Minnesota | 20-0803515 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | x |
PART I | |||||
ITEM 1. | Description of Business | 4 | |||
ITEM 1A. | Risk Factors | 25 | |||
ITEM 1B. | Unresolved Staff Comments | 32 | |||
ITEM 2. | Description of Properties | 32 | |||
ITEM 3. | Legal Proceedings | 32 | |||
ITEM 4. | Mine Safety Disclosures | 32 | |||
PART II | |||||
ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 33 | |||
ITEM 6. | Selected Financial Data 31 | 35 | |||
ITEM 7. | Management’s Discussion and Analysis of Plan of Operations | 35 | |||
ITEM 7.A | Quantitative and Qualitative Disclosures About Market Risk | 40 | |||
ITEM 8. | Financial Statements | 40 | |||
ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 40 | |||
ITEM 9A. | Controls and Procedures | 40 | |||
ITEM 9B. | Other Information | 41 | |||
PART III | |||||
ITEM 10. | Directors, Executive Officers, Promoters, Control Persons and Corporate Governance Compliance with Section 16(A) of the Exchange Act | 42 | |||
ITEM 11. | Executive Compensation | 45 | |||
ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 52 | |||
ITEM 13. | Certain Relationships and Related Transactions, and Director Independence | 54 | |||
ITEM 14. | Principal Accountant Fees and Services | 56 | |||
PART IV | |||||
ITEM 15. | Exhibits, Financial Statement Schedules | 57 | |||
Signatures | 58 | ||||
CERTIFICATIONS | |||||
Exhibit 31 – Management certification | |||||
Exhibit 32 – Sarbanes-Oxley Act |
· | our ability to raise additional funding as required; |
· | the market price for graphite, vanadium, gold, uranium and for any other minerals which we may find; |
· | ongoing joint ventures; |
· | the results of our proposed exploration programs on our mineral properties; |
· | environmental regulations that may adversely impact cost and operations; and |
· | our ability to find joint venture partners, as needed, for the development of our property interests. |
· | Stream Sediment sampling of all stream on the property area |
· | Detailed Geological mapping over selected startigraphic horizons |
· | Reconnaissance geological mapping over the entire property |
· | Soil sampling over selected target areas |
· | Prospecting over selected target areas. |
· | Limited trenching over selected targets |
· | Construction of a cinder block base camp |
· | Construction of a one kilometre long surfaced airstrip |
· | Repair and surfacing of the access road from base camp to the airs trip |
· | Airborne geophysical surveying conducted by Fugro Airborne Surveys Ltd |
· | Infill stream sediment sampling |
· | Detailed Geological mapping over selected stratigraphic horizons |
· | Prospecting over selected target areas |
· | Grid emplacement over selected target areas |
· | Ground-based magnetometer and frequency domain EM surveys |
· | Soil sampling over selected target areas |
· | Infill stream sediment sampling |
· | Detailed geological mapping over selected stratigraphic horizons |
· | Prospecting over selected target areas with the aid of a mobile XRF analyzer |
· | Prospecting over selected target areas with the aid of a mobile XRF analyzer |
· | Ground-based scintillometer surveying over selected target areas |
· | Diamond drilling of 31 holes over 4,073 metres |
· | XRF soil sample analyses (8,490 samples) on lines 200 metres apart covering 18 kilometre strike length |
· | Scintillometer surveying (112 line kilometres) on lines 200 metres apart over an 18 kilometre strike length |
· | Trenching (140 trenches for 17,105 metres) |
· | Diamond drilling of 54 diamond drill holes over 8,931 metres |
The exploration programs to date resulted in the delineation of two vanadium pentoxide (V2O5) deposits (named the Jaky and Manga), characterized by two separate categories: oxide and primary. Within the oxide and primary zone of the Jaky and Manga deposits, the total indicated resources was calculated to be 21.74 Mt at 0.759% V2O5 containing 363.8 Mlb of vanadium pentoxide. The total inferred resources was calculated to be 4.15 Mt at a grade of 0.655% V2O5 containing 59.8 Mlb of vanadium pentoxide.
· | Diamond drilling of 46 diamond drill holes over 8,952 metres |
· | Prospecting over selected target areas with the aid of a mobile XRF analyzer (20 grab samples) |
· | Geologic mapping over the Manga and Mainty deposits at 1:5000 scale |
· | ERT ground geophysical survey (5.64 km) |
· | MAG ground geophysical survey (169.53 km) |
· | Gradient Array EM ground geophysical survey (128.82 km) |
· | Diamond drilling of 10 holes over 1,157.5 metres |
· | Trenching (16 trenches for 1,912 metres) |
· | Prospecting over selected target areas |
· | Diamond drilling of 20 holes over 2,842 metres |
· | Prospecting over selected target areas |
· | EM31 ground geophysical survey over selected target areas (160.5 km) |
· | Trenching (18 trenches for 2,100 metres) |
· | Diamond drilling of 41 diamond drill holes over 8,459 metres |
Pre-tax NPV (10% Discounted, real) | $421,464,000 |
Pre-tax IRR (Real) | 48% |
Post-tax NPV (10$ Discounted, real) | $341,803,000 |
Post-tax IRR (Real) | 41% |
Payback | 3.0 years |
Mine life | 20 years |
Graphite sale price | $1,564 per tonne |
Average Head Grade | 8.50% |
Average annual ore mined | 1,169,749 tonnes per annum |
Average stripping ratio | 1.65 |
Average mill recovery | 89% |
Average annual production | 84,000 tonnes per annum |
Capital cost | $162,043,315 |
Mining cost | $4.76 per tonne mined (Initial life of mine) |
Processing cost | $22.29 per tonne milled |
Transportation cost (FOB port) | $105 per tonne concentrate |
The PEA Study being prepared by DRA indicates that mining will be carried out using a conventional open pit mining method, utilizing trucks and loaders. The mine strip ratio was calculated to show an average value of 1.65 with minimal overburden pre-stripping requirements as the mineralization is exposed at surface. The mine design capacity is to process 1,169,749 tonnes of ore per year at 92% availability, with an average head grade of 8.5% C.
Mining Area Infrastructure | $ | 5,681,745 | ||
Plant Cost | 68,925,519 | |||
General Infrastructure | 39,564,757 | |||
Indirect Costs | 29,892,092 | |||
Contingency (12.5%) | 17,979,201 | |||
Total | $ | 162,043,315 |
A limited allowance has been made for infrastructure investment, outside of the actual mining and processing operations. This final estimate will be defined during the full feasibility study.
Starting Contract Mining ($/T mined) | $4.76/Tonne Mined (Waste and Ore) |
Starting Processing ($/T milled) | $22.90/Tonne Milled |
Starting Transportation (FOB port $/T shipped) | $105.00/Tonne Concentrate transported to port |
· | Contract mining cost from Minopex, who operate and maintain of metal and mineral processing facilities, |
· | Processing cost from DRA, and |
· | Transportation cost from plant site to cargo ship from Panalpina World Transport Ltd. ('Panalpina'). |
Country | Flake output |
China | 380,000 |
Brazil | 96,000 |
India | 35,000 |
North Korea | 30,000 |
Canada | 21,000 |
Norway | 8,000 |
Zimbabwe | 5,000 |
Madagascar | 4,000 |
Russia | 2,000 |
Ukraine | 1,500 |
Germany | 300 |
Total | 582,800 |
Country | Amorphous output |
China | 400,000 |
Austria | 16,000 |
Mexico | 12,000 |
Turkey | 300 |
Total | 428,300 |
Salient Statistics—United States | 2008 | 2009 | 2010 | 2011 | 2012est | |||||||||||||||
Production, mine, mill | 520 | 230 | 1,060 | 590 | 270 | |||||||||||||||
Imports for consumption: | ||||||||||||||||||||
Ferrovanadium | 2,800 | 353 | 1,340 | 2,220 | 3,400 | |||||||||||||||
Vanadium pentoxide, anhydride | 3,700 | 1,120 | 4,000 | 2,810 | 1,570 | |||||||||||||||
Oxides and hydroxides, other | 144 | 25 | 167 | 886 | 1,210 | |||||||||||||||
Aluminum-vanadium master alloys (gross weight) | 618 | 282 | 951 | 278 | 180 | |||||||||||||||
Ash and residues | 1,040 | 791 | 521 | 1,420 | 1,500 | |||||||||||||||
Sulfates | 2 | 16 | 48 | 42 | 40 | |||||||||||||||
Vanadates | 187 | 214 | 158 | 303 | 320 | |||||||||||||||
Vanadium metal, including waste and scrap | 5 | 22 | 10 | 44 | 110 | |||||||||||||||
Exports: | ||||||||||||||||||||
Ferrovanadium | 452 | 672 | 611 | 314 | 530 | |||||||||||||||
Vanadium pentoxide, anhydride | 249 | 401 | 140 | 89 | 40 | |||||||||||||||
Oxides and hydroxides, other | 1,040 | 506 | 1,100 | 254 | 190 | |||||||||||||||
Aluminum-vanadium master alloys (gross weight) 1,390 | 447 | 1,190 | 920 | 1,400 | ||||||||||||||||
Vanadium metal, including waste and scrap | 57 | 23 | 21 | 102 | 10 | |||||||||||||||
Consumption: | ||||||||||||||||||||
Apparent | 5,820 | 1,040 | 5,190 | 6,963 | 6,400 | |||||||||||||||
Reported | 5,170 | 4,690 | 5,030 | 5,120 | 5,200 | |||||||||||||||
Stocks, consumer, yearend | 335 | 295 | 248 | 2185 | 2220 | |||||||||||||||
* Price, average, dollars per pound V2O5 | $ | 12.92 | $ | 5.43 | $ | 6.46 | $ | 6.76 | $ | 6.52 | ||||||||||
Imports + exports + adjustments for government | ||||||||||||||||||||
and industry stock changes as a percentage of | ||||||||||||||||||||
apparent consumption | 91 | % | 78 | % | 81 | % | 92 | % | 96 | % |
* Vanadium is not freely traded on an open market. This means determining prices for vanadium is somewhat of an opaque market as prices are determined through contracts between buyers and sellers.
