For the three months ended March 31, 2024 and 2023
(Presented in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
FIRST MINING GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT MARCH 31, 2024 AND DECEMBER 31, 2023
(Unaudited - Presented in thousands of Canadian dollars unless otherwise noted)
March 31,
2024
December 31,
2023
Assets
Current
Cash and cash equivalents
$
7,732
$
12,211
Investments (Note 3)
106
263
Prepaid expenses, accounts and other receivables (Note 4)
902
875
Total current assets
8,740
13,349
Non-current
Mineral properties (Note 5)
235,830
244,234
Investment in Treasury Metals Inc. (Note 6)
3,034
3,269
Investment in PC Gold Inc. (Note 7)
21,527
21,527
Investment in Big Ridge Gold Corp. (Note 8)
-
1,406
Property and equipment (Note 9)
2,054
2,101
Other assets
343
181
Total non-current assets
262,788
272,718
TOTAL ASSETS
$
271,528
$
286,067
LLIABILITIES
Current
Accounts payable and accrued liabilities (Note 11)
$
4,279
$
4,828
Current portion of lease liability
114
158
Flow-through share premium liability (Note 12)
1,058
1,225
Option – PC Gold (Note 8)
4,576
4,576
Current portion of other liabilities (Note 5 & 9)
400
400
Total current liabilities
10,427
11,187
Non-current
Lease liability
212
14
Provision for environmental remediation (Note 5(b))
1,500
1,500
Provision for Pickle Crow reclamation funding (Note 7)
151
151
Silver Stream derivative liability (Note 10)
38,196
34,295
Other liabilities (Note 5 & 9)
449
526
Total non-current liabilities
40,508
36,486
TOTAL LIABILITIES
$
50,935
$
47,673
SHAREHOLDERS’ EQUITY
Share capital (Note 13)
355,268
354,913
Warrant and share-based payment reserve (Note 13)
53,924
53,623
Accumulated other comprehensive loss
(4,718
)
(4,561
)
Accumulated deficit
(183,881
)
(165,581
)
Total shareholders’ equity
220,593
238,394
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
271,528
$
286,067
Nature of Operations and Going Concern (note 1)
Subsequent Events (Note 18)
The consolidated financial statements were approved by the Board of Directors:
Signed: “Keith Neumeyer”, Director
Signed: “Raymond Polman”, Director
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
1
FIRST MINING GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited - Presented in thousands of Canadian dollars unless otherwise noted)
Three Months Ended March 31,
2024
2023
OPERATING EXPENSES (Note 14)
General and administration
$
1,255
$
1,700
Exploration and evaluation
221
105
Investor relations and marketing communications
384
375
Corporate development and due diligence
274
83
Impairment of non-current assets (Note 5(c))
11,955
-
Loss from operational activities
(14,089
)
(2,263
)
OTHER ITEMS
Gain on disposal of asset and royalties
-
(6,710
)
Interest and other income
(257
)
(326
)
Foreign exchange (gain)/loss
(76
)
36
Other expenses
194
16
Fair value loss on Silver Stream liability (Note 10)
3,901
3,620
Gain/(loss) before income taxes
$
(17,851
)
$
1,101
Deferred income tax recovery
167
591
Equity loss and dilution impact of equity accounted investments (Note 6, 7, 8)
(616
)
(165
)
Net Income/(loss) for the period
$
(18,300
)
$
1,527
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified to net income:
Investments fair value (loss)/gain
(157
)
471
Other comprehensive income/(loss)
(157
)
471
Net Income/(loss) and comprehensive income/(loss) for the period
$
(18,457
)
$
1,998
Loss per share
Basic and diluted
$
(0.02
)
$
0.00
Weighted average number of shares outstanding
Basic and diluted
917,781,199
805,813,381
The accompanying notes are an integral part of these condensed interim consolidated annual financial statements.
2
FIRST MINING GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited - Presented in thousands of Canadian dollars unless otherwise noted)
Three months ended March 31,
2024
2023
Cash flows from operating activities
Net (loss) income for the period
$
(18,300
)
$
1,527
Adjustments for:
Share-based payments (Note 13)
437
504
Depreciation
120
128
Impairment of non-current asset (Note 5)
11,955
-
Gain on sale of royalty
-
(6,710
)
Fair value loss on Silver Stream derivative liability (Note 10)
3,901
3,620
Accrued interest receivable
(52
)
(55
)
Other expenses
24
8
Unrealized foreign exchange (gain)/loss
(72
)
36
Deferred income tax recovery
(167
)
(591
)
Equity and dilution loss on equity accounted investments
616
165
Operating cash flows before movements in working capital
(1,538
)
(1,368
)
Changes in non-cash working capital items:
(Increase)/decrease in accounts and other receivables
(47
)
52
(Increase)/decrease in prepaid expenditures
45
19
Increase (decrease) in accounts payables and accrued liabilities
(496
)
1,481
Total cash (used in) provided by operating activities
(2,036
)
184
Cash flows from investing activities
Mineral property expenditures (Note 5)
(4,170
)
(6,490
)
Proceeds from sale of investments (Note 8)
1,825
-
Property and equipment purchases
(43
)
(131
)
Proceeds from sale of royalties
-
4,680
Cash expended in acquisitions
(100
)
-
Investment in Guaranteed Investment Certificate
-
(4,797
)
Total cash used in investing activities
(2,488
)
(6,738
)
Cash flows from financing activities
Share issuance cost
9
(23
)
Repayment of lease liability
(36
)
(34
)
Finance costs paid
(6
)
(8
)
Total cash used in financing activities
(33
)
(65
)
Foreign exchange effect on cash
78
(32
)
Change in cash and cash equivalents
(4,479
)
(6,651
)
Cash and cash equivalents, beginning
12,211
13,558
Cash and cash equivalents, ending
$
7,732
$
6,907
Cash
5,462
2,606
Term deposits
2,270
4,301
Cash and cash equivalents, ending
$
7,732
$
6,907
The accompanying notes are an integral part of these condensed interim consolidated annual financial statements.
