Exhibit 99.4
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended March 31, 2022 and 2021
(Expressed in US Dollars)
|
| New Pacific Metals Corp. |
| Unaudited Condensed Consolidated Interim Statements of Financial Position |
| (Expressed in US dollars) |
| | | | | | | |
| | Notes | | March 31, 2022 | | | June 30, 2021 | |
| ASSETS | | | | | | | |
| Current Assets | | | | | | | |
Cash | | $ | 35,791,911 | | $ | 46,441,482 | |
Short-term investments | 3 | | 203,886 | | | 143,914 | |
Receivables | | | 262,599 | | | 343,608 | |
Deposits and prepayments | | | 816,622 | | | 523,141 | |
| | | | 37,075,018 | | | 47,452,145 | |
| Non-current Assets | | | | | | | |
Other tax receivable | 4 | | 3,075,400 | | | 2,216,392 | |
Equity investments | 5 | | 558,259 | | | 496,526 | |
Plant and equipment | 7 | | 1,400,459 | | | 1,118,639 | |
Mineral property interests | 8 | | 83,137,004 | | | 75,535,422 | |
| TOTAL ASSETS | | $ | 125,246,140 | | $ | 126,819,124 | |
| LIABILITIES AND EQUITY | | | | | | | |
| Current Liabilities | | | | | | | |
Accounts payable and accrued liabilities | | $ | 2,303,872 | | $ | 1,044,189 | |
Due to a related party | 9 | | 49,383 | | | 50,378 | |
| | | | 2,353,255 | | | 1,094,567 | |
| Total Liabilities | | | 2,353,255 | | | 1,094,567 | |
| Equity | | | | | | | |
Share capital | 10 | | 152,819,627 | | | 149,629,543 | |
Share-based payment reserve | | | 15,175,096 | | | 16,564,197 | |
Accumulated other comprehensive income | | | 13,112,074 | | | 13,641,379 | |
Deficit | | | (58,190,031 | ) | | (54,106,972 | ) |
| Total equity attributable to the equity holders of the Company | | 122,916,766 | | | 125,728,147 | |
Non-controlling interests | 11 | | (23,881 | ) | | (3,590 | ) |
| Total Equity | | | 122,892,885 | | | 125,724,557 | |
| TOTAL LIABILITIES AND EQUITY | | $ | 125,246,140 | | $ | 126,819,124 | |
Approved on behalf of the Board:
(Signed) David Kong
Director
(Signed) Rui Feng
Director
See accompanying notes to the unaudited condensed consolidated interim financial statements
Page | 1
|
| New Pacific Metals Corp. |
| Unaudited Condensed Consolidated Interim Statements of Loss |
| (Expressed in US dollars) |
| | | | | | | | | | | | | |
| | | | Three Months Ended March 31, | | | Nine Months Ended March 31, | |
| | Notes | | 2022 | | | 2021 | | | 2022 | | | 2021 | |
| Operating expense | | | | | | | | | | | | | |
Project evaluation and corporate development | | $ | (240,620 | ) | $ | (302,669 | ) | $ | (490,150 | ) | $ | (668,612 | ) |
Depreciation | | | (41,041 | ) | | (11,038 | ) | | (122,488 | ) | | (32,716 | ) |
Filing and listing | | | (35,462 | ) | | (74,580 | ) | | (205,575 | ) | | (271,572 | ) |
Investor relations | | | (113,598 | ) | | (95,421 | ) | | (349,597 | ) | | (257,705 | ) |
Professional fees | | | (77,974 | ) | | (56,651 | ) | | (377,264 | ) | | (395,451 | ) |
Salaries and benefits | | | (570,857 | ) | | (518,715 | ) | | (1,428,409 | ) | | (1,174,186 | ) |
Office and administration | | | (435,689 | ) | | (155,866 | ) | | (1,032,940 | ) | | (494,415 | ) |
Share-based compensation | 10(b) | | (9,133 | ) | | (389,379 | ) | | (479,272 | ) | | (1,083,373 | ) |
| | | | (1,524,374 | ) | | (1,604,319 | ) | | (4,485,695 | ) | | (4,378,030 | ) |
| Other income (expense) | | | | | | | | | | | | | |
Income from investments | 6 | $ | 124,860 | | $ | 71,747 | | $ | 208,412 | | $ | 606,404 | |
Loss on disposal of plant and equipment | 7 | | - | | | - | | | - | | | (1,861 | ) |
Foreign exchange (loss) gain | | | (36,439 | ) | | (159,261 | ) | | 164,405 | | | (826,217 | ) |
Other expense | | | - | | | - | | | - | | | (371 | ) |
| | | | 88,421 | | | (87,514 | ) | | 372,817 | | | (222,045 | ) |
| Net loss | | $ | (1,435,953 | ) | $ | (1,691,833 | ) | $ | (4,112,878 | ) | $ | (4,600,075 | ) |
| | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | |
Equity holders of the Company | | $ | (1,408,892 | ) | $ | (1,689,401 | ) | $ | (4,083,059 | ) | $ | (4,594,068 | ) |
Non-controlling interests | 11 | | (27,061 | ) | | (2,432 | ) | | (29,819 | ) | | (6,007 | ) |
| Net loss | | $ | (1,435,953 | ) | $ | (1,691,833 | ) | $ | (4,112,878 | ) | $ | (4,600,075 | ) |
| | | | | | | | | | | | | | |
| Loss per share attributable to the equity holders of the Company | | | | | | | | | | | | | |
| Loss per share - basic and diluted | | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) |
| Weighted average number of common shares - basic and diluted | | | 157,594,038 | | | 153,054,120 | | | 157,426,445 | | | 153,036,665 | |
See accompanying notes to the unaudited condensed consolidated interim financial statements
Page | 2
|
| New Pacific Metals Corp. |
| Unaudited Condensed Consolidated Interim Statements of Comprehensive (Loss) |
| Income |
| (Expressed in US dollars) |
| | | | | | | | | | | | | |
| | | | Three Months Ended March 31, | | | Nine Months Ended March 31, | |
| | Notes | | 2022 | | | 2021 | | | 2022 | | | 2021 | |
| Net loss | | $ | (1,435,953 | ) | $ | (1,691,833 | ) | $ | (4,112,878 | ) | $ | (4,600,075 | ) |
| Other comprehensive income (loss), net of taxes: | | | | | | | | | | | | | |
Items that may subsequently be reclassified to net income or loss: | | | | | | | | | | | | | |
Currency translation adjustment, net of tax of $nil | | | 637,970 | | | 636,711 | | | (519,777 | ) | | 5,104,914 | |
| Other comprehensive income (loss), net of taxes | | $ | 637,970 | | $ | 636,711 | | $ | (519,777 | ) | $ | 5,104,914 | |
| Attributable to: | | | | | | | | | | | | | |
Equity holders of the Company | | $ | 636,990 | | $ | 651,279 | | $ | (529,305 | ) | $ | 5,107,829 | |
Non-controlling interests | 11 | | 980 | | | (14,568 | ) | | 9,528 | | | (2,915 | ) |
| Other comprehensive income (loss), net of taxes | | $ | 637,970 | | $ | 636,711 | | $ | (519,777 | ) | $ | 5,104,914 | |
| Total comprehensive (loss) income, net of taxes | | $ | (797,983 | ) | $ | (1,055,122 | ) | $ | (4,632,655 | ) | $ | 504,839 | |
| | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | |
Equity holders of the Company | | $ | (771,902 | ) | $ | (1,038,122 | ) | $ | (4,612,364 | ) | $ | 513,761 | |
Non-controlling interests | | | (26,081 | ) | | (17,000 | ) | | (20,291 | ) | | (8,922 | ) |
| Total comprehensive (loss) income, net of taxes | | $ | (797,983 | ) | $ | (1,055,122 | ) | $ | (4,632,655 | ) | $ | 504,839 | |
See accompanying notes to the unaudited condensed consolidated interim financial statements