Mine production | Reserves (thousand metric tons) | |||||||||||
2011 | 2012est | |||||||||||
China | 23,000 | 23,000 | 5,100 | |||||||||
South Africa | 22,000 | 22,000 | 3,500 | |||||||||
Russia | 15,200 | 16,000 | 5,000 | |||||||||
United States | 1,590 | 1,270 | 45 | |||||||||
Other countries | 1,600 | 1,600 | not applicable | |||||||||
World total (approximate) | 63,390 | 63,870 | 14,000 |
· | Gold and uranium mineralization at redox boundaries along major faults. This work should focus on the intersection between the Romanet fault and the reducing lithologies of the Dunphy and Lace Lake formations. |
· | Unconformity associated polymetallic uranium-style mineralization at the Archean basement contact. The ‘Kilo’ soil anomaly should be targeted for this exploration due to the anomalous soil, RC, and DDH geochemistry, as well as the numerous coincident geophysical anomalies. |
· | Iron-Oxide Copper Gold (IOCG) mineralization. This work should focus on the east-west structure bisecting the Romanet Horst. In particular, the area to the southwest of the Lac Plisse showing should be drill tested as it has coincident gravity and magnetic highs, and has an anomalous IOCG-related geochemical signature for RC, soil, and water geochemical data. Additionally, the DDH geochemistry and alteration mineralogy observed from holes in the ‘Alpha’ soil target area should be re-examined in the context of IOCG mineralization. |
· | Source mineralization for the Mistamisk Boulder Field. The anomalous Alpha, Delta, and Kilo soil targets, as well as A, B, and E RC targets identified during the course of the 2007 exploration program should be examined to ascertain the source mineralization for the Mistamisk Boulder Field. |
OTCBB (US$) | TSX / TSX-V (CDN$) | |||
Period | High | Low | High | Low |
Fiscal year ended June 30, 2013 | ||||
First quarter ended September 30, 2012 | $0.41 | $0.27 | $0.39 | $0.27 |
Second quarter ended December 31, 2012 | $0.36 | $0.29 | $0.29 | $0.37 |
Fiscal year ended June 30, 2012 | ||||
First quarter ended September 30, 2011 | $0.36 | $0.18 | $0.34 | $0.17 |
Second quarter ended December 31, 2011 | $0.26 | $0.15 | $0.23 | $0.15 |
Third quarter ended March 31, 2012 | $0.44 | $0.17 | $0.43 | $0.165 |
Fourth quarter ended June 30, 2012 | $0.48 | $0.22 | $0.48 | $0.22 |
Fiscal year ended June 30, 2011 | ||||
First quarter ended September 30, 2010 | $0.33 | $0.18 | $0.34 | $0.185 |
Second quarter ended December 31, 2010 | $0.50 | $0.195 | $0.51 | $0.20 |
Third quarter ended March 31, 2011 | $0.585 | $0.39 | $0.63 | $0.38 |
Fourth quarter ended June 30, 2011 | $0.45 | $0.30 | $0.42 | $0.285 |
Fiscal year ended June 30, 2010 | ||||
First quarter ended September 30, 2009 | $0.68 | $0.14 | N/A | N/A |
Second quarter ended December 31, 2009 | $0.64 | $0.39 | N/A | N/A |
Third quarter ended March 31, 2010 | $0.48 | $0.29 | N/A | N/A |
Fourth quarter ended June 30, 2010 | $0.45 | $0.20 | $0.49 | $0.22 |
Our common shares commenced trading on the TSX-V on May 5, 2010. Our common shares ceased trading on the TSX-V and commenced trading on the TSX on June 16, 2011.
Plan Category | Number of securities to be issued upon exercise of outstanding options, and warrants | Weighted-average exercise price of outstanding options and warrants | Number of securities remaining available for future under equity compensation plans (excluding securities reflected in column (a) |
Equity compensation plans approved by security holders | -- | -- | -- |
Equity compensation plans not approved by security holders | 7,630,000 | $0.15 | 5,080,000 |
1. | On July 2, 2010, the Company issued 500,000 common share purchase warrants valued at $78,100 to a company who assisted us in listing on the TSX Venture Exchange. The share purchase warrants were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.54%; expected volatility – 172%; dividend yield – NIL; and expected life – 4 years. |
2. | On October 21, 2010, the Company issued 1,100,000 common stock purchase options to a director of the Company valued at $237,710. The common stock purchase options, which vested immediately, were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.54%; expected volatility – 172%; dividend yield – NIL; and expected life – 4 years. |
3. | On December 17, 2010, the Company issued 200,000 shares of common stock valued at $90,000 pursuant to a contract with a party to provide advisory services in China. |
4. | During January and February 2011, the Company closed a private placement of 30,936,654 units for gross proceeds of $13,921,495. Each unit consisted of one common share and one half of one common share purchase warrant. Each of the 15,468,327 warrants issued can be used to purchase one common share at an exercise price of $0.75 for two years from the date of issue. In connection with the private placement, the Company paid $704,115, TSX-V fees of $38,411 and 1,564,700 compensation warrants. The compensation warrant entitles the holder to acquire one unit at $0.45 per unit and expires on February 25, 2013. |
5. | During the year ended June 30, 2011, the Company issued 4,549,500 shares of common stock for consideration of $886,500. The shares were issued pursuant to the exercise of several common share purchase warrants. |
6. | On July 1, 2011, the Company issued 5,175,000 common stock purchase options to directors, officers and consultants of the Company valued at $1,364,648. The common stock purchase options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.95%; expected volatility – 137%; dividend yield – NIL; and expected life – 5 years. These common stock purchase options vested on the grant date. |
7. | On October 24, 2011, the Company issued 1,850,000 common stock purchase options to directors, officers and consultants of the Company valued at $321,530. The common stock purchase options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.60%; expected volatility – 133%; dividend yield – NIL; and expected life – 5 years. These common stock purchase options vested on the grant date. |
8. | On December 16, 2011, the Company issued 2,365,000 common stock purchase options to directors, officers and consultants of the Company valued at $431,613. The common stock purchase options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.60%; expected volatility – 133%; dividend yield – NIL; and expected life – 5 years. These common stock purchase options vested on the grant date. |
9. | On December 16, 2011, the Company issued 7,500,000 shares of common stock at $0.18 per share valued at $1,350,000 as consideration for the Joint Venture Agreement with Malagasy Minerals Ltd. |
10. | On March 4, 2012, the Company issued 460,000 shares of common stock for consideration of $69,000. The shares were issued pursuant to the exercise of common stock purchase options. |
11. | On March 7, 2012, the Company issued 6,275,000 common stock purchase options to directors, officers and consultants of the Company valued at $1,513,530. The common stock purchase options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.00%; expected volatility – 131%; dividend yield – NIL; and expected life – 5 years. These common stock purchase options vested on the grant date. |
12. | On March 25, 2012, the Company closed a private placement with DRA Minerals Inc, a process development and mine engineering company, raising $635,000 by issuing 2,540,000 shares of common stock at $0.25 per share. |
13. | On April 9, 2012, the Company issued 50,000 shares of common stock for consideration of $15,000. The shares were issued pursuant to the exercise of common stock purchase options. |
14. | On May 23, 2012, the Company issued 180,000 common stock purchase options to directors, officers and consultants of the Company valued at $35,982. The common stock purchase options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.00%; expected volatility – 134%; dividend yield – NIL; and expected life – 5 years. These common stock purchase options vested on the grant date. |
Building of a pilot plant | $ | 2,000,000 | ||
Bankable Feasibility Study (“BFS”) and Metallurgy Testing | $ | 1,000,000 | ||
Infill drilling if required for the BFS. | $ | 2,000,000 | ||
Total | $ | 5,000,000 |
· | Amounts spent on mineral properties totalled $8,309,874 (June 30, 2011: $2,172,223), an increase of $6,137,651 year over year. Included within this total were property acquisition costs relating to the transaction with Malagasy totalling $3,770,129 (recorded within the statement of operations under impairment losses), drilling costs associated with the fall 2011 and the spring 2012 drill programs, metallurgical testing analysis and various geological testing incurred during the year. The costs were higher during fiscal 2012 compared to fiscal 2011 due to both the acquisition of the joint venture ground coupled with increased drilling on the properties, mainly the joint venture ground. Following our accounting policies of expensing acquisition costs and exploration expenses on mineral properties as incurred, this amount increased the net loss for the year. |
· | Professional fees totalled $1,801,659 up $552,963 from the June 30, 2011 total of $1,248,696. The increase is due to the utilization of more professionals internally as well as increased legal and accounting service fees paid to external parties in Canada, Australia, Mauritius and Madagascar. |
· | General and administration relates to fees associated with running the Toronto office and the Madagascar operations on the property. These costs decreased by $55,395 between periods (June 30, 2012: $1,487,669, June 30, 2011: $1,543,064). Significant costs within the fiscal 2012 amount include travel expenses for trips to the exploration site in Madagascar, to the capital of Madagascar and Mauritius to meet government officials, to Europe for graphite conferences and meeting with investors and interested parties, and to Australia to negotiate and finalize the Malagasy joint venture agreement. |