3
FIRST MINING GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited - Presented in thousands of Canadian dollars, except share and per share amounts)
Number of common shares
Share capital
Warrant reserve
Share-based payment reserve
Accumulated other comprehensive income (loss)
Accumulated deficit
Total
Balance as at December 31, 2022
802,226,149
$
340,963
$
25,063
$
24,526
$
(4,337
)
$
(158,545
)
$
227,670
Share issuance costs
-
(23
)
-
-
-
-
(23
)
Shares issued on acquisition of mineral properties
4,891,873
1,032
-
-
-
-
1,032
Settlement of restricted share units
539,998
177
-
(177
)
-
-
-
Share-based payments
-
-
-
854
-
-
854
Income for the period
-
-
-
-
-
1,527
1,527
Other comprehensive income/(loss)
-
-
-
-
471
-
471
Balance as at March 31, 2023
807,658,020
$
342,149
$
25,063
$
25,203
$
(3,866
)
$
(157,018
)
$
231,531
Balance as at December 31, 2023
916,414,375
$
354,913
$
26,453
$
27,170
$
(4,561
)
$
(165,581
)
$
238,394
Share issuance cost
-
9
-
-
-
-
9
Shares issuance on acquisition of mineral properties and property, plant and equipment (Note 5 & 9)
1,791,026
273
-
(198
)
-
-
75
Settlement of restricted share units
223,334
73
-
(73
)
-
-
-
Share-based payments
-
-
-
572
-
-
572
Loss for the period
-
-
-
-
-
(18,300
)
(18,300
)
Other comprehensive income/(loss)
-
-
-
-
(157
)
-
(157
)
Balance as at March 31, 2024
918,428,735
$
355,268
$
26,453
$
27,471
$
(4,718
)
$
(183,881
)
$
220,593
The accompanying notes are an integral part of these condensed interim consolidated annual financial statements.
4
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
1. NATURE OF OPERATIONS AND GOING CONCERN
First Mining Gold Corp. (the “Company” or “First Mining”) is a public company which is listed on the Toronto Stock Exchange (the “TSX”) under the symbol “FF”, on the OTCQX under the symbol “FFMGF”, and on the Frankfurt Stock Exchange under the symbol “FMG”. The Company’s head office and principal address is Suite 2070 – 1188 West Georgia Street, Vancouver, British Columbia, Canada, V6E 4A2.
First Mining was incorporated on April 4, 2005 and changed its name to First Mining Gold Corp. in January 2018.
First Mining is advancing a portfolio of gold projects in Canada, with the most advanced projects being the Springpole Gold Project in northwestern Ontario and the Duparquet Gold Project in the Abitibi region of Québec. The Company holds an 10.96% equity position in Treasury Metals Inc., which is advancing the Goliath Gold Complex toward construction. First Mining’s portfolio of gold projects in eastern Canada also includes the Cameron project. In addition, the Company holds a 30% interest in PC Gold Inc., the legal entity which holds the Pickle Crow gold project which is being advanced by FireFly Metals Ltd. (“FireFly Metals”), and a 20% direct project interest in the Hope Brook Project.
Going Concern
The Company’s unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates that the Company will be able to continue its operations for at least twelve months from March 31, 2024 and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has not generated revenue from operations to date and will require additional financing or outside participation to undertake further advanced exploration of its mineral properties. Future operations of the Company are dependent upon its ability to raise additional equity financing and maintain sufficient working capital and upon future production or proceeds from the dispositions of its mineral property interests.
As of March 31, 2024, the Company had cash and cash equivalents of $7,732,000, a working capital deficit of $1,687,000, which is calculated as current assets less current liabilities, and accumulated deficit of $183,881,000. For the period ended March 31, 2024, the Company incurred a net loss of $18,300,000 and used cash in operating activities of $2,036,000. The Company’s operations to date have been financed by the issuance of common shares, sale of investments and royalties, and the exercise of stock options. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and liquidate its investments as necessary. Despite this, there can be no assurance that the Company will be able to continue to secure additional financings in the future, and if they are secured, that they would be on terms that are favourable. This gives rise to a material uncertainty that may raise substantial doubt about the Company’s ability to continue as a going concern.
These unaudited condensed interim consolidated financial statements do not give effect to any adjustments to the carrying values of the assets and liabilities, the reported expenses, and the statements of financial position classifications used that would be necessary should the Company be unable to continue as going concern. Such adjustments could be material.
5
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
2. BASIS OF PRESENTATION
These unaudited condensed interim financial statements (“financial statements”) have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) applicable to the preparation of interim financial statements under International Accounting Standard 34 Interim Financial Reporting. These financial statements do not include all disclosures required for annual financial statements. Accordingly, they should be read in conjunction with the notes to the Company’s audited financial statements for the years ended December 31, 2023 and 2022.
These financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit and loss or fair value through other comprehensive income (loss), which are stated at their fair value. The financial statements are presented in thousands of Canadian dollars, unless otherwise noted, and tabular amounts are presented in thousands of Canadian dollars. These consolidated annual financial statements include the accounts of the Company and its subsidiaries. The functional currency of the Company and its Canadian subsidiaries is the Canadian dollar.
In preparing the Company’s financial statements for the three months ended March 31, 2024, certain new accounting standards and interpretations have been published that are either applicable in the current year or not mandatory for the current period. We have assessed these standards, including Amendments to IAS – Non-current Liabilities with Covenants, and determined they do not have a material impacted on the Company in the current reporting period. In addition, IFRS 18 Presentation and Disclosure in Financial Statements was issued by the IASB in April 2024, with mandatory application of the standard in annual reporting periods beginning on or after January 1, 2027. We are currently assessing the impact of IFRS 18 on our consolidated financial statements. No standards have been early adopted in the current period. Additionally, the areas of estimation uncertainty remain unchanged from those disclosed in the annual consolidated financial statements.
The accounts of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Inter-company transactions, balances and unrealized gains or losses on transactions are eliminated. The following table highlights the Company’s material subsidiaries with their projects:
Name of the
subsidiary
Ownership
Percentage
Project
Location
Gold Canyon Resources Inc.
100%
Springpole Gold Project (“Springpole”)
Birch-Uchi Projects (“Birch-uchi”)
Northwestern Ontario, Canada
Duparquet Gold Mines Inc.
100%
Duparquet Gold Project (“Duparquet”)
Central Duparquet (“Duparquet”)
Duquesne Gold Project (“Duquesne”)
Pitt Gold Project (“Pitt”)
Québec, Canada
These financial statements were approved by the Board of Directors on May 10, 2024.
6
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
3. INVESTMENTS
The movements in investments during the three months ended March 31, 2024 and year ended December 31, 2023 are summarized as follows:
Marketable Securities
(FVTOCI)
Total
Investments
Balance as at December 31, 2022
$
184
$
184
Additions
2,479
2,479
Disposals
(2,322
)
(2,322
)
Loss recorded in other comprehensive income/(loss)
(78
)
(78
)
Balance as at December 31, 2023
$
263
$
263
Additions
-
-
Disposals
-
-
Loss recorded in other comprehensive income/(loss)
(157
)
(157
)
Balance as at March 31, 2024
$
106
$
106
The Company holds securities of publicly traded companies as strategic interests. The investments where the Company does not have significant influence are classified as marketable securities which are designated as FVTOCI.