Page | 3
|
| New Pacific Metals Corp. |
| Unaudited Condensed Consolidated Interim Statements of Cash Flows |
| (Expressed in US dollars) |
| | | | | | | | | | | | | |
| | | | Three Months Ended March 31, | | | Nine Months Ended March 31, | |
| | Notes | | 2022 | | | 2021 | | | 2022 | | | 2021 | |
| Operating activities | | | | | | | | | | | | | |
Net loss | | $ | (1,435,953 | ) | $ | (1,691,833 | ) | $ | (4,112,878 | ) | $ | (4,600,075 | ) |
Add (deduct) items not affecting cash: | | | | | | | | | | | | | |
Income from investments | 6 | | (124,860 | ) | | (71,747 | ) | | (208,412 | ) | | (606,404 | ) |
Depreciation | | | 41,041 | | | 11,038 | | | 122,488 | | | 32,716 | |
Loss on disposal of plant and equipment | 7 | | - | | | - | | | - | | | 1,861 | |
Share-based compensation | 10(b) | | 10,173 | | | 447,944 | | | 490,321 | | | 1,176,308 | |
Unrealized foreign exchange loss (gain) | | | 36,439 | | | 159,261 | | | (164,405 | ) | | 826,217 | |
Changes in non-cash operating working capital | 15 | | 430,457 | | | (573,545 | ) | | 1,047,383 | | | (808,526 | ) |
Dividends and interests received | | | 30,500 | | | 64,144 | | | 83,311 | | | 227,861 | |
| Net cash used in operating activities | | | (1,012,203 | ) | | (1,654,738 | ) | | (2,742,192 | ) | | (3,750,042 | ) |
| Investing activities | | | | | | | | | | | | | |
Mineral property interest | | | | | | | | | | | | | |
Capital expenditures | | | (2,318,302 | ) | | (1,105,704 | ) | | (7,625,886 | ) | | (3,288,469 | ) |
Plant and equipment | | | | | | | | | | | | | |
Additions | | | (238,304 | ) | | (10,339 | ) | | (407,088 | ) | | (43,108 | ) |
Proceeds on disposals | | | 1,808 | | | - | | | 1,808 | | | 1,357 | |
Short-term investments | | | | | | | | | | | | | |
Proceeds on disposals | 3 | | - | | | 4,753,321 | | | - | | | 15,378,700 | |
Equity investments | | | | | | | | | | | | | |
Proceeds on disposals | 6 | | - | | | 55,609 | | | - | | | 4,284,820 | |
Consideration received for transfer of TLG | | | - | | | - | | | - | | | 2,201,350 | |
Changes in other tax receivable | | | (265,734 | ) | | (21,651 | ) | | (859,007 | ) | | (86,929 | ) |
| Net cash (used in) provided by investing activities | | | (2,820,532 | ) | | 3,671,236 | | | (8,890,173 | ) | | 18,447,721 | |
| Financing activities | | | | | | | | | | | | | |
Proceeds from issuance of common shares | | | 377,310 | | | 240,626 | | | 1,296,208 | | | 780,164 | |
| Net cash provided by financing activities | | | 377,310 | | | 240,626 | | | 1,296,208 | | | 780,164 | |
| Effect of exchange rate changes on cash | | | 472,235 | | | 495,723 | | | (313,414 | ) | | 2,444,188 | |
| (Decrease) increase in cash | | | (2,983,190 | ) | | 2,752,847 | | | (10,649,571 | ) | | 17,922,031 | |
| Cash, beginning of the period | | | 38,775,101 | | | 44,993,330 | | | 46,441,482 | | | 29,824,146 | |
| Cash, end of the period | | $ | 35,791,911 | | $ | 47,746,177 | | $ | 35,791,911 | | $ | 47,746,177 | |
See accompanying notes to the unaudited condensed consolidated interim financial statements
Page | 4
|
| New Pacific Metals Corp. |
| Unaudited Condensed Consolidated Interim Statements of Change in Equity |
| (Expressed in US dollars) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | Share capital | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | Total equity | | | | | | | |
| | | Number of | | | | Share-based | | | Accumulated other | | | | | | attributable to the | | | Non- | | | | |
| | | common | | | | payment | | | comprehensive | | | | | | equity holders of | | | controlling | | | | |
| | Notes | shares issued | | Amount | | reserve | | | income | | | Deficit | | | the Company | | | interests | | | Total equity | |
| Balance, July 1, 2020 | | 152,298,778 | $ | 145,904,310 | $ | 16,813,907 | | $ | 7,669,888 | | $ | (40,633,984 | ) | $ | 129,754,121 | | $ | (41,370 | ) | $ | 129,712,751 | |
| Options exercised | | 999,768 | | 1,168,170 | | (388,006 | ) | | - | | | - | | | 780,164 | | | - | | | 780,164 | |
| Restricted share units vested | | 246,900 | | 903,781 | | (903,781 | ) | | - | | | - | | | - | | | - | | | - | |
| Share-based compensation | | - | | - | | 1,772,968 | | | - | | | - | | | 1,772,968 | | | - | | | 1,772,968 | |
| Common shares issued to acquire mineral property interest | | 291,000 | | 350,479 | | (350,479 | ) | | - | | | - | | | - | | | - | | | - | |
| Spin-out distribution | | - | | - | | - | | | - | | | (6,906,548 | ) | | (6,906,548 | ) | | - | | | (6,906,548 | ) |
| Net loss | | - | | - | | - | | | - | | | (4,594,068 | ) | | (4,594,068 | ) | | (6,007 | ) | | (4,600,075 | ) |
| Currency translation adjustment | | - | | - | | - | | | 5,107,829 | | | - | | | 5,107,829 | | | (2,915 | ) | | 5,104,914 | |
| Balance, March 31, 2021 | | 153,836,446 | $ | 148,326,740 | $ | 16,944,609 | | $ | 12,777,717 | | $ | (52,134,600 | ) | $ | 125,914,466 | | $ | (50,292 | ) | $ | 125,864,174 | |
| Options exercised | | 397,167 | | 455,051 | | (159,058 | ) | | - | | | - | | | 295,993 | | | - | | | 295,993 | |
| Restricted share units vested | | 217,650 | | 847,752 | | (847,752 | ) | | | | | | | | - | | | - | | | - | |
| Share-based compensation | | - | | - | | 626,398 | | | - | | | - | | | 626,398 | | | - | | | 626,398 | |
| Net loss | | - | | - | | - | | | - | | | (1,972,372 | ) | | (1,972,372 | ) | | (1,927 | ) | | (1,974,299 | ) |
| Currency translation adjustment | | - | | - | | - | | | 863,662 | | | - | | | 863,662 | | | 48,629 | | | 912,291 | |
| Balance, June 30, 2021 | | 154,451,263 | $ | 149,629,543 | $ | 16,564,197 | | $ | 13,641,379 | | $ | (54,106,972 | ) | $ | 125,728,147 | | $ | (3,590 | ) | $ | 125,724,557 | |
| Options exercised | 10(b) | 1,368,831 | | 1,973,583 | | (646,004 | ) | | - | | | - | | | 1,327,579 | | | - | | | 1,327,579 | |
| Restricted share units vested | 10(b) | 292,233 | | 1,216,501 | | (1,216,501 | ) | | - | | | - | | | - | | | - | | | - | |
| Share-based compensation | 10(b) | - | | - | | 473,404 | | | - | | | - | | | 473,404 | | | - | | | 473,404 | |
| Net loss | | - | | - | | - | | | - | | | (4,083,059 | ) | | (4,083,059 | ) | | (29,819 | ) | | (4,112,878 | ) |
| Currency translation adjustment | | - | | - | | - | | | (529,305 | ) | | - | | | (529,305 | ) | | 9,528 | | | (519,777 | ) |
| Balance, March 31, 2022 | | 156,112,327 | $ | 152,819,627 | $ | 15,175,096 | | $ | 13,112,074 | | $ | (58,190,031 | ) | $ | 122,916,766 | | $ | (23,881 | ) | $ | 122,892,885 | |