· | Investment income increased by $54,174 from $110,759 for the year ended June 30, 2011 to $164,933 for the year ended June 30, 2012. Due to the companies higher cash position in the early part of fiscal 2012, more funds were available to be invested in various money market funds, bond funds and dual currency deposits. |
· | From inception to June 30, 2004, we raised $59,750 through the issuance of 9,585,000 common shares. |
· | For the year ended June 30, 2005, we did not raise any capital from new financings. |
· | For the year ended June 30, 2006, we raised $795,250 through the issuance of 2,750,000 common shares and 2,265,000 common share purchase warrants. |
· | For the year ended June 30, 2007, we raised $17,300,000 through the issuance of 34,600,000 common shares and 29,000,250 common share purchase warrants. |
· | For the year ended June 30, 2008, we did not raise any capital from new financings. |
· | For the year ended June 30, 2009, we raised $680,000 through the issuance of 6,800,000 common shares and 3,400,000 common share purchase warrants. |
· | For the year ended June 30, 2010, we raised $6,500,000 through the issuance of 21,666,667 common shares and 21,666,667 common share purchase warrants. |
· | For the year ended June 30, 2011, we raised net proceeds of $13,178,708 through the issuance of 30,936,654 common shares and 15,468,328 common share purchase warrants and $886,501 (by issuing 4,549,500 common shares) through the exercise of common share purchase warrants. |
· | For the year ended June 30, 2012, we raised proceeds of $635,000 (by issuing 2,540,000 common shares) through the issuance of common shares and $84,000 (by issuing 510,000 common shares) through the exercise of common stock purchase options. |
· | For the six month period ended December 31, 2012, we raised net proceeds of $1,809,549 through the issuance of 5,807,142 common shares and 2,903,571 common share purchase warrants and $105,000, by issuing 700,000 common shares, through the exercise of common stock purchase options. |
· | On July 2, 2010, the Company issued 500,000 common share purchase warrants valued at $78,100 to a company who assisted us with listing on the TSX Venture Exchange. The common share purchase warrants were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate – 1.54%; expected volatility – 172%; dividend yield – NIL; and expected life – 4 years. |
· | On December 17, 2010, the Company issued 200,000 shares of common stock valued at $90,000 pursuant to a contract with a party to provide advisory services in China. |
· | During January and February 2011, the Company closed a private placement of 30,936,654 units for gross proceeds of $13,921,495. Each unit consisted of one common share and one half of one common share purchase warrant. Each of the 15,468,327 warrants issued can be used to purchase one common share at an exercise price of $0.75 for two years from the date of issue. In connection with the private placement, the Company paid $704,115, TSX-V fees of $38,411 and 1,564,700 compensation warrants. Each compensation warrant entitles the holder to acquire one unit at $0.45 per unit expiring February 25, 2013. |
· | During the year ended June 30, 2011, the Company issued 4,549,500 shares of common stock for consideration of $886,500. The shares were issued pursuant to the exercise of several common share purchase warrants. |
· | On December 16, 2011, the Company issued 7,500,000 shares of common stock at $0.18 per share valued at $1,350,000 as consideration for the Joint Venture Agreement with Malagasy Minerals Ltd. |
· | On March 4, 2012, the Company issued 460,000 shares of common stock for consideration of $69,000. The shares were issued pursuant to the exercise of common stock purchase options. |
· | On March 25, 2012, the Company closed a private placement with DRA Minerals Inc, a process development and mine engineering company, raising $635,000 by issuing 2,540,000 common stock at $0.25 per share. |
· | On April 9, 2012, the Company issued 50,000 shares of common stock for consideration of $15,000. The shares were issued pursuant to the exercise of common stock purchase options. |
· | During November 2012, the Company closed a brokered and non-brokered private placement raising a total of $2,032,500. The Company issued 5,807,142 common stock at $0.35 per share and 2,903,571 common share purchase warrants at an exercise of $0.50 and an expiry date 24 months from the date of issue. In addition, the Company paid a fee of $119,010 and issued 340,.028 compensation warrants. Each compensation warrant entitles the holder to purchase one common share at $0.35 and one half of one common share purchase warrant at an exercise price of $0.50. |
· | "Comprehensive Income (Topic-220): Presentation of Comprehensive Income": ("ASU 2011-05") was issued during June 2011. FASB issued guidance regarding the presentation of Comprehensive Income within financial statements. The guidance was effective for interim and annual periods beginning after December 15, 2011. |
· | "Comprehensive Income (Topic-202): Deferral of the Effective date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No 2011-05": ("ASU 2011-12") was issued during December 2011. FASB provides clarification and guidance relating to the effects of reclassifications of amounts out of accumulated other comprehensive income and into net income. The guidance is effective for annual periods beginning after December 15, 2011 and interim periods within those years. |
· | "Intangibles - Goodwill and Other (Topic-350): Indefinite-Lived Intangible Assets for Impairment": ("ASU 2011-08") was issued during September 2011. FASB issued guidance on how to determine whether goodwill amounts on the balance sheet have been impaired. The guidance was effective for annual periods beginning after September 15, 2012 and interim periods within those years. |
· | "Balance Sheet (Topic 201): Disclosures about Offsetting Assets and Liabilities": ("ASU 2011-11") was issued during December 2011. FASB issued guidance on how to determine whether it is appropriate to offset or net certain assets and liabilities on the balance sheet and the additional disclosure that this entails. The guidance is effective annual periods beginning on or after January 1, 2013. |
PART III
Name | Age | Position |
J.A. Kirk McKinnon | 70 | Chief Executive Officer, Chairman and Director |
Craig Scherba | 40 | President, Chief Operating Officer and Director |
Richard E. Schler | 59 | Executive Vice-President and Director |
John Sanderson | 77 | Vice Chairman and Director |
Peter D. Liabotis | 43 | Chief Financial Officer |
V. Peter Harder | 60 | Director |
Quentin Yarie | 47 | Director |
Johann de Bruin | 42 | Director |
Albert A. Thiess, Jr. | 66 | Director |
· | be responsible for the appointment, compensation, retention, termination and oversight of the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; |
· | discuss the annual audited financial statements and the quarterly unaudited financial statements with management and the independent auditor prior to their filing with the SEC in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; |
· | review with the company’s financial management on a periodic basis (a) issues regarding accounting principles and financial statement presentations, including any significant changes in the company’s selection or application of accounting principles, and (b) the effect of any regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the company; |
· | monitor the Company’s policies for compliance with federal, state, local and foreign laws and regulations and the Company’s policies on corporate conduct; |
· | maintain open, continuing and direct communication between the board of directors, the committee and both the company’s independent auditors and its internal auditors; and |
· | monitor our compliance with legal and regulatory requirements, with the authority to initiate any special investigations of conflicts of interest, and compliance with federal, state and local laws and regulations, including the Foreign Corrupt Practices Act. |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) NOTE 6 | Option Awards ($) | Non Equity Inventive Plan Compens-aton ($) | Change in Pension Value and Non Qualified Deferred Compensation Earnings ($) | All Other Compens-ation ($) NOTE 1 | Total ($) NOTE 1 |
J.A. Kirk McKinnon, CEO and Director | 2012 | 248,207 (5) | 0 | 0 | 0 | 0 | 0 | 739,062 (1) | 987,269 (1) |
2011 | 261,810 (4) | 0 | 0 | 0 | 0 | 0 | 0 | 261,810 | |
2010 | 134,178 (3) | 0 | 80,750 (2) | 0 | 0 | 0 | 512,469 (1) | 727,397 (1) | |
Richard E. Schler, Executive Vice-President, Past CFO and Director | 2012 | 201,407 (5) | 0 | 0 | 0 | 0 | 0 | 557,033 (1) | 758,440 (1) |
2011 | 189,490 (4) | 0 | 0 | 0 | 0 | 0 | 0 | 189,490 | |
2010 | 129,953 (3) | 0 | 76,500 (2) | 0 | 0 | 0 | 488,218 (1) | 694,671 (1) | |
Craig Scherba President, COO and Director | 2012 | 105,214 (5) | 0 | 0 | 0 | 0 | 0 | 260,035 (1) | 365,249 (1) |
2011 | 71,048 (4) | 0 | 0 | 0 | 0 | 0 | 0 | 71,048 | |
2010 | 0 | 0 | 0 | 0 | 0 | 0 | 83,325 (1) | 83,325 (1) | |
Brent Nykoliation, Senior Vice President | 2012 | 162,085 (5) | 0 | 0 | 0 | 0 | 0 | 275,345 (1) | 437,430 (1) |
2011 | 99,488 (4) | 0 | 0 | 0 | 0 | 0 | 0 | 99,488 | |
2010 | 42,231 (3) | 0 | 34,000 (2) | 0 | 0 | 0 | 138,715 (1) | 214,946 (1) | |
Peter D. Liabotis, Chief Financial Officer | 2012 | 168,764 (5) | 0 | 0 | 0 | 0 | 0 | 247,975 (1) | 416,739 (1) |
2011 | 67,309 (4) | 0 | 0 | 0 | 0 | 0 | 0 | 67,309 | |
2010 | 0 | 0 | 0 | 0 | 0 | 0 | 83,325 (1) | 83,325 (1) |
(1) | The values in the “All Other Compensation” above do not represent a cash payment of any kind. Rather these values represent the calculated Black-Scholes theoretical value of granted options. It is important to note that these granted options may or may not ever be exercised. Whether granted options are exercised or not will be based primarily, but not singularly, on the Company’s future stock price and whether the granted options become “in-the-money”. If these granted options are unexercised and expire, the cash value or benefit to the above noted individuals is $nil. |