As of March 31, 2024, the Company held common shares of Grid Metals Corp. and Patriot Lithium Limited.
4. PREPAID EXPENSES, ACCOUNTS AND OTHER RECEIVABLES
March 31,
2024
December 31,
2023
GST and HST receivables
$
316
$
344
Other receivables
283
156
Prepaid expenses
303
375
$
902
$
875
7
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
5. MINERAL PROPERTIES
As at March 31, 2024 and December 31, 2023, the Company had the following mineral properties:
Springpole
Birch-Uchi
(Note 5(a))
Duparquet
(Note 5(b))
Cameron
Hope Brook
(Note 5(c))
Others
Total
Balance December 31, 2023
$
138,957
$
7,983
$
48,594
$
32,848
$
15,852
$
-
$
244,234
Acquisition
-
75
-
-
-
-
75
Concessions, taxes and royalties
141
-
38
11
-
-
190
Salaries and share-based payments
475
(5
)
257
12
-
-
739
Drilling, exploration, and technical consulting
131
(3
)
328
3
-
-
459
Assaying, field supplies, and environmental
2,584
11
73
9
-
-
2,677
Travel and other expenses
171
8
29
3
-
-
211
Total Expenditures
$
3,502
$
86
$
725
$
38
$
-
$
-
$
4,351
Option payments received and impairment
-
-
-
-
(12,755
)
-
(12,755
)
Balance March 31, 2024
$
142,459
$
8,069
$
49,319
$
32,886
$
3,097
$
-
$
235,830
Springpole
Birch-Uchi
(Note 5(a))
Duparquet
(Note 5(b))
Cameron
Hope Brook
(Note 5(c))
Others (1)
Total
Balance December 31, 2022
$
125,829
$
3,871
$
42,886
$
32,581
$
15,852
$
128
$
221,147
Acquisition
1,192
450
513
-
-
-
2,155
Concessions, taxes and royalties
405
-
28
23
-
-
456
Salaries and share-based payments
2,509
862
1,293
111
-
-
4,775
Drilling, exploration, and technical consulting
1,654
1,080
1,146
22
-
-
3,902
Assaying, field supplies, and environmental
6,464
1,143
2,570
85
-
-
10,262
Travel and other expenses
904
577
158
26
-
-
1,665
Total Expenditures
$
13,128
$
4,112
$
5,708
$
267
$
-
$
-
$
23,215
Option payments received
-
-
-
-
-
(128
)
(128
)
Balance December 31, 2023
$
138,957
$
7,983
$
48,594
$
32,848
$
15,852
$
-
$
244,234
(1) Other mineral properties as at December 31, 2022 include: A 1.5% NSR Royalty on the Goldlund Property under the terms of the Share Purchase Agreement for Tamaka Gold Corporation, which was sold in 2022; and the Turquoise Canyon property in Nevada (under option with Momentum Minerals Ltd. which was subsequently acquired by IM Exploration Inc. on July 6, 2021 and IM Exploration Inc. was renamed to Westward Gold Inc. on October 7, 2021. Westward Gold Inc. exercised its option to acquire the Turquoise Canyon property on January 30, 2023.)
8
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
5. MINERAL PROPERTIES (continued)
The Company has various underlying agreements and commitments with respect to its mineral properties, which define annual or future payments in connection with royalty buy-backs or maintenance of property interests, the most significant of which are discussed below.
a) Birch-Uchi Properties
(i) Swain Post property option
On February 26, 2021, the Company entered into a three year earn-in agreement with Exiro Minerals Corp. (“Exiro”) pursuant to which First Mining may earn a 100% interest in Exiro’s Swain Post property (“Swain Post Property”) in northwestern Ontario by making total cash and share payments of $335,000 to Exiro during the term of the option, and by completing all assessment work requirements on the Swain Post Property during the three-year option term. During the three months ended March 31, 2024, the Company issued 641,026 common shares valued at $75,000 under the terms of the earn-in agreement. As of March 31, 2024, the Company has made total payments of $335,000 comprised of $60,000 in cash and issued common shares worth of $275,000 and has exercised the option to own 100% interest in Exiro’s Swain Post Property.
(ii) Swain Lake property option
On April 28, 2021, the Company entered into an earn-in agreement with Whitefish Exploration Inc. (“Whitefish”), which gives First Mining the option to earn up to a 100% interest in Whitefish’s Swain Lake project (“Swain Lake”) in northwestern Ontario in two stages over a period of five years. First Mining may earn a 70% interest in Swain Lake by making cash payments totaling $200,000 and share payments totaling $425,000, and by incurring at least $500,000 worth of expenditures on the Swain Lake Property during the first three years of the earn-in term. Upon completing the first stage of the earn-in, First Mining will hold a 70% interest in the Swain Lake Property and will have an additional period of two years within which to acquire the remaining 30% interest in the Swain Lake Property by paying $1,000,000 in cash and issuing $1,000,000 worth of First Mining common shares to Whitefish.
On April 5, 2024, the Company and Whitefish agreed to amend the earn-in agreement to amend the future cash and share payment requirements by issuing $155,000 worth of First Mining common shares to Whitefish on or before the third anniversary of the Closing Date from the original term being the Company to pay Whitefish $50,000 in cash and issue to Whitefish First Mining common shares equal to $100,000 on or before the third anniversary of the Closing date. As at March 31, 2024, the Company had issued 1,256,395 common shares valued at $325,000 and made a payment of $150,000 in cash under the terms of the earn-in agreement.
9
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
5. MINERAL PROPERTIES (continued)
(iii) Vixen properties acquisition
On September 15, 2021, the Company entered into a three-year option agreement with ALX Resources Corp. (“ALX”) pursuant to which First Mining may earn up to a 100% interest in ALX’s Vixen North, Vixen South and Vixen West properties (the “Vixen Properties”) in northwestern Ontario in two stages over a period of five years. First Mining may earn a 70% interest in the Vixen Properties by making cash payments totalling $550,000 and share payments totalling $400,000 to ALX during the initial three-year option term, and by incurring at least $500,000 worth of expenditures on the property during the initial three-year option term.
On September 15, 2023, the Company and ALX agreed to amend the option agreement for the first stage of the earn-in to issue common shares instead of cash payment for future anniversary payments as follows:
·
On or before the second anniversary of the Closing Date, the Company is to issue to ALX common shares of the Company’s shares equal to $175,000 (issued);
·
On or before the third anniversary of the Closing Date, the Company is to issue to ALX commons shares of the Company’s shares equal to $175,000;
·
On or before the fourth anniversary of the Closing Date, the Company is to issue to ALX common shares of the Company’s shares equal to $100,000;
·
On or before the fifth anniversary of the Closing Date, the Company to incur and fund expenditures on the property of not less than $500,000.
