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The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the Prospectus do not constitute an offer to sell these securities and are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. |
(To the Amended and Restated Short Form Base Shelf Prospectus dated April 4, 2011)
New Issue | April 5, 2011 |
Per Note | Total | |||||||
Public offering price(1) | % | US$ | ||||||
Underwriting discount | % | US$ | ||||||
Estimated proceeds to the Company, before expenses | % | US$ |
(1) | Plus accrued interest from , 2011 if settlement occurs after that date. |
BMO Capital Markets | TD Securities |
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Year Ended December 31, | ||||||||||||
2008 | 2009 | 2010 | ||||||||||
Low | 0.7711 | 0.7692 | 0.9278 | |||||||||
High | 1.0289 | 0.9716 | 1.0054 | |||||||||
Average | 0.9381 | 0.8757 | 0.9709 | |||||||||
End | 0.8166 | 0.9555 | 1.0054 |
• | delays or inability to successfully complete the environmental assessment review process for the Prosperity Project; | |
• | the potential for increase in the cash cost of production at the Gibraltar Mine; | |
• | lack of mineral reserves at the Harmony Project and Aley Project; | |
• | the estimates of mineral resources is a subjective process, the accuracy of which is a function of the quantity and quality of available data and the assumptions made and judgment used in the engineering and geological interpretation, which may prove to be unreliable, and may be subject to revision based on various factors; |
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• | inability to achieve target recoveries and concentrate grades estimated from metallurgical test work on drill core samples provided for testing; | |
• | fluctuation of metal prices and currency rates; | |
• | uncertain project realization values; | |
• | current global economic conditions; | |
• | changes in mining legislation adversely affecting our operations; | |
• | inability to obtain adequate financing on acceptable terms; | |
• | inability to obtain necessary exploration and mining permits and comply with all government requirements including environmental, health and safety laws; | |
• | inability to attract and retain key personnel; and | |
• | other risks detailed fromtime-to-time in our quarterly filings, annual information forms, annual reports and annual filings with securities regulators, and those risks which are discussed under the heading “Risk Factors” in this prospectus supplement. |
• | future commodity prices; | |
• | the cost of carrying out exploration and development activities on certain of the Company’s mineral properties; | |
• | the Company’s ability to obtain and keep the necessary expertise in order to carry out its operating, exploration and development activities within the planned time periods; and | |
• | the Company’s ability to obtain adequate financing on acceptable terms. |
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• | annual information form dated March 28, 2011 for the fiscal year ended December 31, 2010 (the “Annual Information Form”); | |
• | consolidated financial statements and the notes thereto as at December 31, 2010 and 2009 and for the years ended December 31, 2010 and 2009 and for the fifteen month period ended December 31, 2008, together with the auditors’ report dated March 16, 2011 thereon; | |
• | management’s discussion and analysis for the year ended December 31, 2010; | |
• | management information circular dated May 13, 2010 relating to the annual general meeting of shareholders held June 16, 2010; and | |
• | consolidated financial statements and the notes thereto as at December 31, 2010 and 2009 and for the years ended December 31, 2010 and 2009 and the fifteen month period ended December 31, 2008 which include note 23, “Differences between Canadian and United States Generally Accepted Accounting Principles”, together with the auditors’ report dated March 28, 2011 thereon. These financial statements were filed in Canada on March 30, 2011 as “Other” and filed in the United States with the Company’s 40-F Annual Report on March 30, 2011. |
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at 0.20% Copper Cut-off
Copper | Molybdenum | |||||||||||||||
Tons | (Cu) | (Mo) | ||||||||||||||
Pit | Category | (millions) | (%) | (%) | ||||||||||||
Connector | Proven | 40.4 | 0.296 | 0.010 | ||||||||||||
Probable | 14.8 | 0.271 | 0.009 | |||||||||||||
Subtotal | 55.2 | 0.289 | 0.010 | |||||||||||||
Gibraltar | Proven | 66.8 | 0.286 | 0.008 | ||||||||||||
Probable | 33.3 | 0.285 | 0.013 | |||||||||||||
Subtotal | 100.1 | 0.286 | 0.010 | |||||||||||||
Granite | Proven | 163.4 | 0.323 | 0.009 | ||||||||||||
Probable | 21.6 | 0.319 | 0.009 | |||||||||||||
Subtotal | 185.0 | 0.322 | 0.009 | |||||||||||||
Gibraltar Extension | Proven | 75.4 | 0.352 | 0.002 | ||||||||||||
Probable | 29.3 | 0.304 | 0.002 | |||||||||||||
Subtotal | 104.7 | 0.339 | 0.002 | |||||||||||||
Total | 445.0 | 0.314 | 0.008 | |||||||||||||
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at 0.20% Copper Cut-off
Copper | Molybdenum | |||||||||||
Tons | Cu | Mo | ||||||||||
Category | (millions) | (%) | (%) | |||||||||
Measured | 583.0 | 0.301 | 0.008 | |||||||||
Indicated | 361.0 | 0.290 | 0.008 | |||||||||
Total | 944.0 | 0.297 | 0.008 | |||||||||
at 0.10% ASCu cut-off
Tons | Cu | ASCu | ||||||||||
Pit | (millions) | (%) | (%) | |||||||||
Connector | 12.7 | 0.349 | 0.151 | |||||||||
Gibraltar | 0.5 | 0.152 | 0.121 | |||||||||
Total | 13.2 | 0.341 | 0.150 | |||||||||
at CDN$5.50 NSR/t Pit-Rim Cut-off
Tonnes | Gold | Copper | Recoverable Gold | Recoverable Copper | ||||||||||||||||
Category | (millions) | (g/t) | (%) | Ounces (millions) | Pounds (billions) | |||||||||||||||
Proven | 481 | 0.46 | 0.26 | 5.0 | 2.4 | |||||||||||||||
Probable | 350 | 0.35 | 0.18 | 2.7 | 1.2 | |||||||||||||||
Total | 831 | 0.41 | 0.23 | 7.7 | 3.6 | |||||||||||||||
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at 0.14% copper cut-off — September 2009
Tonnes | Gold | Copper | ||||||||||
Category | (millions) | (g/t) | (%) | |||||||||
Measured | 547.1 | 0.46 | 0.27 | |||||||||
Indicated | 463.4 | 0.34 | 0.21 | |||||||||
Total | 1,010.5 | 0.41 | 0.24 | |||||||||
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Source: ICSG | Source: ICSG |
Source: ICSG | Source: ICSG |
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Issuer | Taseko Mines Limited | |
Notes Offered | US$200,000,000 principal amount of % Senior Notes due 2019. | |
Maturity Date | The Notes will mature on , 2019. | |
Interest | Interest on the Notes will accrue at a rate of % per annum. | |
Interest on the Notes will be payable on and of each year, beginning on , 2011, and will accrue from the issue date of the Notes. | ||
Ranking | The Notes will be senior unsecured obligations of Taseko and will: | |
• rank senior in right of payment to any future senior subordinated or subordinated indebtedness of Taseko; | ||
• rankpari passu in right of payment with all existing and future senior indebtedness of Taseko; | ||
• be effectively subordinated to all future secured indebtedness of Taseko, if any, to the extent of the value of the assets securing such indebtedness; and | ||
• be structurally subordinated to all obligations of each of Taseko’s subsidiaries that is not a guarantor of the Notes. | ||
Similarly, the Note guarantees will be senior unsecured obligations of the guarantors and will: | ||
• be senior in right of payment to each guarantor’s future senior subordinated or subordinated indebtedness; | ||
• bepari passuin right of payment with all existing and future senior indebtedness of each guarantor; | ||
• be effectively subordinated to any secured indebtedness of each guarantor to the extent of the value of the assets securing such indebtedness; and | ||
• be structurally subordinated to all obligations of any subsidiary of a guarantor if that subsidiary is not also a guarantor of the Notes. | ||
As of December 31, 2010, Taseko had approximately $38.3 million of senior indebtedness outstanding, consisting primarily of equipment loans and capital lease obligations. | ||
See “Credit Supporter Disclosure”. | ||
Guarantees | The Notes will be guaranteed on a senior unsecured basis by each of Taseko’s existing and future subsidiaries, other than |
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certain immaterial subsidiaries. The subsidiary guarantees will in turn be guaranteed by Taseko. | ||
Optional Redemption | Prior to , 2014, Taseko may redeem, at Taseko’s option, up to 35% of the aggregate principal amount of the Notes in an amount not greater than the net proceeds of certain equity offerings, at a redemption price equal to % of their principal amount, plus accrued and unpaid interest to the date of redemption of Notes being redeemed, provided that at least 65% of the aggregate principal amount of the Notes remains outstanding immediately following the redemption. See “Description of the Notes — Optional Redemption.” | |
Prior to , 2015, Taseko may redeem some or all of the Notes for cash at a redemption price equal to 100% of their principal amount plus a “make-whole” premium (as described in “Description of the Notes — Optional Redemption”), plus accrued and unpaid interest to the redemption date. | ||
Beginning on , 2015, Taseko may redeem some or all of the Notes at the redemption prices listed under “Description of the Notes — Optional Redemption”, plus accrued and unpaid interest to the redemption date. | ||
Taseko may also redeem the Notes, in whole but not in part, at any time, upon giving proper notice, if Taseko becomes obligated to pay additional amounts to holders of the Notes as a result of a change in the tax laws of any relevant jurisdiction, at a price equal to the principal amount of the Notes, plus accrued and unpaid interest and additional amounts on the Notes to the date of redemption. See “Description of the Notes — Redemption for Changes in Withholding Taxes”. | ||
Change of Control Offer | If Taseko experiences a change in control, Taseko must give holders of the Notes the opportunity to sell their Notes to Taseko at 101% of their principal amount, plus accrued and unpaid interest. See “Description of the Notes — Repurchase at the Option of Holders — Change of Control”. | |
Taseko might not be able to pay the required price for Notes presented to Taseko at the time of a change of control, because Taseko might not have enough funds at that time. | ||
Asset Sale Proceeds | Upon certain asset sales, Taseko may be required to use the net proceeds of such asset sales to purchase a portion of the Notes at 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date of repurchase, as described under the heading, “Description of the Notes — Repurchase at the Option of Holders — Asset Sales”. | |
Certain Covenants | The indenture governing the Notes will contain covenants limiting, among other things, Taseko’s ability and the ability of Taseko’s restricted subsidiaries to: | |
• incur additional debt; | ||
• pay dividends or distributions on our capital stock or repurchase our capital stock; |
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• issue stock of subsidiaries; | ||
• make certain investments; | ||
• create liens on our assets; | ||
• enter into transactions with affiliates; | ||
• merge, amalgamate or consolidate with another company; and | ||
• transfer and sell assets. | ||
These covenants are subject to a number of important limitations and exceptions. See “Description of the Notes”. | ||
If at any time the Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. and no default or event of default has occurred and is continuing under the indenture governing the Notes, certain of the foregoing covenants will terminate and will no longer apply to the Company or its subsidiaries. See “Description of the Notes — Certain Covenants — Changes in Covenants when Notes Rated Investment Grade”. | ||
No Prior Market | The Notes will be new securities for which there is currently no market. Although the Underwriters have informed Taseko that they intend to make a market in the Notes, they are not obligated to do so and they may discontinue market making activities at any time without notice. Accordingly, Taseko cannot assure you that a liquid market for the Notes will develop or be maintained. This may affect the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. See “Risk Factors”. | |
Use of Proceeds | Taseko expects to use the net proceeds from the Offering to fund its 75% share of the GDP-3 expansion of the Gibraltar Mine, and the remainder for general corporate purposes. See “Use of Proceeds”. | |
Use of the net proceeds to fund the GDP-3 expansion requires the consent of Cariboo. While this is now under consideration by Cariboo, there is no certainty that we will receive Cariboo’s consent on acceptable terms or at all and, as a consequence, we may instead use the net proceeds for general corporate purposes. See “Risk Factors — Risks Related to the Notes — The use of the net proceeds of the Offering to fund the GDP-3 expansion of the Gibraltar Mine requires the consent of Cariboo. In addition, our management will have broad discretion in allocating the net proceeds of the Offering, and may use the proceeds in ways in which you disagree”. | ||
Risk Factors | Investing in the Notes involves substantial risks. See “Risk Factors” contained herein and in the documents incorporated by reference herein for a description of certain of the risks you should consider before investing in the Notes. |
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Governing Law for the Notes and Guarantees | The Notes and guarantees of the Notes will be governed by the laws of the State of New York. | |
U.S. Trustee | The Bank of New York Mellon | |
Canadian Co-Trustee | BNY Trust Company of Canada |
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15 months | ||||||||||||
Ended | ||||||||||||
December 31, | Year Ended December 31, | |||||||||||
2008 | 2009 | 2010 | ||||||||||
(In thousands of dollars) | ||||||||||||
Statements of Operations Data: | ||||||||||||
Revenues | $ | 231,678 | $ | 188,902 | $ | 278,460 | ||||||
Costs and expenses | ||||||||||||
Cost of sales | $ | 196,261 | $ | 132,434 | $ | 142,674 | ||||||
Depletion, depreciation and amortization | 7,363 | 8,150 | 10,336 | |||||||||
Operating profit | $ | 28,054 | $ | 48,318 | $ | 125,450 | ||||||
Other expenses | 30,141 | 21,288 | 18,284 | |||||||||
Earnings (loss) before other items | $ | (2,087 | ) | $ | 27,030 | $ | 107,166 | |||||
Gain on contribution to the joint venture | — | — | 95,114 | |||||||||
Unrealized (loss) on derivative instruments | — | (15,775 | ) | (6,898 | ) | |||||||
Earnings (loss) before income taxes | $ | (2,087 | ) | $ | 11,255 | $ | 195,382 | |||||
Income tax expense (recovery) | (5,597 | ) | 694 | 46,784 | ||||||||
Net earnings | $ | 3,510 | $ | 10,561 | $ | 148,598 | ||||||
Other Operating Data: | ||||||||||||
EBITDA(1)(3) | $ | 6,797 | $ | 21,528 | $ | 191,985 | ||||||
Adjusted EBITDA(2)(3) | $ | 6,629 | $ | 35,485 | $ | 101,499 |
Year Ended December 31, | ||||||||
2009 | 2010 | |||||||
(In thousands of dollars) | ||||||||
Consolidated Balance Sheet Data (as of the end of each period presented): | ||||||||
Cash and cash equivalents | $ | 35,082 | $ | 211,793 | ||||
Property and equipment, net | $ | 339,958 | $ | 312,487 | ||||
Total assets | $ | 535,095 | $ | 687,612 | ||||
Total debt (including current portion and excluding debt discount) | $ | 74,203 | $ | 38,333 | ||||
Total liabilities | $ | 238,402 | $ | 217,661 | ||||
Total shareholders’ equity | $ | 296,693 | $ | 469,951 |
(1) | EBITDA represents net earnings before interest, income taxes, and depletion, depreciation and amortization. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other |
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interested parties in the evaluation of companies in our industry, many of which present EBITDA when reporting their results. | ||
We believe issuers of “high yield” securities also present EBITDA because investors, analysts and rating agencies consider it useful in measuring the ability of those issuers to meet debt service obligations. We believe EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. | ||
EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: |
• | EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; | |
• | EBITDA does not reflect changes in, or cash requirements for, our working capital needs; | |
• | EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; | |
• | although depletion, depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; | |
• | EBITDA does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, as discussed under “Adjusted EBITDA” below; and | |
• | other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See the Consolidated Statements of Cash Flow included in our financial statements included elsewhere in this prospectus supplement. | ||
(2) | We present Adjusted EBITDA as a further supplemental measure of our performance and ability to service debt. We prepare Adjusted EBITDA by adjusting EBITDA to eliminate the impact of a number of items we consider non-recurring or do not consider indicative of our ongoing operating performance. You are encouraged to evaluate each adjustment and the reasons we consider them appropriate for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to EBITDA. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. | |
Adjusted EBITDA is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not likely to recur or are not indicative of our future operating performance consisting of: (i) gain on contribution to the joint venture; (ii) gain on the sale of marketable securities; (iii) loss or gain on extinguishment of debt; (iv) premium paid on redemption of royalty obligation; (v) unrealized derivative instrument losses; and (vi) changes in the fair value of financial instruments. While some of the adjustments are recurring, we believe the elimination of the gain on the contribution to the joint venture, gains/losses on marketable securities, gains/losses on extinguishment of debt and the premium paid on redemption of royalty obligation do not reflect the underlying operating performance of our core mining business and are not necessarily indicative of future results. Furthermore, unrealized derivative instrument losses and changes in the fair value of financial instruments are not necessarily reflective of the underlying operating results for the reporting periods presented. |
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The reconciliation between net earnings, EBITDA, and Adjusted EBITDA is as follows for the years indicated: |
15 Months Ended | ||||||||||||
December 31, | Year Ended December 31, | |||||||||||
2008 | 2009 | 2010 | ||||||||||
