | 37,296 | | | | 32,778 | | | | 108,143 | | | | 94,787 | |
| Change in inventories | | | 1,553 | | | | 2,250 | | | | 8,431 | | | | 4,195 | |
| | | | 38,849 | | | | 35,028 | | | | 116,574 | | | | 98,982 | |
| Unabsorbed fixed costs (a) | | | — | | | | — | | | | — | | | | 1,267 | |
| Total production costs | | $ | 38,849 | | | $ | 35,028 | | | $ | 116,574 | | | $ | 100,249 | |
| | | | | | | | | | | | | | | | | |
| (a) | Unabsorbed fixed costs |
The Company’s operations in Mexico were shut down during April and May 2020 as a result of government orders due to the COVID-19 pandemic. During the shutdown, the Company incurred fixed costs for these operations, which otherwise would have been recorded to inventory but were expensed as incurred.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| 16. | GENERAL AND ADMINISTRATIVE EXPENSES |
| | | Three months ended
September 30, | | Nine months ended
September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Salaries and employee benefits | | $ | 1,146 | | | $ | 1,286 | | | $ | 4,232 | | | $ | 3,633 | |
| Professional fees | | | 630 | | | | 407 | | | | 1,231 | | | | 1,381 | |
| Office and other expenses | | | 1,572 | | | | 1,295 | | | | 4,691 | | | | 3,719 | |
| Amortization | | | 140 | | | | 114 | | | | 382 | | | | 341 | |
| Share-based compensation | | | 200 | | | | 354 | | | | 1,114 | | | | 1,565 | |
| Total general and administrative expenses | | $ | 3,688 | | | $ | 3,456 | | | $ | 11,650 | | | $ | 10,639 | |
| | | | | | | | | | | | | | | | | |
| 17. | EXPLORATION AND EVALUATION EXPENSES |
| | | Three months ended
September 30, | | Nine months
ended September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Salaries and employee benefits | | $ | 705 | | | $ | 512 | | | $ | 1,825 | | | $ | 1,667 | |
| Raw materials and consumables | | | 501 | | | | 900 | | | | 1,433 | | | | 1,230 | |
| Professional fees | | | 1,500 | | | | 1,250 | | | | 3,902 | | | | 3,515 | |
| Office and other expenses | | | 879 | | | | 329 | | | | 1,796 | | | | 1,654 | |
| Share-based compensation | | | 37 | | | | 21 | | | | 121 | | | | 71 | |
| Total exploration and evaluation expenses | | $ | 3,622 | | | $ | 3,012 | | | $ | 9,077 | | | $ | 8,137 | |
| | | | | | | | | | | | | | | | | |
| | | Three months ended
September 30, | | Nine months ended
September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Accretion expense | | $ | 825 | | | $ | 509 | | | $ | 2,251 | | | $ | 1,987 | |
| Loss on derivative instruments | | | — | | | | 776 | | | | 572 | | | | 30,563 | |
| Foreign exchange loss | | | 663 | | | | 1,193 | | | | 1,470 | | | | 15,096 | |
| Other expense | | | 453 | | | | 6 | | | | 1,496 | | | | 1,189 | |
| | | $ | 1,941 | | | $ | 2,484 | | | $ | 5,789 | | | $ | 48,835 | |
| | | | | | | | | | | | | | | | | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| 19. | COMMITMENTS AND CONTINGENCIES |
As at September 30, 2021, the Company had the following commitments:
| | | Total | | 1 year | | 2-3 years | | 4-5 years | | Thereafter |
| Operating lease payments | | $ | 3 | | | $ | 3 | | | $ | — | | | $ | — | | | $ | — | |
| Drilling services | | | 1,013 | | | | 1,013 | | | | — | | | | — | | | | — | |
| Equipment purchases | | | 395 | | | | 395 | | | | — | | | | — | | | | — | |
| Total commitments | | $ | 1,411 | | | $ | 1,411 | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | |
In June 2020, Nyrstar agreed to extend its requirement to post remediation bond obligations as security for closure costs at Coricancha beyond the original June 30, 2020 expiry date. Nyrstar will maintain a $7.0 million bond (previously $9.7 million) until June 30, 2021 and $6.5 million for the following year, effectively deferring Great Panther’s funding requirements for these amounts until June 30, 2022, unless Great Panther decides to permanently close Coricancha. As at September 30, 2021, the total bond amount required was $10.9 million, of which Nyrstar is responsible for $6.5 million and the Company is responsible for $4.4 million.
