Document and Entity Information
Document and Entity Information | 6 Months Ended |
Aug. 31, 2017shares | |
Document and Entity Information: | |
Entity Registrant Name | Fortem Resources Inc. |
Document Type | 10-Q |
Document Period End Date | Aug. 31, 2017 |
Trading Symbol | ftmr |
Amendment Flag | false |
Entity Central Index Key | 1,382,231 |
Current Fiscal Year End Date | --02-28 |
Entity Common Stock, Shares Outstanding | 115,884,698 |
Entity Filer Category | Smaller Reporting Company |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
FORTEM RESOURCES INC. - Consoli
FORTEM RESOURCES INC. - Consolidated Balance Sheets - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 | |
Current Assets: | |||
Cash | $ 145,663 | $ 459,481 | |
Receivable | 12,715 | 27,103 | |
Prepaid expense and other | 22,769 | 24,099 | |
Loan receivable | 99,135 | ||
Total Current Assets | 280,282 | 510,683 | |
Non-current Assets: | |||
Deposit | 35,181 | 33,082 | |
Equipment | 56,436 | 54,956 | |
Investment | 1,500,000 | ||
Rights to the acquisition of mineral exploration project | 39,530,234 | ||
Oil and gas properties, full cost method | 186,035,779 | 641,494 | |
Total Assets | 227,437,912 | 1,240,215 | |
Current liabilities: | |||
Accounts payable and accrued liabilities | 610,509 | 337,506 | |
Due to related parties | 284,771 | 48,831 | |
Note payable | 19,943 | 18,825 | |
Advance payable | 64,058 | ||
Derivative financial liabilities - warrants | 8,915,554 | 2,590,477 | |
Total Current Liabilities | 9,894,835 | 2,995,639 | |
Non-current liabilities: | |||
Due to related parties | 500,000 | 48,831 | |
Asset retirement obligation | 27,303 | 24,546 | |
Deferred tax liabilities | 73,349,071 | ||
Total Liabilities | 83,771,209 | 3,020,185 | |
Stockholders' Equity: | |||
Capital stock | [1] | 107,775 | 29,428 |
Additional paid-in capital | 150,995,339 | 5,028,885 | |
Obligation to issue shares | 6,000,000 | ||
Share subscriptions receivable | (110,000) | ||
Share subscriptions | 100,000 | ||
Accumulated other comprehensive loss | (383,257) | (383,257) | |
Accumulated deficit | (13,153,154) | (6,345,026) | |
Total Stockholders' Equity | 143,666,703 | (1,779,970) | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 227,437,912 | $ 1,240,215 | |
[1] | 750,000,000 common shares, par value $0.001 per share; Issued and outstanding: 115,884,698 common shares; 37,537,556 at February 28, 2017 |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | Aug. 31, 2017 | Feb. 28, 2017 |
Statement of Financial Position | ||
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 750,000,000 | 750,000,000 |
Common Stock, Shares Issued | 115,884,698 | 37,537,556 |
Common Stock, Shares Outstanding | 115,884,698 | 37,537,556 |
FORTEM RESOURCES INC. - Consol4
FORTEM RESOURCES INC. - Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | |
General and administrative expenses | ||||
Accretion | $ 632 | $ 1,806 | $ 1,237 | $ 2,376 |
Consulting | 19,537 | 11,809 | 37,790 | 37,290 |
Depreciation | 867 | 863 | 1,696 | 1,722 |
Investor relations | 300 | 13,284 | ||
Management fees | 30,690 | 23,163 | 90,690 | 46,242 |
Office, travel and general (recovery) | 28,086 | 2,197 | 136,444 | (2,635) |
Professional fees | 162,254 | 22,857 | 220,781 | 38,881 |
Loss from operations | (242,366) | (62,695) | (501,922) | (123,876) |
Foreign exchange gain | 33,330 | 19,449 | ||
Gain on settlement of debt | 307 | 13,599 | 60,232 | |
Interest income | 69 | 64 | 129 | 126 |
Interest expense | (12,603) | (134) | (14,658) | (73,966) |
Gain (loss) on fair value adjustment of derivative financial liabilities | (1,629,348) | 294,831 | (6,325,077) | 235,506 |
Forgiveness and adjustment of accounts payable | 8 | 352 | ||
Net income (loss) | (1,850,603) | 232,066 | (6,808,128) | 98,022 |
Foreign currency translation | (4,131) | (23,911) | ||
Comprehensive income (loss) | $ (1,850,603) | $ 227,935 | $ (6,808,128) | $ 74,111 |
Basic and diluted income (loss) per share | $ (0.02) | $ 0.01 | $ (0.07) | $ 0 |
Weighted average number of basic common shares outstanding | 115,884,698 | 31,082,567 | 95,395,280 | 30,852,247 |
FORTEM RESOURCES INC. - Consol5
FORTEM RESOURCES INC. - Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | |
Cash flows used in operating activities: | ||||
Net income (loss) | $ (1,850,603) | $ 232,066 | $ (6,808,128) | $ 98,022 |
Non-cash items: | ||||
Accretion | 632 | 1,806 | 1,237 | 2,376 |
Depreciation | 867 | 863 | 1,696 | 1,722 |
Gain on settlement of debt | (13,599) | (60,232) | ||
Loss (gain) on fair value adjustment of derivative financial liabilities | 6,325,077 | (235,506) | ||
Forgiveness and adjustment of old accounts payable | (352) | |||
Interest income accrued | (129) | (126) | ||
Interest expense | (12,603) | (134) | 2,055 | 73,831 |
Foreign exchange | (31,710) | |||
Changes in non-cash working capital items: | ||||
Receivable | 14,388 | (2,341) | ||
Prepaid expenses and other | 1,330 | (1,851) | ||
Accounts payable and accrued liabilities | 252,367 | 9,971 | ||
Cash used in operating activities | (224,058) | (145,844) | ||
Cash flows used in investing activities: | ||||
Investments | (1,500,000) | |||
Expenditures on oil and gas properties | (714,861) | |||
Loan receivable | (99,135) | |||
Cash used in investing activities | (2,313,996) | |||
Cash flows from financing activities: | ||||
Common stock issued for cash | 1,354,801 | |||
Issuance of convertible debenture | 200,000 | |||
Share subscriptions | 100,000 | |||
Advances from third party | 4,058 | |||
Net proceeds from (repaid to) related parties | 705,527 | (70,976) | ||
Cash provided by financing activities | 2,164,386 | 129,024 | ||
Effect of foreign exchange | 59,850 | (3,451) | ||
Change in cash | (313,818) | (20,271) | ||
Cash, beginning of period | 459,481 | 22,426 | ||
Cash, end of period | $ 145,663 | $ 2,155 | 145,663 | $ 2,155 |
Non-cash transactions | ||||
Common stock issued for oil and gas properties | 144,800,000 | |||
Obligation to issue shares for oil and gas properties | 6,000,000 | |||
Advance payable for oil and gas properties | $ 60,000 |
1. Nature and Continuance of Op
1. Nature and Continuance of Operations | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
1. Nature and Continuance of Operations | 1. NATURE AND CONTINUANCE OF OPERATIONS Fortem Resources Inc. (the Company) was incorporated in the State of Nevada on July 9, 2004. The Company focuses its business efforts on the acquisition, exploration, and development of oil and gas properties. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of August 31, 2017, the Company has not achieved profitable operations, has incurred losses in developing its business, and further losses are anticipated. The Company has an accumulated deficit of $13,153,154. The Companys ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and pay its liabilities when they come due. To date, the Company has funded operations through the issuance of capital stock and debt. Management plans to continue raising additional funds through equity or debt financings and loans from directors. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern. The ability of the Company to continue its operations as a going concern is dependent upon its ability to raise sufficient new capital to fund its operating commitments and ongoing losses and ultimately on generating profitable operations. The financial statements do not include any adjustments to be recorded to assets or liabilities that might be necessary should the Company be unable to continue as a going concern. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
2. Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited interim financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC). They do not include all information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended February 28, 2017 included in the Companys Annual Report on Form 10-K filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements included in the 10-K report. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ending February 28, 2018. Basis of consolidation These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Colony Energy, LLC, Black Dragon Energy, LLC, Rolling Rock Resources, LLC and City of Gold, LLC. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated upon consolidation. Fair Value of Financial Instruments The estimated fair values for financial instruments are determined based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, receivable, loan receivable, accounts payable and accrued liabilities, amounts due to related party, advance payable and note payable approximate their carrying value due to the short-term nature of those instruments. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 Unobservable inputs that are supported by little or no market activity, there for requiring an entity to develop its own assumptions about the assumption that market participants would use in pricing. The Company had certain level 3 assets and liabilities required to be recorded at fair value on a recurring basis in accordance with US GAAP as at August 31, 2017. As at August 31, 2017, the Companys Level 3 assets consist of shares and warrants of a private company and Level 3 liabilities consisted of warrants of the Company. The resulting level 3 assets and liabilities have no active market and are required to be measured at their fair value each reporting period based on information that is unobservable. As at August 31, 2017, the fair value of the level 3 assets was equal to $1,500,000 with their fair value based on the price paid to acquire the investment. A summary of the Companys level 3 liabilities for the six months ended August 31, 2017 and year ended February 28, 2017 is as follows: August 31, 2017 February 28, 2017 Warrants Beginning fair value $ 2,590,477 $ 150,136 Issuance - 1,043,074 Change in fair value 6,325,077 1,397,267 Ending fair value of warrants 8,915,554 2,590,477 Embedded Conversion feature Beginning fair value - - Bifurcation of embedded conversion feature - 199,999 Change in fair value - (199,999) Ending fair value of embedded conversion feature - - Ending fair value of Level 3 liability $ 8,915,554 $ 2,590,477 Basic and Diluted Income (Loss) per Share Earnings or loss per share (EPS) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income (loss) by the weighted-average of all potentially dilutive shares of the common stock that were outstanding during the years presented. There were 6,123,698 (February 28, 2017 - 6,123,698) potentially dilutive securities excluded from the calculation of diluted loss per share as their effect would be anti-dilutive. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period. Recent Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows. |
3. Acquisitions
3. Acquisitions | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
3. Acquisitions | 3. ACQUISITIONS a) Acquisition of Colony Energy, LLC In April 2017, the Company entered into and closed two membership interest purchase agreements with three arms length vendors to acquire all membership interests of Colony Energy, LLC (Colony), a Nevada limited liability company. Colony holds a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of Northern Alberta (Godin Property). In consideration for the acquisition of Colony, the Company issued an aggregate of 21,000,000 shares of its common stock to the three vendors on the closing date (issued at a fair value of $37,800,000) and agreed to issue an additional 3,000,000 shares (valued at a price of $6,000,000), with 1,000,000 shares to be issued to one of the vendors on each of the first, second and third anniversaries of the closing date. Colony is not considered a business for accounting purposes and accordingly the transaction is treated as an acquisition of oil and gas property and related net assets. $ Oil and gas properties 108,000 Accounts payable and accrued liabilities (13,411) Advance payable (34,058) Due to related parties (60,000) Net assets 531 The total consideration for the acquisition is as follows: $ Value of shares issued 37,800,000 Obligation to issue shares 6,000,000 Transaction costs 12,386 43,812,386 Less: net assets (531) Excess consideration paid over the net assets of Colony 43,811,855 The excess of the consideration over the net assets of Colony has been added to the oil and gas property to reflect the value of the Godin Property. The measurement of the transaction was based on the quoted market price of the shares issued in connection with the acquisition. The Company intends to perform an assessment of the carrying value of the asset in connection with the preparation of the annual financial statements or earlier if indicators of impairment are identified. As a result of the acquisition, the Company recorded a deferred tax liability of $16,171,294. b) Acquisition of Black Dragon Energy, LLC In April 2017, the Company entered into and closed a membership interest purchase agreement with two arms length vendors to acquire all membership interests of Black Dragon Energy, LLC (Black Dragon), a Nevada limited liability company. Black Dragon holds the right to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 165,000 acres (258 sections) at an 80% net revenue interest, located in the Moenkopi formation of the Carbon and Emery Counties, Utah (Black Dragon Property). In consideration for the acquisition of Black Dragon, the Company issued an aggregate of 20,000,000 shares of its common stock to the two vendors on the closing date (issued at a fair value of $38,000,000) and paid $100,000 prior to the closing as a non-refundable deposit. Black Dragon is not considered a business for accounting purposes and accordingly the transaction is treated as an acquisition of oil and gas property and related net assets. $ Oil and gas properties 119,863 Accounts payable and accrued liabilities (26,355) Advance payable (119,863) Net liabilities (26,355) The total consideration for the acquisition is as follows: $ Value of shares issued 38,000,000 Cash paid 100,000 Transaction costs 10,951 38,110,951 Add: net liabilities 26,355 Consideration paid over the net liabilities of Black Dragon 38,137,306 The consideration paid plus the net liabilities of Black Dragon has been added to the oil and gas property to reflect the value of the Black Dragon Property. The measurement of the transaction was based on the quoted market price of the shares issued in connection with the acquisition. The Company intends to perform an assessment of the carrying value of the asset in connection with the preparation of the annual financial statements or earlier if indicators of impairment are identified. As a result of the acquisition, the Company recorded a deferred tax liability of $23,532,941. c) Acquisition of Rolling Rock Resources, LLC In April 2017, the Company entered into and closed a membership interest purchase agreement with two arms length vendors to acquire all membership interests of Rolling Rock Resources, LLC (Rolling Rock), a Nevada limited liability company. Rolling Rock has the right to acquire a 50% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 101,888 acres (160 sections) at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah (Rolling Rock Property). In consideration for the acquisition of Rolling Rock, the Company issued an aggregate of 20,000,000 shares of its common stock to the two vendors on the closing date (issued at a fair value of $39,000,000) and paid $100,000 prior to the closing as a non-refundable deposit. Rolling Rock is not considered a business for accounting purposes and accordingly the transaction is treated as an acquisition of oil and gas property and related net assets. $ Oil and gas properties 130,397 Accounts payable and accrued liabilities (26,032) Advance payable (130,397) Net liabilities (26,032) The total consideration for the acquisition is as follows: $ Value of shares issued 39,000,000 Cash paid 100,000 Transaction costs 9,315 39,109,315 Add: net liabilities 26,032 Consideration paid over