(In thousands of dollars) | ||||||||||||
Net earnings | $ | 3,510 | $ | 10,561 | $ | 148,598 | ||||||
Add: | ||||||||||||
Depletion, depreciation and amortization | 7,363 | 8,150 | 10,336 | |||||||||
Interest expense | 11,222 | 9,525 | 4,542 | |||||||||
Interest and other income | (9,701 | ) | (7,402 | ) | (18,275 | ) | ||||||
Income tax expense (recovery) | (5,597 | ) | 694 | 46,784 | ||||||||
EBITDA | $ | 6,797 | $ | 21,528 | $ | 191,985 | ||||||
Add: other non-operating or non-recurring items | ||||||||||||
Gain on contribution to joint venture(a) | — | — | (95,114 | ) | ||||||||
Gain on sale of marketable securities(b) | (1,034 | ) | (188 | ) | (4,087 | ) | ||||||
Loss (gain) on extinguishment of debt(c) | — | (1,630 | ) | 834 | ||||||||
Premium paid on redemption of royalty obligation(d) | — | — | 1,302 | |||||||||
Unrealized loss on derivative instruments(e) | — | 15,775 | 6,898 | |||||||||
Change in fair value of financial instruments(f) | 866 | — | (319 | ) | ||||||||
Adjusted EBITDA | $ | 6,629 | $ | 35,485 | $ | 101,499 | ||||||
(a) | On March 31, 2010, the Company entered into an agreement to form an unincorporated joint venture over the Gibraltar Mine. The total gain on the Company’s contribution to the joint venture was $389.5 million, of which $95.1 million was recognized in income based on the 25% investment by Cariboo, our joint venture counterparty. | |
(b) | Represents gains/losses on the sale ofavailable-for-sale investments. | |
(c) | During 2009, the Company repurchased US$20 million of its convertible bonds (the “bonds”) from bondholders for the purpose of cancellation. The Company allocated the consideration paid on the extinguishment of the bonds to the liability and equity elements of the security. A gain of $1.6 million attributable to the liability portion was recorded in income. During 2010, the Company realized a loss of $0.8 million as a result of early repayment of its US$50 million term facility with Credit Suisse. | |
(d) | During 2010, the Company exercised its option to repurchase a royalty obligation and issued shares with a fair value of $7.8 million and a carrying value of $6.5 million to settle the obligation. The $1.3 million difference was recognized in income. | |
(e) | Represents unrealized losses on themark-to-market of outstanding put option contracts for copper as at each period end. | |
(f) | Represents changes in fair value of financial instruments during the period. |
(3) | EBITDA and Adjusted EBITDA in this table are measures of our performance that are not required by, or presented in accordance with, Canadian or United States GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under Canadian or United States GAAP and should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with Canadian or United States GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. |
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• | expectations with respect to the rate of inflation; | |
• | the relative strength of the U.S. dollar and certain other currencies; | |
• | interest rates; | |
• | global or regional political or economic conditions, including interest rates and currency values; | |
• | supply and demand for industrial products and jewelry containing metals; and | |
• | sales by central banks and other holders, speculators and producers of copper, gold and other metals in response to any of the above factors. |
• | environmental hazards; | |
• | industrial accidents; | |
• | metallurgical and other processing problems; | |
• | unusual or unexpected rock formations; | |
• | structural cave-ins or slides; | |
• | flooding; |
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• | fire; | |
• | metals losses; and | |
• | periodic interruptions due to inclement or hazardous weather conditions. |
• | the development of our projects will be commenced or completed on a timely basis, if at all; | |
• | the resulting operations will achieve the anticipated production volume; or | |
• | the construction costs and ongoing operating costs associated with the development of our advanced projects will not be higher than anticipated. |
• | environmental protection; | |
• | management and use of toxic substances and explosives; | |
• | management of tailings and other wastes generated by our operations; | |
• | management of natural resources; | |
• | exploration and development of mines, production and post-closure reclamation; | |
• | exports; | |
• | price controls; | |
• | taxation; | |
• | regulations concerning business dealings with First Nations groups; | |
• | labour standards and occupational health and safety, including mine safety; and | |
• | historic and cultural preservation. |
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• | disagreement with a venture counterparty about how to develop, operate or finance a project; | |
• | that a venture counterparty may at any time have economic or business interests or goals which are, or which become, inconsistent with our business interests or goals; | |
• | that a venture counterparty may not comply with a joint venture agreement; | |
• | the possibility that a venture counterparty in an investment might become bankrupt; |
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• | that such venture counterparty may be in a position to take action contrary to Taseko’s instructions or requests or contrary to Taseko’s policies or objectives, including Taseko’s potential inability to obtain Cariboo’s consent regarding GDP-3; | |
• | possible litigation between joint venture counterparty about joint venture matters; | |
• | the inability to exert control over decisions related to a joint venture that Taseko does not have a controlling interest in; or | |
• | the possibility that Taseko may not be able to sell its interest in the joint venture if it desires to exit the joint venture. |
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• | failure to obtain and maintain the necessary regulatory and partner approvals; | |
• | natural phenomena, such as inclement weather conditions or floods; | |
• | labour shortages or strikes; | |
• | delay or lack of success completing construction activities; or | |
• | delays, interruption or reduction in production or construction activities due to fires, failure of critical equipment, shortage of supplies, underground floods, earthquakes, tailings dam failures, lack of tailings capacity, ground movements and cave-ins, or other difficulties. |
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• | the original issue price for the Notes; and | |
• | that portion of the original issue discount that does not constitute “unmatured interest” for purposes of the U.S. Bankruptcy Code. |
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• | issued the guarantee to delay, hinder or defraud present or future creditors; | |
• | received less than reasonably equivalent value or fair consideration for issuing the guarantee at the time it issued the guarantee; | |
• | was insolvent or rendered insolvent by reason of issuing the guarantee; | |
• | was engaged, or about to engage, in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business; | |
• | intended to incur, or believed that it would incur, debts beyond its ability to pay as they mature; or | |
• | with respect to Canadian companies in issuing the guarantee, acted in a manner that was oppressive, unfairly prejudicial to or unfairly disregarded the interests of any shareholder, creditor, director, officer or other interested party. |
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• | the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets; | |
• | the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing indebtedness, including contingent liabilities, as they become absolute and mature; or | |
• | it could not pay its indebtedness as it becomes due. |
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As of December 31, 2010 | ||||||||
As Adjusted | ||||||||
Actual | (unaudited) | |||||||
(Dollars in millions) | ||||||||
Cash and cash equivalents | $ | 211.8 | $ | 404.8(1 | ) | |||
Long-term debt: | ||||||||
Notes offered hereby | $ | nil | $ | 200.0 | ||||
Other long-term debt and capital leases | 38.3 | 38.3 | ||||||
Total long-term debt | $ | 38.3 | $ | 238.3 | ||||
Shareholders’ equity | 470.0 | 470.0 | ||||||
Total capitalization | $ | 508.3 | $ | 708.3 | ||||
(1) | Cash and cash equivalents reflect the net proceeds of the Offering assuming conversion at par (1.00 US$ = 1.00 C$), less Underwriting discounts and commissions and estimated expenses of US$7 million converted at par (1.00 US$ = 1.00 C$). |
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Tenure Type | Number | Area (ha) | ||||||
Claims | 220 | 14,184.14 | ||||||
Leases | 30 | 1,889.68 | ||||||
Total | 250 | 16,073.82 | ||||||
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at 0.20% Copper Cut-off
Cu | Mo | |||||||||||||||
Pit | Category | Tons (millions) | (%) | (%) | ||||||||||||
Connector | Proven | 40.4 | 0.296 | 0.010 | ||||||||||||
Probable | 14.8 | 0.271 | 0.009 | |||||||||||||
Subtotal | 55.2 | 0.289 | 0.010 | |||||||||||||
Gibraltar | Proven | 66.8 | 0.286 | 0.008 | ||||||||||||
Probable | 33.3 | 0.285 | 0.013 | |||||||||||||
Subtotal | 100.1 | 0.286 | 0.010 | |||||||||||||
Granite | Proven | 163.4 | 0.323 | 0.009 | ||||||||||||
Probable | 21.6 | 0.319 | 0.009 | |||||||||||||
Subtotal | 185.0 | 0.322 | 0.009 | |||||||||||||
Gibraltar Extension | Proven | 75.4 | 0.352 | 0.002 | ||||||||||||
Probable | 29.3 | 0.304 | 0.002 | |||||||||||||
Subtotal | 104.7 | 0.339 | 0.002 | |||||||||||||
Total | 445.0 | 0.314 | 0.008 | |||||||||||||
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at 0.20% Copper Cut-off
Tons | Cu | Mo | ||||||||||
Category | (millions) | (%) | (%) | |||||||||
Measured | 583.0 | 0.301 | 0.008 | |||||||||
Indicated | 361.0 | 0.290 | 0.008 | |||||||||
Total | 944.0 | 0.297 | 0.008 | |||||||||
at 0.10% ASCu cut-off
Tons | Cu | ASCu | ||||||||||
Pit | (millions) | (%) | (%) | |||||||||
Connector | 12.7 | 0.349 | 0.151 | |||||||||
Gibraltar | 0.5 | 0.152 | 0.121 | |||||||||
Total | 13.2 | 0.341 | 0.150 | |||||||||
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Total tons mined (millions)(1) | 52.3 | |||
Tons of ore milled (millions) | 15.0 | |||
Stripping ratio | 2.5 | |||
Copper grade (%) | 0.338 | |||
Molybdenum grade (%Mo) | 0.012 | |||
Copper recovery (%) | 89.2 | |||
Molybdenum recovery (%) | 25.5 | |||
Copper production (millions lb)(2) | 92.3 | |||
Molybdenum production (thousands lb) | 941 |
(1) | Total tons mined includes sulphide ore, low grade stockpile material, overburden, and waste rock which were moved from within pit limit to outside pit limit during the period. | |
(2) | Copper production includes concentrate and cathode. |
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at CDN$5.50 NSR/t Pit-Rim Cut-off
Tonnes | Gold | Copper | Recoverable Gold | Recoverable Copper | ||||||||||||||||
Category | (millions) | (g/t) | (%) | Ounces (millions) | Pounds (billions) | |||||||||||||||
Proven | 481 | 0.46 | 0.26 | 5.0 | 2.4 | |||||||||||||||
Probable | 350 | 0.35 | 0.18 | 2.7 | 1.2 | |||||||||||||||
Total | 831 | 0.41 | 0.23 | 7.7 | 3.6 | |||||||||||||||
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at 0.14% copper cut-off — September 2009
Tonnes | Gold | Copper | ||||||||||
Category | (millions) | (g/t) | (%) | |||||||||
Measured | 547.1 | 0.46 | 0.27 | |||||||||
Indicated | 463.4 | 0.34 | 0.21 | |||||||||
Total | 1,010.5 | 0.41 | 0.24 | |||||||||
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Ferro | ||||||||||||||||||||||||||||
Drill Hole | Azimuth | Dip | From | To | Intercept(2) | Nb2O5 | Niobium(1) | |||||||||||||||||||||
Number | (Degrees) | (Degrees) | (Metres) | (Metres) | (Metres) | % | kg/tonne | |||||||||||||||||||||
2010-012 | 20 | −55 | 9.1 | 134.4 | 125.3 | 0.53 | 3.41 | |||||||||||||||||||||
2010-012 Incl. | 70.7 | 96.4 | 25.7 | 0.69 | 4.40 | |||||||||||||||||||||||
2010-013 | 20 | −55 | 7.1 | 27.5 | 20.4 | 0.51 | 3.26 | |||||||||||||||||||||
2010-013 | 42.7 | 126.5 | 83.8 | 0.42 | 2.68 | |||||||||||||||||||||||
2010-014 | 20 | −55 | 14.6 | 91.5 | 76.9 | 0.67 | 4.28 | |||||||||||||||||||||
2010-014 Incl. | 41.2 | 74.6 | 33.4 | 0.87 | 5.52 | |||||||||||||||||||||||
2010-015 | 20 | −55 | 18.9 | 104.8 | 85.9 | 0.53 | 3.41 | |||||||||||||||||||||
2010-015 Incl. | 18.9 | 35.2 | 16.3 | 0.87 | 5.56 | |||||||||||||||||||||||
2010-015 Incl. | 68.6 | 86.2 | 17.6 | 0.64 | 4.07 | |||||||||||||||||||||||
2010-016 | 20 | −55 | 6.1 | 80.4 | 74.3 | 0.60 | 3.82 | |||||||||||||||||||||
2010-016 Incl. | 17.9 | 52.6 | 34.7 | 0.83 | 5.31 | |||||||||||||||||||||||
2010-016 | 106.1 | 119.4 | 13.3 | 0.64 | 4.07 | |||||||||||||||||||||||
2010-017 | 20 | −55 | 6.1 | 30.5 | 24.4 | 0.74 | 4.74 | |||||||||||||||||||||
2010-017 Incl. | 6.1 | 21.4 | 15.3 | 1.00 | 6.36 | |||||||||||||||||||||||
2010-017 | 61.1 | 87.4 | 26.3 | 0.58 | 3.71 | |||||||||||||||||||||||
2010-020 | 20 | −55 | 3.7 | 70.2 | 66.5 | 0.55 | 3.49 | |||||||||||||||||||||
2010-020 Incl. | 31.1 | 55.5 | 24.4 | 0.82 | 5.24 | |||||||||||||||||||||||
2010-020 | 79.4 | 116.6 | 37.2 | 0.45 | 2.85 | |||||||||||||||||||||||
2010-020 | 144.5 | 164.4 | 19.9 | 0.43 | 2.77 |
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Ferro | ||||||||||||||||||||||||||||
Drill Hole | Azimuth | Dip | From | To | Intercept(2) | Nb2O5 | Niobium(1) | |||||||||||||||||||||
Number | (Degrees) | (Degrees) | (Metres) | (Metres) | (Metres) | % | kg/tonne | |||||||||||||||||||||
2010-020 | 180.1 | 193.8 | 13.7 | 0.51 | 3.24 | |||||||||||||||||||||||
2010-021 | 20 | −55 | 6.3 | 140.4 | 134.1 | 0.70 | 4.48 | |||||||||||||||||||||
2010-021 Incl. | 6.3 | 27.4 | 21.1 | 0.98 | 6.27 | |||||||||||||||||||||||
2010-021 Incl. | 51.5 | 62.3 | 10.8 | 1.00 | 6.40 | |||||||||||||||||||||||
2010-021 Incl. | 119.7 | 137.7 | 18.0 | 0.85 | 5.45 | |||||||||||||||||||||||
2010-022 | 20 | −55 | 6.7 | 150.8 | 144.1 | 0.57 | 3.64 | |||||||||||||||||||||
2010-022 Incl. | 21.3 | 49.7 | 28.4 | 0.82 | 5.24 | |||||||||||||||||||||||
2010-022 Incl. | 90.2 | 103.5 | 13.3 | 0.82 | 5.24 | |||||||||||||||||||||||
2010-023 | 20 | −55 | 4.6 | 146.3 | 141.7 | 0.82 | 5.23 | |||||||||||||||||||||
2010-023 Incl. | 12.2 | 106.3 | 94.1 | 1.01 | 6.42 | |||||||||||||||||||||||
2010-023 | 169.4 | 196.5 | 27.1 | 0.43 | 2.77 | |||||||||||||||||||||||
2010-023 | 30 | −55 | 202.5 | 213.4 | 10.9 | 1.61 | 10.27 | |||||||||||||||||||||
2010-024 | 7.3 | 111.6 | 104.3 | 0.44 | 2.78 | |||||||||||||||||||||||
2010-027 | 30 | −45 | 3.5 | 46.1 | 42.6 | 0.36 | 2.28 | |||||||||||||||||||||
2010-027 | 105.3 | 135.6 | 30.3 | 0.91 | 5.78 | |||||||||||||||||||||||
2010-027 Incl. | 110.2 | 125.1 | 14.9 | 1.31 | 8.37 | |||||||||||||||||||||||
2010-029 | 30 | −45 | 4.5 | 115.2 | 110.7 | 0.45 | 2.85 | |||||||||||||||||||||
2010-030 | 30 | −45 | 45.1 | 198.3 | 153.2 | 0.52 | 3.31 | |||||||||||||||||||||
2010-030 Incl. | 101.0 | 138.5 | 37.4 | 0.79 | 5.01 | |||||||||||||||||||||||
2010-031 | 30 | −45 | 20.0 | 42.3 | 22.3 | 0.84 | 5.39 | |||||||||||||||||||||
2010-031 Incl. | 23.7 | 39.1 | 15.4 | 1.06 | 6.73 | |||||||||||||||||||||||
2010-031 | 66.7 | 199.1 | 132.4 | 0.48 | 3.05 | |||||||||||||||||||||||
2010-031 Incl. | 123.6 | 136.0 | 12.4 | 0.81 | 5.19 | |||||||||||||||||||||||
2010-032 | 60 | −50 | 3.1 | 33.5 | 30.4 | 0.67 | 4.29 | |||||||||||||||||||||
2010-032 Incl. | 18.0 | 33.5 | 15.5 | 0.89 | 5.70 | |||||||||||||||||||||||
2010-032 | 67.6 | 146.1 | 78.5 | 0.38 | 2.42 | |||||||||||||||||||||||
2010-033 | 30 | −45 | 6.1 | 213.4 | 207.3 | 0.66 | 4.20 | |||||||||||||||||||||
2010-033 Incl. | 6.1 | 35.7 | 29.6 | 0.90 | 5.74 | |||||||||||||||||||||||
2010-033 Incl. | 61.1 | 123.4 | 62.3 | 0.87 | 5.55 | |||||||||||||||||||||||
2010-033 Incl. | 139.5 | 155.8 | 16.3 | 0.99 | 6.32 | |||||||||||||||||||||||
2010-034 | 60 | −50 | 2.5 | 162.6 | 160.1 | 0.35 | 2.21 |
Note 1: | Ferro niobium (FeNb) content is calculated assuming 60% recovery and 5% conversion loss (Nb2O5 x 6.38). |
Note 2: | True thicknesses of reported intervals have yet to be established. |
Note 3: | No significant intersections in Holes2010-018,2010-019,2010-025. Assays pending Holes2010-026 and2010-028. |
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15 months Ended | ||||||||||||||||||||
Year Ended September 31, | December 31, | Year Ended December 31, | ||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Statements of Operations Data: | ||||||||||||||||||||
Revenues | $ | 161,900 | $ | 218,426 | $ | 231,678 | $ | 188,902 | $ | 278,460 | ||||||||||
Costs and expenses | ||||||||||||||||||||
Cost of sales | $ | 103,628 | $ | 109,533 | $ | 196,261 | $ | 132,434 | $ | 142,674 | ||||||||||
Depletion, depreciation and amortization | 3,412 | 3,155 | 7,363 | 8,150 | 10,336 | |||||||||||||||
Operating profit | $ | 54,860 | $ | 105,738 | $ | 28,054 | $ | 48,318 | $ | 125,450 | ||||||||||
Other expenses | 15,899 | 17,872 | 30,141 | 21,288 | 18,284 | |||||||||||||||
Earnings (loss) before other items | $ | 38,961 | $ | 87,866 | $ | (2,087 | ) | $ | 27,030 | $ | 107,166 | |||||||||
Gain on contribution to joint venture | — | — | — | — | 95,144 | |||||||||||||||
Unrealized (loss) on derivative instruments | — | — | — | (15,775 | ) | (6,898 | ) | |||||||||||||
Earnings (loss) before income taxes | $ | 38,961 | $ | 87,866 | $ | (2,087 | ) | $ | 11,255 | $ | 195,382 | |||||||||
Income tax expense (recovery) | 6,045 | 39,604 | (5,597 | ) | 694 | 46,784 | ||||||||||||||
Net earnings | $ | 32,916 | $ | 48,262 | $ | 3,510 | $ | 10,561 | $ | 148,598 | ||||||||||
Consolidated Balance Sheet Data (as of the end of each period presented): | ||||||||||||||||||||
Cash and cash equivalents | $ | 89,408 | $ | 37,636 | $ | 4,587 | $ | 35,082 | $ | 211,793 | ||||||||||
Property and equipment, net | $ | 43,445 | $ | 176,898 | $ | 330,882 | $ | 339,958 | $ | 312,487 | ||||||||||
Total assets | $ | 297,461 | $ | 377,263 | $ | 478,245 | $ | 535,095 | $ | 687,612 | ||||||||||
Total debt (including current portion) | $ | 42,774 | $ | 41,008 | $ | 57,380 | $ | 74,203 | $ | 38,333 | ||||||||||
Total liabilities | $ | 196,527 | $ | 213,603 | $ | 243,338 | $ | 238,402 | $ | 217,661 | ||||||||||
Total shareholders’ equity | $ | 100,934 | $ | 163,660 | $ | 234,907 | $ | 296,693 | $ | 469,951 |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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• | Copper-in-concentrate sales for the three months ended December 31, 2010 were 32.7 million pounds compared to 16.2 million pounds sold during the three months ended December 31, 2009. | |
• | There were 0.9 million pounds of copper cathode sold in the three months ended December 31, 2010 compared to 0.6 million pounds sold in the three months ended December 31, 2009. |