If a decision to permanently close the mine is made, Nyrstar will fund closure costs up to the revised amount of its bond funding obligation, and Coricancha will be required to post the full amount of the required remediation bond with Peruvian government authorities. If no decision is made to permanently close Coricancha by June 30, 2022, then Coricancha will likewise be required to post the full amount of the required reclamation bond. Nyrstar’s obligation to indemnify the Company for up to $20.0 million for closure of Cancha 1 and 2 tailings storage facilities is not changed by the Company’s decision regarding Coricancha’s future operating plans.
On August 18, 2021, the Peruvian government introduced a new Mine Closure Law (Law No. 31347). The new law contemplates increases to the mine closure bond requirement applicable to all mining companies in Peru. Whereas previously companies were required to provide bonds to cover "Final" and "Post-Closure" stages of the Mine Closure Plan, under the amended law the bonding requirement is inclusive of "Progressive Closure" costs (i.e., closure activities during the operation of the mine) for the main components of the mine. The law does not provide details such as specific costs, or the timing of payment or form of collateral to be provided, and these details are expected to be described in new regulations that are expected to be published by mid-November 2021. Prior to publication of the new regulations, the Company cannot estimate with certainty the amount or timing of incremental closure bond requirements for Coricancha or the impact of such requirements on the Company’s liquidity.
Coricancha has been on care and maintenance since August 2013.
Fines and sanctions
Nyrstar has agreed to reimburse the Company for all fines or sanctions that resulted from activities or ownership of Coricancha prior to June 30, 2017, up to a maximum of $4.0 million. Accordingly, a reimbursement right in the amount of $1.5 million has been recorded in respect of fines or sanctions that have been levied by regulatory bodies in Peru.
The Company has accrued for and recorded a further reimbursement right of $0.4 million for certain civil lawsuits filed by individuals and former suppliers.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
Legacy tailings facilities
The Company has undertaken the reclamation of certain legacy tailings facilities at Coricancha. In addition, as part of the purchase of Coricancha, the Company has an agreement with Nyrstar for the reimbursement of the cost of these reclamation activities. The Company is seeking approval of a modification to a remediation plan in accordance with the recommendations of an independent consultant to preserve the stability of nearby areas by reclaiming the legacy tailings in situ. The Company has changed the scheduling of the reclamation work, pending a decision from the relevant regulatory bodies regarding the proposal to modify the approved remediation plan. The Company is exposed to potential fines, penalties and regulatory action until the modification to the remediation plan is approved.
Peruvian Tax Matters
The Company’s Peruvian subsidiary Great Panther Coricancha S.A. (“GPC”) has received notice from SUNAT, the Peruvian tax authority, that SUNAT intends to hold GPC jointly liable with respect to the unpaid taxes of a leasing company that sold the Coricancha mining assets to GPC (formerly Compañía Minera San Juan S.A.) in March 2006, prior to the Company’s acquisition of Coricancha effective June 30, 2017. The SUNAT claim is for unpaid taxes and related fines of the taxpayer, which is not an affiliate of the Company, from its 2001 tax year, together with related fines. The amount claimed is approximately $20 million.
The Company believes that the probability of the claim resulting in liability for GPC is remote and, as a consequence, has not recorded any contingency. The Company expects legal processes to take several years to reach a conclusion.