(2) | Shares valued at $0.17 per share based on quoted market price issued to these individuals and/or to companies controlled by them. |
(3) | Consulting fees paid and accrued for the fiscal year ended June 30, 2010. |
(4) | Consulting fees paid and accrued for the fiscal year ended June 30, 2011. |
(5) | Salary and/or consulting fees paid and accrued for the fiscal year ended June 30, 2012. |
(6) | The amounts listed in the “Stock Awards” column of the “Summary Compensation” table have been calculated based upon the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and there are no awards subject to performance conditions. |
Option Awards | |||||
Name | No. of Securities Underlying Unexercised Options Exercisable (#) | No. of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date |
J.A. Kirk McKinnon, NEO | 975,000 225,000 1,150,000 675,000 575,000 650,000 1,420,000 | 0 | 0 | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 | July 11, 2012 Sept 2, 2013 May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Richard E. Schler, NEO | 875,000 200,000 1,100,000 600,000 225,000 200,000 1,340,000 | 0 | 0 | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 | July 11, 2012 Sept 2, 2013 May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Craig Scherba, NEO | 250,000 350,000 200,000 200,000 400,000 | 0 | 0 | 0.395 0.30 0.20 0.21 0.28 | May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Brent Nykoliation, NEO | 75,000 400,000 450,000 200,000 200,000 350,000 | 0 | 0 | 0.352 0.395 0.30 0.20 0.21 0.28 | Sept 2, 2013 May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Peter D. Liabotis, NEO | 250,000 350,000 200,000 200,000 350,000 | 0 | 0 | 0.395 0.30 0.20 0.21 0.28 | May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Stock awards | ||||
Name | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested (#) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) |
J.A. Kirk McKinnon, NEO | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 |
Name | Option awards | Stock awards | ||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Investing ($) | |
J.A. Kirk McKinnon, NEO | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 |
Estimated future payouts under non-equity incentive plan awards | Estimated future payouts under equity incentive plan awards | All other stock awards: Number of shares of stock | All other option awards: Number of securities underlying | Exercise or base price of | Grant date fair value of stock | ||||||
Name | Grant date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | or units (#) | options (#) | option awards ($/Sh) | and option awards |
J.A. Kirk McKinnon, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Name | Executive contributions in last FY ($) | Registrant contributions in last FY ($) | Aggregate earnings in last FY ($) | Aggregate withdrawals/ distributions ($) | Aggregate balance at last FYE ($) |
J.A. Kirk McKinnon, NEO | 0 | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 | 0 |
Golden Parachute Compensation
Name | Cash ($) | Equity ($) | Pension/NQDC ($) | Perquisites/benefits ($) | Tax reimbursement ($) | Other ($) | Total ($) |
J.A. Kirk McKinnon, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Number of Shares | Weighted average exercise price ($) | |
Outstanding, June 30, 2010 | 13,620,000 | 0.30 |
Granted | 1,100,000 | 0.25 |
Cancelled | (590,000) | 0.57 |
Outstanding June 30, 2011 | 14,130,000 | 0.29 |
Granted | 15,845,000 | 0.27 |
Exercised | (510,000) | 0.15 |
Expired | (2,475,000) | 0.15 |
Cancelled | (3,300,000) | 0.31 |
Outstanding, June 30, 2012 | 23,690,000 | 0.29 |
Outstanding | Exercisable | ||||
Exercise price | Number of shares | Weighted average remaining life (years) | Weighted average exercise price | Number of shares | Weighted average exercise price |
$0.15 | 2,395,000 | 0.03 | $0.15 | 2,395,000 | $0.15 |
$0.35 | 750,000 | 1.18 | $0.35 | 750,000 | $0.35 |
$0.40 | 5,350,000 | 1.86 | $0.40 | 5,350,000 | $0.40 |
$0.30 | 4,525,000 | 4.01 | $0.30 | 4,525,000 | $0.30 |
$0.20 | 1,850,000 | 4.32 | $0.20 | 1,850,000 | $0.20 |
$0.21 | 2,365,000 | 4.42 | $0.21 | 2,365,000 | $0.21 |
$0.28 | 6,275,000 | 4.69 | $0.28 | 6,275,000 | $0.28 |
$0.23 | 180,000 | 4.90 | $0.23 | 180,000 | $0.23 |
Total/Average | 23,690,000 | 3.31 | $0.29 | 23,690,000 | $0.29 |
· | During early July, 2012, 700,000 stock options which were due to expire on July 11, 2012 were exercised. The remaining 1,695,000 stock options expired. |
· | On July 13, 2012, 1,695,000 stock options were issued at an exercise price of US$0.29 for a term of four years. |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards (1) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All other Comp-ensation ($) | Total (1) ($) |
John Sanderson, Director | 0 | 0 | 74,898 (1) | 0 | 0 | 0 | 74,898 (1) |
Quentin Yarie, Director | 0 | 0 | 187,535 (1) | 0 | 0 | 0 | 187,535 (1) |
V. Peter Harder, Director | 0 | 0 | 101,485 (1) | 0 | 0 | 0 | 101,485 (1) |
Johann de Bruin, Director | 0 | 0 | 48,240 (1) | 0 | 0 | 0 | 48,240 (1) |
Albert A. Thiess, Jr, Director | 0 | 0 | 35,982 (1) | 0 | 0 | 0 | 35,982 (1) |
(1) | The values in the “Option Awards” and included within the “Total” columns above do not represent a cash payment of any kind. Rather these values represent the calculated Black-Scholes theoretical value of granted options. It is important to note that these granted options may or may not ever be exercised. Whether granted options are exercised or not will be based primarily, but not singularly, on the Company’s future stock price and whether the granted options become “in-the-money”. If these granted options are unexercised and expire, the cash value or benefit to the above noted individuals is $nil. |
Name | Plan name | Number of years credited service (#) | Present value of accumulated benefit ($) | Payments during last fiscal year ($) |
J.A. Kirk McKinnon, NEO | not applicable | 0 | 0 | 0 |
Richard E. Schler, NEO | not applicable | 0 | 0 | 0 |
Craig Scherba, NEO | not applicable | 0 | 0 | 0 |
Brent Nykoliation, NEO | not applicable | 0 | 0 | 0 |
Peter D. Liabotis, NEO | not applicable | 0 | 0 | 0 |
Option Awards as of June 30, 2012 | ||||||
Name | No. of Shares of Common Stock Underlying Unexercised Common Stock Purchase Options Exercisable (#) | Date of Grant | Additional Consideration to be Received Upon Exercise or Material Conditions required to Exercise | Option Exercise Price ($) | Value Realized if Exercised ($) * | Option Expiration Date |
J.A. Kirk McKinnon, NEO | 975,000 225,000 1,150,000 675,000 575,000 650,000 1,420,000 | July 11, 2007 September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. None. | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 | Expired 0 0 20,250 74,750 78,000 71,000 | July 11, 2012 Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Richard E. Schler, NEO | 875,000 200,000 1,100,000 600,000 225,000 200,000 1,340,000 | July 11, 2007 September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. None. | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 | Expired 0 0 18,000 29,250 24,000 67,000 | July 11, 2012 Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Craig Scherba, NEO | 250,000 350,000 200,000 200,000 400,000 | May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. | 0.395 0.30 0.20 0.21 0.28 | 0 10,500 26,000 24,000 20,000 | May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Brent Nykoliation, NEO | 75,000 400,000 450,000 200,000 200,000 350,000 | September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. | 0.352 0.395 0.30 0.20 0.21 0.28 | 0 0 13,500 26,000 24,000 17,500 | Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Peter D. Liabotis, NEO | 250,000 350,000 200,000 200,000 350,000 | May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. | 0.395 0.30 0.20 0.21 0.28 | 0 10,500 26,000 24,000 17,500 | May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Quentin Yarie, Director | 50,000 250,000 300,000 50,000 150,000 300,000 | September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. | 0.352 0.395 0.30 0.20 0.21 0.28 | 0 0 9,000 6,500 18,000 15,000 | Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
V. Peter Harder, Director | 250,000 225,000 25,000 75,000 100,000 | May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. | 0.395 0.30 0.20 0.21 0.28 | 0 6,750 3,250 9,000 5,000 | May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
John Sanderson, Director | 50,000 200,000 125,000 50,000 50,000 100,000 | September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. | 0.352 0.395 0.30 0.20 0.21 0.28 | 0 0 3,750 6,500 6,000 5,000 | Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Johann de Bruin, Director | 200,000 | March 7, 2012 | None. | 0.28 | 10,000 | March 7, 2017 |
Albert A. Thiess, Jr., Director | 180,000 | May 23, 2012 | None. | 0.23 | 18,000 | May 23, 2017 |
Option Awards as of June 30, 2012 | |||||
Name | No. of Shares of Common stock Underlying Unexercised Common Stock Purchase Options Exercisable (#) | Date of Grant | Additional Consideration to be Received Upon Exercise or Material Conditions required to Exercise | Option Exercise Price ($) | Option Expiration Date |
Named Executive Officers which includes all current executive officers, as a group on June 30, 2012 (5 persons) - J.A. Kirk McKinnon; Richard E. Schler; Craig Scherba; Brent Nykoliation; Peter D. Liabotis | 1,850,000 500,000 3,150,000 2,425,000 1,400,000 1,450,000 3,860,000 | July 11, 2007 September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. None. | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 | July 11, 2012 Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Total NEO’s on June 30, 2012, as a group (5 persons) | 14,635,000 (less 1,850,000 options that expired unexercised on July 11, 2012) | ||||