the net liabilities of Rolling Rock 39,135,347 The consideration paid plus the net liabilities of Rolling Rock has been added to the oil and gas property to reflect the fair value of the Rolling Rock Property. The measurement of the transaction was based on the quoted market price of the shares issued in connection with the acquisition. The Company intends to perform an assessment of the carrying value of the asset in connection with the preparation of the annual financial statements or earlier if indicators of impairment are identified. As a result of the acquisition, the Company recorded a deferred tax liability of $24,144,836. d) Acquisition of City of Gold, LLC In May 2017, the Company acquired 100% of the membership interest in City of Gold, LLC (City of Gold), a Nevada limited liability company, from two Nevada limited liability companies pursuant to a membership interest purchase agreement. City of Gold has an option to acquire the subsidiary of Asia Pacific Mining Ltd. (the Asia Pacific subsidiary), subject to the completion of a binding financing and option agreement (the Option). The Asia Pacific subsidiary owns the City of Gold mining project. The membership interest purchase agreement provides for a total purchase price consisting of an aggregate of 30,000,000 common shares of its common stock (the Purchase Shares). 15,000,000 of the Purchase Shares were issued at closing (issued at a fair value of $30,000,000); the remaining 15,000,000 Purchase Shares are to be issued within ten Business Days after City of Gold earns the Option. City of Gold is not considered a business for accounting purposes and accordingly the transaction is treated as an acquisition of available for sale investments, rights to the acquisition of mineral exploration project and related net assets. $ Investments 1,500,000 Accounts payable and accrued liabilities (13,932) Note payable (1,516,302) Net liabilities (30,234) The total consideration for the acquisition is as follows: $ Value of shares issued 30,000,000 Add: net liabilities 30,234 Consideration paid over the net liabilities of City of Gold 30,030,234 The consideration paid plus the net liabilities of City of Gold has been added to the right to the mineral exploration project to reflect the value of the City of Gold project. The measurement of the transaction was based on the quoted market price of the shares issued in connection with the acquisition. The Company intends to perform an assessment of the carrying value of the asset in connection with the preparation of the annual financial statements or earlier if indicators of impairment are identified. As a result of the acquisition, the Company recorded a deferred tax liability of $9,500,000. |
4. Oil and Gas Properties
4. Oil and Gas Properties | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
4. Oil and Gas Properties | 4. OIL AND GAS PROPERTIES Compeer Godin Black Dragon Rolling Rock Total $ $ $ $ $ Balance, February 28, 2017 641,494 - - - 641,494 Acquisition - 60,091,149 61,695,247 63,305,183 185,091,579 Exploration - 13,403 92,747 158,473 264,623 Exchange difference 38,083 - - - 38,083 Balance, August 31, 2017 679,577 60,104,552 61,787,994 63,463,656 186,035,779 Compeer Property Effective February 21, 2012, the Company entered into a Farmout Agreement (the Agreement) with Harvest Operations Corp. (Farmor). The Agreement provided for the Companys acquisition of an undivided 100% working interest (Working Interest) in a petroleum and natural gas license covering land located in the Compeer Area in the Province of Alberta, Canada (the Compeer Property). To earn the Working Interest the Company was required to drill, complete, equip or abandon a test well on the Compeer Property (Test Well). On March 14, 2012, the Company obtained operator status and was transferred the well license relating to the Test Well. The Companys Working Interest in the Compeer Property will be held subject to a non-convertible overriding royalty payable to the Farmor (Farmors Royalty). The Farmors Royalty on net crude oil revenues will be measured on a sliding scale from 5% to 15% over a range of production volumes from 1 to 150 barrels per day. The Farmors Royalty on net gas and other petroleum product revenues is 15%. The Test Well was spudded on May 27, 2012, and on September 5, 2012, the Company received an earning notice granting the Company a 100% working interest in the Compeer Property. As of August 31, 2017, the Company has incurred $679,577 (February 28, 2017 - $641,494) in exploration costs to drill, complete and equip the Test Well, net of impairment charges in prior periods. The Company also has $35,181 (CAD$44,103) (February 28, 2017 - $33,082 (CAD$43,934)) in bonds held with the Alberta Energy Regulator for its oil and gas properties. Godin Property On March 31, 2017, Colony (Note 3) entered into a petroleum, natural gas and general rights conveyance agreement to acquire a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of Northern Alberta. In addition, the vendor is entitled to receive certain milestone payments from the Company in the aggregate amount up to $210,000 as follows: i) $30,000 on or before June 29, 2017; ii) $30,000 on or before September 27, 2017; and iii) $150,000 upon the rig release of the second well drilled by the Company in the oil and gas assets described above. This amount will be recorded when the criteria has been met. If the Company fails to make timely payment of any of the milestone payments, the vendor sole recourse will be a claim for debt against the Company for an amount equal to the missed milestone payment. As at August 31, 2017, the vendor has not filed a claim against the Company. Black Dragon Property In March 2017 (and later amended in August 2017), Black Dragon (Note 3) entered into a purchase and sale agreement (the Black Dragon PSA) to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 165,000 acres (258 sections) at an 80% net revenue interest located in the Moenkopi formation of the Carbon and Emery Counties, Utah (the Black Dragon Property). In August 2017, Black Dragon entered into a second amendment to the Black Dragon PSA (the Black Dragon Amendment), which amended the terms of the Black Dragon PSA. Under the Black Dragon Amendment, the Company is required to pay the vendor cash consideration totaling $3.9 million (the Black Dragon Consideration) based upon the following schedule: $100,000 as a non-refundable deposit within 10 business days of closing (paid); the balance of the Black Dragon Cash Consideration by payment to the vendor of an amount equal to 25% of any funds received by the Company from any equity, debt or convertible financing thereof (each, a Financing) upon the closing of each Financing until such amount is paid. In addition: (a) the first $1.5 million raised by the Company will be exempt from a 25% payment to the vendor if such amount is received prior to the Companys listing on a stock exchange; and (b) the full Black Dragon Cash Consideration is required to be paid in full no later than December 31, 2018 regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay US$900,000 on or before September 1, 2017, US$900,000 on or before March 1, 2018 and US$800,000 on or before September 1, 2018. In addition to revising the Black Dragon Cash Consideration as set out above, the Company has agreed to: (a) issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued subsequently); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 (paid) until such time as the Black Dragon Cash Consideration is paid in full. As an added incentive for early payment of the Black Dragon Cash Consideration, such sum will be reduced by $100,000 for each calendar month it is paid in full prior to December 31, 2018 for a maximum discount of 12 months or $1.2 million. Within 10 business days after the later of the Company paying the Black Cash Consideration in full or the Company meeting in full its carry obligation, the vendor will convey to the Company an undivided 75% of