Various claims related to Brazil indirect taxes and labour matters
The Company has various litigation claims from a number of governmental assessments pertaining to indirect taxes and labour disputes associated with former employees and contract labour in Brazil.
As of September 30, 2021, the items for which a loss was probable, inclusive of any related interest, amounted to approximately $1.8 million, for which a provision was recognized (as of September 30, 2020 - $1.6 million).
In connection with the above proceedings, a total of $0.3 million (December 31, 2020 - $0.3 million) of escrow cash deposits were made as of September 30, 2021 (note 4). Generally, any escrowed amounts would be refundable to the extent the matters are resolved in the Company’s favour.
Environmental damages - William Creek
In May 2009, the State of Amapá Public Prosecutor (“MPAP”) filed a public civil action seeking payment for environmental damages caused to William Creek, as well as to other creeks located in the region of influence of Zamin Amapá Mineração (“Zamin”) and Tucano mines. The alleged damage is related to the modification of the creek’s riverbed, soiling and sedimentation. In January 2018, the Amapá State Court ordered Tucano to pay a fine of approximately $1.2 million (BRL 6.0 million plus interest and inflation counted as from the date of the damage) to the State Environmental Fund. As at September 30, 2021, the updated value with interest and inflation is approximately $5.8 million (BRL 31.6 million). The Company is in the process of appealing. Based on legal advice received, the best estimate of the loss is less than the full amount claimed, and the Company has accrued the best estimate of the cost to settle the claim.
Archaeological sites damage
In 2020, a settlement agreement was reached related to certain archaeological civil actions. Tucano agreed to provide BRL 8.0 million, no later than December 31, 2021, for implementation of socio-environmental measures in the local community and has accrued for this amount.
In related proceedings, not covered by the settlement agreement, Tucano is in the process of appealing fines and damages arising in the Federal Court of Appeal. The likelihood of total loss is not considered probable based on legal advice received. However, the best estimate of the loss is less than the full amount claimed, and the Company has accrued the best estimate of costs to settle the claim.
Cyanide usage
In October 2018, the public prosecutor’s office of labour affairs for the State of Amapá filed a public civil action seeking payment for potential damages and medical costs in relation to the Company’s employees’ exposure to cyanide used in the processing of its gold. In August 2019, a regional labour court ordered Tucano to pay compensation of approximately BRL 4.0 million plus interest and inflation for these damages, in addition to surveillance and funding medical costs of any diseases to Tucano’s internal and outsourced employees and former employees, and to stop using cyanide in its production process within one year from the final non-appealable decision on the proceedings. Tucano is in the process of appealing to a Federal Superior Labour Court all aspects of the regional labour court decision. In March 2020, it was accepted that the appeal, exclusively with respect to whether or not the use of cyanide may continue, be admitted for consideration by the Federal Superior Labour Court and the balance of the decision has not yet been accepted for consideration and is under appeal. Tucano is not aware of any circumstances of former or current employees who have suffered health consequences from exposure to cyanide at the Company’s operations. In addition, the Company notes that the use of cyanide in the processing of gold is common in the industry within Brazil and is not prohibited by any federal law in Brazil and that the Company complies with proper safety standards in the use and handling of cyanide in its operations. The Company believes the claims are without merit. As the matter progresses, the Company will review its assessment.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| 20. | RELATED PARTY TRANSACTIONS |
Other than transactions in the normal course of business with key management personnel, the Company had no transaction between related parties in the three and nine months ended September 30, 2021, and 2020.
