PROMISSORY NOTES | 5. PROMISSORY NOTES: January 31, 2020 $ April 30, 2019 $ Third promissory notes 23,493,003 20,908,690 Fifth promissory notes 2,793,833 1,776,847 Sixth promissory notes 702,781 - Total promissory notes 26,989,617 22,685,537 The Company has Third Promissory Notes, Fifth Promissory Notes and Sixth Promissory Notes due to a company controlled by a director of the Company (the “Lender”). The Third Promissory Notes were due on June 30, 2019. On June 28, 2019, the Company entered into an amending agreement with the Lender extending the maturity date to October 31, 2019 for no consideration. The Fifth Promissory Notes were due on December 31, 2019. On October 25, 2019, the Company entered into an amending agreement with the Lender extending the maturity date for both notes, for no consideration, to the earlier of (i) June 30, 2020 and (ii) 60 days after a pre-feasibility study has been filed on SEDAR. The Sixth Promissory Notes have the same maturity date. In accordance with the guidance of ASC 470-50 and ASC 470-60, the Company determined that the June 28, 2019 and October 25, 2019 extension agreements qualify as troubled debt restructurings. here was no accounting impact from the debt modifications. Certain conditions may result in early repayment including immediate repayment in the event a person currently not related to the Company acquires more than 40% of the outstanding common shares of the Company. Third Promissory Notes The Third Promissory Notes bear interest at the rate of 12% per annum and during the nine months ended January 31, 2020, the Company recorded interest of $2,025,196 (2019 - $1,798,172), of which $nil was capitalized to mineral property interest (2019 - $146,379) and $2,025,196 was expensed (2019 - $1,651,793). Interest is payable semi-annually as calculated on May 31 st th During the nine months ended January 31, 2020, the Lender elected to have interest payable from December 1, 2018 to November 30, 2019 of $2,584,313 deemed as advances. Fifth Promissory Notes On September 11, 2018, the Company entered into a Loan Agreement with the Lender pursuant to which up to $2,500,000 will be advanced to the Company in tranches (the “Fifth Promissory Notes”). As at January 31, 2020, the Company had received $2,500,000 (April 30, 2019 - $1,820,000) in advances pursuant to the Fifth Promissory Notes. The Fifth Promissory Notes bear interest at the rate of 14% per annum and during the nine months ended January 31, 2020, the Company recorded interest of $257,587 (2019 - $46,011). Interest is st th During the nine months ended January 31, 2020, the Lender elected to have interest payable from December 1, 2018 to November 30, 2019 of $276,638 deemed as advances. The Company and the Lender agreed that the Lender is to receive bonus shares equal to 6% of each loan tranche advanced under the Fifth Promissory Notes divided by the Company’s common share market price up to a maximum of 1,054,097 bonus shares. During the nine months ended January 31, 2020, the Company issued 1,054,097 bonus shares to the Lender at the fair value of $106,858. The fair value of the bonus shares was determined by reference to the trading price of the Company’s common shares on the date the advances were received. The aggregate finance fees (bonus shares) are recorded against the promissory notes balance and are being amortized to the Statement of Loss over the life of the promissory notes using the effective interest method. The accretion expense in respect of the debt discount recorded on the issuance of bonus shares totalled $60,348 for the nine months ended January 31, 2020 (2019 - $23,813). The unamortized debt discount as at January 31, 2020 is $nil (April 30, 2019 $60,348). Sixth Promissory Notes On October 25, 2019, the Company entered into a Loan Agreement with the Lender pursuant to which up to $700,000 will be advanced to the Company in tranches (the “Sixth Promissory Notes”). On January 20, 2020, the Company entered into an amending agreement whereby the Lender agreed to advance an additional $600,000 under the same terms as the Sixth Promissory Notes. As at January 31, 2020, the Company had received $700,000 in advances pursuant to the Sixth Promissory Notes. Subsequent to January 31, 2020, the Company received advances of $400,000. The Sixth Promissory Notes bear interest at the rate of 14% per annum and during the nine months ended January 31, 2020, the Company recorded interest of $15,543 (2019 - $nil). Interest is st th During the nine months ended January 31, 2020, the Lender elected to have interest payable from November 1, 2019 to November 30, 2019 of $2,781 deemed as advances. The Third Promissory Notes, the Fifth Promissory Notes and the Sixth Promissory Notes are collateralized by the Company’s Helmer-Bovill Property. The following table outlines the estimated cash payments required, by calendar year, in order to repay the principal balance of the Third Promissory Notes, the Fifth Promissory Notes and the Sixth Promissory Notes: 2020 $ 2021 $ 2022 $ 2023 $ 2024 $ Total $ 26,989,617 - - - - 26,989,617 |