See accompanying notes to the unaudited condensed consolidated interim financial statements
Page | 5
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
New Pacific Metals Corp. along with its subsidiaries (collectively, the “Company” or “New Pacific”) is a Canadian mining issuer engaged in exploring and developing mineral properties in Bolivia. The Company is in the stage of exploring and advancing the development of its mineral properties and has not yet determined if they contain economically recoverable Mineral Reserves. The underlying value and the recoverability of the amounts shown for mineral properties are entirely dependent upon the existence of recoverable Mineral Reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the mineral properties, and future profitable production or proceeds from the disposition of the mineral property interests.
The Company is publicly listed on the Toronto Stock Exchange (“TSX”) under the symbol “NUAG” and on the NYSE American stock exchange (“NYSE-A”) under the symbol “NEWP”. The head office, registered address and records office of the Company are located at 1066 Hastings Street, Suite 1750, Vancouver, British Columbia, Canada, V6E 3X1.
| |
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
(a) Statement of Compliance and Basis of Preparation
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting (“IAS 34”) of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended June 30, 2021. These unaudited condensed consolidated interim financial statements follow the same significant accounting policies set out in Note 2 to the audited consolidated financial statements for the year ended June 30, 2021.
These unaudited condensed consolidated interim financial statements have been prepared on a going concern basis.
The Company changed its presentation currency of the consolidated financial statements from Canadian dollar (“CAD”) to US dollar (“USD”) effective July 1, 2020. As a result, comparative figures for the three and nine months ended March 31, 2021 have been restated in USD.
The unaudited condensed consolidated interim financial statements of the Company as at and for the three and nine months ended March 31, 2022 was authorized for issue in accordance with a resolution of the Board of Directors (the “Board”) dated on May 10, 2022.
(b) Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its wholly or partially owned subsidiaries.
Subsidiaries are consolidated from the date on which the Company obtains control up to the date of the disposition of control. Control is achieved when the Company has power over the subsidiary, is exposed or has rights to variable returns from its involvement with the subsidiary, and has the ability to use its power to affect its returns. For non-wholly-owned subsidiaries over which the Company has control, the net assets attributable to outside equity shareholders are presented as “non-controlling interests” in the equity
Page | 6
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
section of the consolidated statements of financial position. Net income or loss for the period that is attributable to the non-controlling interests is calculated based on the ownership of the non-controlling interest shareholders in the subsidiary.
Balances, transactions, income and expenses between the Company and its subsidiaries are eliminated on consolidation.
Details of the Company’s significant subsidiaries which are consolidated are as follows:
| | | | | |
| | | | Proportion of ownership interest held | |
| | | Country of | March 31, | June 30, | Mineral |
| Name of subsidiaries | Principal activity | incorporation | 2022 | 2021 | properties |
| New Pacific Offshore Inc. | Holding company | BVI (i) | 100% | 100% | |
| SKN Nickel & Platinum Ltd. | Holding company | BVI | 100% | 100% | |
| Glory Metals Investment Corp. Limited | Holding company | Hong Kong | 100% | 100% | |
| New Pacific Investment Corp. Limited | Holding company | Hong Kong | 100% | 100% | |
| New Pacific Andes Corp. Limited | Holding company | Hong Kong | 100% | 100% | |
| Fortress Mining Inc. | Holding company | BVI | 100% | 100% | |
| Minera Alcira S.A. | Mining company | Bolivia | 100% | 100% | Silver Sand |
| NPM Minerales S.A. | Mining company | Bolivia | 100% | 100% | |
| Colquehuasi S.R.L. | Mining company | Bolivia | 100% | 100% | Silverstrike |
| Granville S.R.L. | Mining company | Bolivia | 100% | 100% | Carangas |
| Qinghai Found Mining Co., Ltd. | Mining company | China | 82% | 82% | RZY |
| (i) British Virgin Islands (“BVI”) | | | | | |
Short-term investments consist of the following:
| | | | | |
| | | March 31, 2022 | | June 30, 2021 | |
| Bonds | $ | 203,886 | $ | 143,914 | |
The Company acquired bonds issued by other companies from various industries through the open market. These bonds were held to receive coupon interest payments and to realize potential gains. The bonds may also be disposed on demand through the open market should the Company require funds for operational or investment needs. The Company accounts for the bonds at FVTPL at each reporting date.
The continuity of bonds is summarized as follow:
| | | |
| | | Amount | |
| Balance, July 1, 2020 | $ | 462,829 | |
Loss on fair value change | | (318,915 | ) |
| Balance, June 30, 2021 | $ | 143,914 | |
Gain on fair value change | | 59,972 | |
| Balance, March 31, 2022 | $ | 203,886 | |
Other tax receivable is comprised of value-added tax (“VAT”) imposed by the Bolivian government. The Company had VAT inputs through its exploration costs and general expenses incurred in Bolivia. These VAT inputs are deductible against potential future VAT outputs that will be generated through mining production sales.
Page | 7
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
Equity investments represent equity interests of other publicly traded or privately-held companies that the Company has acquired on the open market or through private placements. These equity interests consist of common shares and warrants. Equity investments are classified as fair value through profit or loss (“FVTPL”) and are measured at fair value on initial recognition and subsequent measurement. The fair value of warrants was determined using the Black-Scholes pricing model as at the acquisition date as well as at each period end.