| 21. | SUPPLEMENTAL CASH FLOW INFORMATION |
| | | Three months ended
September 30, | | Nine months ended September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
| Accretion and other expense | | $ | 825 | | | $ | 510 | | | $ | 2,251 | | | $ | 1,988 | |
| Finance income | | | (70 | ) | | | (54 | ) | | | (207 | ) | | | (234 | ) |
| Finance expense | | | 694 | | | | 1,019 | | | | 2,091 | | | | 2,496 | |
| | | $ | 1,449 | | | $ | 1,475 | | | $ | 4,135 | | | $ | 4,250 | |
| (b) | Non-cash investing and financing activities |
| | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 |
Change in reclamation and remediation provision included within mineral properties, plant and equipment and exploration and evaluation assets | | $ | (1,349 | ) | | $ | (218 | ) | | $ | (1,614 | ) | | $ | 1,143 | |
| Change in lease liability related to right-of-use assets | | | 92 | | | | 177 | | | | 2,839 | | | | 680 | |
| Shares issued upon settlement of obligation | | | 53 | | | | — | | | | 53 | | | | — | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
The Company’s operations are all within the mining sector, consisting of three operating segments, two of which are located in Mexico, one of which is located in Brazil, plus one segment associated with Coricancha in Peru, one Exploration segment and one Corporate segment. Due to diversities in geography and production processes, the Company operates Tucano, the GMC and Topia mines separately, with separate budgeting and evaluation of results of operations and exploration activities. The Coricancha segment contains the net assets associated with Coricancha, and the cost of its exploration, evaluation and development activities are separately budgeted and reported. The Corporate segment provides financial, human resources and technical support to the three mining operations and Coricancha. The GMC operation produces silver and gold in concentrate, and the Topia operation produces silver, gold, lead and zinc in concentrate for refining off-site. The Tucano operation produces gold doré. The Exploration segment includes the Company’s mineral exploration and evaluation assets at Santa Rosa, El Horcón, Plomo and Argosy.
| | | Operations | | | | | | | | |
| | | Tucano | | GMC | | Topia | | Coricancha | | Exploration | | Corporate | | Total |
Three months ended
September 30, 2021 | | | | | | | | | | | | | | |
| External revenue | | $ | — | | | $ | 5,223 | | | $ | 4,533 | | | $ | — | | | $ | — | | | $ | 28,595 | | | $ | 38,351 | |
| Intersegment revenue | | | 27,537 | | | | — | | | | — | | | | — | | | | — | | | | (27,537 | ) | | | — | |
| Amortization and depletion | | | 5,189 | | | | 531 | | | | 900 | | | | 71 | | | | — | | | | 65 | | | | 6,756 | |
| Exploration and evaluation expenses | | | 15 | | | | 608 | | | | 368 | | | | 2,430 | | | | 162 | | | | 39 | | | | 3,622 | |
| Non-cash change in reclamation and remediation provision | | | — | | | | (6 | ) | | | — | | | | — | | | | — | | | | — | | | | (6 | ) |
| Finance income | | | 31 | | | | — | | | | — | | | | — | | | | — | | | | 39 | | | | 70 | |
| Finance expense | | | 520 | | | | — | | | | — | | | | 86 | | | | — | | | | 88 | | | | 694 | |
| Income (loss) before income taxes | | | (8,507 | ) | | | (3,104 | ) | | | (998 | ) | | | (2,724 | ) | | | (85 | ) | | | (2,629 | ) | | | (18,047 | ) |
| Income tax expense (recovery) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Net income (loss) | | | (8,507 | ) | | | (3,104 | ) | | | (998 | ) | | | (2,724 | ) | | | (85 | ) | | | (2,629 | ) | | | (18,047 | ) |
| Additions to non-current assets | | | 3,370 | | | | 183 | | | | 1,179 | | | | 422 | | | | — | | | | — | | | | 5,154 | |