Pursuant to the amended agreement, the Company issued common shares of $175,000 during the year ended December 31, 2023. As of March 31, 2024, the Company has made payments of $350,000 in cash and issued common shares worth $375,000.
(iv) Birch Lake properties acquisition
On October 11, 2021, the Company entered into an earn-in agreement with Pelangio Exploration Inc. (“Pelangio”) pursuant to which First Mining may earn up to an 80% interest in Pelangio’s Birch Lake properties (the “Birch Lake Properties”) in two stages over a period of six years. First Mining may earn a 51% interest in the Birch Lake Properties by making cash payments totaling $350,000 and issuing in aggregate 1,300,000 First Mining common shares and by incurring at least $1,750,000 worth of expenditures on the Birch Lake Properties during the first four years of the earn-in term. Upon completing the first stage of the earn-in, First Mining will hold a 51% interest in the Birch Lake Properties and will have an additional period of 2 years to acquire a further 29% interest in the Birch Lake Properties by paying $400,000 to Pelangio in cash or issuing First Mining common shares, at First Mining’s sole discretion, and by incurring an additional $1,750,000 worth of expenditures on the Birch Lake Properties.
On October 12, 2023, the Company and Pelangio agreed to amend the earn-in agreement to amend the future cash and share payment requirements and have additional period of 3 years to complete the first stage of the earn-in. Pursuant to the amended agreement, the Company paid $10,000 in cash and issued 250,000 common shares during the three months ended December 31, 2023. The agreement gives the Company the right to earn, through Gold Canyon, up to an 80% interest in Pelangio’s Birch Lake and Birch Lake West properties. As of March 31, 2024, the Company has made payments of $110,000 in cash and issued common shares worth $153,750.
10
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
5. MINERAL PROPERTIES (continued)
On January 13, 2023, a subsidiary of the Company acquired the net assets of a private Company associated with Birch Lake and Casummit Lake properties for a total consideration of $600,000 cash and 3.5 million of First Mining common shares. $100,000 was paid prior to December 31, 2022, $100,000 cash was paid on closing, with the remaining cash to be paid as follows:
·
$100,000 cash payable on the first anniversary of the Closing Date (Paid in January 2024).
·
$100,000 cash payable on the second anniversary of the Closing Date.
·
$200,000 cash payable on the third anniversary of the Closing Date.
2,000,000 common shares were issued on closing and the remaining shares will be issued as follows:
·
500,000 issued in January 2024, the first anniversary of the Closing Date.
·
1,000,000 common shares will be issued on the earlier of the third anniversary of closing and the date of a positive decision regarding the environmental assessment of the Springpole properties.
(v) Stargazer properties acquisition
On October 29, 2021, the Company entered into a three year earn-in agreement with a private individual pursuant to which First Mining may earn a 100% interest in the Stargazer concession and other properties (“Stargazer Properties”) in northwestern Ontario by making cash and share payments of $250,000 to the private individual during the term of the option, and by incurring at least $350,000 worth of expenditures on the Stargazer Properties during the three-year option term. On November 5, 2023, the Company entered into an amended agreement to amend the original terms of cash and share payments of $250,000 to $236,000 and the Company is to incur $300,000 worth of expenditures instead of $350,000. The remaining share payments will be issued as follows:
·
No option payment is to be made following the second and third anniversary dates of the Closing Date;
·
On the fourth anniversary of the Closing Date, the Company is to issue common shares worth $25,000;
·
On the fifth anniversary of the Closing Date, the Company is to issue common shares worth $25,000;
·
On the sixth anniversary of the Closing Date, the Company is to issue common shares worth $50,000;
·
On the seventh anniversary of the Closing Date, the Company is to issue common shares worth $100,000.
As of March 31, 2024, the Company has made payments of $24,000 in cash and issued common shares worth $12,000.
b) Duparquet Project
On January 30, 2023, First Mining, through its wholly-owned subsidiary Duparquet Gold Mines Inc. (formerly, Clifton Star), entered into an agreement with IAMGOLD Corporation, to acquire its Porcupine East property located adjacent to the Company’s Duparquet property and connecting the land package to its Pitt and Duquesne properties to the east. The transaction closed on February 2, 2023, for a total consideration of:
·
2.5 million First Mining common shares with a fair value of $512,500 issued upon closing of the transaction;
·
The granting of a 1.5% net smelter return royalty on the property;
·
A payment of $500,000, in cash or First Mining common shares, as First Mining may elect at its sole election, if the Company declares a minimum of 350,000 koz gold resource on the property; and
·
A payment of $1,000,000, in cash or First Mining common shares, as First Mining may elect at its sole discretion, to be paid within 12 months of commercial production being declared at the Duparquet Gold Project, as long as any major surface infrastructure related to the Duparquet Gold Project has been constructed on the Porcupine East Property.
11
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
5. MINERAL PROPERTIES (continued)
On April 24, 2023, the Company announced that through its subsidiary it had sold mining claims (“Cat Lake Claims”) located in Manitoba to Grid Metals Corp. for total consideration of:
·
$300,000 in cash;
·
250,000 common shares of Grid Metals Corp.;
·
NSR 2% royalty on all production sold from the property. Grid Metals Corp may at any time purchase from the Company 50% (for a total of 1.0%) of the royalty by paying $1,000,000 to the Company; and
·
Deferred cash payment of $350,000, when the earlier of (i) the delineation of a 2 million tonnes or greater Mineral Resource on the Cat Lake Claims; and (ii) the date Grid Metals announces a construction decision which will result in the Mineral Resources on the Cat Lake Claims being mined at some point in time as part of an overall mining project.
As of March 31, 2024, the Company continues to maintain a provision for environmental remediation activities of $1.5 million (December 31, 2023 - $1.5 million) related to work to be incurred by the Company’s wholly-owned subsidiary.
c) Hope Brook Project
On June 8, 2021, the Company announced it had closed a definitive earn-in agreement with Big Ridge Gold Corp. whereby Big Ridge could earn up to an 80% interest in First Mining’s Hope Brook Gold Project located in Newfoundland, Canada. Upon completion of the earn-in, First Mining will retain a 20% interest in the Hope Brook Project. In accordance with the agreement, upon closing First Mining nominated one member to the Board of Directors of Big Ridge and received $500,000 and 11,500,000 shares of Big Ridge which were credited against the Hope Brook project mineral property balance. On September 13, 2022, Big Ridge completed Stage 1 of the earn-in requirements. The Company received 15.0 million common shares of Big Ridge and the Company’s interest in the project decreased to 49%. On March 21, 2024, the Company and Big Ridge amended the earn-in agreement by removing the requirement for Big Ridge to incur an additional $10,000,000 in expenditures on the Hope Brook Gold Project in order to facilitate the Company’s liquidation of its investment position in Big Ridge and generate additional capital (see Note 8). On March 28, 2024, Big Ridge exercised Stage 2 of the amended earn-in requirement by issuing the Company 10,000,000 Big Ridge common shares (initial recognition - $800,000), reducing the Company’s ownership percentage in the Hope Brook Project from 49% to 20% and reducing the pre-impairment carrying value by $800,000. The Company tested the recoverable amount of the retained project interest; based on the estimated fair value an impairment loss of $11,955,000 was recognized during the period ended March 31, 2024. See Note 8 below for further details of the equity accounted investment in Big Ridge.