The equity investments are summarized as follows:
| | | | | | |
| | | March 31, 2022 | | | June 30, 2021 | |
| Common shares | | | | | | |
Public companies | $ | 558,259 | | $ | 461,635 | |
| Warrants | | | | | | |
Public companies | | - | | | 34,891 | |
| | $ | 558,259 | | $ | 496,526 | |
The fair value of the warrants was estimated using the Black Scholes options pricing model with the following assumptions:
| | | |
| | March 31, 2022 | June 30, 2021 | |
| Risk free interest rate | - | 0.97% | |
| Expected volatility | - | 114% | |
| Expected life of warrants in years | - | 0.19 | |
The continuity of equity investments is summarized as follows:
| | | | | | |
| | | Fair value | | | Accumulated mark-to-market gain included in net income | |
| Balance, July 1, 2020 | $ | 4,111,822 | | $ | 3,515,548 | |
Proceeds on disposal | | (4,345,636 | ) | | - | |
Change in fair value | | 455,597 | | | 455,597 | |
Foreign exchange impact | | 274,743 | | | - | |
| Balance, June 30, 2021 | $ | 496,526 | | $ | 3,971,145 | |
Change in fair value | | 65,129 | | | 65,129 | |
Foreign exchange impact | | (3,396 | ) | | - | |
| Balance, March 31, 2022 | $ | 558,259 | | $ | 4,036,274 | |
Page | 8
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
| |
| 6. | INCOME FROM INVESTMENTS |
Income from investments consist of:
| | | | | | | | | | |
| | | Three Months Ended March 31, | | | Nine Months Ended March 31, | |
| | | 2022 | | 2021 | | | 2022 | | 2021 | |
| Fair value change on equity investments | $ | 60,323 | $ | 37,223 | | $ | 65,129 | $ | 718,876 | |
| Fair value change on bonds | | 34,037 | | (6,039 | ) | | 59,972 | | (338,931 | ) |
| Dividend income | | - | | 1,411 | | | - | | 108,749 | |
| Interest income | | 30,500 | | 39,152 | | | 83,311 | | 117,710 | |
| Income from investments | $ | 124,860 | $ | 71,747 | | $ | 208,412 | $ | 606,404 | |
| | | | | | | | | | | | | | | | | | |
| | | Land and | | | | | | | | | Office equipment | | | Computer | | | | |
| Cost | | building | | | Machinery | | | Motor vehicles | | | and furniture | | | software | | | Total | |
| Balance, July 1, 2020 | $ | 1,283,620 | | $ | 1,059,037 | | $ | 295,565 | | $ | 228,374 | | $ | 183,500 | | $ | 3,050,096 | |
| Additions | | - | | | 2,232 | | | - | | | 110,935 | | | - | | | 113,167 | |
| Disposals | | (653,620 | ) | | (859,519 | ) | | (54,146 | ) | | (37,327 | ) | | (31 | ) | | (1,604,643 | ) |
| Foreign currency translation impact | | - | | | 497 | | | 1,163 | | | 13,259 | | | 18,266 | | | 33,185 | |
| Balance, June 30, 2021 | $ | 630,000 | | $ | 202,247 | | $ | 242,582 | | $ | 315,241 | | $ | 201,735 | | $ | 1,591,805 | |
| Additions | | - | | | 162,617 | | | 219,692 | | | 24,779 | | | - | | | 407,088 | |
| Disposals | | - | | | - | | | - | | | (3,329 | ) | | - | | | (3,329 | ) |
| Reclassifed among asset groups | | - | | | 13,998 | | | 62,428 | | | (76,426 | ) | | - | | | - | |
| Foreign currency translation impact | | - | | | 108 | | | 252 | | | (578 | ) | | (1,641 | ) | | (1,859 | ) |
| Balance, March 31, 2022 | $ | 630,000 | | $ | 378,970 | | $ | 524,954 | | $ | 259,687 | | $ | 200,094 | | $ | 1,993,705 | |
| | | | | | | | | | | | | | | | | | |
| Accumulated depreciation and amortization | | | | | | | | | | | | | | | | | |
| Balance, July 1, 2020 | $ | (653,620 | ) | $ | (867,007 | ) | $ | (145,814 | ) | $ | (162,617 | ) | $ | (94,004 | ) | $ | (1,923,062 | ) |
| Depreciation | | - | | | (24,538 | ) | | (45,820 | ) | | (38,080 | ) | | (23,769 | ) | | (132,207 | ) |
| Disposals | | 653,620 | | | 819,698 | | | 54,556 | | | 73,376 | | | 31 | | | 1,601,281 | |
| Foreign currency translation impact | | - | | | (224 | ) | | (506 | ) | | (8,270 | ) | | (10,178 | ) | | (19,178 | ) |
| Balance, June 30, 2021 | $ | - | | $ | (72,071 | ) | $ | (137,584 | ) | $ | (135,591 | ) | $ | (127,920 | ) | $ | (473,166 | ) |
| Depreciation | | - | | | (32,065 | ) | | (43,529 | ) | | (28,784 | ) | | (18,111 | ) | | (122,488 | ) |
| Disposals | | - | | | - | | | - | | | 1,521 | | | - | | | 1,521 | |
| Foreign currency translation impact | | - | | | (49 | ) | | (111 | ) | | 193 | | | 855 | | | 889 | |
| Balance, March 31, 2022 | $ | - | | $ | (104,185 | ) | $ | (181,224 | ) | $ | (162,661 | ) | $ | (145,176 | ) | $ | (593,245 | ) |
| | | | | | | | | | | | | | | | | | | |
| Carrying amount | | | | | | | | | | | | | | | | | | |
| Balance, June 30, 2021 | $ | 630,000 | | $ | 130,176 | | $ | 104,998 | | $ | 179,650 | | $ | 73,815 | | $ | 1,118,639 | |
| Balance, March 31, 2022 | $ | 630,000 | | $ | 274,785 | | $ | 343,730 | | $ | 97,026 | | $ | 54,918 | | $ | 1,400,459 | |
During the three and nine months ended March 31, 2022, certain plant and equipment were disposed for proceeds of $1,808 and $1,808, respectively, resulting in loss of $nil and $nil, respectively. For the three and nine months ended March 31, 2021, certain plant and equipment were disposed for proceeds of $nil and $1,357 respectively, resulting in loss of $nil and $1,861, respectively.
Page | 9
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
| |
| 8. | MINERAL PROPERTY INTERESTS |
(a) Silver Sand Project
On July 20, 2017, the Company acquired the Silver Sand Project. The Project is located in the Colavi District of the Potosí Department, in Southwestern Bolivia, 35 kilometres (“km”) northeast of Potosí City, the department capital. The project covers an area of approximately 5.42 km2 at an elevation of 4,072 metres (“m”) above sea level.
For the three and nine months ended March 31, 2022, total expenditures of $1,019,294 and $4,441,254, respectively (three and nine months ended March 31, 2021 - $878,991 and $2,231,403, respectively) were capitalized under the project.
(b) Carangas Project
In April 2021, the Company signed an agreement with a private Bolivian company to acquire a 98% interest in the Carangas Project. The project is located approximately 180 km southwest of the city of Oruro and within 50 km from Bolivia’s border with Chile. The private Bolivian company is 100% owned by Bolivian nationals and holds title to the two exploration licenses that cover an area of 6.25 km2.