the Vendors right, title and interest in and to the assets, at an 80% Net Revenue Interest in the assets. Carry Obligation As per the terms of the Black Dragon PSA, and in addition to the Black Dragon Cash Consideration, the Company is required to pay all costs and expenses incurred on the assets with respect to any and all exploration, development and production during the carry period. The Carry Period continues until the later of either (i) the date that the Company pays the full Black Dragon Cash Consideration set out above or (ii) the date that the Company pays all costs and expenses for the drilling, logging, testing and completion two new wells, each well with a horizontal leg extending at least 2,000 in the target zone within the Moenkopi formation (the Two Obligation Wells). The Company is required to drill to completion or cause to be drilled to completion (or plugging and abandonment) the Two Obligation Wells on or before February 28, 2019, failing which, the Companys right to earn any assignment in and to the assets will terminate immediately. For each vertical well drilled to 200 below the top of the Kaibab formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite. Rolling Rock Property In March 2017, Rolling Rock (Note 3) entered into a purchase and sale agreement (the Rolling Rock PSA) to acquire a 50% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 101,888 acres (160 sections) at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah (the Rolling Rock Property). In August 2017, Rolling Rock entered into a second amendment to the Rolling Rock PSA (the Rolling Rock Amendment), which amended the terms of the Rolling Rock PSA. Under the Rolling Rock Amendment, the Company is required to pay the vendor cash consideration totaling $3.6 million (the Rolling Rock Cash Consideration) based upon the following schedule: · the balance of the Rolling Rock Cash Consideration by cash payment to the vendor of an amount equal to 25% of any funds received by the Company from any Financing upon the closing of each Financing until such amount is paid. In addition: (a) the first $1.5 million raised by the Company will be exempt from a 25% payment to the vendor if such amount is received prior to the Companys listing on a stock exchange; and (b) the full Rolling Rock Cash Consideration is required to be paid in full no later than December 31, 2018 regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay US$1.3 million on or before September 1, 2017, $500,000 on or before March 1, 2018 and $500,000 on or before September 1, 2018; and after payment of the Rolling Rock Cash Consideration, an additional payment of $300,000 (the Workover Funds) to the vendor which is payable by an amount equal to 25% of any funds received by the Company from any Financing until the Workover Funds are paid in full. In addition to revising the Rolling Rock Cash Consideration as set out above, Rolling Rock has agreed to: (a) cause the Company to issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued subsequently); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 (paid) until such time as the Rolling Rock Cash Consideration and the Workover Funds are paid in full. As an added incentive for early payment of the Rolling Rock Cash Consideration, such sum will be reduced by $100,000 for each calendar month it is paid in full prior to December 31, 2018 for a maximum discount of 12 months or $1.2 million. Within 10 business days after the later of the Company paying the Rolling Rock Cash Consideration in full or the Company meeting in full its carry obligation, the vendor agrees to convey to the Company an undivided 50% of the vendors right, title and interest in and to the Leases, or a 80% net revenue interest in the Leases. Notwithstanding this transfer, within 10 business days after the later of payment of $300,000 on or before September 1, 2017 (which amount is in addition to the deposit and included in the Rolling Rock Cash Consideration set out above) and the replacement of the vendors bonds on or before September 1, 2017, the vendor agrees to convey to the Company an undivided 50% of the vendors right, title and interest in and to the Cisco Dome leases and related assets. However, if the Company fails to timely meet any of its obligations under the Rolling Rock PSA, after having taken assignment of the Cisco Dome leases and assets, then, if the vendor elects in its sole discretion, the Company is required to reassign the Cisco Dome leases and assets to the vendor without any additional encumbrances. Carry Obligation As per the terms of the Rolling Rock PSA, and in addition to the Rolling Rock Cash Consideration, the Company is required to pay all costs and expenses incurred on the Leases with respect to any and all exploration, development and production during the carry period. The Carry Period continues until the later of either (i) the date that the Company pays the full Rolling Rock Cash Consideration set out above or (ii) the date that the Company pays all costs and expenses for the drilling, logging, testing and completion of three new wells in each of the three Federal Units, each well with a horizontal leg extending at least 1,000 in the target zone within the Mancos formation (the Three Obligation Wells). The Company is required to drill to completion or cause to be drilled to completion (or plugging and abandonment) the Three Obligation Wells on or before February 28, 2019, failing which, the Companys right to earn any assignment in and to the Leases will terminate immediately. For each vertical well drilled to the top of the Dakota formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite. The obligation well in the Grand Mancos Unit will be a vertical well drilled to a depth sufficient to test the Granite Walsh formation within such Federal Unit. For this well, completion (or plugging and abandonment) is expected to take place no later than 2 months after the rig that drilled to total depth has been removed from the wellsite and for a period of 6 months after completion of this obligation well (or plugging and abandonment), and the Company will have the exclusive option to purchase an additional 25% of the vendors right, title and interest in and to the leases with respect to the Granite Walsh formation within the boundary of the Grand Mancos Unit for an additional payment of $10 million. |
5. Investment in Asia Pacific M
5. Investment in Asia Pacific Mining Ltd. | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
5. Investment in Asia Pacific Mining Ltd. | 5. INVESTMENT IN ASIA PACIFIC MINING LTD. In April 2017, a binding financing and option agreement (the Agreement) (Note 3 (d)) was assigned to the Company where the Company subscribed a total of 2,930,259 units in the capital of Asia Pacific Mining Limited (Asia Pacific) at a total cost of $1,500,000, which represents approximately 7.5% of the issued and outstanding shares of Asia Pacific immediately after the financing. Asia Pacific is a private company registered in Hong Kong. Each unit consisted of one common share and one share purchase warrant which will entitle the holder of each warrant to acquire an additional share of Asia Pacific at an exercise price of $0.5119 per share during the term equal to the greater of two years from the closing of additional financing of Asia Pacific according to the terms of the Agreement or 18 months from the receipts of all necessary permits to carry out the exploration program. |
6. Rights To The Acquisition of
6. Rights To The Acquisition of Mineral Exploration Project | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