6. INVESTMENT IN TREASURY METALS
a) Treasury Metals Share Purchase Agreement Overview
On August 7, 2020, First Mining completed a transaction with Treasury Metals under a share purchase agreement (the “Treasury Share Purchase Agreement”), pursuant to which Treasury Metals agreed to acquire all of the issued and outstanding shares of Tamaka Gold Corporation, a previously wholly-owned subsidiary of the Company, and 100% owner of the Goldlund Project. The only remaining term of the Treasury Share Purchase Agreement is the right by First Mining over certain contingent milestone payments totaling $5 million, payable in cash on certain key advancements at Goldlund which have not been recorded as at March 31, 2024.
12
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
6. INVESTMENT IN TREASURY METALS (continued)
b) Equity Accounting Method for Investment in Treasury Metals and Impairment
The Company has concluded it has significant influence over Treasury Metals. The Company is accounting for itsinvestment using the equity method. As at March 31, 2024 the carrying value of $3,034,000 approximates to the fair value of the Company’s investment in common shares of Treasury Metals (December 31, 2023 - $ 3,269,000). Management assessed no significant or prolonged change in carrying value of the investment resulting in no reversal of impairment for the period ended March 31, 2024.
As at March 31, 2024, the Company owns approximately 20.0 million common shares of Treasury Metals.
March 31,
2024
December 31,
2023
Balance, beginning of period
$
3,269
$
5,592
Equity (loss)
(235
)
(778
)
Impairment of Investment in Treasury Metals Inc.
-
(1,545
)
Balance, end of period
$
3,034
$
3,269
The equity accounting for Treasury Metals is based on audited results that is publicly available information for the year ended December 31, 2023 and an estimate of results for the period of January 1, 2024 to March 31, 2024. The Company’s equity share of Treasury Metals’s net loss for the period ending March 31, 2024 was $235,000.
7. INVESTMENT IN PC GOLD INC.
Pursuant to a definitive Earn-in agreement (“Earn-in”) the Company and FireFly Metals executed on March 12, 2020, comprised of two stages, on June 9, 2021, the Company announced completion of the Stage 1 earn-in and accordingly FireFly Metals obtained a 51% ownership of the PC Gold legal entity. First Mining received the scheduled 100,000,000 FireFly Metals shares and executed the joint venture shareholders agreement. Following the completion of the Stage 1 earn-in by FireFly Metals, the Company’s percentage ownership of its former subsidiary, PC Gold, was reduced from 100% to 49%, which led to a loss of control and the resulting deconsolidation of PC Gold Inc. from First Mining’s financial statements. First Mining determined that its then 49% investment in the common shares of PC Gold gave it significant influence over PC Gold, requiring PC Gold to be recorded in First Mining’s financial statements using the equity method of accounting as an investment in associate. Upon the completion of Stage 2 earn-in by FireFly Metals in August 2021, the Company’s percentage ownership reduced from 49% to 30%.
The initial recognition of the investment in an associate was accounted for based on an estimated fair value using a market approach to value Pickle Crow’s inferred resources on a per unit of metal basis derived fromcomparable gold project transactions. As at March 31, 2024, the Company owns a 30% interest in PC Gold Inc.
March 31,
2024
December 31,
2023
Balance, beginning of period
$
21,527
$
21,572
Equity income/(loss)
-
(45
)
Balance, end of period
$
21,527
$
21,527
13
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
7. INVESTMENT IN PC GOLD INC. (continued)
The subsequent equity accounting for PC Gold is based on audited results that is publicly available information for the year-ended June 30, 2023, and on the unaudited nine-month period ended March 31, 2024.
The $4,576,000 (December 31, 2023 - $4,576,000) liability balance as at March 31, 2024 represents the additional net dilution which would result from FireFly Metals completing its additional 10% equity interest. Following receipt of $3,000,000 under this option, First Mining’s ownership would reduce to 20%.
The FireFly Metals Earn-In Agreement requires First Mining to contribute its pro-rata share of environmental reclamation funding, which was 30% as at March 31, 2024 following completion of the Stage 2 earn-in. The Company has recorded a provision of $151,000 as of March 31, 2024 (December 31, 2023 - $151,000) which is in line with FireFly Metals’ revised estimate of the environmental reclamation provision.
8. INVESTMENT IN BIG RIDGE GOLD CORP.
On September 13, 2022, Big Ridge completed Stage 1 of the earn-in requirements necessary to satisfy the earn-in threshold set out in the Hope Brook earn-in agreement. Big Ridge issued a total of 15.0 million common shares to the Company with an aggregate fair value of $2,175,000, resulting in an increase in the Company’s common share ownership interest in Big Ridge from 10.8% to 19.5% on December 31, 2022. In addition to its share ownership interest, the Company considered various qualitative factors including representation rights on Big Ridge’s board of directors in arriving at the determination that significant influence exists, and therefore the Company applies the equity method of accounting.
On March 21, 2024, the Company amended the existing earn-in agreement with Big Ridge. Subsequently, Big Ridge completed Stage 2 of the earn-in requirement and issued a total of 10.0 million common shares to the Company with an aggregate fair value of $800,000, increasing the Company’s common share ownership interest in Big Ridge to 18.4% from 14.1% (see Note 5(c)). During the three months ended March 31, 2024, the Company completed the sale of 36,500,000 Big Ridge shares for $1,749,845 ($1,825,000 net of transaction costs of $75,155) resulting in a net realized loss of $385,030 based on the original cost at the time of initial recognition of the securities and the Company no longer owns an equity interest in Big Ridge.
March 31,
2024
December 31,
2023
Balance, beginning of period
$
1,406
$
2,119
Equity (loss)
(381
)
(149
)
Completion of Stage 2 Earn-in
800
-
Dilution losses on Investment
-
(564
)
Disposal of investment
(1,825
)
Balance, end of period
$
-
$
1,406
The equity accounting for Big Ridge is based on its audited results that is publicly available information for the year ended June 30, 2023, and an estimate of results for the period of July 1, 2023 to March 28, 2024.