Under the agreement, the Company is required to cover 100% of the future expenditures on exploration, mining, development, and production activities for the project. The agreement has a term of 30 years and is renewable for an additional 15 years.
For the three and nine months ended March 31, 2022, total expenditures of $1,155,206 and $3,126,314, respectively (three and nine months ended March 31, 2022- $nil and $nil, respectively) were capitalized under the project.
(c) Silverstrike Project
In December 2019, the Company acquired a 98% interest in the Silverstrike Project from a private Bolivian corporation. The project covers an area of approximately 13 km2 and is located approximately 140 km southwest of the city of La Paz, Bolivia.
For the three and nine months ended March 31, 2022, total expenditures of $30,596 and $41,401, respectively (three and nine months ended March 31, 2021 - $427,947 and $1,400,683, respectively) were capitalized under the project.
(d) RZY Project
The RZY Project, located in Qinghai, China is an early stage silver-lead-zinc exploration project. The RZY Project is located approximately 237 km from the city of Yushu Tibetan Autonomous Prefecture. In 2016, the Qinghai Government issued a moratorium which suspended exploration for 26 mining projects in the region, including the RZY Project, and classified the region as a National Nature Reserve Area.
During Fiscal 2020, the Company’s subsidiary, Qinghai Found Mining Co., Ltd. (“Qinghai Found”), reached a compensation agreement with the Qinghai Government for the RZY Project. Pursuant to the agreement, Qinghai Found will surrender its title to the RZY Project to the Qinghai Government after completing certain
Page | 10
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
reclamation works for one-time cash compensation of $2.7 million (RMB ¥20 million). As of March 31, 2022, the process was under review and subject to approval by the Qinghai Government.
The continuity schedule of mineral property acquisition costs and deferred exploration and development costs are summarized as follows:
| | | | | | | | | | | | | |
| Cost | | Silver Sand | | | Silverstrike | | | Carangas | | RZY Project | | Total | |
| Balance, July 1, 2020 | $ | 65,300,994 | | $ | 1,821,190 | | $ | - | $ | 2,623,616 | $ | 69,745,800 | |
| Capitalized exploration expenditures | | | | | | | | | | | | | |
Reporting and assessment | | 482,355 | | | 4,119 | | | - | | - | | 486,474 | |
Drilling and assaying | | 78,201 | | | 169,102 | | | 21,952 | | - | | 269,255 | |
Project management and support | | 2,505,338 | | | 996,005 | | | 178,753 | | - | | 3,680,096 | |
Camp service | | 225,016 | | | 113,666 | | | 49,569 | | - | | 388,251 | |
Camp construction | | 53,199 | | | - | | | - | | - | | 53,199 | |
Permitting | | 12,995 | | | 11,015 | | | 153 | | - | | 24,163 | |
Foreign currency impact | | 587,402 | | | 48,207 | | | 4,823 | | 247,752 | | 888,184 | |
| Balance, June 30, 2021 | $ | 69,245,500 | | $ | 3,163,304 | | $ | 255,250 | $ | 2,871,368 | $ | 75,535,422 | |
| Capitalized exploration expenditures | | | | | | | | | | | | | |
Reporting and assessment | | 216,028 | | | 40 | | | - | | - | | 216,068 | |
Drilling and assaying | | 2,744,356 | | | - | | | 2,079,533 | | - | | 4,823,889 | |
Project management and support | | 1,182,926 | | | 11,773 | | | 713,760 | | - | | 1,908,459 | |
Camp service | | 283,415 | | | 22,034 | | | 333,021 | | - | | 638,470 | |
Permitting | | 14,529 | | | 7,554 | | | - | | - | | 22,083 | |
Foreign currency impact | | (57,469 | ) | | (7,597 | ) | | 3,945 | | 53,734 | | (7,387 | ) |
| Balance, March 31, 2022 | $ | 73,629,285 | | $ | 3,197,108 | | $ | 3,385,509 | $ | 2,925,102 | $ | 83,137,004 | |
| |
| 9. | RELATED PARTY TRANSACTIONS |
Related party transactions are made on terms agreed upon by the related parties. The balances with related parties are unsecured, non-interest bearing, and due on demand. Related party transactions not disclosed elsewhere in the condensed consolidated interim financial statements are as follows:
| | | | | |
| Due to a related party | | March 31, 2022 | | June 30, 2021 | |
| Silvercorp Metals Inc. | $ | 49,383 | $ | 50,378 | |
(a) Silvercorp Metals Inc. (“Silvercorp”) has two directors and two officers in common with the Company. Silvercorp and the Company share office space and Silvercorp provides various general and administrative services to the Company. The Company expects to continue making payments to Silvercorp in the normal course of business. Expenses in general and administrative services rendered and incurred by Silvercorp on behalf of the Company for the three and nine months ended March 31, 2022 were $174,606 and $534,950, respectively (three and nine months ended March 31, 2021 - $160,324 and $461,185, respectively).
Page | 11
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
(b) Compensation of key management personnel
The remuneration of directors and other members of key management personnel for the three and nine months ended March 31, 2022 and 2021 are as follows:
| | | | | | | | | | | |
| | | Three months ended March 31, | | | | Nine months ended March 31, | |
| | | 2022 | | 2021 | | | | 2022 | | 2021 | |
| Director's cash compensation | $ | 16,748 | $ | 202,494 | | | $ | 68,985 | | 251,826 | |
| Director's share-based compensation | | 721,545 | | 576,547 | | | | 721,545 | | 576,547 | |
| Key management's cash compensation | | 353,050 | | 268,512 | | | | 847,470 | | 724,495 | |
| Key management's share-based compensation | | 933,595 | | 1,398,093 | | | | 933,595 | | 1,398,093 | |
| | $ | 2,024,938 | $ | 2,445,646 | | | $ | 2,571,595 | $ | 2,950,961 | |
Other than as disclosed above, the Company does not have any ongoing contractual or other commitments resulting from transactions with related parties.
(a) Share Capital - authorized share capital
The Company’s authorized share capital consists of an unlimited number of common shares without par value.
(b) Share-based compensation
The Company has a share-based compensation plan (the “Plan”) under which the Company may issue stock options and restricted share units (“RSUs”). The maximum number of common shares to be reserved for issuance on any share-based compensation under the Plan is a rolling 10% of the issued and outstanding common shares from time to time.
For the three and nine months ended March 31, 2022, a total of $9,133 and $479,272, respectively (three and nine months ended March 31, 2021 - $389,379 and $1,083,373, respectively) was recorded as share-based compensation expense.
For the three and nine months ended March 31, 2022, a total of $1,040 and $11,049, respectively (three and nine months ended March 31, 2021 - $58,565 and $92,935, respectively) was included in the project evaluation and corporate development expense.
For the three and nine months ended March 31, 2022, a total of $146,265 and $16,918, respectively (three and nine months ended March 31, 2021 - $194,344 and $596,660, respectively was capitalized) was reversed under mineral property interests.