All current Directors who are not NEO’s or executive officers as a group on June 30, 2012 (5 persons) - Quentin Yarie; V. Peter Harder; John Sanderson; Johann de Bruin; Albert A. Thiess, Jr. | 100,000 700,000 650,000 125,000 275,000 700,000 180,000 | September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 May 23, 2012 | None. None. None. None. None. None. None. | 0.352 0.395 0.30 0.20 0.21 0.28 0.23 | Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 May 23, 2017 |
Total all current Directors who are not NEO’s or executive officers as a group on June 30, 2012 (5 persons) | 2,730,000 | ||||
All nominees for Directors (8 persons) | 1,850,000 525,000 3,200,000 2,275,000 1,125,000 1,325,000 3,860,000 180,000 | July 11, 2007 September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 May 23, 2012 | None. None. None. None. None. None. None. None. | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 0,23 | July 11, 2012 Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 December 1, 2016 March 7, 2017 May 23, 2017 |
Total All nominees for Directors (8 persons) | 14,340,000 (less 1,850,000 that expired unexercised on July 11, 2012) | ||||
All employees (excluding all Named Executive Officers as they also serve as executive officers and Directors) as a group on June 30, 2012 | 545,000 150,000 1,500,000 1,450,000 325,000 640,000 1,715,000 | July 11, 2007 September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 | None. None. None. None. None. None. None. | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 | July 11, 2012 Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 |
Total employees (excluding all NEO’s as they serve as executive officers) as a group on June 30, 2012 | 6,325,000 (less 545,000 that expired unexercised on July 11, 2012) | ||||
Outstanding Options as of June 30, 2012 (all parties) | 2,395,000 750,000 5,350,000 4,525,000 1,850,000 2,365,000 6,275,000 180,000 | July 11, 2007 September 2, 2009 May 11, 2010 July 1, 2011 October 24, 2011 December 1, 2011 March 7, 2012 May 23, 2012 | None. None. None. None. None. None. None. None. | 0.15 0.352 0.395 0.30 0.20 0.21 0.28 0,23 | July 11, 2012 Sept 2, 2013 May 11, 2014 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 May 23, 2017 |
Total Options as of June 30, 2012 (all parties) | 23,690,000 (less 2,395,000 that expired unexercised on July 11, 2012) |
· | On April 21, 2009, the Company re-priced the 7,630,000 then outstanding stock options by amending the exercise price ranging between $0.55 to $0.85 per share to $0.15 per share. These stock options were re-priced during the economic downturn in 2008/2009 in order to incentivize the holders of these stock options to continue to drive the Company towards its goals and objectives. No additional consideration was received by the Company. The options subsequently expired. Apart from the April 21, 2009 re-pricing to incentivize management, no consideration has been or will be received by the Company for the granting or extension, if any, of the options, warrants or rights. |
· | There are no associates of any such directors, executive officers, or nominees to that have or are to receive options or any other person who received or is to receive 5 percent of such options, warrants or rights |
· | All of the stock options in the above noted table are convertible into common stock. |
· | The exercise price of all of the stock options noted above was based on the closing price the date before the granting of the stock option. There are no cashless or and other provisions aside from the right for the holder of the stock option to exercise. |
· | Messrs McKinnon, Schler, Scherba, Nykoliation and Liabotis provide services to the Company on an ongoing basis. |
Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percentage of Outstanding Common Shares Beneficially Owned(1) |
Consolidated Thompson Iron Mines Limited 1155 University Street, Suite 508 Montréal, Québec, Canada | 13,333,334 | 5.72% |
Dundee Corporation 1 Adelaide Street East, Suite 2800 Toronto, Ontario, Canada | 11,896,450 | 5.10% |
J.A. Kirk McKinnon, Chairman, CEO & Director 46 Ferndale Crescent Brampton, Ontario, Canada (2) (13) | 10,457,000 | 4.49% |
Richard E. Schler, Executive Vice President & Director 80 Greybeaver Trail Toronto, Ontario, Canada (3) (13) | 9,100,000 | 3.90% |
John Sanderson, Director 1721 – 27th Street West Vancouver, BC, Canada (4) (10) (13) | 825,000 | 0.35% |
Quentin Yarie, Director 196 McAllister Road North York, Ontario (5) (10) (13) | 1,425,000 | 0.61% |
V. Peter Harder, Director 5538 Pattapiece Crescent Manotick, Ontario, Canada (6) (10) (13) | 1,000,000 | 0.44% |
Craig Scherba, President & Director 1480 Willowdown Road, Oakville, Ontario, Canada (7) (13) | 1,400,000 | 0.43% |
Johann de Bruin, Director 1283 Dunwoodie Ave Pretoria, South Africa (8) (13) | 200,000 | 0.09% |
Albert A. Thiess, Jr., Director 8 Lawson’s Pond Court Bluffton, SC, USA (9) (13) | 280,000 | 0.12% |
Peter D. Liabotis, SVP and CFO 2261 Rockingham Drive, Oakville, Ontario, Canada (11) (13) | 1,481,000 | 0.64% |
Brent Nykoliation, SVP 161 Fallingbrook Road Toronto, Ontario, Canada (12) (13) | 2,350,000 | 1.01% |
All directors and executive officers as a group (10 persons) (12) | 28,518,000 | 12.08% |
a) | The Company incurred a total of $74,550 (June 30, 2011: $59,410) in office administration and rent expense from a company related by common management. |
b) | 9,600,000 (June 30, 2011: 1,100,000) stock options were issued to related parties during the period with exercise prices between $0.20 and $0.30. These stock options valued at $2,181,213 (June 30, 2011: $237,710) were issued to directors and officers of the Company. |
c) | The Company incurred $717,886 (June 30, 2011: $821,338) in administrative, management and consulting fees to directors and officers. |
d) | The Company incurred $1,137,725 (June 30, 2011: $Nil) in charges from a mining and engineering firm in which one of the Company's directors serves as a senior officer and a director for. |
a) | Related party balances of $Nil (June 30, 2011: $168,000) were included in accounts payable and accrued liabilities and $34,319 (June 30, 2011: $37,000) in prepaid expenses. |
b) | The Company has recorded a short term loan to a related party company, Red Pine Exploration Inc, listed on the TSX-V who has common directors totaling $258,416 (June 30, 2011: $Nil). This loan is interest bearing at a rate of 3% and is expected to be paid back in full within the next 12 months. $300,000 was originally loaned during January 2012 and represents the highest outstanding balance. $45,000 has been paid back on the loan since inception up to June 30, 2012, all of it principal. As of October 31, 2012 $220,716 remains outstanding on the balance. $85,000 has been paid since the loan’s inception, all of it principal. Accrued interest due totals $5,716 as at October 31, 2012. |
· | a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; |
· | a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper; and |
· | to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense. |
3.1 | Articles of Incorporation of Uranium Star Corp. (now known as Energizer Resources Inc.) (Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K as filed with the SEC on May 20, 2008) |
3.2 | Articles of Amendment to Articles of Incorporation of Uranium Star Corp. changing its name to Energizer Resources Inc. (Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed with the SEC on July 16, 2010) |
3.3 | Amended and Restated By-Laws of Energizer Resources Inc. (Incorporated by reference to Exhibit 3.2 to the registrant’s current report on Form 8-K as filed with the SEC on July 16, 2010) |
4.1 | Amended and Restated 2006 Stock Option Plan of Energizer Resources, Inc. (as of February 2009) (Incorporated by reference to Exhibit 4.1 to the registrant's Form S-8 registration statement as filed with the SEC on February 19, 2010) |
4.2 | Form of broker Subscription Agreement for Units (Canadian and Offshore Subscribers) (Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010) |
4.3 | Form of standard Subscription Agreement for Units (Canadian and Offshore Subscribers) (Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010) |
4.4 | Form of Warrant to Purchase common shares (Incorporated by reference to Exhibit 4.3 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010) |
4.5 | Form of Class A broker warrant to Purchase common shares (Incorporated by reference to Exhibit 4.4 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010) |
4.6 | Form of Class B broker warrant to Purchase common shares (Incorporated by reference to Exhibit 4.5 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010) |
4.7 | Agency Agreement, dated March 15, 2010, between Energizer Resources, Clarus Securities Inc. and Byron Securities Limited (Incorporated by reference to Exhibit 4.6 to the registrant’s current report on Form 8-K filed with the SEC on March 19, 2010) |
4.8 | Form of Warrant relating to private placement completed during November 2012. |
4.9 | Agency Agreement relating to private placement completed during November 2012. |
10.1 | Property Agreement effective May 14, 2004 between Thornton J. Donaldson and Thornton J. Donaldson, Trustee for Yukon Resources Corp. (Incorporated by reference to Exhibit 10.1 to the registrant's Form SB-2 registration statement as filed with the SEC on September 14, 2004) |
10.2 | Letter of Intent dated March 10, 2006 with Apofas Ltd. (Incorporated by reference to Exhibit 99.1 to the registrant's current report on Form 8-K as filed with the SEC on March 13, 2006) |
10.3 | Letter agreement effective May 12, 2006 between Yukon Resources Corp. and Virginia Mines Inc. (Incorporated by reference to Exhibit 99.1 to the registrant's current report on Form 8-K filed as with the SEC on May 9, 2006) |
10.4 | Joint Venture Agreement dated August 22, 2007 between Uranium Star Corp. & Madagascar Minerals and Resources Sarl (Incorporated by reference to Exhibit 10.1 to the registrant's current report on Form 8-K as filed with SEC on September 11, 2007) |