9. PROPERTY AND EQUIPMENT
On April 28, 2023, the Company acquired real and personal property for $800,000 in cash and 1,000,000 common shares of the Company from a private company and individual on the following payment terms:
·
$200,000 cash payable on the closing date and issue 1,000,000 shares (paid)
·
$300,000 cash payable on or before the first anniversary of the closing date (paid in April 2024)
·
$300,000 cash payable on or before the second anniversary of the closing date.
14
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
10. SILVER STREAM DERIVATIVE LIABILITY
a) Silver Purchase Agreement Overview and Consideration Received
On June 10, 2020, the Company entered into a silver purchase agreement (the “Silver Purchase Agreement”) with First Majestic Silver Corp. (“First Majestic”), which closed on July 2, 2020. Under the terms of the Silver Purchase Agreement, First Majestic agreed to pay First Mining total consideration of US$22.5 million (approx. $30.6 million as at the closing date), in three tranches, for the right to purchase 50% of the payable silver produced from the Springpole Gold Project over the life of the project (the “Silver Stream”) and also received 30 million common share purchase warrants of First Mining. Each share purchase warrant entitles First Majestic to purchase one common share of First Mining at an exercise price of $0.40 for a period of five years (subsequently re-priced to $0.37 in accordance with the terms of the Silver Purchase Agreement).
First Mining has the right to repurchase 50% of the Silver Stream for US$22.5 million (approximately $30.5 million as at March 31, 2024) at any time prior to the commencement of production at Springpole (the “Buy-Back Right”).
Per the Silver Purchase Agreement, First Majestic paid US$10 million ($13.7 million) to First Mining on the July 2, 2020, closing date, with US$2.5 million ($3.3 million) paid in cash and the remaining US$7.5 million ($10.4 million) paid in 805,698 common shares of First Majestic (“Tranche 1”). Upon announcement of the Pre-Feasibility Study (“PFS”) on March 4, 2021, First Mining received US$7.5 million ($9.8 million) from First Majestic, with US$3.75 million ($4.8 million) paid in cash and the remaining US$3.75 million ($5.0 million) paid in 287,300 common shares of First Majestic (“Tranche 2”). The final tranche (“Tranche 3”) of US$5.0 million ($6.5 million) is payable by First Majestic upon First Mining receiving approval of a federal or provincial environmental assessment for the Springpole Gold Project, which is to be paid half in cash and half in shares of First Majestic.
The Silver Stream has an initial term of 40 years from July 2, 2020. The term is automatically extended by successive 10-year periods as long as the life of mine continues for the Springpole Gold Project. If, upon expiration of the term of the Silver Purchase Agreement, the Company has not sold to First Majestic an amount of silver sufficient to reduce the Advance Payment to nil, then a refund of the uncredited balance, without interest shall be due and owing by the Company to First Majestic.
The silver delivered to First Majestic may be sourced from the Springpole Gold Project, or the Company may substitute any required refined silver with refined silver from a source other than the Springpole Gold Project, with the exception of silver purchased on a commodity exchange.
15
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
The Company has considered that the Silver Stream is a standalone derivative measured at FVTPL. The estimated fair value of the Silver Stream derivative liability is determined using a discounted cash flow model which incorporates a Monte Carlo simulation, with the following key input assumptions: 1) Observable assumptions include, Silver Stream based implied volatility of COMEX silver, COMEX silver future curve, silver spot price, USD risk-free rate, USD/CAD foreign exchange rates, and share price of the Company, and 2) Unobservable assumptions include the Company’s credit spread, historical volatility of the warrant and payable silver quantities. The fair value of the Silver Stream derivative liability is a Level 3 measurement.
The fair value of the Silver Stream derivative liability is calculated at each reporting date as the net of the future Advance Payment tranches receivable and the Silver Stream obligation, with gains or losses recorded in the statement of net loss and comprehensive loss. The fair value of the Silver Stream derivative liability as at March 31, 2024 is US$28,189,300 ($38,196,470), which is comprised of the Silver Stream obligation fair value of US$31,649,000 ($42,884,000) less the Advance Payment receivable fair value of US$3,459,270 ($4,687,310). The fair value of the Silver Stream derivative liability as at December 31, 2023 was US$25,930,000 ($34,295,000), which is comprised of the Silver Stream obligation fair value of US$29,470,000 ($38,976,000) less the Advance Payment receivable fair value of US$3,540,000 ($4,681,000).
March 31,
2024
December 31,
2023
Balance, beginning of period
$
(34,295
)
$
(27,171
)
Change in fair value
(3,901
)
(7,124
)
Balance, end of period
$
(38,196
)
$
(34,295
)
11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
March 31,
2024
December 31,
2023
Accounts payable
$
2,069
$
1,844
Accrued liabilities
2,210
2,984
Total
$
4,279
$
4,828
16
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
12. FLOW-THROUGH SHARE PREMIUM LIABILITY
The following is a continuity schedule of the liability portion of the Company’s flow-through share issuances:
August 26,
2022
September 2,
2022
June 23,
2023
Total
Balance, December 31, 2022
$
872
$
170
$
-
$
1,042
Settlement of flow-through share premium liability upon incurring eligible expenditures
(872
)
(170
)
(534
)
(1,576
)
Liability incurred for flow-through share issued June 23, 2023
-
-
1,759
1,759
Balance, December 31, 2023
$
-
$
-
$
1,225
$
1,225
Settlement of flow-through share premium liability upon incurring eligible expenditures
-
-
(167
)
(167
)
Balance, March 31, 2024
$
-
$
-
$
1,058
$
1,058
As at March 31, 2024, the Company had $3,009,000 (December 31, 2023 – $3,482,000) of unspent flow-through expenditure commitments which will be spent by December 31, 2024.
13. SHARE CAPITAL
a) Authorized
Unlimited number of common shares with no par value.
Unlimited number of preferred shares with no par value.
b) Issued and Fully Paid
Common shares as at March 31, 2024: 918,428,735 (December 31, 2023 – 916,414,375).
Preferred shares as at March 31, 2024: nil (December 31, 2023 – nil).