Page | 12
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
(i) Stock Options
The continuity schedule of stock options, as at March 31, 2022, is as follows:
| | | | |
| | | | Weighted average | |
| | Number of options | | exercise price (CAD$) | |
| Balance, July 1, 2020 | 4,662,767 | | 1.36 | |
| Options exercised | (1,396,935 | ) | 0.98 | |
| Options cancelled | (150,000 | ) | 0.82 | |
| Balance, June 30, 2021 | 3,115,832 | | 1.56 | |
| Options Granted | 1,178,000 | | 3.36 | |
| Options exercised | (1,368,831 | ) | 1.20 | |
| Options cancelled | (103,334 | ) | 2.69 | |
| Balance, March 31, 2022 | 2,821,667 | | 2.45 | |
During the nine months ended March 31, 2022, a total of 1,178,000 options with a life of five years were granted to directors, officers, and employees at an exercise price of CAD$3.33 to CAD$3.89 per share subject to a vesting schedule over a three-year term with 1/6 of the options vesting every 6 months after the date of grant until fully vested.
The fair value of the options granted during the nine months ended March 31, 2022, were calculated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
| | |
| | Nine months ended March 31, | |
| | 2022 | |
| Risk free interest rate | 1.45% | |
| Expected volatility | 75.88% | |
| Expected life of options in years | 2.75 | |
| Estimated forfeiture rate | 13.58% | |
The weighted average grant date fair value of options granted during the nine months ended March 31, 2022, was CAD$1.59. Volatility was determined based on the historical volatility of the Company’s shares over the estimated life of stock options.
The following table summarizes information about stock options outstanding as of March 31, 2022:
| | | | | |
| | | Number of options | Weighted | Number of options | Weighted |
| | Exercise | outstanding as at | average remaining | exercisable as at | average |
| | prices (CAD$) | 3/31/2022 | contractual life (years) | 3/31/2022 | exercise price (CAD$) |
| $ | 1.15 | 415,000 | 0.33 | 415,000 | $1.15 |
| | 1.57 | 200,000 | 0.69 | 200,000 | $1.57 |
| | 2.15 | 1,073,667 | 1.90 | 1,073,667 | $2.15 |
| | 3.33 | 1,072,000 | 4.85 | - | - |
| | 3.89 | 61,000 | 4.90 | - | - |
| | 1.15 - 3.89 | 2,821,667 | 2.77 | 1,688,667 | $1.84 |
Page | 13
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
Subsequent to March 31, 2022, a total of 237,500 options with an exercise price of CAD$1.15 to CAD$2.15 were exercised for total proceeds of $215,383 and a total of 198,000 options with exercise price of CAD$3.33 to CAD$3.89 were cancelled.
(ii) RSUs
The continuity schedule of RSUs, as at March 31, 2022, is as follows:
| | | | | | |
| | | Number of shares | | | Weighted average grant date closing price per share (CAD$) | |
| Balance, July 1, 2020 | | 925,200 | | $ | 4.70 | |
Granted | | 360,500 | | | 6.46 | |
Cancelled | | (26,250 | ) | | 4.80 | |
Distributed | | (464,550 | ) | | 4.72 | |
| Balance, June 30, 2021 | | 794,900 | | $ | 5.48 | |
Granted | | 408,000 | | $ | 3.38 | |
Cancelled | | (224,250 | ) | | 4.21 | |
Distributed | | (292,233 | ) | | 3.85 | |
| Balance, March 31, 2022 | | 686,417 | | $ | 5.34 | |
Subsequent to March 31, 2022, a total of 50,000 RSUs were distributed and 39,067 RSUs were cancelled.
| |
| 11. | NON-CONTROLLING INTEREST |
| | | |
| | | Qinghai Found | |
| Balance, July 1, 2020 | $ | (41,370 | ) |
| Share of net loss | | (7,934 | ) |
| Share of other comprehensive income | | 45,714 | |
| Balance, June 30, 2021 | $ | (3,590 | ) |
| Share of net loss | | (29,819 | ) |
| Share of other comprehensive income | | 9,528 | |
| Balance, March 31, 2022 | $ | (23,881 | ) |
As at March 31, 2022 and June 30, 2021, the non-controlling interest in the Company’s subsidiary Qinghai Found was 18%.
The Company manages its exposure to financial risks, including liquidity risk, foreign exchange rate risk, interest rate risk, credit risk, and equity price risk in accordance with its risk management framework. The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.
Page | 14
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
(a) Fair Value
The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of inputs used in making the measurements as defined in IFRS 13 – Fair Value Measurement (“IFRS 13”).
Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs which are supported by little or no market activity.
The following table sets forth the Company’s financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy as at March 31, 2022 and June 30, 2021 that are not otherwise disclosed. As required by IFRS 13, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
| | | | | | | | | | | | |
| | | Fair value as at March 31, 2022 | |
| Recurring measurements | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Financial Assets | | | | | | | | | | | | |
Cash | $ | 35,791,911 | | $ | - | | $ | - | | $ | 35,791,911 | |
Short-term investments - bonds | | 203,886 | | | - | | | - | | | 203,886 | |
Common shares | | 558,259 | | | - | | | - | | | 558,259 | |
| | | | |
| | | Fair value as at June 30, 2021 | |
| Recurring measurements | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Financial Assets | | | | | | | | | | | | |
Cash | $ | 46,441,482 | | $ | - | | $ | - | | $ | 46,441,482 | |
Short-term investments - bonds | | 143,914 | | | - | | | - | | | 143,914 | |
Common or preferred shares | | 461,635 | | | - | | | - | | | 461,635 | |
Warrants | | - | | | 34,891 | | | - | | | 34,891 | |
Fair value of other financial instruments excluded from the table above approximates their carrying amount as of March 31, 2022 and June 30, 2021, respectively.
There were no transfers into or out of Level 3 during the three and nine months ended March 31, 2022.
(b) Liquidity Risk
The Company has a history of losses and no operating revenues from its operations. Liquidity risk is the risk that the Company will not be able to meet its short term business requirements. As at March 31, 2022, the Company had a working capital position of $34,721,763 and sufficient cash resources to meet the Company’s short-term financial liabilities and its planned exploration expenditures on various projects in Bolivia for, but not limited to, the next 12 months.
Page | 15
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following summarizes the remaining contractual maturities of the Company’s financial liabilities:
| | | | | | | | | |
| | | March 31, 2022 | | | June 30, 2021 | |
| | | Due within a year | | | Total | | | Total | |
| Accounts payable and accrued liabilities | $ | 2,303,872 | | $ | 2,303,872 | | $ | 1,044,189 | |
| Due to a related party | | 49,383 | | | 49,383 | | | 50,378 | |
| | $ | 2,353,255 | | $ | 2,353,255 | | $ | 1,094,567 | |
(c) Foreign Exchange Risk
The Company is exposed to foreign exchange risk when it undertakes transactions and holds assets and liabilities denominated in foreign currencies other than its functional currencies. The functional currency of the head office, Canadian subsidiaries and all intermediate holding companies is CAD. The functional currency of all Bolivian subsidiaries is USD. The functional currency of the Chinese subsidiary is RMB. The Company currently does not engage in foreign exchange currency hedging. The Company’s exposure to foreign exchange risk that could affect net income is summarized as follows:
| | | | | | |
| Financial assets denominated in foreign currencies other than relevant functional currency | | March 31, 2022 | | | June 30, 2021 | |
| United States dollars | $ | 2,332,238 | | $ | 11,079,194 | |
| Bolivianos | | 649,549 | | | 285,267 | |
| Total | $ | 2,981,787 | | $ | 11,364,461 | |
| | | | | | | |
| Financial liabilities denominated in foreign currencies other than relevant functional currency | | | | | | |
| Bolivianos | | 1,396,725 | | | 333,405 | |
| Total | $ | 1,396,725 | | $ | 333,405 | |
As at March 31, 2022, with other variables unchanged, a 1% strengthening (weakening) of the USD against the CAD would have increased (decreased) net income by approximately $24,000.