Nine months ended
September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| External revenue | | $ | — | | | $ | 17,177 | | | $ | 17,680 | | | $ | — | | | $ | — | | | $ | 108,161 | | | $ | 143,018 | |
| Intersegment revenue | | | 104,789 | | | | — | | | | — | | | | — | | | | — | | | | (104,789 | ) | | | — | |
| Amortization and depletion | | | 19,810 | | | | 777 | | | | 2,591 | | | | 177 | | | | — | | | | 193 | | | | 23,548 | |
| Exploration and evaluation expenses | | | 149 | | | | 2,138 | | | | 845 | | | | 5,322 | | | | 341 | | | | 282 | | | | 9,077 | |
| Non-cash change in reclamation and remediation provision | | | — | | | | (6 | ) | | | — | | | | — | | | | — | | | | — | | | | (6 | ) |
| Finance income | | | 103 | | | | — | | | | — | | | | 3 | | | | — | | | | 101 | | | | 207 | |
| Finance expense | | | 1,503 | | | | — | | | | — | | | | 272 | | | | — | | | | 316 | | | | 2,091 | |
| Income (loss) before income taxes | | | (6,793 | ) | | | (6,218 | ) | | | 836 | | | | (6,343 | ) | | | (314 | ) | | | (9,382 | ) | | | (28,214 | ) |
| Income tax expense | | | 6 | | | | 147 | | | | 68 | | | | — | | | | — | | | | — | | | | 221 | |
| Net income (loss) | | | (6,799 | ) | | | (6,365 | ) | | | 768 | | | | (6,343 | ) | | | (314 | ) | | | (9,382 | ) | | | (28,435 | ) |
| Additions to non-current assets | | | 29,083 | | | | 1,297 | | | | 3,292 | | | | 1,442 | | | | — | | | | — | | | | 35,114 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As at September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 149,725 | | | $ | 6,264 | | | $ | 15,820 | | | $ | 45,748 | | | $ | 2,153 | | | $ | 32,273 | | | $ | 251,983 | |
| Total liabilities | | $ | 77,694 | | | $ | 16,563 | | | $ | 2,133 | | | $ | 44,917 | | | $ | 526 | | | $ | 27,777 | | | $ | 169,610 | |
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
| | | Operations | | | | | | | | |
| | | Tucano | | GMC | | Topia | | Coricancha | | Exploration | | Corporate | | Total |
| Three months ended September 30, 2020 | | | | | | | | | | | |
| External revenue | | $ | — | | | $ | 7,236 | | | $ | 6,566 | | | $ | — | | | $ | — | | | $ | 63,217 | | | $ | 77,019 | |
| Intersegment revenue | | | 59,784 | | | | — | | | | — | | | | — | | | | — | | | | (59,784 | ) | | | — | |
| Amortization and depletion | | | 9,047 | | | | 394 | | | | 656 | | | | 52 | | | | — | | | | 64 | | | | 10,213 | |
| Exploration and evaluation expenses | | | 15 | | | | 774 | | | | 137 | | | | 1,937 | | | | 81 | | | | 47 | | | | 2,991 | |
| Non-cash change in reclamation and remediation provision | | | — | | | | 22 | | | | — | | | | — | | | | — | | | | — | | | | 22 | |
| Care and maintenance costs | | | — | | | | 142 | | | | — | | | | — | | | | — | | | | — | | | | 142 | |
| Finance income | | | 40 | | | | — | | | | — | | | | — | | | | — | | | | 14 | | | | 54 | |
| Finance expense | | | 582 | | | | — | | | | — | | | | 93 | | | | — | | | | 344 | | | | 1,019 | |
| Income (loss) before income taxes | | | 21,803 | | | | 567 | | | | 1,928 | | | | (1,656 | ) | | | (124 | ) | | | (1,717 | ) | | | 20,801 | |
| Income tax expense | | | 2,162 | | | | — | | | | — | | | | — | | | | — | | | | 4 | | | | 2,166 | |
| Net income (loss) | | | 19,641 | | | | 567 | | | | 1,928 | | | | (1,656 | ) | | | (124 | ) | | | (1,721 | ) | | | 18,635 | |
| Additions to non-current assets | | | 7,772 | | | | 515 | | | | 840 | | | | (492 | ) | | | — | | | | — | | | | 8,635 | |
Nine months ended September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
| External revenue | | $ | — | | | $ | 15,853 | | | $ | 12,624 | | | $ | — | | | $ | — | | | $ | 163,620 | | | $ | 192,097 | |