17
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
13. SHARE CAPITAL (continued)
c) Warrants
The movements in warrants during the three months ended March 31, 2024 and year ended December 31, 2023 are summarized as follows:
Number
Weighted average
exercise price
Balance as at December 31, 2022
50,347,237
$
0.35
Warrants expired
(18,297,009
)
0.31
Warrants issued
52,589,759
0.21
Balance as at December 31, 2023
84,639,987
$
0.27
Warrants expired
-
-
Warrants issued
-
-
Balance as at March 31, 2024
84,639,987
$
0.27
The following table summarizes information about warrants outstanding as at March 31, 2024:
Exercise price
Number of warrants
outstanding
Weighted average exercise price
($ per share)
Weighted average
remaining life (years)
$
0.20
43,330,500
$
0.20
2.64
$
0.27
9,259,259
$
0.27
2.22
$
0.37
32,050,228
$
0.37
1.25
84,639,987
$
0.27
2.07
18
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
13. SHARE CAPITAL (continued)
d) Stock Options
The Company has adopted a stock option plan that allows for the granting of stock options to Directors, Officers, employees and certain consultants of the Company for up to 10% of the Company’s issued and outstanding common shares. Stock options granted under the plan may be subject to vesting provisions as determined by the Board of Directors.
The movements in stock options during the three months ended March 31, 2024, and year ended December 31, 2023 are summarized as follows:
Number
Weighted average
exercise price
Balance as at December 31, 2022
46,372,500
$
0.37
Options granted
16,960,000
0.19
Options expired
(16,517,500
)
0.44
Options forfeited
(1,755,000
)
0.23
Balance as at December 31, 2023
45,060,000
$
0.28
Options granted
26,607,500
0.12
Options expired/cancelled
(8,175,000
)
0.35
Options forfeited
(1,262,500
)
0.19
Balance as at March 31, 2024
62,230,000
$
0.20
The following table summarizes information about the stock options outstanding as at March 31, 2024:
Options Outstanding
Options Exercisable
Exercise
price
Number of options
Weighted average exercise price
($ per share)
Weighted average remaining life (years)
Number ofoptions
Weighted average exercise price
($ per share)
Weighted average remaining life (years)
0.10- 0.18
27,195,000
$
0.12
4.85
6,951,875
$
0.12
4.84
0.185- 0.25
17,260,000
$
0.20
3.35
13,742,500
$
0.20
3.21
0.26- 0.50
17,775,000
$
0.33
2.46
17,775,000
$
0.33
2.46
62,230,000
$
0.20
3.75
38,469,375
$
0.25
3.16
During the three months ended March 31, 2024, there were 26,607,500 (March 31, 2023 –16,075,000) stock options granted with an aggregate fair value at the date of grant of $1,500,715 (March 31, 2023- $3,054,250), or a weighted average fair value of $0.06 per option (March 31, 2023 - $0.19). As at March 31, 2024, 23,760,625 (March 31, 2023 – 16,026,250) stock options remain unvested with an aggregate grant date fair value of $1,503,560 (March 31, 2023 - $1,741,558).
19
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
13. SHARE CAPITAL (continued)
Certain stock options granted were directly attributable to exploration and evaluation expenditures on mineral properties and were therefore capitalized to mineral properties. In addition, certain stock options were subject to vesting provisions. These two factors result in differences between the aggregate fair value of stock options granted and total share-based payments expensed during the periods. For the three months ended March 31, 2024, share-based payments expense is comprised of stock options $591,398, restricted share units (“RSUs”) - $15,979, deferred share units (“DSUs”) $21,285, and performance share units (“PSUs”) - $24,779, and is classified within the financial statements as follows:
For the three months ended
March 31,
Statements of Net Loss:
2024
2023
General and administration
$
210
$
374
Exploration and evaluation
14
6
Investor relations and marketing communications
90
52
Corporate development and due diligence
123
72
Subtotal
$
437
$
504
Statements of Financial Position:
Mineral Properties
135
350
Total
$
572
$
854
The grant date fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model with the following weighted average assumptions:
Three months
ended March 31,
2024
Year ended
December 31,
2023
Risk-free interest rate
3.51
%
3.25
%
Share price at grant date (in dollars)
$
0.12
$
0.19
Exercise price (in dollars)
$
0.12
$
0.19
Expected life (years)
5.00 years
5.00 years
Expected volatility (1)
57.20
%
65.06
%
Forfeiture rate
7.50
%
7.50
%
Expected dividend yield
Nil
Nil
(1) The computation of expected volatility was based on the Company’s historical price volatility, over a period which approximates the expected life of the option.
e) Restricted Share Units
During the three months ended March 31, 2024, the Company granted 8,422,115 (March 31, 2023 – 2,817,045) RSUs under its share-based compensation plan to the Company’s executive officers and management as part of the Company’s long-term incentive plan (“LTIP”). Unless otherwise stated, the awards typically have a graded vesting schedule over a three-year period and will be settled in equity upon vesting.
During the three months ended March 31, 2024, the Company issued 223,334 (March 31, 2023 – 539,998) common shares pursuant to the exercise of RSUs for an aggregate settlement value of $73,090 (March 31, 2023 - $176,921).
20
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
13. SHARE CAPITAL (continued)
The associated compensation cost, which is based on the underlying share price on the date of grant, is recorded as share-based payments expense against share-based payment reserve.
The following table summarizes the changes in RSU’s for the three months ended March 31, 2024 and year ended December 31, 2023:
Number
Weighted average fair value
Balance as at December 31, 2022
1,890,002
$
0.31
RSUs granted
2,817,045
0.18
RSUs settled
(763,330
)
0.33
RSUs forfeited
(330,002
)
0.30
Balance as at December 31, 2023
3,613,715
$
0.20
RSUs granted
8,422,115
0.11
RSUs settled
(223,334
)
0.33
RSUs forfeited
(1,261,213
)
0.18
Balance as at March 31, 2024
10,551,283
$
0.12
f) Deferred Share Units
During the three months ended March 31, 2024, the company granted 400,000 (March 31, 2023 – 450,000) DSUs under its share-based compensation plan to a director as part of the Company’s LTIP. DSUs have a graded vesting schedule over an 18-month period and will be settled in equity upon vesting.
The associated compensation cost, which is based on the underlying share price on the date of grant, is recorded as share-based payments expense against share-based payment reserve.
Number
Weighted average fair value
Balance as at December 31, 2022
659,000
$
0.30
DSUs granted
450,000
0.18
Balance as at December 31, 2023
1,109,000
$
0.25
DSUs granted
400,000
0.11
Balance as at March 31, 2024
1,509,000
$
0.21
21
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
13. SHARE CAPITAL (continued)
g) Performance Share Units
During the three months ended March 31, 2024, the Company granted 5,650,000 PSUs (March 31, 2023 – 4,900,000) under the Plan to certain executives as part of the Company’s LTIP. The amount of shares ultimately to be issued will vary from a factor of 0 to 2 based on the number of PSUs granted, depending on the Company’s share performance as compared to the share performance of a selected group of peer companies.