21 | Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21.1 to the registrant’s annual report on Form 10-K as filed on September 21, 2009) |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (filed herein) |
31.2 | Certification of Principal Financial & Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (filed herein) |
32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. (filed herein) |
32.2 | Certification of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. (filed herein) |
99.1 | Canadian National Instrument 43-101 Technical Report Update for Green Giant Property, Fotadrevo, Province of Toliara, Madagascar (Incorporated by reference to Exhibit 99.1 to the registrant's report on Form 8-K filed with SEC on July 9, 2010) |
ENERGIZER RESOURCES INC. | ||
By: | /s/ J A Kirk McKinnon | |
Name: J A Kirk McKinnon | ||
Title: President, Chief Executive Officer and Director | ||
Dated: February 28, 2013 | ||
By: | /s/ Peter D. Liabotis | |
Name: Peter D. Liabotis, CA | ||
Title: Chief Financial Officer (Principal Accounting Officer) | ||
Dated: February 28, 2013 |
Signatures | Title | Date | ||
/S/ J A Kirk McKinnon | Chairman, Chief Executive Officer, Director | February 28, 2013 | ||
J A Kirk McKinnon | ||||
/S/ Richard E. Schler | Executive Vice-President, Director | February 28, 2013 | ||
Richard Schler |
/S/ Craig Scherba | President, Director | February 28, 2013 | ||
Craig Scherba | ||||
/S/ John Sanderson | Vice-Chairman, Director | February 28, 2013 | ||
John Sanderson | ||||
/S/ Quentin Yarie | Director | February 28, 2013 | ||
Quentin Yarie | ||||
/S/ V. Peter Harder | Director | February 28, 2013 | ||
V. Peter Harder | ||||
/S/ Johann de Bruin | Director | February 28, 2013 | ||
Johann de Bruin | ||||
/S/ Albert A. Thiess, Jr. | Director | February 28, 2013 | ||
Albert A. Thiess, Jr. | ||||
/S/ Peter D. Liabotis | Chief Financial Officer (Principal Accounting Officer) | February 28, 2013 | ||
Peter D. Liabotis |
Signed: “MSCM LLP” | |
Chartered Accountants | |
Licensed Public Accountants |
June 30, 2012 | June 30, 2011 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 3,479,484 | $ | 4,536,275 | ||||
Dual currency deposits (note 5) | - | 8,031,076 | ||||||
Amounts receivable and prepaid expenses (note 6) | 437,876 | 135,392 | ||||||
Loan to related party (note 6) | 258,416 | - | ||||||
Marketable securities (note 7) | 20,542 | 40,403 | ||||||
Tax credits recoverable | - | 12,073 | ||||||
Total current assets | 4,196,318 | 12,755,219 | ||||||
Equipment (note 4) | 50,624 | 6,667 | ||||||
Total assets | $ | 4,246,942 | $ | 12,761,886 | ||||
Liabilities and Stockholders' Equity | ||||||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities (note 6) | $ | 1,646,686 | $ | 689,857 | ||||
Derivative liability | - | 12,619 | ||||||
Total liabilities | 1,646,686 | 702,476 | ||||||
Stockholders' Equity | ||||||||
Common stock, 350,000,000 shares authorized, $0.001 par value, | ||||||||
156,747,178 issued and outstanding (June 30, 2011 - | ||||||||
146,197,178) (note 9) | 156,747 | 146,197 | ||||||
Additional paid-in capital | 69,724,488 | 63,998,735 | ||||||
Donated capital | 20,750 | 20,750 | ||||||
Accumulated comprehensive loss | (52,336 | ) | (32,432 | ) | ||||
Accumulated deficit during exploration stage | (67,249,393 | ) | (52,073,840 | ) | ||||
Total stockholders' equity | 2,600,256 | 12,059,410 | ||||||
Total liabilities and stockholders' equity | $ | 4,246,942 | $ | 12,761,886 |
March 1, 2004 | ||||||||||||
(date of inception) to | For the year ended June 30, | |||||||||||
June 30, 2012 | 2012 | 2011 | ||||||||||
Revenues | $ | - | $ | - | $ | - | ||||||
Mineral exploration expense (notes 6 and 8) | 23,207,701 | 4,539,745 | 2,172,223 | |||||||||
Stock-based compensation (notes 6, 9 and 10) | 22,704,866 | 3,667,303 | 237,710 | |||||||||
Impairment loss on mineral properties (note 8) | 11,358,637 | 3,770,129 | - | |||||||||
General and administrative (note 6) | 6,526,453 | 1,487,669 | 1,543,064 | |||||||||
Professional and consulting fees (note 6) | 5,499,854 | 1,801,659 | 1,248,696 | |||||||||
Depreciation (note 4) | 65,033 | 9,781 | 8,889 | |||||||||
Donated services and expenses | 18,750 | - | - | |||||||||
Foreign currency translation (gain)/loss | (907,495 | ) | 64,200 | (226,268 | ) | |||||||
Total expenses | 68,473,799 | 15,340,486 | 4,984,314 | |||||||||
Net loss from operations | (68,473,799 | ) | (15,340,486 | ) | (4,984,314 | ) | ||||||
Other Income | ||||||||||||
Investment income | 920,553 | 164,933 | 110,759 | |||||||||
Other income | 303,853 | - | - | |||||||||
Loss before income tax recovery | (67,249,393 | ) | (15,175,553 | ) | (4,873,555 | ) | ||||||
Net Loss | (67,249,393 | ) | (15,175,553 | ) | (4,873,555 | ) | ||||||
Unrealized (loss)/gain from investments in | ||||||||||||
marketable securities | (58,180 | ) | (19,904 | ) | 11,844 | |||||||
Comprehensive loss | $ | (67,307,573 | ) | $ | (15,195,457 | ) | $ | (4,861,711 | ) | |||
Loss per share - basic and diluted (note 13) | $ | (0.10 | ) | $ | (0.04 | ) | ||||||
Weighted average shares outstanding - basic and diluted | 151,107,724 | 126,983,413 |
March 1, 2004 | ||||||||||||
(date of inception) to | Year Ended | Year Ended | ||||||||||
June 30, 2012 | June 30, 2012 | June 30, 2011 | ||||||||||
Operating Activities | ||||||||||||
Net loss | $ | (67,249,393 | ) | $ | (15,175,553 | ) | $ | (4,873,555 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation | 65,033 | 9,781 | 8,889 | |||||||||
Donated services and expenses | 20,750 | - | - | |||||||||
Non-cash proceeds received | (74,000 | ) | - | (18,456 | ) | |||||||
Dual currency deposits | 71,680 | 90,136 | - | |||||||||
Impairment loss on mineral properties | 11,358,637 | 3,770,129 | - | |||||||||
Stock-based compensation | 22,704,866 | 3,667,303 | 237,710 | |||||||||
Issuance of shares and warrants for services rendered | 168,100 | - | 168,100 | |||||||||
Change in operating assets and liabilities: | ||||||||||||
Amounts receivable and prepaid expenses | (437,876 | ) | (302,484 | ) | (66,396 | ) | ||||||
Accounts payable and accrued liabilities | 1,647,512 | 956,829 | 276,736 | |||||||||
Tax credits recoverable | (245,186 | ) | 12,073 | (12,627 | ) | |||||||
Non-cash portion of marketable securities | 337 | - | - | |||||||||
Net cash used in operating activities | (31,969,540 | ) | (6,971,786 | ) | (4,279,599 | ) | ||||||
Financing Activities | ||||||||||||
Proceeds from issuance of common stock, net | 38,099,105 | 635,000 | 13,178,708 | |||||||||
Exercise of warrants and stock options | 970,500 | 84,000 | 886,500 | |||||||||
Government grants received | 245,186 | - | 245,186 | |||||||||
Net cash provided by financing activities | 39,314,791 | 719,000 | 14,310,394 | |||||||||
Investing Activities | ||||||||||||
Mineral property acquisition costs | (3,419,973 | ) | (2,420,129 | ) | - | |||||||
Purchase of property and equipment | (115,656 | ) | (53,738 | ) | - | |||||||
Investment in dual currency deposits | (32,938,800 | ) | (24,938,800 | ) | (8,000,000 | ) | ||||||
Redemption of dual currency deposits | 32,867,078 | 32,867,078 | - | |||||||||
Loan to related party | (258,416 | ) | (258,416 | ) | - | |||||||
Net cash (used in) provided by investing activities | (3,865,767 | ) | 5,195,995 | (8,000,000 | ) | |||||||
Increase (decrease) in cash and cash equivalents | 3,479,484 | (1,056,791 | ) | 2,030,795 | ||||||||
Cash and cash equivalents - beginning of period | - | 4,536,275 | 2,505,480 | |||||||||
Cash and cash equivalents - end of period | $ | 3,479,484 | $ | 3,479,484 | $ | 4,536,275 | ||||||
Non-cash investing and financing activities: | ||||||||||||
Issuance of common stock for mineral properties | $ | 5,190,500 | $ | 1,350,000 | $ | - | ||||||
Issuance of common stock and warrants for services | $ | 5,811,125 | $ | - | $ | 90,000 | ||||||
Supplemental Disclosures: | ||||||||||||
Interest received | $ | 817,442 | $ | 61,822 | $ | 110,759 | ||||||
Income taxes paid | $ | - | $ | - | $ | - | ||||||
Taxes received | $ | - | $ | - | $ | - |
Deficit | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Additional | Accumulated | Common | During the | |||||||||||||||||||||||||||||
Paid-In | Comprehensive | Stock | Donated | Exploration | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Income (loss) | Subscribed | Capital | Stage | Total | |||||||||||||||||||||||||
# | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Balance - March 1, 2004 (Date of Incorporation) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Issuance of common shares for cash-at $0.01/share | 7,500,000 | 7,500 | 17,500 | - | - | - | - | 25,000 | ||||||||||||||||||||||||
Issuance of common shares for cash-at $0.05/share | 2,085,000 | 2,085 | 32,665 | - | - | - | - | 34,750 | ||||||||||||||||||||||||
Issuance of common stock for mineral property | 7,500,000 | 7,500 | (5,800 | ) | - | - | - | - | 1,700 | |||||||||||||||||||||||
Donated services and expenses | - | - | - | - | - | 5,000 | - | 5,000 | ||||||||||||||||||||||||
Net loss for period | - | - | - | - | - | - | (9,991 | ) | (9,991 | ) | ||||||||||||||||||||||
Balance - June 30, 2004 | 17,085,000 | 17,085 | 44,365 | - | - | 5,000 | (9,991 | ) | 56,459 | |||||||||||||||||||||||
Donated services and expenses | - | - | - | - | - | 9,000 | - | 9,000 | ||||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (38,500 | ) | (38,500 | ) | ||||||||||||||||||||||
Balance - June 30, 2005 | 17,085,000 | 17,085 | 44,365 | - | - | 14,000 | (48,491 | ) | 26,959 | |||||||||||||||||||||||
Issuance of common shares for cash-at $0.20/share | 2,265,000 | 2,265 | 448,235 | - | - | - | - | 450,500 | ||||||||||||||||||||||||
Issuance of shares to exercise stock options | 255,000 | 255 | 114,495 | - | - | - | - | 114,750 | ||||||||||||||||||||||||
Issuance of common shares for mineral properties: | ||||||||||||||||||||||||||||||||
-at $0.101/share | 300,000 | 300 | 30,000 | - | - | - | - | 30,300 | ||||||||||||||||||||||||