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• | The average price realized for sales of copper during the three months ended December 31, 2010 was US$4.12 per pound, compared to US$3.10 per pound realized in the three months ended December 31, 2009. The realized price included adjustments on final invoices related to prior quarters. | |
• | Molybdenum-in-concentrate sales for the three months ended December 31, 2010 were 261,000 pounds compared to 97,000 pounds sold in the three months ended December 31, 2009. | |
• | The average price realized for sales of molybdenum for the three months ended December 31, 2010 was US$16.24 per pound, compared to US$12.01 per pound realized in the three months ended December 31, 2009. |
• | Copper-in-concentrate sales increased to 84.8 million pounds for the year ended December 31, 2010 from the 65.9 million pounds sold during the year ended December 31, 2009. | |
• | Copper cathode sales decreased in the year ended December 31, 2010 to 1.5 million pounds compared to 2.2 million pounds in the year ended December 31, 2009. | |
• | The average price realized for sales of copper in the year ended December 31, 2010 was US$3.66 per pound, compared to US$2.31 per pound realized in the year ended December 31, 2009. | |
• | Molybdenum-in-concentrate sales increased to 924,000 pounds in the year ended December 31, 2010 from 692,000 pounds sold in the year ended December 31, 2009. | |
• | The average price realized for sales of molybdenum for the year ended December 31, 2010 was US$16.32 per pound, compared to US$11.02 per pound realized in the year ended December 31, 2009. |
• | Copper-in-concentrate inventory at December 31, 2010 was 5.0 million pounds compared to 3.8 million pounds at December 31, 2009. | |
• | Copper cathode inventory at December 31, 2010 was 0.5 million pounds compared to 0.1 million pounds at December 31, 2009. | |
• | Molybdenum-in-concentrate inventory at December 31, 2010 was 33,000 pounds compared to 16,000 pounds at December 31, 2009. |
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Year | Year | Three Months | Three Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Total tons mined (millions)(1) | 52.3 | 34.9 | 15.6 | 11.3 | ||||||||||||
Tons of ore milled (millions) | 15.0 | 13.0 | 3.9 | 3.2 | ||||||||||||
Stripping ratio | 2.5 | 1.8 | 2.9 | 2.2 | ||||||||||||
Copper grade(%) | 0.338 | 0.319 | 0.333 | 0.319 | ||||||||||||
Molybdenum grade(%) | 0.012 | 0.011 | 0.012 | 0.010 | ||||||||||||
Copper recovery(%) | 89.2 | 82.3 | 89.1 | 84.1 | ||||||||||||
Molybdenum recovery(%) | 25.5 | 24.4 | 29.8 | 20.9 | ||||||||||||
Copper production (millions lb)(2) | 92.3 | 70.3 | 23.4 | 17.4 | ||||||||||||
Molybdenum production (thousands lb) | 941 | 629 | 276 | 113 | ||||||||||||
Foreign exchange ($C/$US) | 1.03 | 1.14 | 1.01 | 1.06 | ||||||||||||
Copper production costs, net of by-product credits(3), per lb of copper | US$ | 1.34 | US$ | 1.24 | US$ | 1.38 | US$ | 1.67 | ||||||||
Off-property costs for transport, treatment & marketing per lb of copper | US$ | 0.36 | US$ | 0.30 | US$ | 0.49 | US$ | 0.31 | ||||||||
Total cash costs of production per lb of copper(4) | US$ | 1.70 | US$ | 1.54 | US$ | 1.87 | US$ | 1.98 |
(1) | Total tons mined includes sulphide ore, low grade stockpile material, overburden, and waste rock which were moved from within pit limit to outside pit limit during the period. | |
(2) | Copper production includes concentrate and cathode. | |
(3) | By-product credit is calculated on actual period sales. | |
(4) | See “Non-GAAP Measures” below. |
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December 31, 2010 | ||||
($ in thousands) | ||||
Assets | ||||
Current assets | $ | 97,713 | ||
Advances for equipment | 1,188 | |||
Reclamation deposits | 22,977 | |||
Mineral property interests, plant and equipment, net | 301,219 | |||
Liabilities | ||||
Current liabilities | $ | 29,538 | ||
Long-term liabilities | 28,019 | |||
Site closure & reclamation obligation | 8,178 |
From March 31, 2010 to | ||||
December 31, 2010 | ||||
($ in thousands) | ||||
Revenues | $ | 194,370 | ||
Operating expenses | 97,461 | |||
Depreciation and depletion | 7,092 | |||
Other expenses | 4,867 | |||
Other comprehensive loss | 39 | |||
Total comprehensive income | $ | 84,911 | ||
From March 31, 2010 to | ||||
December 31, 2010 | ||||
($ in thousands) | ||||
Operating activities | $ | 93,103 | ||
Investing activities | (44,496 | ) | ||
Financing activities | 8,270 |
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Gibraltar Mine Mineral Reserves | ||||||||||||||
At 0.20% copper cut-off | ||||||||||||||
Tons | Cu | Mo | ||||||||||||
Pit | Category | (Millions) | (%) | (%) | ||||||||||
Connector | Proven | 40.4 | 0.296 | 0.010 | ||||||||||
Probable | 14.8 | 0.271 | 0.009 | |||||||||||
Subtotal | 55.2 | 0.289 | 0.010 | |||||||||||
Gibraltar East | Proven | 66.8 | 0.286 | 0.008 | ||||||||||
Probable | 33.3 | 0.285 | 0.013 | |||||||||||
Subtotal | 100.1 | 0.286 | 0.010 | |||||||||||
Granite | Proven | 163.4 | 0.323 | 0.009 | ||||||||||
Probable | 21.6 | 0.319 | 0.009 | |||||||||||
Subtotal | 185.0 | 0.322 | 0.009 | |||||||||||
Gibraltar Extension | Proven | 75.4 | 0.352 | 0.002 | ||||||||||
Probable | 29.3 | 0.304 | 0.002 | |||||||||||
Subtotal | 104.7 | 0.339 | 0.002 | |||||||||||
Total | 445.0 | 0.314 | 0.008 | |||||||||||
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Prosperity Project Mineral Reserves | ||||||||||||||||||||||||||||
at C$5.50 NSR/t cut-off | ||||||||||||||||||||||||||||
Grade | Recoverable Metal | Contained Metal | ||||||||||||||||||||||||||
Tonnes | Au | Cu | Au | Cu | Au | Cu | ||||||||||||||||||||||
Category | (Millions) | (g/t) | (%) | (M oz) | (B lb) | (M oz) | (B lb) | |||||||||||||||||||||
Proven | 481 | 0.46 | 0.26 | 5.0 | 2.4 | 7.1 | 2.8 | |||||||||||||||||||||
Probable | 350 | 0.35 | 0.18 | 2.7 | 1.2 | 3.9 | 1.4 | |||||||||||||||||||||
Total | 831 | 0.41 | 0.23 | 7.7 | 3.6 | 11.0 | 4.2 | |||||||||||||||||||||
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As at December 31 | ||||||||||||
Balance Sheets | 2010 | 2009 | 2008 | |||||||||
Current assets | $ | 281,300 | $ | 92,316 | $ | 41,283 | ||||||
Mineral properties | 27,737 | 32,631 | 32,610 | |||||||||
Plant and equipment | 283,024 | 305,205 | 292,390 | |||||||||
Other assets | 95,551 | 104,943 | 111,962 | |||||||||
Total assets | $ | 687,612 | $ | 535,095 | $ | 478,245 | ||||||
Current liabilities | $ | 66,636 | $ | 75,179 | $ | 112,053 | ||||||
Other liabilities | 151,025 | 163,223 | 131,285 | |||||||||
Shareholders’ equity | 469,951 | 296,693 | 234,907 | |||||||||
Total liabilities & shareholders’ equity | $ | 687,612 | $ | 535,095 | $ | 478,245 | ||||||
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Year Ended | Year Ended | Fifteen Months | ||||||||||
December 31 | December 31 | Ended December 31 | ||||||||||
Statements of Operations | 2010 | 2009 | 2008 | |||||||||
Revenue | $ | 278,460 | $ | 188,902 | $ | 231,678 | ||||||
Cost of sales | 142,674 | 132,434 | 196,261 | |||||||||
Depletion, depreciation and amortization | 10,336 | 8,150 | 7,363 | |||||||||
Operating profit | $ | 125,450 | $ | 48,318 | $ | 28,054 | ||||||
Accretion of reclamation obligation | 860 | 968 | 1,451 | |||||||||
Asset retirement obligation change of estimates | — | — | (6,917 | ) | ||||||||
Change in fair market value of financial instruments | (319 | ) | — | 886 | ||||||||
Exploration | 10,090 | 3,407 | 11,864 | |||||||||
Foreign exchange loss (gain) | 2,650 | (8,800 | ) | 4,032 | ||||||||
Gain on convertible bond repurchase | — | (1,630 | ) | — | ||||||||
General and administration | 13,853 | 8,382 | 11,896 | |||||||||
Interest accretion on convertible debt | — | 1,260 | 2,938 | |||||||||
Interest and other income | (18,275 | ) | (7,402 | ) | (9,701 | ) | ||||||
Interest expense | 4,542 | 8,265 | 8,284 | |||||||||
Gain on sale of marketable securities | (4,087 | ) | (188 | ) | (1,034 | ) | ||||||
Loss on prepayment of credit facility | 834 | — | — | |||||||||
Premium paid on the redemption of royalty obligation | 1,302 | — | — | |||||||||
Realized loss (gain) on derivative instruments | (3,575 | ) | 11,330 | — | ||||||||
Stock-based compensation | 10,409 | 5,696 | 6,442 | |||||||||
Earnings (loss) before other items | $ | 107,166 | $ | 27,030 | $ | (2,087 | ) | |||||
Other items: | ||||||||||||
Gain on contribution to the Joint Venture | 95,114 | — | — | |||||||||
Unrealized loss on derivative instruments | (6,898 | ) | (15,775 | ) | — | |||||||
Earnings before income taxes: | $ | 195,382 | $ | 11,255 | $ | (2,087 | ) | |||||
Current income tax expense (recovery) | 4,106 | 669 | (2,151 | ) | ||||||||
Future income tax expense (recovery) | 42,678 | 25 | (3,446 | ) | ||||||||
Earnings for the year | $ | 148,598 | $ | 10,561 | $ | 3,510 | ||||||
Other comprehensive income (loss): | ||||||||||||
Unrealized gain (loss) on reclamation deposits | $ | (118 | ) | $ | (1,040 | ) | $ | 1,859 | ||||
Unrealized gain (loss) on marketable securities/investments | 6,117 | 14,263 | (11,295 | ) | ||||||||
Reclassification of realized gain on sale of marketable securities | (4,087 | ) | (188 | ) | (1,152 | ) | ||||||
Tax effect | (239 | ) | (1,779 | ) | 1,570 | |||||||
Other comprehensive income (loss) | $ | 1,673 | $ | 11,256 | $ | (9,018 | ) | |||||
Total comprehensive income (loss) | $ | 150,271 | $ | 21,817 | $ | (5,508 | ) | |||||
Basic earnings per share | $ | 0.80 | $ | 0.06 | $ | 0.02 | ||||||
Diluted earnings per share | $ | 0.73 | $ | 0.06 | $ | 0.02 | ||||||
Basic weighted average number of common shares outstanding | 186,103 | 173,170 | 142,062 | |||||||||
Diluted weighted average number of common shares outstanding | 203,006 | 180,835 | 156,928 |
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Dec 31 | Sept 30 | Jun 30 | Mar 31 | Dec 31 | Sept 30 | June 30 | Mar 31 | |||||||||||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||
Current assets | 281,300 | 262,581 | 238,691 | 249,118 | 92,316 | 90,209 | 75,950 | 58,357 | ||||||||||||||||||||||||
Mineral properties | 27,737 | 27,588 | 26.628 | 26,566 | 32,631 | 32,617 | 32,617 | 32,619 | ||||||||||||||||||||||||
Plant and equipment | 283,024 | 263,544 | 235,535 | 233,672 | 305,205 | 303,434 | 301,891 | 295,094 | ||||||||||||||||||||||||
Other assets | 95,551 | 96,190 | 99,851 | 96,641 | 104,943 | 107,686 | 107,707 | 112,321 | ||||||||||||||||||||||||
Total assets | 687,612 | 649,903 | 600,705 | 605,997 | 535,095 | 533,946 | 518,165 | 498,391 | ||||||||||||||||||||||||
Current liabilities | 66,636 | 80,998 | 53,621 | 78,468 | 75,179 | 58,949 | 61,503 | 91,195 | ||||||||||||||||||||||||
Other liabilities | 151,025 | 128,626 | 112,362 | 139,077 | 163,223 | 183,856 | 165,341 | 166,596 | ||||||||||||||||||||||||
Shareholders’ equity | 469,951 | 440,279 | 434,722 | 388,452 | 296,693 | 291,141 | 291,321 | 240,600 | ||||||||||||||||||||||||
Total liabilities and shareholders’ equity | 687,612 | 649,903 | 600,705 | 605,997 | 535,095 | 533,946 | 518,165 | 498,391 | ||||||||||||||||||||||||
Revenue | 108,959 | 37,540 | 56,453 | 75,508 | 55,966 | 40,132 | 52,632 | 40,172 | ||||||||||||||||||||||||
Mine site operating costs | 38,116 | 14,743 | 30,488 | 31,559 | 32,160 | 24,528 | 26,203 | 25,454 | ||||||||||||||||||||||||
Transportation and treatment | 8,716 | 4,115 | 6,678 | 8,259 | 5,724 | 4,554 | 7,609 | 6,202 | ||||||||||||||||||||||||
Amortization | 4,637 | 1,217 | 1,902 | 2,580 | 2,421 | 1,677 | 2,142 | 1,910 | ||||||||||||||||||||||||
Operating profit | 57,490 | 17,465 | 17,385 | 33,110 | 15,661 | 9,373 | 16,678 | 6,606 | ||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||
Accretion of reclamation obligation | 205 | 202 | 197 | 256 | 250 | 245 | 239 | 234 | ||||||||||||||||||||||||
Change in fair value of financial instruments | (319 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Exploration | 3,971 | 3,619 | 1,519 | 981 | 1,519 | 805 | 549 | 534 | ||||||||||||||||||||||||
Foreign exchange loss (gain) | 4,042 | 1,972 | (2,774 | ) | (590 | ) | (681 | ) | (3,108 | ) | (7,941 | ) | 2,930 | |||||||||||||||||||
General and administration | 4,659 | 3,139 | 3,270 | 2,785 | 2,197 | 1,752 | 2,104 | 2,329 | ||||||||||||||||||||||||
Interest and other income | (3,117 | ) | (2,917 | ) | (10,611 | ) | (1,630 | ) | (1,702 | ) | (1,529 | ) | (1,987 | ) | (2,184 | ) | ||||||||||||||||
Interest expense and accretion charges | 1,058 | 652 | 731 | 2,101 | 1,935 | 2,041 | 2,765 | 2,784 | ||||||||||||||||||||||||
Gain on convertible bond repurchase | — | — | — | — | — | (948 | ) | (682 | ) | — | ||||||||||||||||||||||
Loss (gain) on sale of marketable securities | — | (2,973 | ) | (765 | ) | (349 | ) | (1,004 | ) | 816 | — | — | ||||||||||||||||||||
Loss on prepayment of credit facility | — | — | — | 834 | — | — | — | — | ||||||||||||||||||||||||
Premium paid on redemption of royalty obligation | — | — | — | 1,302 | — | — | — | — | ||||||||||||||||||||||||
Realized loss (gain) on derivative instrument | (15,117 | ) | — | 3,881 | 7,661 | 7,762 | 3,568 | — | — | |||||||||||||||||||||||
Stock-based compensation | 2,669 | 1,176 | 1,110 | 5,454 | 2,385 | 1,073 | 1,581 | 657 | ||||||||||||||||||||||||
(1,949 | ) | 4,870 | (3,442 | ) | 18,805 | 12,661 | 4,715 | (3,372 | ) | 7,284 | ||||||||||||||||||||||
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Dec 31 | Sept 30 | Jun 30 | Mar 31 | Dec 31 | Sept 30 | June 30 | Mar 31 | |||||||||||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||
Earnings (loss) before other items | 59,439 | 12,595 | 20,827 | 14,305 | 3,000 | 4,658 | 20,050 | (678 | ) | |||||||||||||||||||||||
Other Items: | ||||||||||||||||||||||||||||||||
Gain (loss) on contribution to the joint venture | 1,095 | (3,363 | ) | — | 97,382 | — | — | — | — | |||||||||||||||||||||||
Unrealized gain (loss) on derivative instruments | (18,284 | ) | (5,015 | ) | 8,910 | 7,491 | (4,237 | ) | (8,829 | ) | (2,709 | ) | — | |||||||||||||||||||
Earnings (loss) before income taxes | 42,250 | 4,217 | 29,737 | 119,178 | (1,237 | ) | (4,171 | ) | 17,341 | (678 | ) | |||||||||||||||||||||
Income tax expense (recovery) | 16,919 | 2,839 | (15,703 | ) | 42,729 | 766 | (1,822 | ) | 5,936 | (4,186 | ) | |||||||||||||||||||||
Earnings (loss) for the period | 25,331 | 1,378 | 45,440 | 76,449 | (2,003 | ) | (2,349 | ) | 11,405 | 3,508 | ||||||||||||||||||||||
Earnings (loss) per share — basic | 0.14 | 0.01 | 0.24 | 0.42 | (0.01 | ) | (0.01 | ) | 0.07 | 0.02 | ||||||||||||||||||||||
Earnings (loss) per share — diluted | 0.12 | 0.01 | 0.24 | 0.40 | (0.01 | ) | (0.01 | ) | 0.06 | 0.02 |
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Contractual | Over 3-5 | |||||||||||||||||||
As at December 31, 2010 | Obligations | 2011 | 2012 | 2013 | Years | |||||||||||||||
Accounts payable and accrued liabilities | $ | 22,983 | $ | 22,983 | $ | — | $ | — | $ | — | ||||||||||
Amounts due to a related party | 154 | 154 | — | — | — | |||||||||||||||
Capital lease obligations | 20,313 | 5,354 | 5,394 | 4,511 | 5,054 | |||||||||||||||
Long-term equipment loan | 18,020 | 4,961 | 6,828 | 3,672 | 2,559 | |||||||||||||||
Total liabilities | $ | 61,470 | $ | 33,452 | $ | 12,222 | $ | 8,183 | $ | 7,613 | ||||||||||
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• | Phase 1 — Initial Scoping and Impact Assessment Analysis: to isolate key areas that will be impacted by the transition to IFRS. | |
• | Phase 2 — Evaluation and Design: to identify specific changes required to existing accounting policies, information systems and business processes, together with an analysis of policy alternatives allowed under IFRS and development of draft IFRS financial statements. | |
• | Phase 3 — Implementation and Review: to execute the changes to information systems and business processes, completing formal authorization processes to approve recommended |
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accounting policy changes and training programs across the Company’s finance and other staff, as necessary. This will culminate in the collection of financial information necessary to compile IFRS compliant financial statements, including embedding IFRS principles in business processes, and Audit Committee review and approval of the financial statements. |
• | to apply the requirements of IFRS 3, Business Combinations, prospectively from the Transition Date; | |
• | to apply the requirements of IFRS 2, Share-based Payments, to equity instruments granted which had vested as of the Transition Date; | |
• | to apply the borrowing cost exemption and apply IAS 23, Borrowing Costs, prospectively from the Transition Date; and | |
• | to elect not to comply with IFRIC 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities, for changes in such liabilities that occurred before the Transition Date. |
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Jan-1, 2010 | ||||||||||
Opening | ||||||||||
Balance | ||||||||||
Dec-31, 2010 | Sheet at | |||||||||
Revised | Transition | |||||||||
Comparatives | Date | |||||||||
Total Assets per Canadian GAAP | $ | 687,612 | $ | 535,095 | ||||||
Deferred tax adjustments | — Mineral property interest | (4,374 | ) | (4,862 | ) | |||||
Reversal of previous impairments | — Mineral property interest | 3,339 | (4,574 | ) | ||||||
Asset retirement obligation adjustments | — Plant, property and equipment | 6,126 | 8,508 | |||||||
Total Assets per IFRS | $ | 692,703 | $ | 543,315 | ||||||
Total Liabilities per Canadian GAAP | $ | 217,661 | $ | 238,402 | ||||||
Deferred tax adjustments | — Mineral property interest | (4,862 | ) | (4,862 | ) | |||||
Asset retirement obligation adjustments | —Site closure and reclamation obligation | 7,138 | 9,899 | |||||||
Total Liabilities per IFRS | $ | 219,937 | $ | 243,439 | ||||||
Total Shareholders’ Equity per Canadian GAAP | $ | 469,951 | $ | 296,693 | ||||||
Deferred tax adjustments | — Retained deficit | 489 | — | |||||||
Reversal of previous impairments | — Retained deficit | 3,339 | 4,574 | |||||||
Asset retirement obligation adjustments | — Retained deficit | (1,013 | ) | (1,391 | ) | |||||
Total Shareholders’ Equity per IFRS | $ | 472,766 | $ | 299,876 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 692,703 | $ | 543,315 | ||||||
Total Comprehensive Income per Canadian GAAP | $ | 150,271 | ||||||||
Reversal of previous impairments | —Depletion, depreciation and amortization | (99 | ) | |||||||
Asset retirement obligation adjustments | — Finance costs | 331 | ||||||||
Asset retirement obligation adjustments | —Depletion, depreciation and amortization | (185 | ) | |||||||
Gain on contribution to the joint venture | (415 | ) | ||||||||
Total Comprehensive Income per IFRS | $ | 149,903 | ||||||||
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Expiry Date | Exercise Price | Number | Number | |||||||||||||
Common shares | 188,999,687 | |||||||||||||||
Share purchase option | 28-Mar-11 | $ | 2.18 | 110,000 | ||||||||||||
28-Mar-11 | $ | 2.63 | 40,000 | |||||||||||||