6. Rights To The Acquisition of Mineral Exploration Project | 6. RIGHTS TO THE ACQUISITION OF MINERAL EXPLORATION PROJECT In connection to the acquisition of City of Gold, LLC, the Company owns the right to an option agreement. Under the option agreement, the vendors have agreed to grant to City of Gold the option (the Option) to purchase 100% of the ownership interest in a wholly owned subsidiary of Asia Pacific (the Project Subsidiary) which, in turn, owns 100% of the rights to the City of Gold mineral exploration project located in Myanmar which covers an area of approximately 465 square kilometers in close proximity to hydropower, water, and infrastructure to accommodate exploration and development of the property. The Company can exercise the Option if Asia Pacific completes an additional financing of $1.5 million within 60 days upon the issuance of an exploration license for the City of Gold Project. Once it has exercise the Option, the Company may, at its discretion, to require Asia Pacific to transfer the Project Subsidiary to another Canadian publicly listed company to be selected by the Company (Acquisition Co)(if the Project Subsidiary is not transferred to another Canadian publicly list company, Acquisition Co means the Company) for an exercise price consisting of $7,000,000 in cash and thirty percent of the issued and outstanding share capital of Acquisition Co (calculated on a fully diluted basis, excluding up to 10% in stock options, but including shares Acquisition Co may have issued in order to raise the exercise price of $7,000,000 and an additional $5,000,000 in working capital). Half of the cash portion of the exercise price must be paid upon exercise of the Option; the balance is to be paid on the first anniversary of the exercise and is to be evidenced by a one-year secured term note. Although the Company has the right to select Acquisition Co., it must select a Canadian publicly listed company that meets certain criteria at exercise of the Option, Acquisition Co must have less than US$100,000 in liabilities and US$5,000,000 or more in working capital and Asia Pacific will have the right to nominate 30% of its directors. |
7. Equipment
7. Equipment | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
7. Equipment | 7. EQUIPMENT August 31, 2017 Cost Accumulated Depreciation A. $ $ $ Oil and gas equipment 71,284 14,848 56,436 February 28, 2017 Cost Accumulated Depreciation B. $ $ $ Oil and gas equipment 67,289 12,333 54,956 |
8. Accounts Payable
8. Accounts Payable | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
8. Accounts Payable | 8. ACCOUNTS PAYABLE During the six months ended August 31, 2017, the Company paid $5,693 (CAD$7,500) in cash to settle $19,292 (CAD$25,415) of balance owing to a vendor of the Company. As a result, the Company recorded a gain on settlement of debt of $13,599. |
9. Note Payable
9. Note Payable | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
9. Note Payable | 9. NOTE PAYABLE As at August 31, 2017, the Company had $19,943 (CAD$25,000) (February 28, 2017 - $18,825 (CAD$25,000)) in short term note obligations. The note payable is unsecured, non-interest bearing and payable upon demand. |
10. Advance Payable
10. Advance Payable | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
10. Advance Payable | 10. ADVANCE PAYABLE As at August 31, 2017, the Company had $64,058 (February 28, 2017 - $nil) due to two unrelated parties. The balance of $60,000 was related to the acquisition of the Godin property (Note 4) and the remaining balance was related to expenses paid by an unrelated party. The note payable is unsecured, non-interest bearing and payable upon demand. |
11. Asset Retirement Obligation
11. Asset Retirement Obligation | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
11. Asset Retirement Obligation | 11. ASSET RETIREMENT OBLIGATION The Companys asset retirement obligation consists of reclamation and closure costs associated with the Test Well in the Compeer Property. The asset retirement obligation was estimated based on the Companys understanding of its requirements to reclaim currently disturbed areas. Significant reclamation and closure activities include land rehabilitation, water, removal of building and well facilities and tailings reclamation. The undiscounted estimate of this liability was $39,885 (CAD$50,000) (February 28, 2017 - $37,650 (CAD$50,000)) reflecting payments commencing in 2024. This estimate was adjusted for an inflation rate of 2.00% and then discounted at a rate of 10.00% for a net present value of $27,303 (CAD$34,227) (February 28, 2017 - $24,546 (CAD$32,597)) as at August 31, 2017. |
12. Derivative Financial Liabil
12. Derivative Financial Liabilities - Warrants | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
12. Derivative Financial Liabilities - Warrants | 12. DERIVATIVE FINANCIAL LIABILITIES - WARRANTS Balance, February 29, 2016 $ 150,136 Warrants issued 1,043,074 Fair value adjustment 1,397,267 Balance, February 28, 2017 2,590,477 Fair value adjustment 6,325,077 Balance, August 31, 2017 $ 8,915,554 The derivative liability consists of the fair value of share purchase warrants that were issued in unit private placements that have an exercise price in a currency other than the functional currency of the Company. At August 31, 2017, the fair value of the warrants was determined using the Black-Scholes Option Pricing Model using the following weighted average market assumptions: August 31, 2017 February 28, 2017 Volatility 168 % 265 % Risk-free interest rate 1.27 % 1.22 % Expected life 1.48 years 1.99 years Dividend yield nil nil |
13. Share Capital
13. Share Capital | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
13. Share Capital | 13. SHARE CAPITAL Six months ended August 31, 2017: In April 2017, the Company issued 21,000,000 shares with a fair value of $37,800,000 in connection to the acquisition of Colony (Note 3a). In April 2017, the Company issued 20,000,000 shares with a fair value of $38,000,000 in connection to the acquisition of Black Dragon (Note 3b). In April 2017, the Company issued 20,000,000 shares with a fair value of $39,000,000 in connection to the acquisition of Rolling Rock (Note 3c). In May 2017, the Company issued 15,000,000 shares with a fair value of $30,000,000 in connection to the acquisition of City of Gold (Note 3d). During the six month ended August 31, 2017, the Company issued 2,347,142 common shares for total gross proceeds of $1,305,000 pursuant to private placements. The Company paid a total of $60,200 in finders fees in connection with the private placements of equity financings. As at August 31, 2017, the Company received $100,000 of share subscriptions related to the shares issued subsequently (Note 15). Year ended February 28, 2017: In March 2016, the Company issued 500,000 units at a price of $0.10 per unit for a total of $50,000. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant being exercisable into one additional share at an exercise price of $0.40 for a period of three years. The proceeds for this issuance were received in the year ended February 29, 2016 and on the issuance of these units, the Company allocated $500 to share capital and $49,500 to the warrant liability. In May 2016, the Company issued 353,521 common shares with a fair price of $0.10 per share for a total of $35,352 to settle accounts payable of $95,584 (CAD$123,733). As a result, the Company recorded a gain on settlement of debt of $60,232. In May 2016, the Company issued 200,000 units with a fair price of $0.21 per share in regards to the secured convertible debenture. Each unit consists of one common share of the Company and one common share purchase warrant. Each warrant is exercisable to purchase one common share at a price of $0.40 per share for a period of two years. The warrants were determined to be derivatives. At issuance date, the fair value of the common shares and warrants was $73,621 with $41,000 allocated to share capital and $32,621 allocated to warrant liability. In September 2016, the Company issued 250,000 units at a price of $0.10 per unit for gross proceeds of $25,000. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant being exercisable into one additional share at an exercise price of $0.40 for a period of three years. Upon the issuance of these units, the Company allocated $250 to share capital and $24,750 to the warrant liability. In November 2016, the Company issued 400,000 common shares at a price of $0.25 per share for gross proceeds of $100,000. In January 2017, the Company issued 1,680,000 common shares with a fair price of $0.25 per share for a total of $420,000 to settle amounts due to a related party payable of $420,000. In January 2017, the Company issued 182,832 common shares with a fair price of $0.25 per share for a total of $45,708 to settle accrued liabilities of $76,100. As a result, the Company recorded a gain on settlement of debt of $30,392. In January 2017, the Company issued 121,888 common shares with a fair price of $0.25 per share for a total of $30,472 to settle amounts due to a related party of $30,472. In January 2017, the Company issued 236,571 common shares with a fair price of $0.38 per share for a total of $89,897 to settle accounts payable of $59,143. As a result, the Company recorded a loss on settlement of debt of $30,754. In January 2017, the Company issued 400,000 shares at a price of $0.25 per share for gross proceeds of $100,000. In February 2017, the Company issued 1,310,000 shares at a price of $0.25 per share for gross proceeds of $327,500. In February 2017, the Company issued 800,000 units at a price of $0.25 per unit for gross proceeds of $200,000. Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant being exercisable into one additional share at an exercise price of $0.60 for a period of two years. Upon the issuance of these units, the Company allocated $800 to share capital and $199,200 to the warrant liability. In February 2017, the Company issued 1,073,698 units with a fair price of $1,509,022 in connection with the conversion of the convertible debenture (Note 8). Each unit consists of one common share of the Company and one common share purchase warrant, with each warrant being exercisable into one additional share at an exercise price of $0.40 for a period of two years. Upon the issuance of these units, the Company allocated $773,063 to share capital and $735,959 to the warrant liability. The Company paid a total of $43,225 in finders fees in connection with the private placements of equity financings during the year ended February 28, 2017. Warrants Below is a summary of the common share purchase warrant transactions: Number of Warrants Weighted Average Exercise Price per Warrant $ Outstanding at February 29, 2016 1,080,000 0.40 Issued 2,823,698 0.46 Expired (80,000) 1.50 Number of warrants at February 28, 2017 and August 31, 2017 3,823,698 0.44 A summary of the common share purchase warrants outstanding and exercisable at August 31, 2017 is as follows: Exercise Price Number Outstanding Expiry Date $ 0.40 200,000 May 17, 2018 0.40 1,000,000 March 8, 2019 0.40 500,000 March 9, 2019 0.60 800,000 February 10, 2019 0.40 1,073,698 February 10, 2019 0.40 250,000 September 22, 2019 3,823,698 The weighted average exercise price is $0.44 and weighted average life of the warrants is 1.48 years. Stock Options The Companys Stock Option Plan allows a maximum 5,579,335 shares to be reserved for issuance under the plan. Options granted under the plan may not have a term exceeding 10 years and vesting provisions are at the discretion of the Board of Directors. A summary of the stock options outstanding and exercisable at August 31, 2017 is as follows: Exercise Price Number Outstanding and Exercisable Expiry Date Aggregate Intrinsic Value $ $ 0.10 2,300,000 November 3, 2020 5,750,000 As at August 31 The aggregate intrinsic value in the proceeding table represents the total intrinsic value, based on the Companys closing stock price of $2.60 per share as of August 31, 2017. |
14. Related Party Transactions
14. Related Party Transactions | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
14. Related Party Transactions | 14. RELATED PARTY TRANSACTIONS Due to related parties consist of the following: August 31, 2017 February 28, 2017 $ $ Due to directors and officers of the Company 253,812 48,831 As at August 31, 2017, the Company had $500,000 (February 28, 2017 - $nil) in long term note obligations owing to a company with a common director. The note payable is unsecured, with an interest of 10% per annum and due on or before January 18, 2019. As at August 31, 2017, the Company has an accrued interest of $30,959. |
15. Subsequent Event
15. Subsequent Event | 6 Months Ended |
Aug. 31, 2017 | |
Notes | |
15. Subsequent Event | 15. SUBSEQUENT EVENT In September 2017, the Company issued 250,000 shares at a price of $2.00 per share for gross proceeds of $500,000. (Note 13). |
2. Summary of Significant Acc21
2. Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 6 Months Ended |
Aug. 31, 2017 | |
Policies | |
Basis of Presentation | Basis of Presentation The unaudited interim financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC). They do not include all information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended February 28, 2017 included in the Companys Annual Report on Form 10-K filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements included in the 10-K report. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ending February 28, 2018. |
2. Summary of Significant Acc22
2. Summary of Significant Accounting Policies: Basis of Consolidation (Policies) | 6 Months Ended |
Aug. 31, 2017 | |
Policies | |
Basis of Consolidation | Basis of consolidation These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Colony Energy, LLC, Black Dragon Energy, LLC, Rolling Rock Resources, LLC and City of Gold, LLC. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated upon consolidation. |
2. Summary of Significant Acc23
2. Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 6 Months Ended |
Aug. 31, 2017 | |
Policies | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The estimated fair values for financial instruments are determined based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, receivable, loan receivable, accounts payable and accrued liabilities, amounts due to related party, advance payable and note payable approximate their carrying value due to the short-term nature of those instruments. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 Unobservable inputs that are supported by little or no market activity, there for requiring an entity to develop its own assumptions about the assumption that market participants would use in pricing. The Company had certain level 3 assets and liabilities required to be recorded at fair value on a recurring basis in accordance with US GAAP as at August 31, 2017. As at August 31, 2017, the Companys Level 3 assets consist of shares and warrants of a private company and Level 3 liabilities consisted of warrants of the Company. The resulting level 3 assets and liabilities have no active market and are required to be measured at their fair value each reporting period based on information that is unobservable. As at August 31, 2017, the fair value of the level 3 assets was equal to $1,500,000 with their fair value based on the price paid to acquire the investment. A summary of the Companys level 3 liabilities for the six months ended August 31, 2017 and year ended February 28, 2017 is as follows: August 31, 2017 February 28, 2017 Warrants Beginning fair value $ 2,590,477 $ 150,136 Issuance - 1,043,074 Change in fair value 6,325,077 1,397,267 Ending fair value of warrants 8,915,554 2,590,477 Embedded Conversion feature Beginning fair value - - Bifurcation of embedded conversion feature - 199,999 Change in fair value - (199,999) Ending fair value of embedded conversion feature - - Ending fair value of Level 3 liability $ 8,915,554 $ 2,590,477 |
2. Summary of Significant Acc24
2. Summary of Significant Accounting Policies: Basic and Diluted Income (loss) Per Share (Policies) | 6 Months Ended |
Aug. 31, 2017 | |
Policies | |