| Intersegment revenue | | | 153,004 | | | | — | | | | — | | | | — | | | | — | | | | (153,004 | ) | | | — | |
| Amortization and depletion | | | 26,943 | | | | 1,127 | | | | 2,049 | | | | 154 | | | | — | | | | 193 | | | | 30,466 | |
| Exploration and evaluation expenses | | | 380 | | | | 1,617 | | | | 282 | | | | 5,465 | | | | 185 | | | | 137 | | | | 8,066 | |
| Non-cash change in reclamation and remediation provision | | | — | | | | 57 | | | | — | | | | — | | | | — | | | | — | | | | 57 | |
| Care and maintenance costs | | | — | | | | 693 | | | | — | | | | — | | | | — | | | | — | | | | 693 | |
| Finance income | | | 90 | | | | — | | | | — | | | | — | | | | — | | | | 144 | | | | 234 | |
| Finance expense | | | 1,410 | | | | — | | | | — | | | | 94 | | | | — | | | | 992 | | | | 2,496 | |
| Net income (loss) before income taxes | | | 26,690 | | | | (714 | ) | | | 42 | | | | (5,406 | ) | | | (1 | ) | | | (31,398 | ) | | | (10,787 | ) |
| Income tax expense (recovery) | | | 2,519 | | | | (26 | ) | | | (14 | ) | | | — | | | | — | | | | 11 | | | | 2,490 | |
| Net income (loss) | | | 24,171 | | | | (688 | ) | | | 56 | | | | (5,406 | ) | | | (1 | ) | | | (31,409 | ) | | | (13,277 | ) |
| Additions to non-current assets | | | 31,879 | | | | 1,277 | | | | 2,204 | | | | (548 | ) | | | — | | | | 43 | | | | 34,855 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As at September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 139,089 | | | $ | 5,744 | | | $ | 14,416 | | | $ | 30,438 | | | $ | 2,125 | | | $ | 62,822 | | | $ | 254,634 | |
| Total liabilities | | $ | 76,509 | | | $ | 14,750 | | | $ | 2,423 | | | $ | 29,524 | | | $ | — | | | $ | 39,240 | | | $ | 162,446 | |
The Company completed the conditions precedent to funding for a $5.0 million lead concentrate prepayment agreement with Samsung (the “Samsung Advance”) entered into on September 21, 2021. On November 2 2021, the conditions precedent to funding which includes the completion of a pledge of the shares of Great Panther’s Mexican subsidiary, Minera Mexicana El Rosario S.A. de C.V. (“MMR”) were satisfied and funds were received. Under the Concentrate Agreement, Samsung agreed to advance a $5 million prepayment, net of transaction costs, (the “Samsung Advance”) to MMR in consideration for exclusive offtake of the lead concentrate production from the Topia Mine (“the Concentrate”), up to a maximum contract quantity of 5,400 tonnes representing approximately 21 months of production from the mine. The Samsung Advance will be repaid in twelve equal monthly instalments commencing in April 2022 and bears interest at an annual rate of 3- month USD LIBOR plus 6.5%. MMR has a full option for early repayment of the Samsung Advance, subject to a 3% penalty applied to the outstanding balance.
Great Panther MINING Limited
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts expressed in thousands of US dollars, except where otherwise noted)
As at and for the three and nine months ended September 30, 2021 and 2020 (Unaudited)
On November 1, 2021, the Company closed the share purchase agreement, entered into on August 4, 2021, with Newrange Gold Corp. (“Newrange”) under which the Company will sell the shares of its wholly-owned subsidiary Cangold Limited (“Cangold”) to Newrange for a purchase price of CAD$1.0 million paid as a combination of cash and common shares of Newrange. Cangold holds the Company’s interest in the Argosy property in Northern Ontario in the Red Lake Mining District. Prior to closing, the Company completed a reorganization to retain its 100% interest in the Company’s Plomo property located in Mexico, previously owned by a subsidiary of Cangold.