22-Aug-11 | $ | 4.09 | 15,000 | |||||||||||||
10-Dec-11 | $ | 1.00 | 858,800 | |||||||||||||
24-Feb-12 | $ | 3.07 | 165,000 | |||||||||||||
24-Feb-12 | $ | 4.50 | 135,000 | |||||||||||||
30-Jul-12 | $ | 2.17 | 26,000 | |||||||||||||
15-Jan-13 | $ | 4.77 | 960,000 | |||||||||||||
10-Dec-13 | $ | 1.00 | 2,168,000 | |||||||||||||
4-Jan-14 | $ | 5.13 | 310,000 | |||||||||||||
12-Jan-14 | $ | 1.15 | 1,917,000 | |||||||||||||
21-Apr-14 | $ | 1.71 | 1,446,167 | |||||||||||||
2-Dec-14 | $ | 4.14 | 100,000 | |||||||||||||
5-Jan-15 | $ | 4.46 | 1,925,000 | |||||||||||||
15-Jan-15 | $ | 4.77 | 150,000 | |||||||||||||
28-Jan-15 | $ | 5.00 | 210,000 | |||||||||||||
16-Feb-15 | $ | 4.59 | 120,000 | |||||||||||||
6-Apr-15 | $ | 5.39 | 100,000 | |||||||||||||
16-Sep-15 | $ | 4.61 | 160,000 | |||||||||||||
4-Jan-16 | $ | 5.13 | 1,960,000 | |||||||||||||
12,875,967 | ||||||||||||||||
Preferred shares redeemable into Taseko Mines Limited common shares | 12,483,916 |
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Year Ending | Year Ending | |||||||
December 31, 2010 | December 31, 2009 | |||||||
GAAP operating costs (in thousands of CAD) | $ | 118,450 | $ | 109,964 | ||||
Add: inventory adjustments | (3,544 | ) | (324 | ) | ||||
Less: molybdenum credits | (12,656 | ) | (8,786 | ) | ||||
Less: silver credits | (2,885 | ) | (2,001 | ) | ||||
Net operating costs (in thousands of CAD) | $ | 99,365 | $ | 98,853 | ||||
Total copper production (in thousands of lbs) | 92,348 | 70,347 | ||||||
Cost per lb (CAD) | 1.38 | 1.41 | ||||||
Average exchange rate | 1.03 | 1.13 | ||||||
Cost per lb (USD) | $ | 1.34 | $ | 1.24 | ||||
GAAP treatment and transportation costs (in thousands of CAD) | $ | 27,768 | $ | 24,089 | ||||
Treatment and transportation per lb of copper (in CAD) | 0.37 | 0.34 | ||||||
Average exchange rate | 1.03 | 1.13 | ||||||
Treatment and transportation cost per lb (in USD) | $ | 0.36 | $ | 0.30 | ||||
Total cash cost per lb of copper (in USD) | $ | 1.70 | $ | 1.54 |
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• | will be general unsecured obligations of Taseko; | |
• | will be effectively subordinated to all existing and future secured Indebtedness of Taseko; | |
• | will bepari passuin right of payment with all existing and future unsecured senior Indebtedness of Taseko; | |
• | will be senior in right of payment to any future subordinated Indebtedness of Taseko; and | |
• | will be unconditionally guaranteed by the Guarantors. |
• | will be a general unsecured obligation of the Guarantor; | |
• | will be effectively subordinated to all existing and future secured Indebtedness of that Guarantor; |
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• | will bepari passuin right of payment with all existing and future unsecured senior Indebtedness of that Guarantor; and | |
• | will be senior in right of payment to any future subordinated Indebtedness of that Guarantor. |
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Year | Percentage | |||
2015 | % | |||
2016 | % | |||
2017 and thereafter | 100.000 | % |
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• | upon deposit of a Global Note with DTC’s custodian, DTC will credit portions of the principal amount of the Global Note to the accounts of DTC participants designated by the Underwriters; and | |
• | ownership of beneficial interests in a Global Note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the Global Note). |
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• | a limited purpose trust company organized under the laws of the State of New York; | |
• | a “banking organization” within the meaning of the New York State Banking Law; | |
• | a member of the Federal Reserve System; | |
• | a “clearing corporation” within the meaning of the Uniform Commercial Code; and | |
• | a “clearing agency” registered under Section 17A of the Exchange Act. |
• | will not be entitled to have notes represented by the Global Note registered in their names; | |
• | will not receive or be entitled to receive physical, certificated notes; and | |
• | will not be considered the owners or holders of the notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustees under the indenture. |
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• | DTC notifies Taseko at any time that it is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days; | |
• | DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days; or | |
• | an Event of Default in respect of the notes has occurred and is continuing. |
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Year Ended | ||||
December 31, 2010 | ||||
Earnings Coverage | Actual | Pro Forma(1) | ||
(thousands of dollars) | ||||
Interest and dividend requirements | $4,542 | $ | ||
Earnings before interest expense and taxes(2) | $199,924 | $199,924 | ||
Earnings coverage ratio(3) | 44x | x |
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Subsidiary | Non-Guarantor | Total | ||||||||||||||||||
Taseko | Guarantors | Subsidiaries | Consolidating | Consolidated | ||||||||||||||||
2010 | (unconsolidated) | (combined) | (combined) | Adjustments | Amounts | |||||||||||||||
Revenue | $ | 6,194 | $ | 278,460 | $ | 380 | $ | (6,574 | ) | $ | 278,460 | |||||||||
Net earnings (loss) | $ | (62,745 | ) | $ | 211,345 | $ | 378 | $ | (380 | ) | $ | 148,598 | ||||||||
Current assets | $ | 223,536 | $ | 158,929 | $ | 2 | $ | (101,167 | ) | $ | 281,300 | |||||||||
Non-current assets | $ | 25,192 | $ | 398,861 | $ | 14,031 | $ | (31,772 | ) | $ | 406,312 | |||||||||
Current liabilities | $ | 5,755 | $ | 167,200 | $ | 5,565 | $ | (111,884 | ) | $ | 66,636 | |||||||||
Non-current liabilities | $ | 62,391 | $ | 86,679 | $ | 1,955 | $ | — | $ | 151,025 |
Subsidiary | Non-Guarantor | Total | ||||||||||||||||||
Taseko | Guarantors | Subsidiaries | Consolidating | Consolidated | ||||||||||||||||
2009 | (unconsolidated) | (combined) | (combined) | Adjustments | Amounts | |||||||||||||||
Revenue | $ | 16,461 | $ | 188,902 | $ | — | $ | (16,461 | ) | $ | 188,902 | |||||||||
Net earnings (loss) | $ | 802 | $ | 8,573 | $ | 1,186 | $ | — | $ | 10,561 | ||||||||||
Current assets | $ | 205,602 | $ | 54,656 | $ | 2 | $ | (167,944 | ) | $ | 92,316 | |||||||||
Non-current assets | $ | 39,931 | $ | 405,371 | $ | 36,577 | $ | (39,100 | ) | $ | 442,779 | |||||||||
Current liabilities | $ | 3,638 | $ | 237,861 | $ | 12,345 | $ | (178,665 | ) | $ | 75,719 | |||||||||
Non-current liabilities | $ | 18,239 | $ | 143,029 | $ | 1,955 | $ | — | $ | 163,223 |
Subsidiary | Non-Guarantor | Total | ||||||||||||||||||
Taseko | Guarantors | Subsidiaries | Consolidating | Consolidated | ||||||||||||||||
2008 | (unconsolidated) | (combined) | (combined) | Adjustments | Amounts | |||||||||||||||
Revenue | $ | 23,262 | $ | 231,678 | $ | — | $ | (23,262 | ) | $ | 231,678 | |||||||||
Net earnings (loss) | $ | (9,607 | ) | $ | 11,941 | $ | 1,176 | $ | — | $ | 3,510 | |||||||||
Current assets | $ | 188,549 | $ | 37,293 | $ | 2 | $ | (184,561 | ) | $ | 41,283 | |||||||||
Non-current assets | $ | 39,953 | $ | 396,512 | $ | 39,597 | $ | (39,100 | ) | $ | 436,962 | |||||||||
Current liabilities | $ | 47,446 | $ | 244,377 | $ | 15,512 | $ | (195,282 | ) | $ | 112,053 | |||||||||
Non-current liabilities | $ | 10,468 | $ | 118,862 | $ | 1,955 | $ | — | $ | 131,285 |
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Principal Amount | ||
Underwriters | of Notes | |
Barclays Capital Inc. | US$ | |
BMO Capital Markets Corp. | ||
TD Securities (USA) LLC | ||
Total | US$200,000,000 | |
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Independent Auditor’s Report | F-2 | |||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 | ||||
F-10 |
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KPMG LLP Chartered Accountants PO Box 10426 777 Dunsmuir Street Vancouver BC V7Y 1K3 Canada | Telephone (604) 691-3000 Fax (604) 691-3031 Internet www.kpmg.ca |
network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
KPMG Canada provides services to KPMG LLP.
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KPMG LLP Chartered Accountants PO Box 10426 777 Dunsmuir Street Vancouver BC V7Y 1K3 Canada | Telephone (604) 691-3000 Fax (604) 691-3031 Internet www.kpmg.ca |
network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
KPMG Canada provides services to KPMG LLP.
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Taseko Mines Limited Page 2 |
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(Expressed in thousands of Canadian Dollars)
December 31 | December 31 | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and equivalents | $ | 211,793 | $ | 35,082 | ||||
Restricted cash (note 13) | — | 3,153 | ||||||
Marketable securities and investments (note 7) | 18,521 | 11,856 | ||||||
Accounts receivable | 20,154 | 12,505 | ||||||
Inventory (note 5) | 21,286 | 21,792 | ||||||
Prepaid expenses | 534 | 2,112 | ||||||
Advances for equipment | — | 1,119 | ||||||
Advances to Joint Venture (note 4) | 1,764 | — | ||||||
Current portion of promissory note (note 16(a)) | 7,248 | 4,697 | ||||||
281,300 | 92,316 | |||||||
Advances for equipment | 1,726 | 2,122 | ||||||
Reclamation deposits (note 17) | 23,266 | 29,421 | ||||||
Promissory note (note 16(a)) | 70,559 | 73,400 | ||||||
Mineral property interests, plant and equipment (note 10) | 310,761 | 337,836 | ||||||
$ | 687,612 | $ | 535,095 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 22,983 | $ | 14,821 | ||||
Amounts due to a related party (note 11) | 154 | 13 | ||||||
Current portion of long-term credit facility (note 14) | — | 21,896 | ||||||
Current portion of long-term loan obligations (note 12) | 10,315 | 5,782 | ||||||
Current portion of deferred revenue (note 16) | 175 | 175 | ||||||
Current portion of royalty obligations (note 16) | 7,248 | 11,208 | ||||||
Liability under derivative instruments (note 15) | 225 | 18,935 | ||||||
Income taxes payable | 24,528 | 370 | ||||||
Current portion of future income taxes (note 18) | 1,008 | 1,979 | ||||||
66,636 | 75,179 | |||||||
Income taxes (note 18) | 2,500 | 32,299 | ||||||
Royalty obligations (note 16) | 51,645 | 57,621 | ||||||
Deferred revenue (note 16) | 481 | 656 | ||||||
Credit facility (note 14) | — | 29,609 | ||||||
Loan obligations (note 12) | 28,018 | 16,916 | ||||||
Site closure and reclamation obligation (note 17) | 8,178 | 9,807 | ||||||
Future income taxes (note 18) | 60,203 | 16,315 | ||||||
217,661 | 238,402 | |||||||
Shareholders’ equity | ||||||||
Share capital (note 20) | 338,911 | 323,734 | ||||||
Tracking preferred shares (note 8) | 26,642 | 26,642 | ||||||
Contributed surplus | 28,128 | 20,318 | ||||||
Accumulated other comprehensive income | 6,249 | 4,576 | ||||||
Retained earnings (deficit) | 70,021 | (78,577 | ) | |||||
469,951 | 296,693 | |||||||
Commitments (note 21) | ||||||||
Subsequent event (notes 8 and 20(b)) | ||||||||
$ | 687,612 | $ | 535,095 | |||||
/s/ Ronald W. Thiessen | /s/ Russell E. Hallbauer | |
Ronald W. Thiessen | Russell E. Hallbauer | |
Director | Director |
F-6
Table of Contents
Year Ended | Year Ended | Fifteen Months Ended | ||||||||||
December 31, 2010 | December 31, 2009 | December 31, 2008 | ||||||||||
Revenue | ||||||||||||
Copper | $ | 265,804 | $ | 180,115 | $ | 209,784 | ||||||
Molybdenum | 12,656 | 8,787 | 21,894 | |||||||||
278,460 | 188,902 | 231,678 | ||||||||||
Cost of sales | 142,674 | 132,434 | 196,261 | |||||||||
Depletion, depreciation and amortization | 10,336 | 8,150 | 7,363 | |||||||||
Operating profit | 125,450 | 48,318 | 28,054 | |||||||||
Expenses (income) | ||||||||||||
Accretion of reclamation obligation (note 17) | 860 | 968 | 1,451 | |||||||||
Asset retirement obligation change of estimates (note 17) | — | — | (6,917 | ) | ||||||||
Change in fair value of financial instruments | (319 | ) | — | 886 | ||||||||
Exploration | 10,090 | 3,407 | 11,864 | |||||||||
Foreign exchange loss (gain) | 2,650 | (8,800 | ) | 4,032 | ||||||||
Gain on convertible bond repurchase (note 19) | — | (1,630 | ) | — | ||||||||
General and administration | 13,853 | 8,382 | 11,896 | |||||||||
Interest accretion on convertible debt (note 19) | — | 1,260 | 2,938 | |||||||||
Interest and other income | (18,275 | ) | (7,402 | ) | (9,701 | ) | ||||||
Interest expense | 4,542 | 8,265 | 8,284 | |||||||||
Gain on sale of marketable securities | (4,087 | ) | (188 | ) | (1,034 | ) | ||||||
Loss on prepayment of credit facility (note 14) | 834 | — | — | |||||||||
Premium paid on the redemption of royalty obligation (note 16(b)) | 1,302 | — | — | |||||||||
Realized (gain) loss on derivative instruments (note 15) | (3,575 | ) | 11,330 | — | ||||||||
Stock-based compensation (note 20(c)) | 10,409 | 5,696 | 6,442 | |||||||||
18,284 | 21,288 | 30,141 | ||||||||||
Earnings (loss) before other items | 107,166 | 27,030 | (2,087 | ) | ||||||||
Other items | ||||||||||||
Gain on contribution to the Joint Venture (note 4) | 95,114 | — | — | |||||||||
Unrealized loss on derivative instruments (note 15) | (6,898 | ) | (15,775 | ) | — | |||||||
Earnings (loss) before income taxes | 195,382 | 11,255 | (2,087 | ) | ||||||||
Current income tax expense (recovery) (note 18) | 4,106 | 669 | (2,151 | ) | ||||||||
Future income tax expense (recovery) (note 18) | 42,678 | 25 | (3,446 | ) | ||||||||
Net earnings for the year | $ | 148,598 | $ | 10,561 | $ | 3,510 | ||||||
Other comprehensive income (loss) | ||||||||||||
Unrealized gain (loss) onavailable-for-sale reclamation deposit | (118 | ) | (1,040 | ) | 1,859 | |||||||
Unrealized gain (loss) onavailable-for-sale marketable securities | 6,117 | 14,263 | (11,295 | ) | ||||||||
Reclassification of realized gain sale of marketable securities | (4,087 | ) | (188 | ) | (1,152 | ) | ||||||
Tax effect | (239 | ) | (1,779 | ) | 1,570 | |||||||
Other comprehensive income (loss) | $ | 1,673 | $ | 11,256 | $ | (9,018 | ) | |||||
Total comprehensive income (loss) | $ | 150,271 | $ | 21,817 | $ | (5,508 | ) | |||||
Earnings per share | ||||||||||||
Basic | $ | 0.80 | $ | 0.06 | $ | 0.02 | ||||||
Diluted | $ | 0.73 | $ | 0.06 | $ | 0.02 | ||||||
Weighted average number of common shares outstanding (expressed in thousands) | ||||||||||||
Basic | 186,103 | 173,170 | 142,062 | |||||||||
Diluted | 203,006 | 180,835 | 156,928 |
F-7
Table of Contents
(Expressed in thousands of Canadian Dollars, except for per share and share amounts)
Year Ended | Year Ended | Fifteen Months Ended | ||||||||||||||||||||||
December 31, 2010 | December 31, 2009 | December 31, 2008 | ||||||||||||||||||||||
Number of | Number of | Number of | ||||||||||||||||||||||
Common Shares | Shares | Shares | Shares | |||||||||||||||||||||
Balance at beginning of the year | 182,924,664 | $ | 323,734 | 153,187,116 | $ | 285,690 | 130,580,538 | $ | 205,040 | |||||||||||||||
Share purchase options at $1.00 per share | 1,073,500 | 1,074 | 893,750 | 894 | — | — | ||||||||||||||||||
Share purchase options at $1.15 per share | 1,286,667 | 1,480 | 66,333 | 76 | — | — | ||||||||||||||||||
Share purchase options at $1.71 per share | 100,667 | 172 | 33,666 | 58 | — | — | ||||||||||||||||||
Share purchase options at $1.90 per share | — | — | 7,000 | 13 | — | — | ||||||||||||||||||
Share purchase options at $2.07 per share | 20,000 | 41 | 50,000 | 103 | 30,000 | 62 | ||||||||||||||||||
Share purchase options at $2.17 per share | 31,000 | 67 | — | — | — | — | ||||||||||||||||||
Share purchase options at $2.18 per share | 82,000 | 179 | 100,000 | 218 | 145,500 | 317 | ||||||||||||||||||
Share purchase options at $2.68 per share | — | — | — | — | 7,500 | 20 | ||||||||||||||||||
Share purchase options at $3.07 per share | 35,000 | 108 | 11,000 | 34 | 78,500 | 241 | ||||||||||||||||||
Share purchase options at $4.03 per share | 60,000 | 242 | — | — | — | — | ||||||||||||||||||
Share purchase options at $4.09 per share | — | — | — | — | 3,600 | 15 | ||||||||||||||||||
Share purchase options at $4.50 per share | 67,000 | 302 | — | — | 5,000 | 23 | ||||||||||||||||||
Share purchase options at $4.77 per share | 36,000 | 172 | — | — | — | — | ||||||||||||||||||
Fair value of stock options allocated to shares issued on exercise | — | 2,599 | — | 2,108 | — | 514 | ||||||||||||||||||
Shares issued for the purchase of royalty interest (note 16(b)) | 1,556,355 | 7,813 | — | — | 1,000,000 | 5,220 | ||||||||||||||||||
Shares issued for donation | 225,000 | 928 | — | — | — | — | ||||||||||||||||||
Shares issued for debt conversion (note 19) | — | — | — | — | 2,612,971 | 21,318 | ||||||||||||||||||
Equity financings at $5.20 per share, net of issue costs (note 20(b)) | — | — | — | — | 9,637,792 | 46,945 | ||||||||||||||||||
Equity financings at $0.70 per share, net of issue costs (note 20(b)) | — | — | — | — | 9,085,715 | 5,975 | ||||||||||||||||||
Equity financings at $1.45 per share, net of issue costs (note 20(b)) | — | — | 19,490,084 | 26,817 | — | — | ||||||||||||||||||
Warrants exercised (note 20(b)) | — | — | 9,085,715 | 7,723 | — | — | ||||||||||||||||||
Balance at end of the year | 187,497,853 | 338,911 | 182,924,664 | 323,734 | 153,187,116 | 285,690 | ||||||||||||||||||
Equity component of convertible debt | ||||||||||||||||||||||||
Balance at beginning of the year | — | 3,832 | 13,655 | |||||||||||||||||||||
Repurchase of convertible bond (note 19) | — | (3,832 | ) | — | ||||||||||||||||||||
Convertible debenture conversion adjustment (note 19) | — | — | (9,823 | ) | ||||||||||||||||||||
Balance at end of the year | — | — | 3,832 | |||||||||||||||||||||
Tracking preferred shares | ||||||||||||||||||||||||
Balance at beginning and end of the year | 26,642 | 26,642 | 26,642 | |||||||||||||||||||||
Contributed surplus | ||||||||||||||||||||||||
Balance at beginning of the year | 20,318 | 14,561 | 8,633 | |||||||||||||||||||||
Stock-based compensation (note 20(c)) | 10,409 | 5,696 | 6,442 | |||||||||||||||||||||
Repurchase of convertible bond (note 19) | — | 2,169 | — | |||||||||||||||||||||
Fair value of stock options allocated to shares issued on exercise | (2,599 | ) | (2,108 | ) | (514 | ) | ||||||||||||||||||
Balance at end of the year | 28,128 | 20,318 | 14,561 | |||||||||||||||||||||
Accumulated other comprehensive income (loss) | ||||||||||||||||||||||||
Balance at beginning of the year | 4,576 | (6,680 | ) | 2,338 | ||||||||||||||||||||
Unrealized gain (loss) on reclamation deposits | (118 | ) | (1,040 | ) | 1,859 | |||||||||||||||||||
Unrealized gain (loss) onavailable-for-sale marketable securities | 6,117 | 14,263 | (11,295 | ) | ||||||||||||||||||||
Reclassification of realized gain on sale of marketable securities | (4,087 | ) | (188 | ) | (1,152 | ) | ||||||||||||||||||
Tax effect | (239 | ) | (1,779 | ) | 1,570 | |||||||||||||||||||
Balance at end of the year | 6,249 | 4,576 | (6,680 | ) | ||||||||||||||||||||
Retained earnings (deficit) | ||||||||||||||||||||||||
Balance at beginning of the year | (78,577 | ) | (89,138 | ) | (92,648 | ) | ||||||||||||||||||