As at March 31, 2022, with other variables unchanged, a 1% strengthening (weakening) of the Bolivianos against the USD would have increased (decreased) net income by approximately $8,000.
(d) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company holds a portion of cash in bank accounts that earn variable interest rates. Due to the short-term nature of these financial instruments, fluctuations in market rates do not have significant impact on the fair values of the financial instruments as of March 31, 2022. The Company, from time to time, also owns guaranteed investment certificates (“GICs”) and bonds that earn interest payments at fixed rates to maturity. Fluctuation in market interest rates usually will have an impact on bond’s fair value. An increase in market interest rates will generally reduce bond’s fair value while a decrease in market interest rates will generally increase it. The Company monitors market interest rate fluctuations closely and adjusts the investment portfolio accordingly.
Page | 16
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
(e) Credit Risk
Credit risk is the risk of financial loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s exposure to credit risk is primarily associated with cash, bonds, and receivables. The carrying amount of financial assets included on the statement of financial position represents the maximum credit exposure.
The Company has deposits of cash that meet minimum requirements for quality and liquidity as stipulated by the Board. Management believes the risk of loss to be remote, as the majority of its cash are held with major financial institutions. Bonds by nature are exposed to more credit risk than cash. The Company manages its risk associated with bonds by only investing in large globally recognized corporations from diversified industries. As at March 31, 2022, the Company had a receivables balance of $262,599 (June 30, 2021 - $343,608). There were no material amounts in receivables which were past due on March 31, 2022 (June 30, 2021 - $nil).
(f) Equity Price Risk
The Company holds certain marketable securities that will fluctuate in value as a result of trading on global financial markets. Based upon the Company’s portfolio at March 31, 2022, a 10% increase (decrease) in the market price of the securities held, ignoring any foreign exchange effects would have resulted in an increase (decrease) to net income of approximately $56,000.
The objectives of the capital management policy are to safeguard the Company’s ability to support exploration and operating requirements on an ongoing basis, continue the investment in high quality assets along with safeguarding the value of its mineral properties, and support any expansionary plans.
The capital of the Company consists of the items included in equity less cash and bonds. Risk and capital management are primarily the responsibility of the Company’s corporate finance function and is monitored by the Board. The Company manages the capital structure and makes adjustments depending on economic conditions. Significant risks are monitored and actions are taken, when necessary, according to the Company’s approved policies.
In addition, the current COVID-19 pandemic has caused significant disruption to global economic conditions which may adversely impact the Company’s results.
Page | 17
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
As at and for the nine months ended March 31, 2022, the Company operates in three (as at and for the year ended June 30, 2021 – three) reportable operating segments, one being the corporate segment; the other two being the exploration and development segments focused on safeguarding the value of its mineral properties in Bolivia and China. These reportable segments are components of the Company where separate financial information is available that is evaluated regularly by the Company’s Chief Executive Officer, the chief operating decision maker (“CODM”).
(a) Segment information for assets and liabilities are as follows:
| | | | | | | | | | | | | | | |
| | | | | | | | March 31, 2022 | | | | | |
| | | | Corporate | | | | Exploration and Development | | | | Total | |
| | | | Canada and BVI | | | | Bolivia | | | China | | | | | |
| Cash | | $ | 34,903,682 | | | $ | 836,158 | | $ | 52,071 | | | $ | 35,791,911 | |
| Short-term investments | | | 203,886 | | | | - | | | - | | | | 203,886 | |
| Equity investments | | | 558,259 | | | | - | | | - | | | | 558,259 | |
| Plant and equipment | | | 84,037 | | | | 1,301,349 | | | 15,073 | | | | 1,400,459 | |
| Mineral property interests | | | - | | | | 80,211,901 | | | 2,925,103 | | | | 83,137,004 | |
| Other assets | | | 753,887 | | | | 3,289,417 | | | 111,317 | | | | 4,154,621 | |
| Total Assets | | $ | 36,503,751 | | | $ | 85,638,825 | | $ | 3,103,564 | | | $ | 125,246,140 | |
| | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | (656,022 | ) | | $ | (1,396,725 | ) | $ | (300,508 | ) | | $ | (2,353,255 | ) |
| | | | | | | | | | | | | |
| | | | | | | | June 30, 2021 | | | | | |
| | | | Corporate | | | | Exploration and Development | | | | Total | |
| | | | Canada and BVI | | | | Bolivia | | | China | | | | | |
| Cash | | $ | 46,259,720 | | | $ | 158,539 | | $ | 23,223 | | | $ | 46,441,482 | |
| Short-term investments | | | 143,914 | | | | - | | | - | | | | 143,914 | |
| Equity investments | | | 496,526 | | | | - | | | - | | | | 496,526 | |
| Plant and equipment | | | 115,340 | | | | 988,503 | | | 14,796 | | | | 1,118,639 | |
| Mineral property interests | | | - | | | | 72,664,054 | | | 2,871,368 | | | | 75,535,422 | |
| Other assets | | | 461,135 | | | | 2,427,576 | | | 194,430 | | | | 3,083,141 | |
| Total Assets | | $ | 47,476,635 | | | $ | 76,238,672 | | $ | 3,103,817 | | | $ | 126,819,124 | |
| | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | (573,163 | ) | | $ | (333,405 | ) | $ | (187,999 | ) | | $ | (1,094,567 | ) |
Page | 18
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
| (b) | Segment information for operating results are as follows: |
| | |
| | | | | | | | | | | | | | | |
| | | | | | | | Three months ended March 31, 2022 | | | | | |