-at $0.85/share | 2,000,000 | 2,000 | 1,698,000 | - | - | - | - | 1,700,000 | ||||||||||||||||||||||||
Issuance of common shares for services-at $0.60/share | 5,550,000 | 5,550 | 3,324,450 | - | - | - | - | 3,330,000 | ||||||||||||||||||||||||
Common stock subscribed | - | - | - | - | 255,000 | - | - | 255,000 | ||||||||||||||||||||||||
Fair value of warrants issued | - | - | 1,925,117 | - | - | - | - | 1,925,117 | ||||||||||||||||||||||||
Stock-based compensation | - | - | 2,228,626 | - | - | - | - | 2,228,626 | ||||||||||||||||||||||||
Donated services and expenses | - | - | - | - | - | 6,750 | - | 6,750 | ||||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (9,595,317 | ) | (9,595,317 | ) | ||||||||||||||||||||||
Balance - June 30, 2006 | 27,455,000 | 27,455 | 9,813,288 | - | 255,000 | 20,750 | (9,643,808 | ) | 472,685 |
Deficit | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Additional | Accumulated | Common | During the | |||||||||||||||||||||||||||||
Paid-In | Comprehensive | Stock | Donated | Exploration | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Income (loss) | Subscribed | Capital | Stage | Total | |||||||||||||||||||||||||
# | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Continued from prior page: | ||||||||||||||||||||||||||||||||
Issuance of common shares for mineral properties | ||||||||||||||||||||||||||||||||
-at $0.82/share | 500,000 | 500 | 409,500 | - | - | - | - | 410,000 | ||||||||||||||||||||||||
Cancellation of common stock subscribed | - | - | - | - | (25,000 | ) | - | - | (25,000 | ) | ||||||||||||||||||||||
Stock-based compensation | - | - | 5,193,315 | - | - | - | - | 5,193,315 | ||||||||||||||||||||||||
Issuance of common shares for mineral properties | ||||||||||||||||||||||||||||||||
-at $0.69/share | 150,000 | 150 | 103,350 | - | - | - | - | 103,500 | ||||||||||||||||||||||||
Issuance of common shares for mineral properties | ||||||||||||||||||||||||||||||||
-at $1.22/share | 1,000,000 | 1,000 | 1,219,000 | - | - | - | - | 1,220,000 | ||||||||||||||||||||||||
Fair value of warrants issued | - | - | 2,941,961 | - | - | - | - | 2,941,961 | ||||||||||||||||||||||||
Issuance of common shares for services-at $0.41/share | 1,450,000 | 1,450 | 596,675 | - | - | - | - | 598,125 | ||||||||||||||||||||||||
Issuance of shares to exercise stock options | 343,119 | 343 | 507,157 | - | - | - | - | 507,500 | ||||||||||||||||||||||||
Private placement common shares subscribed | 460,000 | 460 | 229,540 | - | (230,000 | ) | - | - | - | |||||||||||||||||||||||
Issuance of common shares for cash-at $0.50/share | 34,600,000 | 34,600 | 17,265,400 | - | - | - | - | 17,300,000 | ||||||||||||||||||||||||
Commission | 891,850 | 891 | 807,824 | - | - | - | - | 808,715 | ||||||||||||||||||||||||
Cost of issue | - | - | (3,843,798 | ) | - | - | - | - | (3,843,798 | ) | ||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (14,390,122 | ) | (14,390,122 | ) | ||||||||||||||||||||||
Balance - June 30, 2007 | 66,849,969 | 66,849 | 35,243,212 | - | - | 20,750 | (24,033,930 | ) | 11,296,881 | |||||||||||||||||||||||
Issuance of shares to exercise of warrants | 561,388 | 561 | 207,152 | - | - | - | - | 207,713 | ||||||||||||||||||||||||
Issuance of common shares for mineral properties | ||||||||||||||||||||||||||||||||
-at $0.30/share | 1,250,000 | 1,250 | 373,750 | - | - | - | - | 375,000 | ||||||||||||||||||||||||
Fair value of warrants issued | - | - | 60,560 | - | - | - | - | 60,560 | ||||||||||||||||||||||||
Issuance of common shares for services-at $0.20/share | 2,975,000 | 2,975 | 592,025 | - | - | - | - | 595,000 | ||||||||||||||||||||||||
Stock-based compensation | - | - | 1,827,270 | - | - | - | - | 1,827,270 | ||||||||||||||||||||||||
Accumulated comprehensive loss | - | - | - | (22,952 | ) | - | - | - | (22,952 | ) | ||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (9,202,295 | ) | (9,202,295 | ) | ||||||||||||||||||||||
Balance - June 30, 2008 | 71,636,357 | 71,635 | 38,303,969 | (22,952 | ) | - | 20,750 | (33,236,225 | ) | 5,137,177 |
Deficit | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Additional | Accumulated | Common | During the | |||||||||||||||||||||||||||||
Paid-In | Comprehensive | Stock | Donated | Exploration | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Income (loss) | Subscribed | Capital | Stage | Total | |||||||||||||||||||||||||
# | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Continued from prior page: | ||||||||||||||||||||||||||||||||
Issuance of common shares for services-at $0.10/share | 2,500,000 | 2,500 | 247,500 | - | - | - | - | 250,000 | ||||||||||||||||||||||||
Issuance of common shares for services-at $0.08/share | 1,600,000 | 1,600 | 126,400 | - | - | - | - | 128,000 | ||||||||||||||||||||||||
Issuance of common shares for services-at $0.10/share | 6,800,000 | 6,800 | 673,200 | - | - | - | - | 680,000 | ||||||||||||||||||||||||
Commission | 408,000 | 408 | (408 | ) | - | - | - | - | - | |||||||||||||||||||||||
Stock-based compensation | 750,000 | 750 | 131,174 | - | - | - | - | 131,924 | ||||||||||||||||||||||||
Incremental value of stock options on repricing | - | - | 128,328 | - | - | - | - | 128,328 | ||||||||||||||||||||||||
Accumulated comprehensive loss | - | - | - | (26,134 | ) | - | - | - | (26,134 | ) | ||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (3,255,471 | ) | (3,255,471 | ) | ||||||||||||||||||||||
Balance - June 30, 2009 | 83,694,357 | 83,693 | 39,610,163 | (49,086 | ) | - | 20,750 | (36,491,696 | ) | 3,173,824 | ||||||||||||||||||||||
Issuance of common shares for services-at $0.17/share | 2,250,000 | 2,250 | 380,250 | - | - | - | - | 382,500 | ||||||||||||||||||||||||
Stock-based compensation | - | - | 2,813,517 | - | - | - | - | 2,813,517 | ||||||||||||||||||||||||
Issuance of common shares for services-at $0.68/share | 500,000 | 500 | 339,500 | - | - | - | - | 340,000 | ||||||||||||||||||||||||
Fair value of warrants issued | - | - | 113,125 | - | - | - | - | 113,125 | ||||||||||||||||||||||||
Cost of issue | - | - | (469,085 | ) | - | - | - | - | (469,085 | ) | ||||||||||||||||||||||
Private placement common share subscribed | 21,666,667 | 21,667 | 6,478,333 | - | - | - | - | 6,500,000 | ||||||||||||||||||||||||
Commission | 400,000 | 400 | (400 | ) | - | - | - | - | - | |||||||||||||||||||||||
Issuance of shares to exercise stock options | 2,000,000 | 2,000 | 298,000 | - | - | - | - | 300,000 | ||||||||||||||||||||||||
Accumulated comprehensive gain | - | - | - | 4,810 | - | - | - | 4,810 | ||||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (10,708,589 | ) | (10,708,589 | ) | ||||||||||||||||||||||
Balance - June 30, 2010 | 110,511,024 | 110,510 | 49,563,403 | (44,276 | ) | - | 20,750 | (47,200,285 | ) | 2,450,102 |
Deficit | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Additional | Accumulated | Common | During the | |||||||||||||||||||||||||||||
Paid-In | Comprehensive | Stock | Donated | Exploration | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Income (loss) | Subscribed | Capital | Stage | Total | |||||||||||||||||||||||||
# | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Continued from prior page: | ||||||||||||||||||||||||||||||||
Private placement common shares subscribed | 30,936,654 | 30,936 | 13,890,559 | - | - | - | - | 13,921,495 | ||||||||||||||||||||||||
Fair value of warrants issued | - | - | 78,100 | - | - | - | - | 78,100 | ||||||||||||||||||||||||
Cost of issue | - | - | (742,787 | ) | - | - | - | - | (742,787 | ) | ||||||||||||||||||||||
Issuance of common shares for services-at $0.45/share | 200,000 | 200 | 89,800 | - | - | - | - | 90,000 | ||||||||||||||||||||||||
Issuance of shares to exercise warrants | 4,549,500 | 4,551 | 881,950 | - | - | - | - | 886,501 | ||||||||||||||||||||||||
Stock-based compensation | - | - | 237,710 | - | - | - | - | 237,710 | ||||||||||||||||||||||||
Accumulated comprehensive gain | - | - | - | 11,844 | - | - | - | 11,844 | ||||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (4,873,555 | ) | (4,873,555 | ) | ||||||||||||||||||||||
Balance - June 30, 2011 | 146,197,178 | 146,197 | 63,998,735 | (32,432 | ) | - | 20,750 | (52,073,840 | ) | 12,059,410 | ||||||||||||||||||||||
Private placement common shares subscribed | 2,540,000 | 2,540 | 632,460 | - | - | - | - | 635,000 | ||||||||||||||||||||||||
Issuance of common stock for mineral property | 7,500,000 | 7,500 | 1,342,500 | - | - | - | - | 1,350,000 | ||||||||||||||||||||||||
Exercise of stock options | 510,000 | 510 | 83,490 | - | - | - | - | 84,000 | ||||||||||||||||||||||||
Stock-based compensation | - | - | 3,667,303 | - | - | - | - | 3,667,303 | ||||||||||||||||||||||||
Accumulated comprehensive gain | - | - | - | (19,904 | ) | - | - | - | (19,904 | ) | ||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (15,175,553 | ) | (15,175,553 | ) | ||||||||||||||||||||||
Balance - June 30, 2012 | 156,747,178 | 156,747 | 69,724,488 | (52,336 | ) | - | 20,750 | (67,249,393 | ) | 2,600,256 |
1. | Exploration Stage Company |
2. | Significant Accounting Policies |
2. | Significant Accounting Policies - continued |
2. | Significant Accounting Policies - continued |
2. | Significant Accounting Policies - continued |
3. | Recent Accounting Pronouncements Affecting The Company |
1. | "Comprehensive Income (Topic-220): Presentation of Comprehensive Income": ("ASU 2011-05") was issued during June 2011. FASB issued guidance regarding the presentation of Comprehensive Income within financial statements. The guidance was effective for interim and annual periods beginning after December 15, 2011. |
2. | "Comprehensive Income (Topic-202): Deferral of the Effective date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No 2011-05": ("ASU 2011-12") was issued during December 2011. FASB provides clarification and guidance relating to the effects of reclassifications of amounts out of accumulated other comprehensive income and into net income. The guidance is effective for annual periods beginning after December 15, 2011 and interim periods within those years. |