Net earnings for the year | 148,598 | 10,561 | 3,510 | |||||||||||||||||||||
Balance at end of the year | 70,021 | (78,577 | ) | (89,138 | ) | |||||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | $ | 469,951 | $ | 296,693 | $ | 234,907 | ||||||||||||||||||
F-8
Table of Contents
(Expressed in thousands of Canadian Dollars)
Fifteen Months | ||||||||||||
Year Ended | Year Ended | Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Operating activities | ||||||||||||
Net earnings for the year | $ | 148,598 | $ | 10,561 | $ | 3,510 | ||||||
Items not involving cash | ||||||||||||
Accretion of reclamation obligation | 860 | 968 | 1,451 | |||||||||
Change in fair value of financial instruments | (319 | ) | — | 886 | ||||||||
Depreciation, depletion and amortization | 10,336 | 8,150 | 7,363 | |||||||||
Unrealized foreign exchange loss (gain) | (1,760 | ) | (8,839 | ) | 6,334 | |||||||
Future income taxes | 42,678 | 25 | (3,446 | ) | ||||||||
Gain on contribution to the Joint Venture (note 4) | (95,114 | ) | — | — | ||||||||
Gain on convertible debt repurchase (note 19) | — | (1,630 | ) | — | ||||||||
Gain on sale of marketable securities | (4,087 | ) | (188 | ) | (1,034 | ) | ||||||
Interest accretion on convertible debt | — | 1,260 | 2,938 | |||||||||
Interest accretion on long-term credit facility | 213 | 512 | — | |||||||||
Loss on prepayment of credit facility (note 14) | 834 | — | — | |||||||||
Non cash donation expense (note 22) | 928 | — | — | |||||||||
Premium paid on the redemption of royalty obligation (note 16(b)) | 1,302 | — | — | |||||||||
Reclamation obligation change in estimate | — | — | (6,917 | ) | ||||||||
Site closure and reclamation expenditures (note 17) | (91 | ) | (1,590 | ) | (183 | ) | ||||||
Stock-based compensation | 10,409 | 5,696 | 6,442 | |||||||||
Realized loss (gain) on derivative instruments (note 15) | (15,775 | ) | — | — | ||||||||
Unrealized loss (gain) on derivative instruments (note 15) | 6,898 | 15,775 | — | |||||||||
Changes in non-cash operating working capital | ||||||||||||
Accounts payable and accrued liabilities | 8,162 | (38,216 | ) | 22,603 | ||||||||
Accounts receivable | (7,649 | ) | (7,899 | ) | 7,415 | |||||||
Accrued interest expense on royalty obligation | (3,425 | ) | (2,039 | ) | (1,060 | ) | ||||||
Accrued interest income on promissory note | 291 | (1,029 | ) | (2,632 | ) | |||||||
Amounts due to a related party | 141 | (1,759 | ) | 2,579 | ||||||||
Deferred revenue | (175 | ) | (175 | ) | (219 | ) | ||||||
Income taxes payable | (5,641 | ) | (6,261 | ) | 2,358 | |||||||
Inventory | (4,730 | ) | (1,452 | ) | (2,282 | ) | ||||||
Advances to Joint Venture (note 4) | (1,764 | ) | — | — | ||||||||
Asset/liability under derivative instruments (note 15) | (2,502 | ) | 3,160 | — | ||||||||
Prepaid expenses | 1,194 | (1,784 | ) | 741 | ||||||||
Cash provided by (used for) operating activities | 89,812 | (26,754 | ) | 46,847 | ||||||||
Investing activities | ||||||||||||
Accrued interest income on reclamation deposits | (1,293 | ) | (1,919 | ) | (2,032 | ) | ||||||
Funds released from reclamation deposits | — | 3,900 | 5,000 | |||||||||
Funds released from restricted cash | 3,153 | 1,247 | — | |||||||||
Advance payments for equipment | — | — | (6,381 | ) | ||||||||
Investment in derivative asset | (7,331 | ) | — | — | ||||||||
Investment in marketable securities | (16,678 | ) | (4,421 | ) | (254 | ) | ||||||
Proceeds from contribution to the Joint Venture (note 4) | 186,811 | — | — | |||||||||
Proceeds from sale of marketable securities | 16,449 | 9,966 | 3,360 | |||||||||
Purchase of property, plant and equipment | (55,303 | ) | (17,019 | ) | (134,186 | ) | ||||||
Reclamation deposits | — | (45 | ) | (109 | ) | |||||||
Cash provided by (used for) investing activities | 125,808 | (8,291 | ) | (134,602 | ) | |||||||
Financing activities | ||||||||||||
Capital lease payments | (3,320 | ) | (3,199 | ) | (1,061 | ) | ||||||
Common shares issued for cash, net of issue costs | 3,837 | 35,937 | 53,599 | |||||||||
Principal repayment of loan obligations | (2,712 | ) | (345 | ) | — | |||||||
Proceeds (repayment) of bank indebtedness | — | (5,737 | ) | 5,737 | ||||||||
Proceeds from loan obligations (note 12(b)) | 14,076 | 9,054 | — | |||||||||
Proceeds from royalty obligation (note 16(b)) | — | 6,511 | — | |||||||||
Proceeds (repayment) of long term credit facility (note 14) | (50,790 | ) | 56,997 | — | ||||||||
Re-purchase of convertible debt (note 19) | — | (33,678 | ) | (3,569 | ) | |||||||
Cash provided by (used for) financing activities | (38,909 | ) | 65,540 | 54,706 | ||||||||
Increase (decrease) in cash and equivalents | 176,711 | 30,495 | (33,049 | ) | ||||||||
Cash and equivalents, beginning of year | 35,082 | 4,587 | 37,636 | |||||||||
Cash and equivalents, end of year | $ | 211,793 | $ | 35,082 | $ | 4,587 | ||||||
F-9
Table of Contents
Notes to the Consolidated Financial Statements
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
1. | NATURE OF OPERATIONS AND BASIS OF PRESENTATION |
2. | SIGNIFICANT ACCOUNTING POLICIES |
(a) | Cash and equivalents |
(b) | Revenue recognition |
(c) | Inventory |
F-10
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(d) | Financial Instruments |
• | Held-to-maturity investments, loans and receivables, and other financial liabilities are initially measured at fair value and subsequently measured at amortized cost. Amortization of premiums or discounts and losses due to impairment are included in current period net earnings (loss). | |
• | Available-for-sale financial assets are measured at fair value. Changes in fair value are included in other comprehensive income (loss) until the gain or loss is recognized in net earnings (loss) or if an impairment is determined to be other than temporary. | |
• | Held-for-trading financial instruments are measured at fair value. All changes in fair value are included in net earnings (loss) in the period in which they arise. | |
• | All derivative financial instruments are measured at fair value, even when they are part of a hedging relationship. Changes in fair value are included in net earnings (loss) in the period in which they arise, except for cash flow hedge transactions which qualify for hedge accounting treatment in which case gains and losses are recognized in other comprehensive income (loss). |
F-11
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
Financial Instrument | Classification | Measurement | ||
Cash and equivalents | Held-for-Trading | Fair Value | ||
Restricted cash | Held-for-Trading | Fair Value | ||
Marketable securities and investments, except for derivative instruments | Available for Sale | Fair Value | ||
Accounts receivable | Loans and Receivables | Amortized cost | ||
Advances to Joint Venture | Loans and Receivables | Amortized cost | ||
Reclamation deposits | Available for Sale | Fair Value | ||
Promissory note | Loans and Receivables | Amortized cost | ||
Accounts payable and accrued liabilities | Other Financial Liability | Amortized cost | ||
Amounts due to a related party | Other Financial Liability | Amortized cost | ||
Loan obligations | Other Financial Liability | Amortized cost | ||
Credit facility | Other Financial Liability | Amortized cost | ||
Royalty obligation | Other Financial Liability | Amortized cost | ||
Derivative instruments | Held-for-Trading | Fair Value |
(e) | Plant and equipment |
(f) | Mineral property interests |
F-12
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(g) | Site closure and reclamation costs |
(h) | Impairment of long-lived assets |
(i) | Share capital |
(j) | Stock-based compensation |
F-13
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(k) | Income taxes |
(l) | Functional currency and foreign currency translations |
(m) | Earnings (loss) per common share |
(n) | Use of estimates |
F-14
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(o) | Segment disclosures |
3. | CHANGES IN ACCOUNTING POLICIES |
(a) | New Accounting Standards Adopted: |
(b) | New Accounting Standards Not Yet Adopted: |
F-15
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
4. | GIBRALTAR JOINT VENTURE |
December 31, 2010 | ||||
Assets | ||||
Current assets | $ | 97,713 | ||
Advances for equipment | 1,188 | |||
Reclamation deposits | 22,977 | |||
Mineral property interests, plant and equipment, net | 301,219 | |||
Liabilities | ||||
Current liabilities | $ | 29,538 | ||
Long-term liabilities | 28,019 | |||
Site closure & reclamation obligation | 8,178 | |||
F-16
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
Year Ended | ||||
December 31, 2010 | ||||
Revenues | $ | 194,370 | ||
Operating expenses | 97,461 | |||
Depreciation and depletion | 7,092 | |||
Other expenses | 4,867 | |||
Other comprehensive loss | 39 | |||
Total comprehensive income | $ | 84,911 | ||
Year Ended | ||||
December 31, 2010 | ||||
Operating activities | $ | 93,103 | ||
Investing activities | (44,496 | ) | ||
Financing activities | 8,270 | |||
5. | INVENTORY |
December 31 | December 31 | |||||||
2010 | 2009 | |||||||
Metal in concentrate — copper | $ | 7,515 | $ | 5,830 | ||||
Ore in-process | 1,514 | 1,897 | ||||||
Copper cathode | 982 | 178 | ||||||
Metal in concentrate — molybdenum | 53 | 70 | ||||||
Materials and supplies | 11,222 | 13,817 | ||||||
$ | 21,286 | $ | 21,792 | |||||
F-17
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
6. | CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS |
(a) | Capital Management Objectives |
(b) | Carrying Amounts and Fair Values of Financial Instruments |
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; | |
• | Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and | |
• | Level 3 — Inputs that are not based on observable market data. |
F-18
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
Financial Assets at Fair Value | ||||||||||||||||
December 31, | ||||||||||||||||
Level 1 | Level 2 | Level 3 | 2010 | |||||||||||||
Cash and equivalents | $ | 211,793 | $ | — | $ | — | $ | 211,793 | ||||||||
Restricted cash (note 13) | — | — | — | — | ||||||||||||
Warrants held in other public company (note 7) | — | 599 | — | 599 | ||||||||||||
Held-for-trading | 211,793 | 599 | — | 212,392 | ||||||||||||
Marketable securities and investments (note 7) | 17,922 | — | — | 17,922 | ||||||||||||
Reclamation deposits | 23,266 | — | — | 23,266 | ||||||||||||
Available-for-sale financial assets | 41,188 | — | — | 41,188 | ||||||||||||
Total financial assets at fair value | $ | 252,981 | $ | 599 | $ | — | $ | 253,580 | ||||||||
Financial Liabilities at Fair Value | ||||||||||||||||
December 31, | ||||||||||||||||
Level 1 | Level 2 | Level 3 | 2010 | |||||||||||||
Liability under derivative financial instruments (note 15) | $ | — | $ | 225 | $ | — | $ | 225 | ||||||||
Financial Assets at Fair Value | ||||||||||||||||
December 31, | ||||||||||||||||
Level 1 | Level 2 | Level 3 | 2009 | |||||||||||||
Cash and equivalents | $ | 35,082 | $ | — | $ | — | $ | 35,082 | ||||||||
Restricted cash (note 13) | 3,153 | — | — | 3,153 | ||||||||||||
Held for trading | 38,235 | — | — | 38,235 | ||||||||||||
Marketable securities and investments (note 7) | 11,856 | — | — | 11,856 | ||||||||||||
Reclamation deposits | 29,421 | — | — | 29,421 | ||||||||||||
Available for sale financial assets | 41,277 | — | — | 41,277 | ||||||||||||
Total financial assets at fair value | $ | 79,512 | $ | — | $ | — | $ | 79,512 | ||||||||
Financial Liabilities at Fair Value | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | 2009 | |||||||||||||||||||||
Liability under derivative financial instruments (note 15) | $ | — | $ | 18,935 | $ | — | $ | 18,935 | ||||||||||||||||
(c) | Financial Instrument Risk Exposure and Risk Management |
F-19
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(i) | Credit Risk |
(ii) | Liquidity Risk |
Contractual | Over 3 | |||||||||||||||||||
As at December 31, 2010 | Obligations | 2011 | 2012 | 2013 | Years | |||||||||||||||
Accounts payable and accrued liabilities | $ | 22,983 | $ | 22,983 | $ | — | $ | — | $ | — | ||||||||||
Amounts due to a related party (note 11) | 154 | 154 | — | — | — | |||||||||||||||
Long-term equipment loan (note 12(b)) | 18,020 | 4,961 | 6,828 | 3,672 | 2,559 | |||||||||||||||
Total liabilities | $ | 41,157 | $ | 28,098 | $ | 6,828 | $ | 3,672 | $ | 2,559 | ||||||||||
Contractual | Over 3 | |||||||||||||||||||
As at December 31, 2009 | Obligations | 2010 | 2011 | 2012 | Years | |||||||||||||||
Accounts payable and accrued liabilities | $ | 14,821 | $ | 14,821 | $ | — | $ | — | $ | — | ||||||||||
Amounts due to a related party | 13 | 13 | — | — | — | |||||||||||||||
Long-term credit facility (note 14) | 52,550 | 21,896 | 26,275 | 4,379 | — | |||||||||||||||
Long-term equipment loan (note 12(b)) | 10,112 | 2,701 | 2,701 | 4,710 | — | |||||||||||||||
Total liabilities | $ | 77,496 | $ | 39,431 | $ | 28,976 | $ | 9,089 | $ | — | ||||||||||
(iii) | Market Risk |
F-20
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(a) | Commodity Price Risk |
December 31, | December 31, | December 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Net Earnings before income taxes | $ | 27,514 | $ | 16,180 | $ | 23,168 | ||||||
(b) | Foreign Exchange Risk |
December 31, | December 31, | |||||||
Carrying Value | 2010 | 2009 | ||||||
Cash and equivalents | $ | 142,154 | $ | 30,719 | ||||
Restricted cash | — | 3,153 | ||||||
Accounts receivable | 16,811 | 10,802 | ||||||
Total financial assets | $ | 158,965 | $ | 44,674 | ||||
December 31, | December 31, | |||||||
Carrying Value | 2010 | 2009 | ||||||
Accounts payable and accrued liabilities | $ | 1,200 | $ | 705 | ||||
Derivative liability (note 15 ) | 225 | 18,935 | ||||||
Long-term credit facility (note 14) | — | 51,505 | ||||||
Total financial liabilities | $ | 1,425 | $ | 71,145 | ||||
Annual Average Rate | Year End Spot Rate | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
CAD vs. USD | 1.0301 | 1.1420 | 0.9946 | 1.0510 | ||||||||||||
F-21
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
December 31, | December 31, | December 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Net earnings before income taxes | $ | 29,385 | $ | 13,276 | $ | 12,613 | ||||||
(c) | Interest Rate Risk |
Weighted | ||||||||||||
Weighted | Average Period | |||||||||||
Average | for Which the | |||||||||||
Effective interest | Interest Rate is | |||||||||||
Total | Rate (Percent) | Fixed (Years) | ||||||||||
Financial assets subject to floating interest rates | $ | 211,793 | 0.70 | N/A | ||||||||
Financial assets subject to fixed interest rates | 101,073 | 5.91 | 5.85 | |||||||||
Equity investments | 18,521 | N/A | N/A | |||||||||
Accounts receivables | 20,154 | N/A | N/A | |||||||||
Total financial assets | $ | 351,541 | ||||||||||
Weighted | ||||||||||||
Weighted | Average Period | |||||||||||
Average Effective | for Which the | |||||||||||
Interest Rate | Interest Rate is | |||||||||||
Total | (Percent) | Fixed (Years) | ||||||||||
Financial assets subject to floating interest rates | $ | 35,082 | 0.32 | N/A | ||||||||
Financial assets subject to fixed interest rates | 107,518 | 6.22 | 6.44 | |||||||||
Equity investments | 11,856 | N/A | N/A | |||||||||
Trade and other receivables | 12,505 | N/A | N/A | |||||||||
Total financial assets | $ | 166,961 | ||||||||||
F-22
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Weighted | Period for | Weighted | ||||||||||||||
Average | Which the | Average | ||||||||||||||
Effective | Interest Rate | Period Until | ||||||||||||||
Interest Rate | is Fixed | Maturity | ||||||||||||||
Total | (Percent) | (Years) | (Years) | |||||||||||||
Financial liabilities subject to floating interest rates | $ | — | N/A | N/A | N/A | |||||||||||
Financial liabilities subject to fixed interest rates | 18,020 | 7.50 | 2.37 | 2.37 | ||||||||||||
Derivative liability | 225 | N/A | N/A | N/A | ||||||||||||
Other liabilities | 23,136 | N/A | N/A | N/A | ||||||||||||
Total financial liabilities | $ | 41,381 | ||||||||||||||
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Weighted | Period for | Weighted | ||||||||||||||
Average | Which the | Average | ||||||||||||||
Effective | Interest Rate | Period Until | ||||||||||||||
Interest Rate | is Fixed | Maturity | ||||||||||||||
Total | (Percent) | (Years) | (Years) | |||||||||||||
Financial liabilities subject to floating interest rates | $ | 51,505 | 6.92 | N/A | 2.09 | |||||||||||
Financial liabilities subject to fixed interest rates | 15,221 | 7.49 | 2.62 | 2.62 | ||||||||||||
Derivative liability | 18,935 | N/A | N/A | N/A | ||||||||||||
Other liabilities | 14,834 | N/A | N/A | N/A | ||||||||||||
Total financial liabilities | $ | 100,495 | ||||||||||||||
December 31, | December 31, | December 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Net earnings before income taxes | $ | 89 | $ | 86 | $ | 142 | ||||||
F-23
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
7. | MARKETABLE SECURITIES AND INVESTMENTS |
As at December 31, 2010 | ||||||||||||
Unrealized | Fair | |||||||||||
Available-for-Sale Investments | Cost | Gain | Value | |||||||||
Continental Minerals Corporation — common shares | $ | 5,657 | $ | 5,995 | $ | 11,652 | ||||||
Investment in other public companies | 5,405 | 865 | 6,270 | |||||||||
11,062 | 6,860 | 17,922 | ||||||||||
Held for trading investments | ||||||||||||
Warrants held in other public company | 280 | 319 | 599 | |||||||||
$ | 11,342 | $ | 7,179 | $ | 18,521 |
As at December 31, 2009 | ||||||||||||
Unrealized | Fair | |||||||||||
Cost | Gain | Value | ||||||||||
Continental Minerals Corporation — common shares | $ | 7,026 | $ | 4,830 | $ | 11,856 | ||||||
8. | TRACKING PREFERRED SHARES |
F-24
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
9. | MINERAL PROPERTY INTERESTS |
December 31 | December 31 | |||||||
2010 | 2009 | |||||||
Gibraltar Copper Mine | $ | 13,752 | $ | 16,766 | ||||
Prosperity Gold-Copper Property | 1 | 1 | ||||||
Harmony Gold Property | 1 | 1 | ||||||
Aley Niobium Property | 8,343 | 8,343 | ||||||
Oakmont Royalty Interest | 5,640 | 7,520 | ||||||
$ | 27,737 | $ | 32,631 | |||||
(a) | Gibraltar Copper Mine |
F-25
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(b) | Prosperity Gold-Copper Property |
(c) | Harmony Gold Property |
(d) | Aley Niobium Property |
(e) | Purchase of Oakmont Ventures Ltd. |
F-26
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
10. | MINERAL PROPERTY INTERESTS, PLANT AND EQUIPMENT |
December 31, 2010 | ||||||||||||
Accumulated | Net Book | |||||||||||
Cost | Amortization | Value | ||||||||||
Buildings and equipment | $ | 2,872 | $ | 1,695 | $ | 1,177 | ||||||
Mine equipment | 127,056 | 12,421 | 114,635 | |||||||||
Plant and equipment | 97,776 | 7,649 | 90,127 | |||||||||
Vehicles | 3,079 | 1,640 | 1,439 | |||||||||
Computer equipment | 2,543 | 2,445 | 98 | |||||||||
Social assets | 301 | — | 301 | |||||||||
Deferred pre-stripping costs | 39,401 | 6,650 | 32,751 | |||||||||