Basic and Diluted Income (loss) Per Share | Basic and Diluted Income (Loss) per Share Earnings or loss per share (EPS) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income (loss) by the weighted-average of all potentially dilutive shares of the common stock that were outstanding during the years presented. There were 6,123,698 (February 28, 2017 - 6,123,698) potentially dilutive securities excluded from the calculation of diluted loss per share as their effect would be anti-dilutive. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period. |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Aug. 31, 2017 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows. |
2. Summary of Significant Acc26
2. Summary of Significant Accounting Policies: Fair Value of Financial Instruments: Fair Value of Financial Instruments Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Fair Value of Financial Instruments Table Text Block | August 31, 2017 February 28, 2017 Warrants Beginning fair value $ 2,590,477 $ 150,136 Issuance - 1,043,074 Change in fair value 6,325,077 1,397,267 Ending fair value of warrants 8,915,554 2,590,477 Embedded Conversion feature Beginning fair value - - Bifurcation of embedded conversion feature - 199,999 Change in fair value - (199,999) Ending fair value of embedded conversion feature - - Ending fair value of Level 3 liability $ 8,915,554 $ 2,590,477 |
3. Acquisitions_ Acquisition of
3. Acquisitions: Acquisition of Colony Energy LLC Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Acquisition of Colony Energy LLC Table Text Block | $ Oil and gas properties 108,000 Accounts payable and accrued liabilities (13,411) Advance payable (34,058) Due to related parties (60,000) Net assets 531 The total consideration for the acquisition is as follows: $ Value of shares issued 37,800,000 Obligation to issue shares 6,000,000 Transaction costs 12,386 43,812,386 Less: net assets (531) Excess consideration paid over the net assets of Colony 43,811,855 |
3. Acquisitions_ Acquisition 28
3. Acquisitions: Acquisition of Black Dragon Energy LLC Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Acquisition of Black Dragon Energy LLC Table Text Block | $ Oil and gas properties 119,863 Accounts payable and accrued liabilities (26,355) Advance payable (119,863) Net liabilities (26,355) The total consideration for the acquisition is as follows: $ Value of shares issued 38,000,000 Cash paid 100,000 Transaction costs 10,951 38,110,951 Add: net liabilities 26,355 Consideration paid over the net liabilities of Black Dragon 38,137,306 |
3. Acquisitions_ Acquisition 29
3. Acquisitions: Acquisition of Rolling Rock Resources LLC Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Acquisition of Rolling Rock Resources LLC Table Text Block | $ Oil and gas properties 130,397 Accounts payable and accrued liabilities (26,032) Advance payable (130,397) Net liabilities (26,032) The total consideration for the acquisition is as follows: $ Value of shares issued 39,000,000 Cash paid 100,000 Transaction costs 9,315 39,109,315 Add: net liabilities 26,032 Consideration paid over the net liabilities of Rolling Rock 39,135,347 |
3. Acquisitions_ Acquisition 30
3. Acquisitions: Acquisition of City of Gold LLC Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Acquisition of City of Gold LLC Table Text Block | $ Investments 1,500,000 Accounts payable and accrued liabilities (13,932) Note payable (1,516,302) Net liabilities (30,234) The total consideration for the acquisition is as follows: $ Value of shares issued 30,000,000 Add: net liabilities 30,234 Consideration paid over the net liabilities of City of Gold 30,030,234 |
4. Oil and Gas Properties_ Sche
4. Oil and Gas Properties: Schedule of Oil and Gas Properties Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Oil and Gas Properties Table Text Block | Compeer Godin Black Dragon Rolling Rock Total $ $ $ $ $ Balance, February 28, 2017 641,494 - - - 641,494 Acquisition - 60,091,149 61,695,247 63,305,183 185,091,579 Exploration - 13,403 92,747 158,473 264,623 Exchange difference 38,083 - - - 38,083 Balance, August 31, 2017 679,577 60,104,552 61,787,994 63,463,656 186,035,779 |
7. Equipment_ Property, Plant a
7. Equipment: Property, Plant and Equipment (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Property, Plant and Equipment | August 31, 2017 Cost Accumulated Depreciation A. $ $ $ Oil and gas equipment 71,284 14,848 56,436 February 28, 2017 Cost Accumulated Depreciation B. $ $ $ Oil and gas equipment 67,289 12,333 54,956 |
12. Derivative Financial Liab33
12. Derivative Financial Liabilities - Warrants: Schedule of Derivative Liabilities at Fair Value (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Derivative Liabilities at Fair Value | Balance, February 29, 2016 $ 150,136 Warrants issued 1,043,074 Fair value adjustment 1,397,267 Balance, February 28, 2017 2,590,477 Fair value adjustment 6,325,077 Balance, August 31, 2017 $ 8,915,554 |
12. Derivative Financial Liab34
12. Derivative Financial Liabilities - Warrants: Schedule of Assumptions Used (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Assumptions Used | August 31, 2017 February 28, 2017 Volatility 168 % 265 % Risk-free interest rate 1.27 % 1.22 % Expected life 1.48 years 1.99 years Dividend yield nil nil |
13. Share Capital_ Warrants Out
13. Share Capital: Warrants Outstanding Table Text Block (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Warrants Outstanding Table Text Block | Number of Warrants Weighted Average Exercise Price per Warrant $ Outstanding at February 29, 2016 1,080,000 0.40 Issued 2,823,698 0.46 Expired (80,000) 1.50 Number of warrants at February 28, 2017 and August 31, 2017 3,823,698 0.44 |
13. Share Capital_ Schedule of
13. Share Capital: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Exercise Price Number Outstanding Expiry Date $ 0.40 200,000 May 17, 2018 0.40 1,000,000 March 8, 2019 0.40 500,000 March 9, 2019 0.60 800,000 February 10, 2019 0.40 1,073,698 February 10, 2019 0.40 250,000 September 22, 2019 3,823,698 |
13. Share Capital_ Schedule o37
13. Share Capital: Schedule of Stockholders Equity (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Stockholders Equity | Exercise Price Number Outstanding and Exercisable Expiry Date Aggregate Intrinsic Value $ $ 0.10 2,300,000 November 3, 2020 5,750,000 |
14. Related Party Transactions_
14. Related Party Transactions: Schedule of Related Party Transactions (Tables) | 6 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Related Party Transactions | August 31, 2017 February 28, 2017 $ $ Due to directors and officers of the Company 253,812 48,831 |
3. Acquisitions_ Acquisition 39
3. Acquisitions: Acquisition of Colony Energy LLC Table Text Block (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Advance payable | $ 64,058 | |
Due to related parties | 284,771 | $ 48,831 |
Obligation to issue shares | 6,000,000 | |
Colony Energy, LLC | ||
Oil and Gas Properties Acquisition | 108,000 | |
Accounts Payable and Accrued Liabilities, Current | (13,411) | |
Advance payable | (34,058) | |
Due to related parties | (60,000) | |
Net Assets | 531 | |
Value of Shares Issued | 37,800,000 | |
Obligation to issue shares | 6,000,000 | |
Transaction Costs | 12,386 | |
Total Consideration | 43,812,386 | |
Less: Net Assets | (531) | |
Excess Consideration Paid Over the Net Assets | $ 43,811,855 |
3. Acquisitions_ Acquisition 40
3. Acquisitions: Acquisition of Black Dragon Energy LLC Table Text Block (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Advance payable | $ 64,058 | |
Total Liabilities | 83,771,209 | $ 3,020,185 |
Black Dragon Energy, LLC | ||
Oil and Gas Properties Acquisition | 119,863 | |
Accounts Payable and Accrued Liabilities, Current | (26,355) | |
Advance payable | (119,863) | |
Total Liabilities | (26,355) | |
Value of Shares Issued | 38,000,000 | |
Cash Paid | 100,000 | |
Transaction Costs | 10,951 | |
Total Consideration | 38,110,951 | |
Add: Net Liabilities | 26,355 | |
Consideration Paid Over the Net Liabilities | $ 38,137,306 |
3. Acquisitions_ Acquisition 41
3. Acquisitions: Acquisition of Rolling Rock Resources LLC Table Text Block (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Advance payable | $ 64,058 | |