3. | "Intangibles - Goodwill and Other (Topic-350): Indefinite-Lived Intangible Assets for Impairment": ("ASU 2011-08") was issued during September 2011. FASB issued guidance on how to determine whether goodwill amounts on the balance sheet have been impaired. The guidance is effective for annual periods beginning after September 15, 2012 and interim periods within those years. |
4. | "Balance Sheet (Topic 201): Disclosures about Offsetting Assets and Liabilities": ("ASU 2011-11") was issued during December 2011. FASB issued guidance on how to determine whether it is appropriate to offset or net certain assets and liabilities on the balance sheet and the additional disclosure that this entails. The guidance is effective annual periods beginning on or after January 1, 2013. |
4. | Equipment |
June 30, 2012 | June 30, 2011 | |||||||||||||||
Accumulated | Net Book | Net Book | ||||||||||||||
Cost | Depreciation | Value | Value | |||||||||||||
Exploration equipment | $ | 53,738 | $ | 3,114 | $ | 50,624 | $ | 6,667 |
5. | Dual Currency Deposits |
6. | Related Party Transactions and Balances |
a) | The Company incurred a total of $74,550 (June 30, 2011: $59,410) in office administration and rent expense from a company related by common management. |
b) | 9,600,000 (June 30, 2011: 1,100,000) stock options were issued to related parties during the period with exercise prices between $0.20 and $0.30. These stock options valued at $2,181,213 (June 30, 2011: $237,710) were issued to directors and officers of the Company. |
c) | The Company incurred $717,886 (June 30, 2011: $821,338) in administrative, management and consulting fees to directors and officers. |
d) | The Company incurred $1,137,725 (June 30, 2011: $Nil) in charges from a mining and engineering firm in which one of the Company's directors serves as a senior officer and a director for. |
a) | Related party balances of $Nil (June 30, 2011: $168,000) were included in accounts payable and accrued liabilities and $34,319 (June 30, 2011: $37,000) in prepaid expenses. |
b) | The Company has recorded a short-term loan to a related party totaling $258,416 (June 30, 2011: $Nil). This loan is interest bearing and is expected to be paid back in full within the next 12 months. |
7. | Marketable Securities |
8. | Mineral Properties |
9. | Common Stock |
a) | On July 2, 2010, the Company issued 500,000 common share purchase warrants valued at $78,100 to a company who assisted the Company with listing on the TSX Venture Exchange. The share purchase warrants were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.54%; expected volatility - 172%; dividend yield - NIL; and expected life - 4 years. |
b) | On October 21, 2010, the Company issued 1,100,000 stock options to a director of the Company valued at $237,710. The stock options, which vested immediately, were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.54%; expected volatility - 172%; dividend yield - NIL; and expected life - 4 years. |
c) | On December 17, 2010, the Company issued 200,000 shares of common stock valued at $90,000 pursuant to a contract with a party to provide advisory services in China. |
9. | Common Stock - continued |
d) | During January and February 2011, the Company closed a private placement of 30,936,654 units for gross proceeds of $13,921,495. Each unit consisted of one common share and one half of one common share purchase warrant. Each of the 15,468,327 warrants issued can be used to purchase one common share at an exercise price of $0.75 for two years from the date of issue. In connection with the private placement, the Company paid $704,115, TSX-V fees of $38,411 and 1,564,700 compensation warrants. The compensation warrant entitles the holder to acquire one unit at $0.45 per unit and expire on February 25, 2013. |
e) | During the year ended June 30, 2011, the Company issued 4,549,500 shares of common stock for consideration of $886,500. The shares were issued pursuant to the exercise of several share purchase warrants. |
f) | On July 1, 2011, the Company issued 5,175,000 stock options to directors, officers and consultants of the Company valued at $1,364,648. The stock options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.95%; expected volatility - 137%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date. |
g) | On October 24, 2011, the Company issued 1,850,000 stock options to directors, officers and consultants of the Company valued at $321,530. The stock options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.60%; expected volatility - 133%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date. |
h) | On December 16, 2011, the Company issued 2,365,000 stock options to directors, officers and consultants of the Company valued at $431,613. The stock options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.60%; expected volatility - 133%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date. |
i) | On December 16, 2011, the Company issued 7,500,000 shares of common stock at $0.18 per share valued at $1,350,000 as consideration for the Joint Venture Agreement with Malagasy Minerals Ltd. |
j) | On March 4, 2012, the Company issued 460,000 shares of common stock for consideration of $69,000. The shares were issued pursuant to the exercise of stock options. |
k) | On March 7, 2012, the Company issued 6,275,000 stock options to directors, officers and consultants of the Company valued at $1,513,530. The stock options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.00%; expected volatility - 131%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date. |
l) | On March 25, 2012, the Company closed a private placement with DRA Minerals Inc, a process development and mine engineering company, raising $635,000 by issuing 2,540,000 common stock at $0.25 per share. |
m) | On April 9, 2012, the Company issued 50,000 shares of common stock for consideration of $15,000. The shares were issued pursuant to the exercise of stock options. |
n) | On May 23, 2012, the Company issued 180,000 stock options to directors, officers and consultants of the Company valued at $35,982. The stock options were valued using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.00%; expected volatility - 134%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date. |
10. | Stock Options |
Number | Weighted‑Average | |||||||
of Options | Exercise Price ($) | |||||||
Outstanding and exercisable, June 30, 2010 | 13,620,000 | 0.3 | ||||||
Granted | 1,100,000 | 0.25 | ||||||
Cancelled | (590,000 | ) | 0.57 | |||||
Outstanding and exercisable, June 30, 2011 | 14,130,000 | 0.29 | ||||||
Granted | 15,845,000 | 0.27 | ||||||
Exercised | (510,000 | ) | 0.16 | |||||
Expired | (2,475,000 | ) | 0.15 | |||||
Cancelled | (3,300,000 | ) | 0.31 | |||||
Outstanding and exercisable, June 30, 2012 | 23,690,000 | 0.29 |
Exercise | Number of | Expiry | ||
Price ($) | Stock Options | Date | ||
0.15 | 2,395,000 | July 11, 2012 | ||
0.35 | 750,000 | September 2, 2013 | ||
0.4 | 5,350,000 | May 11, 2014 | ||
0.3 | 4,525,000 | July 1, 2016 | ||
0.2 | 1,850,000 | October 24, 2016 | ||
0.21 | 2,365,000 | December 1, 2016 | ||
0.28 | 6,275,000 | March 7, 2017 | ||
0.23 | 180,000 | May 23, 2017 | ||
0.29 | 23,690,000 |
Energizer Resources Inc.
11. | Warrants |
Number | Exercise | |||||||
of Warrants | Price ($) | |||||||
Outstanding, June 30, 2010 | 31,889,667 | 0.41 | ||||||
Granted | 17,737,028 | 0.70 | ||||||
Exercised | (4,549,500 | ) | 0.19 | |||||
Expired | (511,500 | ) | 0.20 | |||||
Outstanding, June 30, 2011 | 44,565,695 | 0.55 | ||||||
Expired | (946,000 | ) | 0.37 | |||||
Outstanding, June 30, 2012 | 43,619,695 | 0.56 |
The following is a summary warrants outstanding as of June 30, 2012:
Exercise | Number of | Expiry | ||
Price ($) | Warrants | Date | ||
0.75 | 15,468,328 | January 28, 2013 - February 25, 2013 | ||
0.45 | 1,564,700 | February 25, 2013 | ||
0.50 | 870,000 | March 15, 2013 | ||
0.30 | 400,000 | March 15, 2013 | ||
0.15 | 3,650,000 | April 26, 2013 | ||
0.50 | 21,666,667 | May 5, 2013 | ||
43,619,695 |
June 30, 2012 | June 30, 2011 | |||||||
Net loss | $ | (15,175,553 | ) | $ | (4,873,555 | ) | ||
Rate | 27.30 | % | 29.30 | % | ||||
Expected income tax recovery | $ | (4,135,338 | ) | $ | (1,427,952 | ) | ||
Permanent differences | 3,118,465 | 615,830 | ||||||
Tax rate changes and other adjustments | 198,695 | 59,675 | ||||||
Share issue and financing costs | - | (217,637 | ) | |||||
Expiry of non-capital losses | 182,707 | 117,121 | ||||||
Increase in valuation allowance | 635,471 | 852,963 | ||||||
Income tax recovery reflected in the Statements of Operations | ||||||||
And Comprehensive Loss | $ | - | $ | - |
June 30, 2012 | June 30, 2011 | |||||||
Future Income Tax Assets | ||||||||
Non-capital losses - Canada | $ | 2,659,595 | $ | 1,952,256 | ||||
Non-capital losses - Madagascar | 518,505 | 483,447 | ||||||
Exploration expenditures | 582,498 | 606,997 | ||||||
Share issue and financing costs | 161,512 | 235,277 | ||||||
Marketable Securities | 6,194 | 3,706 | ||||||
Other deductible temporary differences | 2,096 | 13,246 | ||||||
3,930,400 | 3,294,929 | |||||||
Less: valuation allowance | (3,930,400 | ) | (3,294,929 | ) | ||||
Net future income tax assets | $ | - | $ | - |
12. | Income Taxes - continued |
2027 | $ | 1,070,736 | ||
2028 | 1,038,253 | |||
2029 | 1,049,995 | |||
2030 | 1,776,341 | |||
2031 | 2,503,112 | |||
2032 | 3,199,944 | |||
$ | 10,638,381 |
13. | Loss Per Share |
14. | Subsequent Event(s) |
EXHIBIT 31.1
Dated: March 4, 2013 | /s/ J A Kirk McKinnon | ||
J A Kirk McKinnon, Chief Executive Officer |
Dated: March 4, 2013 | /s/ Peter D. Liabotis | ||
Peter D. Liabotis, Chief Financial Officer (Principal Accounting Officer) |
82
Dated: March 4, 2013 | /s/ J A Kirk McKinnon | ||
J A Kirk McKinnon, Chief Executive Officer |
Dated: March 4, 2013 | /s/ Peter D. Liabotis | ||
Peter D. Liabotis, Chief Financial Officer (Principal Accounting Officer) |