Construction in progress | 15,254 | — | 15,254 | |||||||||
Assets under capital lease | 26,589 | 706 | 25,883 | |||||||||
Asset retirement costs | 163 | — | 163 | |||||||||
$ | 315,034 | $ | 33,206 | $ | 281,828 | |||||||
Other equipment and leasehold improvements | 1,720 | 524 | 1,196 | |||||||||
Total mineral property interests (note 9) | 27,737 | |||||||||||
Mineral property interest, plant and equipment | $ | 310,761 | ||||||||||
F-27
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
December 31, 2009 | ||||||||||||
Accumulated | Net Book | |||||||||||
Cost | Amortization | Value | ||||||||||
Buildings and equipment | $ | 3,646 | $ | 2,807 | $ | 839 | ||||||
Mine equipment | 90,632 | 11,265 | 79,367 | |||||||||
Plant and equipment | 104,000 | 6,824 | 97,176 | |||||||||
Vehicles | 2,744 | 1,593 | 1,151 | |||||||||
Computer equipment | 3,390 | 3,130 | 260 | |||||||||
Social assets | 402 | — | 402 | |||||||||
Deferred pre-stripping costs | 52,535 | 5,307 | 47,228 | |||||||||
Construction in progress | 60,616 | — | 60,616 | |||||||||
Assets under capital lease | 18,222 | 333 | 17,889 | |||||||||
Asset retirement costs | 62 | — | 62 | |||||||||
$ | 336,248 | $ | 31,259 | $ | 304,989 | |||||||
Other equipment and leasehold improvements | 423 | 207 | 216 | |||||||||
Total mineral property interests (note 9) | 32,631 | |||||||||||
Mineral property interest, plant and equipment | $ | 337,836 | ||||||||||
11. | RELATED PARTY TRANSACTIONS AND BALANCES |
�� | ||||||||||||
Twelve Months Ended December 31 | ||||||||||||
Transactions | 2010 | 2009 | 2008 | |||||||||
Joint Venture — Management fee income (note 11(b)) | $ | 648 | $ | — | $ | — | ||||||
Hunter Dickinson Services Inc. (note 11(a)) — Services rendered to the Company and reimbursement of third party expenses | $ | 2,958 | $ | 2,709 | $ | 8,934 |
Due to (from) related parties: | December 31, 2010 | December 31, 2009 | ||||||
Joint Venture (Note 4) | $ | (1,764 | ) | — | ||||
Hunter Dickinson Services Inc | $ | 154 | $ | 13 | ||||
(a) | Hunter Dickinson Services Inc. (“HDSI”) |
F-28
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(b) | Management Fee |
12. | LOAN OBLIGATIONS |
Capital Lease | Equipment | Total Loan | ||||||||||
As at December 31, 2010 | Obligations(a) | Loans(b) | Obligations | |||||||||
2011 | $ | 6,452 | $ | 5,942 | $ | 12,394 | ||||||
2012 | 6,144 | 7,449 | 13,593 | |||||||||
2013 | 4,941 | 3,916 | 8,857 | |||||||||
2014 | 2,983 | 2,611 | 5,594 | |||||||||
2015 | 2,361 | — | 2,361 | |||||||||
Total payments | 22,881 | 19,918 | 42,799 | |||||||||
Less: interest portion | (2,568 | ) | (1,898 | ) | (4,466 | ) | ||||||
Present value of obligations | 20,313 | 18,020 | 38,333 | |||||||||
Current portion | (5,354 | ) | (4,961 | ) | (10,315 | ) | ||||||
Non-current portion | $ | 14,959 | $ | 13,059 | $ | 28,018 | ||||||
Capital Lease | Equipments | Total Loan | ||||||||||
As at December 31, 2009 | Obligations(a) | Loans(b) | Obligations | |||||||||
2010 | $ | 4,543 | $ | 2,701 | $ | 7,244 | ||||||
2011 | 4,266 | 2,701 | 6,967 | |||||||||
2012 | 4,215 | 4,710 | 8,925 | |||||||||
Thereafter until 2013 | 2,612 | — | 2,612 | |||||||||
Total payments | 15,636 | 10,112 | 25,748 | |||||||||
Less: interest portion | (1,648 | ) | (1,402 | ) | (3,050 | ) | ||||||
Present value of obligations | 13,988 | 8,710 | 22,698 | |||||||||
Current portion | (3,750 | ) | (2,032 | ) | (5,782 | ) | ||||||
Non-current portion | $ | 10,238 | $ | 6,678 | $ | 16,916 | ||||||
(a) | Capital Lease Obligations |
F-29
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(b) | Equipment Loans |
13. | RESTRICTED CASH |
14. | CREDIT FACILITY |
15. | DERIVATIVE FINANCIAL INSTRUMENTS |
Premium per | Purchased Metric | |||||||||||
Strike Price | Contract | Tonnes (mt) of | ||||||||||
Contract Period | US$/lb | US$ | Copper | |||||||||
January to June 2011 | $ | 3.00 | $ | 5,275 | 12,000 | |||||||
January to June 2011 | $ | 3.00 | $ | 1,678 | 3,600 |
F-30
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
Fair Value | ||||||||||||||
Strike Price | Notional Quantity | (Liability)/Asset | ||||||||||||
Option | US$/lb | mt of Copper | Due Date | US$ | ||||||||||
Call option(1) | $ | 3.95 | 2,250 | Dec 31, 2010 | $ | (662 | ) | |||||||
Put option | $ | 3.00 | 15,600 | Jun 30, 2011 | $ | 436 | ||||||||
Total Fair Value of Contracts (in US) | $ | (226 | ) | |||||||||||
Total Fair Value of Contracts (in CAD) | $ | (225 | ) |
(1) | Amount payable for December 2010 settlement of call option, which settled in January, 2011. |
16. | ROYALTY OBLIGATIONS |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Royalty Agreement — Red Mile No. 2 LP | $ | 58,893 | $ | 62,318 | ||||
Gibraltar Royalty LP | — | 6,511 | ||||||
Total royalty obligations | $ | 58,893 | $ | 68,829 | ||||
(a) | Royalty Agreement — Red Mile No. 2 LP (promissory note and royalty obligation) |
F-31
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(b) | Gibraltar Royalty LP |
F-32
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
17. | RECLAMATION OBLIGATION AND RECLAMATION DEPOSITS |
Balance, September 30, 2007 | $ | 17,441 | ||
Changes during fiscal, 2008: | ||||
Reclamation incurred | (183 | ) | ||
Accretion expense | 1,451 | |||
Additional site closure and reclamation obligation recognized | 366 | |||
Reduction in the present value of reclamation obligation due to a revision in mine life | (8,709 | ) | ||
Balance, December 31, 2008 | $ | 10,366 | ||
Changes during fiscal 2009: | ||||
Reclamation incurred | (1,590 | ) | ||
Accretion expense | 968 | |||
Additional site closure and reclamation obligation recognized | 63 | |||
Balance, December 31, 2009 | $ | 9,807 | ||
Changes during fiscal 2010: | ||||
Reclamation incurred | (91 | ) | ||
Accretion expense | 860 | |||
Additional site closure and reclamation obligation recognized | 195 | |||
Less: JV 25% portion of the March 31/10 total reclamation obligation | (2,593 | ) | ||
Balance, December 31, 2010 | $ | 8,178 | ||
• | an increase to asset retirement costs included in mineral property interests, plant and equipment and corresponding increase to reclamation obligation as at December 31, 2008 of $366 | |
• | a decrease as at December 31, 2008 of $1,426 in asset retirement costs included in mineral property interests, plant and equipment | |
• | a decrease as at December 31, 2008 of $8,709 in the present value of the reclamation obligation due to an extension in the mine life | |
• | a gain for the 15 months ended December 31, 2008 of $6,917 |
F-33
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
18. | TAX AND INTEREST RECOVERIES |
2010 | 2009 | 2008 | ||||||||||
Earnings (loss) before income taxes | $ | 195,382 | $ | 11,255 | $ | (2,087 | ) | |||||
Expected tax expense based on statutory rates | 55,684 | 3,376 | (657 | ) | ||||||||
Permanent differences | (20,387 | ) | 1,141 | 6,790 | ||||||||
Mineral tax | 14,293 | 981 | 606 | |||||||||
Future tax rate differences | (3,637 | ) | (3,674 | ) | 1,215 | |||||||
Recognition of previously unrecognized tax assets | — | — | (13,613 | ) | ||||||||
Other | 831 | (1,130 | ) | 62 | ||||||||
Tax expense (recovery) for the year | $ | 46,784 | $ | 694 | $ | (5,597 | ) | |||||
Presented as: | ||||||||||||
Current income tax expense (recovery) | $ | 4,106 | $ | 669 | $ | (2,151 | ) | |||||
Future income tax expense (recovery) | 42,678 | 25 | (3,446 | ) | ||||||||
$ | 46,784 | $ | 694 | $ | (5,597 | ) | ||||||
F-34
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
2010 | 2009 | |||||||
Loss carry forwards | $ | 89 | $ | 8,985 | ||||
Royalty obligation | 12,911 | 16,343 | ||||||
BC mining taxes | — | 1,952 | ||||||
Copper hedge and other tax pools | 651 | 6,210 | ||||||
Future income tax assets | 13,651 | 33,490 | ||||||
Partnership deferral | — | (5,820 | ) | |||||
Reclamation obligation | (3,760 | ) | (4,800 | ) | ||||
Plant and equipment | (46,662 | ) | (20,323 | ) | ||||
BC Mining taxes | (9,531 | ) | — | |||||
Mineral properties and deferred stripping | (13,973 | ) | (19,436 | ) | ||||
Unrealized foreign exchange gain | (43 | ) | (751 | ) | ||||
Unrealized gain recorded in comprehensive income | (893 | ) | (654 | ) | ||||
Net future income tax liability | $ | (61,211 | ) | $ | (18,294 | ) | ||
Current portion — future income tax liability | $ | (1,008 | ) | $ | (1,979 | ) | ||
Long term future income tax liability | (60,203 | ) | (16,315 | ) | ||||
Net future income tax liability | $ | (61,211 | ) | $ | (18,294 | ) | ||
19. | CONVERTIBLE DEBT |
(a) | Convertible Bonds |
F-35
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(b) | Convertible Debenture |
20. | SHARE CAPITAL |
(a) | Authorized |
(b) | Equity Issued |
F-36
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(c) | Share purchase option plan |
F-37
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
2010 | 2009 | 2008 | ||||||||||||||||||||||
Number | Average | Number | Average | Number | Average | |||||||||||||||||||
of Shares | Price | of Shares | Price | of Shares | Price | |||||||||||||||||||
Opening balance | 10,384,635 | 1.40 | 7,817,718 | 1.33 | 5,707,334 | $ | 2.60 | |||||||||||||||||
Granted during the year | 3,708,500 | 4.63 | 3,983,500 | 1.50 | 8,472,050 | 2.19 | ||||||||||||||||||
Exercised during the year | (2,791,834 | ) | 1.37 | (1,161,749 | ) | 1.20 | (270,100 | ) | 2.48 | |||||||||||||||
Expired/cancelled during year | (187,500 | ) | 1.62 | (254,834 | ) | 2.14 | (6,091,566 | ) | 3.67 | |||||||||||||||
Closing balance | 11,113,801 | $ | 2.47 | 10,384,635 | $ | 1.40 | 7,817,718 | $ | 1.33 | |||||||||||||||
Average contractual remaining life (years) | 2.68 | 3.17 | 3.47 | |||||||||||||||||||||
Range of exercise prices | $ | 1.00 - $5.39 | $ | 1.00 - $4.50 | $ | 1.00 -$5.45 | ||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Outstanding at | Average | Average | Exercisable at | Average | ||||||||||||||||
December 31 | Remaining | Exercise | December 31 | Exercise | ||||||||||||||||
Range of Exercise Prices | 2010 | Contractual Life | Price | 2010 | Price | |||||||||||||||
$1.00 to $1.15 | 5,205,634 | 2.61 years | $ | 1.06 | 4,480,636 | $ | 1.04 | |||||||||||||
$1.71 to $2.18 | 1,732,167 | 2.82 years | $ | 1.79 | 1,186,333 | $ | 1.82 | |||||||||||||
$2.63 to $3.07 | 205,000 | 0.97 years | $ | 2.98 | 205,000 | $ | 2.98 | |||||||||||||
$4.03 to $4.49 | 2,090,000 | 3.98 years | $ | 4.34 | 756,665 | $ | 4.41 | |||||||||||||
$4.50 to $5.39 | 1,881,000 | 2.82 years | $ | 4.78 | 832,999 | $ | 4.74 | |||||||||||||
11,113,801 | 2.90 years | $ | 2.47 | 7,461,633 | $ | 1.97 | ||||||||||||||
Options outstanding | Options exercisable | |||||||||||||||||||
Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Outstanding at | Average | Average | Exercisable at | Average | ||||||||||||||||
December 31 | Remaining | Exercise | December 31 | Exercise | ||||||||||||||||
Range of Exercise Prices | 2009 | Contractual Life | Price | 2009 | Price | |||||||||||||||
$1.00 to $1.15 | 7,711,801 | 3.11 years | $ | 1.06 | 5,937,535 | $ | 1.08 | |||||||||||||
$1.71 to $2.18 | 1,979,834 | 3.68 years | $ | 2.17 | 874,169 | $ | 1.91 | |||||||||||||
$2.63 to $3.07 | 240,000 | 1.71 years | $ | 3.00 | 240,000 | $ | 3.00 | |||||||||||||
$4.03 to $4.09 | 225,000 | 3.53 years | $ | 4.11 | 125,000 | $ | 4.08 | |||||||||||||
$4.50 | 228,000 | 1.74 years | $ | 4.50 | 228,000 | $ | 4.50 | |||||||||||||
10,384,635 | 3.17 years | $ | 1.39 | 7,404,704 | $ | 1.40 | ||||||||||||||
F-38
Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
2010 | 2009 | 2008 | ||||
Risk-free interest rate | 2.37% | 1.9% | 2.4% | |||
Expected life | 4.37 years | 3.17 years | 3.52 years | |||
Volatility | 78% | 74% | 65% | |||
Expected dividends | nil | nil | nil |
d) | Share purchase warrants |
Outstanding | Outstanding | |||||||||||||||||
Exercise | December 31, | December 31 | ||||||||||||||||
Expiry Dates | Price | 2008 | Issued | Exercised | Expired | 2009 | ||||||||||||
December 17, 2010 | $ | 0.85 | 9,085,715 | — | 9,085,715 | — | — | |||||||||||
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | September 30 | December 31 | ||||||||||||||||||||||
Expiry Dates | Price | 2007 | Issued | Exercised | Expired | 2008 | ||||||||||||||||||
December 17, 2010 | $ | 0.85 | — | 9,085,715 | — | — | 9,085,715 | |||||||||||||||||
February 22, 2008 | $ | 3.48 | 120,000 | — | — | 120,000 | — | |||||||||||||||||
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
e) | Earnings per share |
2010 | 2009 | 2008 | ||||||||||
Earnings available to common shareholders | $ | 148,598 | $ | 10,561 | $ | 3,510 | ||||||
Effect of assumed conversions: | ||||||||||||
Royalty payments to GRLP (note 16(b)) | 65 | 130 | — | |||||||||
Tax effect on interest on convertible bonds | — | (45 | ) | — | ||||||||
Earnings available to common shareholders including assumed conversions: | 148,663 | 10,646 | 3,510 | |||||||||
Basic weighted-average number of shares outstanding (in 000’s) | 186,103 | 173,170 | 142,062 | |||||||||
Effect of dilutive securities (in 000’s): | ||||||||||||
Stock options | 10,626 | 3,244 | 5,142 | |||||||||
Warrants | — | — | 7,060 | |||||||||
Potential shares issued in settlement of GRLP Royalty | — | 1,757 | — | |||||||||
Tracking preferred shares | 6,277 | 2,664 | 2,664 | |||||||||
Diluted weighted-average number of shares outstanding (in 000’s) | 203,006 | 180,835 | 156,928 | |||||||||
Earnings per share | ||||||||||||
Basic | $ | 0.80 | $ | 0.06 | $ | 0.02 | ||||||
Diluted | $ | 0.73 | $ | 0.06 | $ | 0.02 | ||||||
2010 | 2009 | 2008 | ||||||||||
Stock options | 488 | 7,141 | 2,626 | |||||||||
Shares issuable under convertible bonds | — | — | 8,956 | |||||||||
21. | COMMITMENTS |
(a) | Treatment and refining agreement |
(b) | Off-Take Agreement |
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Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(c) | Franco-Nevada Gold Stream Transaction |
22. | SUPPLEMENTARY CASH FLOW DISCLOSURES |
December 31 | December 31 | December 31 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Acquisition of assets under capital lease | $ | 12,923 | $ | 765 | $ | 17,484 | ||||||
Conversion of convertible debenture (note 14(b)) | — | — | 21,318 | |||||||||
Decrease in asset retirement costs included in mineral properties, plant and equipment (note 15) | — | — | 1,426 | |||||||||
Shares and units issued for the purchase of mineral property interests (note 9 (e) & (f)) | — | — | 5,220 | |||||||||
Shares issued for finders fee | — | — | 360 | |||||||||
Shares issued for the purchase of royalty interest (note 16(b)) | 7,813 | — | — | |||||||||
Shares issued for donation | 928 | — | — | |||||||||
Fair value of stock options transferred to share capital from contributed surplus on exercise of options | 2,599 | 2,108 | 514 | |||||||||
Supplemental cash flow information | ||||||||||||
Cash paid during the year for | ||||||||||||
Interest | $ | 2,696 | $ | 4,461 | $ | 2,844 | ||||||
Taxes | $ | 1,911 | $ | 98 | $ | 315 |
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Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
23. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES |
Year Ended | Year Ended | 15 Months Ended | ||||||||||
Consolidated Statements of Operations and Comprehensive | December 31 | December 31 | December 31 | |||||||||
Income (Loss) | 2010 | 2009 | 2008 | |||||||||
Earnings for the period under Canadian GAAP | $ | 148,598 | $ | 10,561 | $ | 3,510 | ||||||
Adjustments under US GAAP | ||||||||||||
Interest accretion on convertible debt(a) | — | (898 | ) | 2,938 | ||||||||
Amortization of deferred financing costs(a) | — | (312 | ) | (580 | ) | |||||||
Foreign exchange gain (loss) on convertible debt(a) | — | 2,977 | (363 | ) | ||||||||
Reduction of gain on convertible bond repurchase(a) | — | (3,707 | ) | — | ||||||||
Adjustment to gain recognized on Joint Venture(b) | 285,342 | — | — | |||||||||
Adjustment to future income taxes related to gain(b) | (71,336 | ) | — | — | ||||||||
Additional depreciation and depletion(b) | (6,006 | ) | — | — | ||||||||
Tax effect of additional depreciation(b) | 1,502 | — | — | |||||||||
Earnings for the period under US GAAP | $ | 358,100 | $ | 8,621 | $ | 5,505 | ||||||
Other comprehensive income (loss) under Canadian and US GAAP — no differences | $ | 1,673 | $ | 11,256 | $ | (9,018 | ) | |||||
Total comprehensive income (loss) under US GAAP | $ | 359,773 | $ | 19,877 | $ | (3,513 | ) | |||||
Earnings per share | ||||||||||||
Earnings per share for the period under US GAAP | $ | 1.92 | $ | 0.05 | $ | 0.04 | ||||||
Diluted earnings per share for the period under US GAAP | $ | 1.76 | $ | 0.05 | $ | 0.04 | ||||||
Weighted average number of common shares outstanding (in thousands) | ||||||||||||
Basic | 186,103 | 173,170 | 142,062 | |||||||||
Diluted | 203,006 | 180,835 | 156,928 | |||||||||
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
As at | As at | |||||||
December 31 | December 31 | |||||||
Consolidated Balance Sheets | 2010 | 2009 | ||||||
Total assets under Canadian GAAP | $ | 687,612 | $ | 535,095 | ||||
Adjustments under US GAAP | ||||||||
Fair value adjustment to mineral property interests, plant and equipment, net of depreciation(b) | 279,336 | — | ||||||
Total assets under US GAAP | $ | 966,948 | $ | 535,095 | ||||
Total liabilities under Canadian GAAP | $ | 217,661 | $ | 238,402 | ||||
Adjustments under US GAAP | ||||||||
Additional future income tax liabilities recognized(b) | 69,834 | — | ||||||
Total liabilities under US GAAP | $ | 287,495 | $ | 238,402 | ||||
Total shareholders’ equity under Canadian GAAP | $ | 469,951 | $ | 296,693 | ||||
Adjustments under US GAAP | ||||||||
Fair value adjustment to mineral property interests, plant and equipment, net of depreciation and income taxes | 209,502 | — | ||||||
Total shareholders’ equity under US GAAP | $ | 679,453 | $ | 296,693 | ||||
(a) | Convertible debt |
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Table of Contents
Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
• | the fair value of the conversion feature in the amount of $21 was bifurcated from the Bonds and reflected as a derivative liability; | |
• | a net $1,649 decrease to the Bonds to reflect the reduced carrying value of the Bonds under US GAAP; and | |
• | a cumulative adjustment to reduce opening deficit by $1,628. |
(b) | Gibraltar Joint Venture |
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(c) | Current assets |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Trade receivables | $ | 17,519 | $ | 10,802 | ||||
GST/HST receivables | 2,305 | 1,377 | ||||||
Other receivables | 330 | 326 | ||||||
Total accounts receivable | $ | 20,154 | $ | 12,505 | ||||
2010 | 2009 | 2008 | ||||||||||
Decrease (increase) in trade receivables | $ | (6,716 | ) | $ | (10,802 | ) | $ | 6,909 | ||||
Decrease (increase) in GST/HST receivable | (928 | ) | (218 | ) | 2,207 | |||||||
Decrease (increase) in other receivables | (5 | ) | 3,121 | (1,701 | ) | |||||||