Total Liabilities | 83,771,209 | $ 3,020,185 |
Rolling Rock Resources, LLC | ||
Oil and Gas Properties Acquisition | 130,397 | |
Accounts Payable and Accrued Liabilities, Current | (26,032) | |
Advance payable | (130,397) | |
Total Liabilities | (26,032) | |
Value of Shares Issued | 39,000,000 | |
Cash Paid | 100,000 | |
Transaction Costs | 9,315 | |
Total Consideration | 39,109,315 | |
Add: Net Liabilities | 26,032 | |
Consideration Paid Over the Net Liabilities | $ 39,135,347 |
3. Acquisitions_ Acquisition 42
3. Acquisitions: Acquisition of City of Gold LLC Table Text Block (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Note payable | $ 19,943 | $ 18,825 |
Total Liabilities | 83,771,209 | $ 3,020,185 |
City of Gold, LLC | ||
Investments | 1,500,000 | |
Accounts Payable and Accrued Liabilities, Current | (13,932) | |
Note payable | (1,516,302) | |
Total Liabilities | (30,234) | |
Value of Shares Issued | 30,000,000 | |
Add: Net Liabilities | 30,234 | |
Consideration Paid Over the Net Liabilities | $ 30,030,234 |
4. Oil and Gas Properties_ Sc43
4. Oil and Gas Properties: Schedule of Oil and Gas Properties Table Text Block (Details) - USD ($) | 6 Months Ended | |
Aug. 31, 2017 | Feb. 28, 2017 | |
Compeer | ||
Oil and Gas Properties | $ 679,577 | $ 641,494 |
Exchange Difference | 38,083 | |
Godin | ||
Oil and Gas Properties | 60,104,552 | |
Acquisition | 60,091,149 | |
Exploration | 13,403 | |
Black Dragon | ||
Oil and Gas Properties | 61,787,994 | |
Acquisition | 61,695,247 | |
Exploration | 92,747 | |
Rolling Rock | ||
Oil and Gas Properties | 63,463,656 | |
Acquisition | 63,305,183 | |
Exploration | 158,473 | |
Total | ||
Oil and Gas Properties | 186,035,779 | $ 641,494 |
Acquisition | 185,091,579 | |
Exploration | 264,623 | |
Exchange Difference | $ 38,083 |
4. Oil and Gas Properties (Deta
4. Oil and Gas Properties (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Aug. 31, 2017 | Feb. 28, 2017 | |
Details | ||
Exploration and Production Costs | $ 679,577 | $ 641,494 |
7. Equipment_ Property, Plant45
7. Equipment: Property, Plant and Equipment (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Cost | ||
Property, Plant and Equipment, Net | $ 71,284 | $ 67,289 |
Accumulated Depreciation | ||
Property, Plant and Equipment, Net | 14,848 | 12,333 |
Net Book Value | ||
Property, Plant and Equipment, Net | $ 56,436 | $ 54,956 |
8. Accounts Payable (Details)
8. Accounts Payable (Details) | Aug. 31, 2017USD ($) |
Details | |
Settlement of Debt | $ 5,693 |
Gain on Debt Settlement | $ 13,599 |
9. Note Payable (Details)
9. Note Payable (Details) | Aug. 31, 2017USD ($) |
Details | |
Notes and Loans Payable | $ 19,943 |
10. Advance Payable (Details)
10. Advance Payable (Details) | Aug. 31, 2017USD ($) |
Details | |
Due to Unrelated Parties | $ 64,058 |
11. Asset Retirement Obligati49
11. Asset Retirement Obligation (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Details | ||
Asset Retirement Obligations, Noncurrent | $ 27,303 | $ 24,546 |
12. Derivative Financial Liab50
12. Derivative Financial Liabilities - Warrants: Schedule of Derivative Liabilities at Fair Value (Details) - Derivative Financial Liabilities - Warrants - USD ($) | 6 Months Ended | 12 Months Ended | |
Aug. 31, 2017 | Feb. 28, 2017 | Feb. 29, 2016 | |
Warrants | $ 8,915,554 | $ 2,590,477 | $ 150,136 |
Warrants Issued | 1,043,074 | ||
Fair Value Adjustment of Warrants | $ 6,325,077 | $ 1,397,267 |
12. Derivative Financial Liab51
12. Derivative Financial Liabilities - Warrants: Schedule of Assumptions Used (Details) | 3 Months Ended | 12 Months Ended |
Aug. 31, 2017 | Feb. 28, 2017 | |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 168.00% | 265.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 1.27% | 1.22% |
Expected Life | 1 year 5 months 23 days | 1 year 11 months 26 days |
13. Share Capital (Details)
13. Share Capital (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2016 | Aug. 31, 2017 | Nov. 30, 2016 | Feb. 28, 2017 | Apr. 30, 2017 | Feb. 27, 2017 | Feb. 26, 2017 | Jan. 31, 2017 | Jan. 30, 2017 | Jan. 29, 2017 | Jan. 28, 2017 | Jan. 27, 2017 | Nov. 29, 2016 | May 31, 2016 | May 30, 2016 | Mar. 30, 2016 | |
Common Stock, Shares Issued | 115,884,698 | 37,537,556 | ||||||||||||||
Due to related parties | $ 284,771 | $ 48,831 | ||||||||||||||
Colony | ||||||||||||||||
Common Stock, Shares Issued | 21,000,000 | |||||||||||||||
Black Dragon | ||||||||||||||||
Common Stock, Shares Issued | 20,000,000 | |||||||||||||||
Rolling Rock | ||||||||||||||||
Common Stock, Shares Issued | 20,000,000 | |||||||||||||||
City of Gold | ||||||||||||||||
Common Stock, Shares Issued | 15,000,000 | |||||||||||||||
During the Three Months Ended May 31, 2017 | ||||||||||||||||
Common Stock, Shares Issued | 2,347,142 | |||||||||||||||
Gross Proceeds for Subscriptions | $ 1,305,000 | |||||||||||||||
During the Year Ended February 28, 2017 | ||||||||||||||||
Common Stock, Shares Issued | 250,000 | 1,310,000 | 800,000 | 1,073,698 | 1,680,000 | 182,832 | 121,888 | 236,571 | 400,000 | 400,000 | 353,521 | 200,000 | 500,000 | |||
Gross Proceeds for Subscriptions | $ 25,000 | $ 327,500 | $ 200,000 | $ 1,509,022 | $ 100,000 | $ 100,000 | $ 50,000 | |||||||||
Finder's Fees | $ 60,200 | 43,225 | ||||||||||||||
Shares Issued, Price Per Share | $ 0.10 | $ 0.21 | ||||||||||||||
Represents the monetary amount of SharesIssuedForServices, during the indicated time period. | $ 73,621 | |||||||||||||||
Share Capital | 250 | 41,000 | ||||||||||||||
Warrant Liability | $ 24,750 | $ 32,621 | ||||||||||||||
Related Party Transaction, Due from (to) Related Party | $ 420,000 | |||||||||||||||
Accrued Liabilities, Current | $ 76,100 | |||||||||||||||
Due to related parties | $ 30,472 | |||||||||||||||
Accounts Payable, Current | $ 59,143 |
13. Share Capital_ Warrants O53
13. Share Capital: Warrants Outstanding Table Text Block (Details) - $ / shares | 6 Months Ended | |
Aug. 31, 2017 | Feb. 29, 2016 | |
Details | ||
Class of Warrant or Right, Outstanding | 3,823,698 | 1,080,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.44 | $ 0.40 |
Debt Conversion, Converted Instrument, Warrants or Options Issued | 2,823,698 | |
Warrants per share issued | $ 0.46 | |
Warrants Expired | (80,000) | |
Warrants Expired Price Per Share | $ 1.50 |
13. Share Capital_ Schedule o54
13. Share Capital: Schedule of Stockholders' Equity Note, Warrants or Rights (Details) | 3 Months Ended |
Aug. 31, 2017$ / sharesshares | |
Warrant1 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ / shares | $ 0.40 |
Temporary Equity, Shares Outstanding | shares | 200,000 |
Expiry Date | May 17, 2018 |
Warrant2 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ / shares | $ 0.40 |
Temporary Equity, Shares Outstanding | shares | 1,000,000 |
Expiry Date | Mar. 8, 2019 |
Warrant3 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ / shares | $ 0.40 |
Temporary Equity, Shares Outstanding | shares | 500,000 |
Expiry Date | Mar. 9, 2019 |
Warrant4 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ / shares | $ 0.60 |
Temporary Equity, Shares Outstanding | shares | 800,000 |
Expiry Date | Feb. 10, 2019 |
Warrant5 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ / shares | $ 0.40 |
Temporary Equity, Shares Outstanding | shares | 1,073,698 |
Expiry Date | Feb. 10, 2019 |
Warrant6 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ / shares | $ 0.40 |
Temporary Equity, Shares Outstanding | shares | 250,000 |
Expiry Date | Sep. 22, 2019 |
13. Share Capital_ Schedule o55
13. Share Capital: Schedule of Stockholders Equity (Details) | 3 Months Ended |
Aug. 31, 2017USD ($)$ / sharesshares | |
Details | |
Exercise Price | $ / shares | $ 0.10 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 2,300,000 |
Expiration Date | Nov. 3, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ | $ 5,750,000 |
14. Related Party Transaction56
14. Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Details | ||
Due to Other Related Parties | $ 253,812 | $ 48,831 |