| | | | | | | | Exploration and Development | | | | Total | |
| | | | Canada and BVI | | | | Bolivia | | | China | | | | | |
| Project evaluation and corporate development | | $ | (189,455 | ) | | $ | (51,165 | ) | $ | - | | | $ | (240,620 | ) |
| Salaries and benefits | | | (449,424 | ) | | | (117,345 | ) | | (4,088 | ) | | | (570,857 | ) |
| Share-based compensation | | | (9,133 | ) | | | - | | | - | | | | (9,133 | ) |
| Other operating expenses | | | (571,107 | ) | | | (128,464 | ) | | (4,193 | ) | | | (703,764 | ) |
| Total operating expense | | | (1,219,119 | ) | | | (296,974 | ) | | (8,281 | ) | | | (1,524,374 | ) |
| Income from investments | | | 124,811 | | | | - | | | 49 | | | | 124,860 | |
| Foreign exchange loss | | | (36,438 | ) | | | - | | | (1 | ) | | | (36,439 | ) |
| Net loss | | $ | (1,130,746 | ) | | $ | (296,974 | ) | $ | (8,233 | ) | | $ | (1,435,953 | ) |
| Attributed to: | | | | | | | | | | | | | | | |
| Equity holders of the Company | | $ | (1,130,746 | ) | | $ | (296,974 | ) | $ | 18,828 | | | $ | (1,408,892 | ) |
| Non-controlling interests | | | - | | | | - | | | (27,061 | ) | | | (27,061 | ) |
| Net loss | | $ | (1,130,746 | ) | | $ | (296,974 | ) | $ | (8,233 | ) | | $ | (1,435,953 | ) |
| | | | | | | | | | | | | |
| | | | | | | | Three months ended March 31,2021 | | | | | |
| | | | Corporate | | | | Exploration and Development | | | | Total | |
| | | | Canada and BVI | | | | Bolivia | | | China | | | | | |
| Project evaluation and corporate development | | $ | (177,749 | ) | | $ | (124,920 | ) | $ | - | | | $ | (302,669 | ) |
| Salaries and benefits | | | (509,651 | ) | | | - | | | (9,064 | ) | | | (518,715 | ) |
| Share-based compensation | | | (389,379 | ) | | | - | | | - | | | | (389,379 | ) |
| Other operating expenses | | | (368,527 | ) | | | (20,561 | ) | | (4,468 | ) | | | (393,556 | ) |
| Total operating expense | | | (1,445,306 | ) | | | (145,481 | ) | | (13,532 | ) | | | (1,604,319 | ) |
| Income from investments | | | 71,699 | | | | - | | | 48 | | | | 71,747 | |
| Foreign exchange loss | | | (159,261 | ) | | | - | | | - | | | | (159,261 | ) |
| Net loss | | $ | (1,532,868 | ) | | $ | (145,481 | ) | $ | (13,484 | ) | | $ | (1,691,833 | ) |
| Attributed to: | | | | | | | | | | | | | | | |
| Equity holders of the Company | | $ | (1,532,868 | ) | | $ | (145,481 | ) | $ | (11,052 | ) | | $ | (1,689,401 | ) |
| Non-controlling interests | | | - | | | | - | | | (2,432 | ) | | $ | (2,432 | ) |
| Net loss | | $ | (1,532,868 | ) | | $ | (145,481 | ) | $ | (13,484 | ) | | $ | (1,691,833 | ) |
Page | 19
|
| New Pacific Metals Corp. |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
| for the three and nine months ended March 31, 2022 and 2021 |
| (Expressed in US dollars) |
| | | | | | | | | | | | | | |
| | | Nine months ended March 31, 2022 | |
| | | Corporate | | | | Exploration and Development | | | | Total | |
| | | Canada and BVI | | | | Bolivia | | | China | | | | | |
| Project evaluation and corporate development | $ | (285,067 | ) | | $ | (205,083 | ) | $ | - | | | $ | (490,150 | ) |
| Salaries and benefits | | (1,127,541 | ) | | | (288,560 | ) | | (12,308 | ) | | | (1,428,409 | ) |
| Share-based compensation | | (479,272 | ) | | | - | | | - | | | | (479,272 | ) |
| Other operating expenses | | (1,730,970 | ) | | | (346,048 | ) | | (10,846 | ) | | | (2,087,864 | ) |
| Total operating expense | | (3,622,850 | ) | | | (839,691 | ) | | (23,154 | ) | | | (4,485,695 | ) |
| Income from investments | | 208,232 | | | | - | | | 180 | | | | 208,412 | |
| Foreign exchange gain (loss) | | 164,988 | | | | - | | | (583 | ) | | | 164,405 | |
| Net loss | $ | (3,249,630 | ) | | $ | (839,691 | ) | $ | (23,557 | ) | | $ | (4,112,878 | ) |
| Attributed to: | | | | | | | | | | | | | | |
| Equity holders of the Company | $ | (3,249,630 | ) | | $ | (839,691 | ) | $ | 6,262 | | | $ | (4,083,059 | ) |
| Non-controlling interests | | - | | | | - | | | (29,819 | ) | | | (29,819 | ) |
| Net loss | $ | (3,249,630 | ) | | $ | (839,691 | ) | $ | (23,557 | ) | | $ | (4,112,878 | ) |
| | | | |
| | | Nine months ended March 31, 2021 | |
| | | Corporate | | | | Exploration and Development | | | | Total | |
| | | Canada | | | | Bolivia | | | China | | | | | |
| Project evaluation and corporate development | $ | (226,527 | ) | | $ | (442,085 | ) | $ | - | | | $ | (668,612 | ) |
| Salaries and benefits | | (1,148,650 | ) | | | - | | | (25,536 | ) | | | (1,174,186 | ) |
| Share-based compensation | | (1,083,373 | ) | | | - | | | - | | | | (1,083,373 | ) |
| Other operating expenses | | (1,424,864 | ) | | | (21,348 | ) | | (5,647 | ) | | | (1,451,859 | ) |
| Total operating expense | | (3,883,414 | ) | | | (463,433 | ) | | (31,183 | ) | | | (4,378,030 | ) |
| Income from investments | | 606,308 | | | | - | | | 96 | | | | 606,404 | |
| Loss on disposal of plant and equipment | | - | | | | - | | | (1,861 | ) | | | (1,861 | ) |
| Foreign exchange loss | | (826,217 | ) | | | - | | | - | | | | (826,217 | ) |
| Other expense | | - | | | | - | | | (371 | ) | | | (371 | ) |
| Net loss | $ | (4,103,323 | ) | | $ | (463,433 | ) | $ | (33,319 | ) | | $ | (4,600,075 | ) |
| Attributed to: | | | | | | | | | | | | | | |
| Equity holders of the Company | $ | (4,103,323 | ) | | $ | (463,433 | ) | $ | (27,312 | ) | | $ | (4,594,068 | ) |
| Non-controlling interests | | - | | | | - | | | (6,007 | ) | | $ | (6,007 | ) |
| Net loss | $ | (4,103,323 | ) | | $ | (463,433 | ) | $ | (33,319 | ) | | $ | (4,600,075 | ) |
| 15. | SUPPLEMENTARY CASH FLOW INFORMATION |
| | |
| | | | | | | | | | | | | |
| Changes in non-cash operating working capital: | | Three Months Ended March 31, | | | | Nine Months Ended March 31, | |
| | | 2022 | | | 2021 | | | | 2022 | | | 2021 | |
Receivables | $ | 88,363 | | $ | (36,619 | ) | | $ | 83,634 | | $ | 29,989 | |
Deposits and prepayments | | 148,747 | | | 35,011 | | | | (294,137 | ) | | (175,990 | ) |
Accounts payable and accrued liabilities | | 208,018 | | | (545,157 | ) | | | 1,258,465 | | | (657,426 | ) |
Due to a related party | | (14,671 | ) | | (26,780 | ) | | | (579 | ) | | (5,099 | ) |
| | $ | 430,457 | | $ | (573,545 | ) | | $ | 1,047,383 | | $ | (808,526 | ) |
Page | 20