Total decrease (increase) in accounts receivable | $ | (7,649 | ) | $ | (7,899 | ) | $ | 7,415 | ||||
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(d) | Current Liabilities |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Trade payables | $ | 10,151 | $ | 5,008 | ||||
Accrued liabilities | 9,869 | 7,685 | ||||||
Payroll liabilities | 2,819 | 2,034 | ||||||
Other payables | 144 | 94 | ||||||
Total accounts payable and accrued liabilities | $ | 22,983 | $ | 14,821 | ||||
2010 | 2009 | 2008 | ||||||||||
Increase (decrease) in concentrate payable | $ | — | $ | (18,260 | ) | $ | 18,260 | |||||
Increase (decrease) in trade payables | 5,142 | (10,420 | ) | 2,973 | ||||||||
Increase (decrease) in accrued liabilities | 2,184 | (8,328 | ) | (931 | ) | |||||||
Increase (decrease) in payroll liabilities | 785 | (1,262 | ) | 2,264 | ||||||||
Increase (decrease) in other payables | 51 | 54 | 37 | |||||||||
Total increase (decrease) in accounts payable and accrued liabilities | $ | 8,162 | $ | (38,216 | ) | $ | 22,603 | |||||
(e) | Shareholders’ Equity |
(f) | Significant Risks and Uncertainties |
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(g) | Accounting for Uncertain Tax Positions and Reconciliations of Unrecognized Tax Benefits: |
Year Ended | Year Ended | |||||||
December 31, 2010 | December 31, 2009 | |||||||
Unrecognized tax benefits, opening balance | $ | 32,299 | $ | 30,685 | ||||
Reclassifications within tax provision: | ||||||||
Gross increases (decreases) — tax positions in prior period | 158 | (167 | ) | |||||
Gross increases — tax positions in current period | 264 | 1,781 | ||||||
Amounts derecognized during period | (30,221 | ) | — | |||||
Unrecognized tax benefits, ending balance | $ | 2,500 | $ | 32,299 | ||||
(h) | Share Purchase Option Plan |
December 31, | December 31, | December 31, | ||||||||||
Aggregate Intrinsic Value as at | 2010 | 2009 | 2008 | |||||||||
Closing balance of options outstanding at period end | $ | 30,326 | $ | 31,774 | $ | — | ||||||
Options exercisable at period end | $ | 24,085 | $ | 17,818 | $ | — | ||||||
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
i) | Unrecognized Stock Compensation |
ii) | Stock Option Modification |
(i) | Recently Adopted US GAAP Accounting Pronouncements |
(i) | Measuring Fair Value of Liabilities |
(ii) | Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities |
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
(j) | Future US GAAP Accounting Policy Changes |
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AMENDING AND RESTATING THE SHORT FORM BASE SHELF PROSPECTUS
DATED OCTOBER 8, 2010
New Issue | April 4, 2011 |
Common Shares
Warrants
Subscription Receipts
Units
Debt Securities
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iii
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Notes to the Consolidated Financial Statements — (Continued)
For the years ended December 31, 2010 and 2009, and fifteen months ended December 31, 2008.
(Expressed in thousands of Canadian dollars, except per ounce figures, unless stated otherwise)
1 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
7 | ||||
13 | ||||
13 | ||||
13 | ||||
17 | ||||
18 | ||||
18 | ||||
34 | ||||
34 | ||||
34 | ||||
34 | ||||
34 | ||||
35 | ||||
A-1 |
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• | annual information form dated March 28, 2011 for the fiscal year ended December 31, 2010 (the “Annual Information Form”); | |
• | consolidated financial statements and the notes thereto as at December 31, 2010 and 2009 and for the years ended December 31, 2010 and 2009 and for the fifteen month period ended December 31, 2008, together with the auditors’ report dated March 16, 2011 thereon; | |
• | management’s discussion and analysis for the year ended December 31, 2010; | |
• | management information circular dated May 13, 2010 relating to the annual general meeting of shareholders held June 16, 2010; and | |
• | consolidated financial statements and the notes thereto as at December 31, 2010 and 2009 and for the years ended December 31, 2010 and 2009 and the fifteen month period ended December 31, 2008 which include note 23, “Differences between Canadian and United States Generally Accepted Accounting Principles”, together with the auditors’ report dated March 28, 2011 thereon. These financial statements were filed in Canada on March 30, 2011 as “Other” and filed in the United States with the Company’s 40-F Annual Report on March 30, 2011. |
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• | delays or inability to successfully complete the environmental assessment review process for the Prosperity Project; | |
• | the potential for increase in the cash cost of production; | |
• | lack of mineral reserves at the Harmony Project and Aley Project; | |
• | the estimates of mineral resources is a subjective process, the accuracy of which is a function of the quantity and quality of available data and the assumptions made and judgment used in the engineering and geological interpretation, which may prove to be unreliable, and may be subject to revision based on various factors; | |
• | fluctuation of metal prices and currency rates; | |
• | uncertain project realization values; | |
• | current global economic conditions; |
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• | changes in mining legislation adversely affecting our operations; | |
• | inability to obtain adequate financing on acceptable terms; | |
• | inability to obtain necessary exploration and mining permits and comply with all government requirements including environmental, health and safety laws; | |
• | inability to attract and retain key personnel; and | |
• | other risks detailed fromtime-to-time in the Company’s quarterly filings, annual information forms, annual reports and annual filings with securities regulators. |
• | future commodity prices; | |
• | the cost of carrying out exploration and development activities on certain of the Company’s mineral properties; | |
• | the Company’s ability to obtain and keep the necessary expertise in order to carry out its operating, exploration and development activities within the planned time periods; and | |
• | the Company’s ability to obtain adequate financing on acceptable terms. |
g/t | means grams per tonne; | |
km | means kilometres; | |
kV | means kilovolts; | |
Lb | means pound; | |
m | means metres; | |
NI43-101 | means National Instrument 43-101 — Standards of Disclosure for Mineral Projects; | |
ton | means 2,000 pounds; and | |
tonne or t | means 1 metric tonne, equal to 1,000 kilograms, or 1.102 tons. |
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4
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• | management’s discussion and analysis of financial condition and results of operations; | |
• | consolidated audited financial statements, which are prepared in accordance with Canadian GAAP and reconciled to U.S. GAAP; and |
• | material information that the Company otherwise makes publicly available in reports that the Company files with securities regulatory authorities in Canada; | |
• | material information that the Company files with, and which is made public by, the TSX and Amex; and | |
• | material information that the Company distributes to its shareholders in Canada. |
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at 0.20% Copper Cut-off
Tons | Cu | Mo | ||||||||||||||
Pit | Category | (millions) | (%) | (%) | ||||||||||||
Connector | Proven | 40.4 | 0.296 | 0.010 | ||||||||||||
Probable | 14.8 | 0.271 | 0.009 | |||||||||||||
Subtotal | 55.2 | 0.289 | 0.010 | |||||||||||||
Gibraltar | Proven | 66.8 | 0.286 | 0.008 | ||||||||||||
Probable | 33.3 | 0.285 | 0.013 | |||||||||||||
Subtotal | 100.1 | 0.286 | 0.010 | |||||||||||||
Granite | Proven | 163.4 | 0.323 | 0.009 | ||||||||||||
Probable | 21.6 | 0.319 | 0.009 | |||||||||||||
Subtotal | 185.0 | 0.322 | 0.009 | |||||||||||||
Gibraltar Extension | Proven | 75.4 | 0.352 | 0.002 | ||||||||||||
Probable | 29.3 | 0.304 | 0.002 | |||||||||||||
Subtotal | 104.7 | 0.339 | 0.002 | |||||||||||||
Total | 445.0 | 0.314 | 0.008 | |||||||||||||
Gibraltar Mine Mineral Resources
at 0.20% Copper Cut-off
Tons | Cu | Mo | ||||||||||
Category | (millions) | (%) | %) | |||||||||
Measured | 583.0 | 0.301 | 0.008 | |||||||||
Indicated | 361.0 | 0.290 | 0.008 | |||||||||
Total | 944.0 | 0.297 | 0.008 |
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• | Located near existing infrastructure in south-central British Columbia; | |
• | 33 year mine life at a milling rate of 70,000 tonnes/day; and | |
• | Life of minewaste-to-ore strip ratio of 1.5. |
Prosperity Mineral Reserves
at $5.50 NSR/t Pit-Rim Cut-off
Recoverable | Recoverable | |||||||||||||||||||
Tonnes | Gold | Copper | Gold Ounces | Copper Pounds | ||||||||||||||||
Category | (millions) | (g/t) | (%) | (millions) | (billions) | |||||||||||||||
Proven | 481 | 0.46 | 0.26 | 5.0 | 2.4 | |||||||||||||||
Probable | 350 | 0.35 | 0.18 | 2.7 | 1.2 | |||||||||||||||
Total | 831 | 0.41 | 0.23 | 7.7 | 3.6 | |||||||||||||||
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Prosperity Mineral Resources
at 0.14% Copper Cut-Off
Tonnes | Gold | Copper | ||||||||||
Category | (millions) | (g/t) | (%) | |||||||||
Measured | 547.1 | 0.46 | 0.27 | |||||||||
Indicated | 463.4 | 0.34 | 0.21 | |||||||||
Total | 1,010.5 | 0.41 | 0.24 | |||||||||
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Aggregate Number and Type of | ||||||||
Date of Issuance | Securities Issued | Price per Security | ||||||
April 1, 2010 | 21,000 Common Shares | $ | 4.50 | |||||
April 6, 2010 | 53,000 Common Shares | $ | 1.00 | |||||
April 6, 2010 | 100,000 Options | $ | 5.39 | |||||
April 9, 2010 | 31,000 Common Shares | $ | 1.00 | |||||
April 9, 2010 | 7,000 Common Shares | $ | 2.18 | |||||
April 12, 2010 | 1,500 Common Shares | $ | 1.00 | |||||
April 14, 2010 | 11,500 Common Shares | $ | 1.00 | |||||
April 14, 2010 | 10,000 Common Shares | $ | 4.50 | |||||
April 15, 2010 | 3,000 Common Shares | $ | 1.00 | |||||
April 19, 2010 | 30,000 Common Shares | $ | 4.03 | |||||
April 20, 2010 | 21,000 Common Shares | $ | 4.50 | |||||
April 20, 2010 | 30,000 Common Shares | $ | 1.00 | |||||
April 27, 2010 | 2,000 Common Shares | $ | 1.00 |
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Aggregate Number and Type of | ||||||||
Date of Issuance | Securities Issued | Price per Security | ||||||
May 4, 2010 | 33,667 Common Shares | $ | 1.71 | |||||
May 13, 2010 | 7,000 Common Shares | $ | 1.00 | |||||
May 18, 2010 | 90,000 Common Shares | $ | 1.15 | |||||
May 26, 2010 | 10,000 Common Shares | $ | 1.15 | |||||
June 16, 2010 | 50,000 Common Shares | $ | 1.00 | |||||
June 21, 2010 | 1,500 Common Shares | $ | 1.00 | |||||
June 25, 2010 | 67,000 Common Shares | $ | 1.71 | |||||
June 25, 2010 | 25,000 Common Shares | $ | 2.18 | |||||
June 29, 2010 | 6,500 Common Shares | $ | 1.00 | |||||
June 29, 2010 | 4,000 Common Shares | $ | 4.77 | |||||
June 30, 2010 | 22,000 Common Shares | $ | 1.00 | |||||
July 2, 2010 | 50,000 Common Shares | $ | 1.00 | |||||
July 7, 2010 | 5,000 Common Shares | $ | 1.00 | |||||
July 8, 2010 | 3,000 Common Shares | $ | 1.00 | |||||
August 13, 2010 | 100,000 Common Shares | * | $ | 4.25 | (deemed) | |||
August 16, 2010 | 4,000 Common Shares | $ | 1.00 | |||||
August 17, 2010 | 2,000 Common Shares | $ | 1.00 | |||||
August 31, 2010 | 4,000 Common Shares | $ | 1.00 | |||||
September 13, 2010 | 4,000 Common Shares | $ | 1.00 | |||||
September 16, 2010 | 160,000 Options | $ | 4.61 | |||||
September 20, 2010 | 4,000 Common Shares | $ | 1.00 | |||||
September 22, 2010 | 500 Common Shares | $ | 1.00 | |||||
September 23, 2010 | 5,000 Common Shares | $ | 1.00 | |||||
September 29, 2010 | 1,000 Common Shares | $ | 1.00 | |||||
October 1, 2010 | 3,000 Common Shares | $ | 1.00 | |||||
October 5, 2010 | 11,000 Common Shares | $ | 1.00 | |||||
October 5, 2010 | 2,000 Common Shares | $ | 4.77 | |||||
October 6, 2010 | 67,000 Common Shares | $ | 1.00 | |||||
October 7, 2010 | 11,000 Common Shares | $ | 1.00 | |||||
October 7, 2010 | 4,000 Common Shares | $ | 4.77 | |||||
October 8, 2010 | 14,000 Common Shares | $ | 1.00 | |||||
October 8, 2010 | 5,000 Common Shares | $ | 4.77 | |||||
October 8, 2010 | 1,500 Common Shares | $ | 1.00 | |||||
October 12, 2010 | 24,000 Common Shares | $ | 2.17 | |||||
October 12, 2010 | 1,000 Common Shares | $ | 1.00 | |||||
October 13, 2010 | 7,000 Common Shares | $ | 2.17 | |||||
October 13, 2010 | 6,500 Common Shares | $ | 4.77 | |||||
October 13, 2010 | 23,000 Common Shares | $ | 1.00 | |||||
October 14, 2010 | 33,000 Common Shares | $ | 1.00 | |||||
October 14, 2010 | 5,000 Common Shares | $ | 4.50 | |||||
October 19, 2010 | 2,000 Common Shares | $ | 4.77 | |||||
October 26, 2010 | 5,000 Common Shares | $ | 1.00 | |||||
October 26, 2010 | 8,000 Common Shares | $ | 4.77 | |||||
October 29, 2010 | 2,000 Common Shares | $ | 4.77 |
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Aggregate Number and Type of | ||||||||
Date of Issuance | Securities Issued | Price per Security | ||||||
November 1, 2010 | 5,500 Common Shares | $ | 1.00 | |||||
November 1, 2010 | 500 Common Shares | $ | 4.77 | |||||
November 12, 2010 | 100,000 Common Shares | $ | 1.00 | |||||
November 17, 2010 | 100,000 Common Shares | $ | 1.00 | |||||
December 9, 2010 | 1,000 Common Shares | $ | 1.00 | |||||
December 10, 2010 | 42,500 Common Shares | $ | 1.00 | |||||
December 13, 2010 | 55,000 Common Shares | $ | 1.00 | |||||
December 13, 2010 | 2,000 Common Shares | $ | 4.77 | |||||
December 14, 2010 | 14,000 Common Shares | $ | 1.00 | |||||
December 15, 2010 | 2,500 Common Shares | $ | 1.00 | |||||
December 16, 2010 | 5,000 Common Shares | $ | 1.00 | |||||
December 16, 2010 | 50,000 Common Shares | $ | 1.15 | |||||
December 16, 2010 | 50,000 Common Shares | $ | 2.18 | |||||
December 17, 2010 | 13,000 Common Shares | $ | 1.00 | |||||
December 20, 2010 | 21,500 Common Shares | $ | 1.00 | |||||
January 4, 2011 | 2,270,000 Options | $ | 5.13 | |||||
January 5, 2011 | 5,000 Common Shares | $ | 1.00 | |||||
January 6, 2011 | 25,000 Common Shares | $ | 2.18 | |||||
January 7, 2011 | 3,000 Common Shares | $ | 1.00 | |||||
January 10, 2011 | 2,000 Common Shares | $ | 1.00 | |||||
January 11, 2011 | 2,500 Common Shares | $ | 1.00 | |||||
January 13, 2011 | 16,000 Common Shares | $ | 4.50 | |||||
January 17, 2011 | 50,000 Common Shares | $ | 4.14 | |||||
January 17, 2011 | 4,000 Common Shares | $ | 4.17 | |||||
January 17, 2011 | 14,500 Common Shares | $ | 1.00 | |||||
January 18, 2011 | 100,000 Common Shares | $ | 1.00 | |||||
January 25, 2011 | 1,000 Common Shares | $ | 1.00 | |||||
January 28, 2011 | 25,000 Common Shares | $ | 1.00 | |||||
February 2, 2011 | 10,000 Common Shares | $ | 4.50 | |||||
February 2, 2011 | 50,000 Common Shares | $ | 2.18 | |||||
February 2, 2011 | 45,000 Common Shares | $ | 1.00 | |||||
February 3, 2011 | 9,000 Common Shares | $ | 1.00 | |||||
February 4, 2011 | 3,000 Common Shares | $ | 1.00 | |||||
February 4, 2011 | 2,000 Common Shares | $ | 4.77 | |||||
February 9, 2011 | 33,334 Common Shares | $ | 1.15 | |||||
February 15, 2011 | 87,200 Common Shares | $ | 6.05 | |||||
February 16, 2011 | 8,000 Common Shares | $ | 4.77 | |||||
February 16, 2011 | 9,500 Common Shares | $ | 1.00 | |||||
February 17, 2011 | 25,000 Common Shares | * | $ | 6.05 | ||||
February 17, 2011 | 887,800 Common Shares | * | $ | 6.05 | ||||
February 23, 2011 | 4,000 Common Shares | $ | 1.00 | |||||
February 23, 2011 | 210,000 Common Shares | $ | 1.05 | |||||
February 28, 2011 | 5,000 Common Shares | $ | 1.00 | |||||
March 4, 2011 | 75,000 Common Shares | $ | 2.18 |
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Aggregate Number and Type of | ||||||||
Date of Issuance | Securities Issued | Price per Security | ||||||
March 24, 2011 | 4,000 Common Shares | $ | 4.77 | |||||
March 28, 2011 | 50,000 Common Shares | $ | 2.18 | |||||
March 28, 2011 | 60,000 Common Shares | $ | 2.18 | |||||
March 28, 2011 | 40,000 Common Shares | $ | 2.63 |
* | All common shares were issued pursuant to the exercise of stock options unless otherwise indicated with a * |
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TSX Price Range | ||||||||||||
Month | High | Low | Total Volume | |||||||||
March 2010 | 5.36 | 4.74 | 17,347,300 | |||||||||
April 2010 | 6.19 | 5.33 | 19,376,400 | |||||||||
May 2010 | 6.17 | 4.67 | 26,141,300 | |||||||||
June 2010 | 5.54 | 4.50 | 10,901,800 | |||||||||
July 2010 | 4.49 | 3.27 | 19,507,300 | |||||||||
August 2010 | 4.85 | 4.07 | 10,408,800 | |||||||||
September 2010 | 5.55 | 4.44 | 17,219,400 | |||||||||
October 2010 | 7.27 | 4.58 | 24,460,300 | |||||||||
November 2010 | 6.72 | 4.13 | 31,648,100 | |||||||||
December 2010 | 5.34 | 4.51 | 10,011,500 | |||||||||
January 2011 | 6.10 | 4.84 | 21,274,900 | |||||||||
February 2011 | 6.22 | 5.13 | 11,550,400 | |||||||||
March 2011 | 6.22 | 5.13 | 13,767,100 | |||||||||
April 1, 2011 | 5.77 | 5.71 | 153,100 |
Amex Price Range (in US$) | ||||||||||||
Month | High | Low | Total Volume | |||||||||
March 2010 | 5.25 | 4.59 | 38,840,700 | |||||||||
April 2010 | 6.21 | 5.25 | 44,072,500 | |||||||||
May 2010 | 6.05 | 4.35 | 71,796,000 | |||||||||
June 2010 | 5.28 | 4.22 | 38,526,300 | |||||||||
July 2010 | 4.36 | 3.31 | 46,334,200 | |||||||||
August 2010 | 4.71 | 3.90 | 31,060,800 | |||||||||
September 2010 | 5.40 | 4.28 | 38,134,500 | |||||||||
October 2010 | 7.23 | 4.58 | 93,091,700 | |||||||||
November 2010 | 6.62 | 4.02 | 125,700,200 | |||||||||
December 2010 | 5.29 | 4.43 | 61,288,800 | |||||||||
January 2011 | 6.06 | 4.85 | 79,347,500 | |||||||||
February 2011 | 6.33 | 5.18 | 38,706,500 | |||||||||
March 2011 | 6.38 | 5.18 | 49,916,600 | |||||||||
April 1, 2011 | 5.91 | 5.99 | 917,000 |
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• | the designation (series or otherwise) and aggregate number of Warrants; | |
• | the price at which the Warrants will be offered; | |
• | the currency or currencies in which the Warrants will be offered; | |
• | the date on which the right to exercise the Warrants will commence and the date on which the right will expire; | |
• | whether the warrants will be listed on a recognized stock exchange; | |
• | the number of common shares that may be purchased upon exercise of each Warrant and the price at which and currency or currencies in which the Common Shares may be purchased upon exercise of each Warrant; | |
• | the designation and terms of any securities with which the Warrants will be offered, if any, and the number of the Warrants that will be offered with each security; | |
• | the date or dates, if any, on or after which the Warrants and the related securities will be transferable separately; | |
• | whether the Warrants will be subject to redemption and, if so, the terms of such redemption provisions; | |