The estimated value of the PSUs is determined at the grant date using a Monte Carlo simulation model. The model is based on several assumptions, including the share price volatility of the Company’s stock, as well as the volatility of the selected group of peer companies and the correlation of returns between the peer group and the Company.
The following table summarizes the changes in PSUs for the three months ended March 31, 2024 and year ended December 31, 2023:
Number
Weighted average fair value
Balance as at December 31, 2022
1,913,000
$
0.24
PSUs granted
4,900,000
0.22
Balance as at December 31, 2023
6,813,000
$
0.23
PSUs granted
5,650,000
0.09
PSU forfeited
(1,997,000
)
0.22
Balance as at March 31, 2024
10,466,000
$
0.16
22
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
14. OPERATING EXPENSES
Operating expenses by nature, which map to the Company’s functional operating expense categories presented in the consolidated statements of net loss and comprehensive loss, are as follows:
For the three months ended March 31, 2024
General and administration
Exploration and evaluation
Investor relations and marketing communications
Corporate development and due diligence
Total
Administrative and office
$
36
$
62
$
5
$
1
$
104
Consultants
55
6
-
114
175
Depreciation (non-cash)
43
77
-
-
120
Directors’ fees
74
-
-
-
74
Marketing and conferences
-
3
177
-
180
Professional fees
(5
)
-
-
-
(5
)
Salaries
694
58
93
27
872
Share-based payments
(non-cash) (Note 13(d))
210
14
90
123
437
Transfer agent and filing fees
137
-
-
-
137
Travel and accommodation
11
1
19
9
40
Operating expenses total
$
1,255
$
221
$
384
$
274
$
2,134
Impairment of non-current asset (non-cash)
11,955
Loss from operational activities
$
14,089
For the three months ended March 31, 2023
General and administration
Exploration and evaluation
Investor relations and marketing communications
Corporate development and due diligence
Total
Administrative and office
$
86
$
28
$
6
$
10
$
130
Consultants
53
18
-
(35
)
36
Depreciation (non-cash)
128
-
-
-
128
Directors’ fees
70
-
-
-
70
Marketing and conferences
-
2
211
5
218
Professional fees
250
-
-
-
250
Salaries
660
44
86
30
820
Share-based payments
(non-cash) (Note 13(d))
374
6
52
72
504
Transfer agent and filing fees
74
-
-
-
74
Travel and accommodation
5
7
20
1
33
Operating expenses total
$
1,700
$
105
$
375
$
83
$
2,263
Loss from operational activities
$
2,263
23
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
15. SEGMENT INFORMATION
The Company operates in a single reportable operating segment, being the acquisition, exploration, development and strategic disposition of its North American mineral properties. Geographic information about the Company’s non-current assets, excluding financial instruments, as at March 31, 2024 and December 31, 2023 is as follows: Canada - $260,243,000 (December 31, 2023 - $272,718,000).
16. RELATED PARTY TRANSACTIONS
The Company’s related parties consist of the key management personnel, Company’s Directors and Officers.
Key management of the Company includes the members of the Board of Directors, Officers and Vice Presidents of the Company. The compensation paid or payable to key management for services during the three months ended March 31, 2024 and 2023 is as follows:
Service or Item
Three months ended March 31,
2024
2023
Directors’ fees
$
74
$
71
Salaries and consultants’ fees
476
754
Share-based payments (non-cash)
308
575
Total
$
858
$
1,400
17. FAIR VALUE
Fair values have been determined for measurement and/or disclosure requirements based on the methods below.
The Company characterizes fair value measurements using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The three levels of the fair value hierarchy are as follows:
·
Level 1 fair value measurements are quoted prices (unadjusted) in active markets for identical assets or liabilities;
·
Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
·
Level 3 fair value measurements are those derived from valuation techniques that include significant inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The carrying values of cash and cash equivalents, short term investments, current accounts and other receivables, and accounts payable, accrued and other liabilities approximated their fair values because of the short-term nature of these financial instruments. These financial instruments are financial assets and liabilities at amortized cost.
The carrying value of investments was based on the quoted market prices of the shares as at March 31, 2024 and was therefore considered to be Level 1.
As the FireFly Metals Earn‐In Agreement provides FireFly Metals the right to earn an interest in PC Gold Inc., rather than a direct interest in the Pickle Crow project, FireFly Metals’ option to acquire PC Gold shares is a financial liability of First Mining. As a derivative, the Pickle Crow project option liability is classified as financial liability at FVTPL. The carrying value of the Option is not based on observable market data and therefore is considered to be Level 3.
24
FIRST MINING GOLD CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Presented in Canadian dollars unless otherwise noted, tabular amounts are presented in thousands of Canadian dollars except for number of shares and per share amount)
17. FAIR VALUE (continued)
The fair value of the Option – Pickle Crow Gold Project as at March 31, 2024, was determined by reference to the portion of the estimated fair value of PC Gold Inc. to be given up by the Company with the option for FireFly Metals to earn an additional 10%, net of $3,000,000 proceeds to be received on exercise.
The Silver Stream was determined to be a derivative liability, which is classified as a financial liability at FVTPL. The carrying value of the derivative liability was not based on observable market data and involved complex valuation methods and was therefore considered to be Level 3. The following table presents the Company’s fair value hierarchy for financial assets and liabilities that are measured at fair value:
March 31, 2024
December 31, 2023
Fair value measurement
Fair value measurement
Carrying value
Level 1
Level 2
Level 3
Carrying value
Level 1
Level 2
Level 3
Financial assets:
Investments (Note 3)
$
106
$
106
$
-
$
-
$
263
$
263
$
-
$
-
Financial liabilities:
Silver Stream derivative liability (Note 10)
$
38,196
$
-
$
-
$
38,196
$
34,295
$
-
$
-
$
34,295
Option – PC Gold (Note 7)
$
4,576
$
-
$
-
$
4,576
$
4,576
$
-
$
-
$
4,576
18. SUBSEQUENT EVENTS
a)
Subsequent to March 31, 2024, 2,312,500 stock options expired at a weighted average exercise price of $0.27.
b)
On May 2, 2024, the Company issued to Whitefish 987,130 shares representing the last payment requirement to complete the Stage 1 earn-in pursuant to the amended earn-in agreement. The Company, now retains a 70% ownership interest in the Swain Lake project.
c)
On May 6, 2024, the Company sold 4,539,000 common shares of Treasury Metals Inc. for gross proceeds of approximately $1.0 million, decreasing the Company’s equity ownership in Treasury Metals Inc. to 8.26% (15,461,311 common shares).
25
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