• | material Canadian and United States federal income tax consequences of owning the Warrants; and | |
• | any other material terms or conditions of the Warrants. |
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• | the number of subscription receipts; | |
• | the price at which the subscription receipts will be offered; | |
• | the procedures for the exchange of the subscription receipts into Common Shares or Warrants; | |
• | the number of Common Shares or Warrants that may be exchanged upon exercise of each subscription receipt; | |
• | the designation and terms of any other securities with which the subscription receipts will be offered, if any, and the number of subscription receipts that will be offered with each security; | |
• | terms applicable to the gross or net proceeds from the sale of the subscription receipts plus any interest earned thereon; | |
• | material Canadian and United States income tax consequences of owning the subscription receipts; and | |
• | any other material terms and conditions of the subscription receipts. |
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• | the title of the Debt Securities; | |
• | the aggregate principal amount of the Debt Securities; | |
• | the percentage of principal amount at which the Debt Securities will be issued; | |
• | whether payment of principal, interest and premium, if any, on the Debt Securities will be senior or subordinated to the Company’s other liabilities or obligations; | |
• | whether payment of the Debt Securities will be guaranteed by any other person; | |
• | the date or dates, or the methods by which such dates will be determined or extended, on which the Company may issue the Debt Securities and the date or dates, or the methods by which such dates will be determined or extended, on which the Company will pay the principal on the Debt Securities and the portion (if less than the principal amount) of Debt Securities to be payable upon a declaration of acceleration of maturity; | |
• | whether the Debt Securities will bear interest, the interest rate (whether fixed or variable) or the method of determining the interest rate, the date from which interest will accrue, the dates on which the Company will pay interest and the record dates for interest payments, or the methods by which such dates will be determined; | |
• | the place or places the Company will pay principal, premium and interest, if any, and the place or places where Debt Securities can be presented for registration of transfer, exchange or conversion; | |
• | whether and under what circumstances the Company will be required to pay any additional amounts for withholding or deduction for Canadian taxes with respect to the Debt Securities, and whether and on what terms the Company will have the option to redeem the Debt Securities rather than pay the additional amounts; | |
• | whether the Company will be obligated to redeem, repay or repurchase the Debt Securities pursuant to any sinking or other provision, or at the option of a holder and the terms and conditions of such redemption, repayment or repurchase; | |
• | whether the Company may redeem the Debt Securities, in whole or in part, prior to maturity and the terms and conditions of any such redemption; |
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• | the denominations in which the Company will issue any registered Debt Securities, if other than denominations of $2,000 and integral multiples of $1,000 in excess thereof and, if other than denominations of $5,000 and integral multiples of $5,000, the denominations in which any unregistered Debt Security shall be issuable; | |
• | whether the Company will make payments on the Debt Securities in a currency other than U.S. dollars; | |
• | whether payments on the Debt Securities will be payable with reference to any index, formula or other method; | |
• | whether the Company will issue the Debt Securities as global securities and, if so, the identity of the depositary for the global securities; | |
• | whether the Company will issue the Debt Securities as unregistered securities, registered securities or both; | |
• | any changes or additions to, or deletions of, events of default or covenants whether or not such events of default or covenants are consistent with the events of default or covenants in the Indenture; | |
• | the applicability of, and any changes or additions to, the provisions for defeasance described under “Defeasance” below; | |
• | whether the holders of any series of Debt Securities have special rights if specified events occur; | |
• | the terms, if any, for any conversion or exchange of the Debt Securities for any other securities; | |
• | provisions as to modification, amendment or variation of any rights or terms attaching to the Debt Securities; and | |
• | any other terms, conditions, rights and preferences (or limitations on such rights and preferences). |
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• | issue, register the transfer of or exchange any series of the Debt Securities in definitive form during a period beginning at the opening of 15 days before any selection of securities of that series of the Debt Securities to be redeemed and ending on the relevant date of notice of such redemption, as provided in the Indenture; | |
• | register the transfer of or exchange any registered security in definitive form, or portion thereof, called for redemption, except the unredeemed portion of any registered security being redeemed in part; | |
• | exchange any unregistered security called for redemption except to the extent that such unregistered security may be exchanged for a registered security of that series and like tenor; provided that such registered security will be simultaneously surrendered for redemption; or | |
• | issue, register the transfer of or exchange any of the Debt Securities in definitive form which have been surrendered for repayment at the option of the holder, except the portion, if any, of such Debt Securities not to be so repaid. |
• | the resulting, surviving or transferee person is organized and existing under the laws of Canada, or any province or territory thereof, the United States, any state thereof or the District of Columbia, or, if the amalgamation, merger, consolidation, statutory arrangement or other transaction would not impair the rights of holders, any other country; | |
• | the resulting, surviving or transferee person, if other than the Company, assumes all of the Company’s obligations under the Debt Securities and the Indenture; and | |
• | immediately after the transaction, no default or event of default under the Indenture shall have happened and be continuing, |
• | the resulting, surviving or transferee person a) shall either be the Company or a subsidiary guarantor, or b) is organized and existing under the laws of the United States, any state thereof or the District of Columbia; |
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• | in the case of b) above, the resulting, surviving or transferee person assumes all of the subsidiary guarantor’s obligations under the Debt Securities and the Indenture; and | |
• | immediately after the transaction, no default or event of default under the Indenture shall have happened and be continuing. |
• | any Taxes that would not have been imposed but for the holder or beneficial owner of the Debt Securities being a citizen or resident or national of, incorporated in or carrying on a business, in the relevant Tax Jurisdiction in which such Taxes are imposed or having any other present or former connection with the relevant Tax Jurisdiction other than the mere acquisition, holding, enforcement or receipt of payment in respect of the Debt Securities; | |
• | any Taxes that are imposed or withheld as a result of the failure of the holder or beneficial owner of the Debt Securities to comply with any reasonable written request, made to that holder or beneficial owner in writing at least 90 days before any such withholding or deduction would be payable, by the Company to provide timely and accurate information concerning the nationality, residence or identity of such holder or beneficial owner or to make any valid and timely declaration or similar claim or satisfy any certification, information or other reporting requirement, which is required or imposed by a statute, treaty, regulation or administrative practice of the relevant Tax Jurisdiction as a precondition to any exemption from or reduction in all or part of such Taxes; | |
• | any Debt Security presented for payment (where Debt Securities are in definitive form and presentation is required) more than 30 days after the relevant payment is first made available for payment to the holder or beneficial owner (except to the extent that the holder or |
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beneficial owner would have been entitled to Additional Amounts had the Debt Security been presented on any day during such30-day period); |
• | any estate, inheritance, gift, sale, transfer, personal property or similar Taxes; | |
• | any Taxes withheld, deducted or imposed on a payment to an individual and that are required to be made pursuant to European Council Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN Council meeting of 26 and 27 November 2000 on the taxation of savings income or any law implementing or complying with or introduced in order to conform to such Directive; | |
• | any Taxes which the payor is not required to deduct or withhold from payments under, or with respect to, the Debt Security; | |
• | any Taxes withheld, deducted or imposed because the holder or beneficial owner of the Debt Security does not deal at arm’s length with the Company or a relevant guarantor at a relevant time for purposes of theIncome Tax Act(Canada); or | |
• | is subject to such Taxes by reason of any combination of the items listed above. |
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• | within 120 days after the end of each fiscal year, copies of the Company’s annual financial information and certifications that would be required to be contained in a filing with the SEC onForm 20-F orForm 40-F, as applicable, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a report on the annual financial statements by the Company’s auditors; |
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• | within 60 days after the end of each of the first three fiscal quarters of each fiscal year, all interim quarterly financial information that would be required to be contained in quarterly reports under the laws of Canada or any Province thereof to security holders of a company with securities listed on the TSX, in each case including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and whether or not the Company has any of its securities listed on such exchange; and | |
• | within the time periods specified in the SEC’s rules and regulations, all current reports that would be required to be furnished to the SEC onForm 6-K if the Company were required to furnish these reports. |
• | the Company fails to pay principal of, or any premium on, or any Additional Amounts in respect of, any Debt Security of that series when it is due and payable; | |
• | the Company fails to pay interest (including Additional Amounts) payable on any Debt Security of that series when it becomes due and payable, and such default continues for 30 days; | |
• | the Company fails to make any required sinking fund or analogous payment when due for that series of Debt Securities; | |
• | the Company fails to observe or perform any of its covenants or agreements in the Indenture that affect or are applicable to the Debt Securities of that series for 90 days after written notice to the Company by the trustees or to the Company and the trustees by holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of that series; |
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• | certain events involving the Company’s bankruptcy, insolvency or reorganization; | |
• | except as otherwise permitted under the Indenture, any guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any guarantor, or any person acting on behalf of any guarantor, denies or disaffirms its obligations under its guarantee; and | |
• | any other event of default provided for in that series of Debt Securities. |
• | the entire principal and interest of the Debt Securities of the series; or | |
• | if the Debt Securities are discounted securities, that portion of the principal as is described in the applicable Prospectus Supplement. |
• | the holder has previously given to the trustees written notice of a continuing event of default with respect to the Debt Securities of the affected series; |
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• | the holders of at least 25% in principal amount of the outstanding Debt Securities of the series affected by an event of default have made a written request, and the holders have offered reasonable indemnity, to the trustees to institute a proceeding as trustees; and | |
• | the trustees have failed to institute a proceeding, and have not received from the holders of a majority in aggregate principal amount of the outstanding Debt Securities of the series affected (or in the case of bankruptcy, insolvency or reorganization, all series outstanding) by an event of default a direction inconsistent with the request, within 60 days after receipt of the holders’ notice, request and offer of indemnity. |
• | the Company will be discharged from the obligations with respect to the Debt Securities of that series; or | |
• | the Company will no longer be under any obligation to comply with certain restrictive covenants under the Indenture and certain events of default will no longer apply to the Company. |
• | an opinion of counsel in the United States to the effect that the holders of the outstanding Debt Securities of the affected series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of a defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance had not occurred; | |
• | an opinion of counsel in Canada or a ruling from the Canada Revenue Agency to the effect that the holders of the outstanding Debt Securities of the affected series will not recognize income, gain or loss for Canadian federal, provincial or territorial income or other tax purposes as a result of a defeasance and will be subject to Canadian federal, provincial or territorial income tax and other tax on the same amounts, in the same manner and at the same times as would have been the case had the defeasance not occurred; and | |
• | a certificate of one of the Company’s officers and an opinion of counsel, each stating that all conditions precedent provided for relating to defeasance have been complied with. |
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• | no event of default or event that, with the passing of time or the giving of notice, or both, shall constitute an event of default shall have occurred and be continuing for the Debt Securities of the affected series; | |
• | the Company is not an “insolvent person” within the meaning of applicable bankruptcy and insolvency legislation; and | |
• | other customary conditions precedent are satisfied. |
• | change the stated maturity of the principal of, premium, if any, or any instalment of interest, if any, on any Debt Security; | |
• | reduce the principal, premium, if any, or rate of interest, if any, or change any obligation of the Company to pay any Additional Amounts; | |
• | reduce the amount of principal of a debt security payable upon acceleration of its maturity or the amount provable in bankruptcy; | |
• | change the place or currency of any payment; | |
• | affect the holder’s right to require the Company to repurchase the Debt Securities at the holder’s option; | |
• | impair the right of the holders to institute a suit to enforce their rights to payment; | |
• | adversely affect any conversion or exchange right related to a series of Debt Securities; | |
• | reduce the percentage of Debt Securities required to modify the Indenture or to waive compliance with certain provisions of the Indenture; | |
• | reduce the percentage in principal amount of outstanding Debt Securities necessary to take certain actions; | |
• | waive a redemption payment with respect to any Debt Security (other than a payment hat may be required pursuant to certain covenants contained in an amendment or supplement of the provisions of the Indenture); | |
• | release any guarantor from any of its obligations under its guarantee or the Indenture, except in accordance with the Indenture. |
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• | evidence its successor, or a successor of a subsidiary guarantor, under the Indenture; | |
• | make any change that would provide additional rights or benefits to holders of the Debt Securities or that does not adversely affect the legal rights of a holder; | |
• | add events of default; | |
• | provide for unregistered securities to become registered securities under the Indenture and make other such changes to unregistered securities that in each case do not materially and adversely affect the interests of holders of outstanding Debt Securities; | |
• | establish the forms of the Debt Securities; | |
• | appoint a successor trustee under the Indenture; | |
• | add provisions to permit or facilitate the defeasance and discharge of the Debt Securities as long as there is no material adverse effect on the holders; | |
• | cure any ambiguity, correct or supplement any defective or inconsistent provision or make any other provisions in each case that would not materially and adversely affect the interests of holders of outstanding Debt Securities, if any; | |
• | comply with any applicable laws of the United States and Canada in order to effect and maintain the qualification of the Indenture under such laws to the extent they do not conflict with the applicable laws of the United States; | |
• | change or eliminate any provisions of the Indenture where such change takes effect when there are no Debt Securities outstanding which are entitled to the benefit of those provisions under the Indenture; | |
• | to provide for the assumption by the Company or a subsidiary guarantor’s obligations in the case of a merger, amalgamation or consolidation or sale of all or substantially all of the assets of the Company or subsidiary guarantor; | |
• | to comply with the requirements of the SEC; | |
• | to conform the text of the Indenture, the Debt Securities or a guarantee to the Indenture; | |
• | to provide for the issuance of additional Debt Securities in accordance with the Indenture; and | |
• | to allow a subsidiary guarantor to execute a Supplemental Indenture. |
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April , 2011