UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
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| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For fiscal year ended December 31, 2023 | ||
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the transition period from ____ to ______ | ||
OR | ||
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| SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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Date of event requiring this shell company report: |
Commission file number: 0-18860
CANARC RESOURCE CORP.
(Exact name of Registrant as specified in its charter)
Province of British Columbia, Canada (Jurisdiction of incorporation or organization)
Suite (Address of principal executive offices)
Canagold Resources Ltd., Suite (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Shares, without par value
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
Indicate by check mark whether the Registrant has submitted electronically
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer,
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
If
If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
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CAUTION –CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 20-F and the exhibits attached hereto contain "forward-looking statements"“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward looking statements concern the Registrant'sCompany’s anticipated results and developments in the Registrant'sCompany’s operations in future periods, planned exploration and development of its mineral property interests, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects"“expects” or "does“does not expect"expect”, "is expected"“is expected”, "anticipates"“anticipates” or "does“does not anticipate"anticipate”, "plans"“plans”, "estimates"“estimates” or "intends"“intends”, or stating that certain actions, events or results "may"“may”, "could"“could”, "would"“would”, "might"“might” or "will"“will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:
| · | risks related to our exploration and development activities; |
| · | risks related to the financing needs of our planned operations; |
| · | risks related to estimates of mineral deposits, resources and reserves; |
| · | risks related to fluctuations in mineral prices; |
| · | risks related to the titles of our mineral property interests; |
| · | risks related to competition in the mineral exploration and mining industry; |
| · | risks related to potential conflicts of interest with our officers and directors; |
| · | risks related to environmental and regulatory requirements; |
| · | risks related to foreign currency fluctuations; |
| · | risks related to our possible status as a passive foreign investment company; |
| · | risks related to the volatility of our common stock; |
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| · | risks related to the possible dilution of our common |
· | risks related the uncertainty related to unsettled First Nations rights and title in British Columbia (BC, Canada); | |
· | risks related to uninsured risks; and | |
· | risks related to cybersecurity. |
This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the sections titled "Risk Factors"“Item 3. Key Information – D. Risk Factors” and "Information“Item 4. Information on the Company"Company” of this annual report.report on Form 20-F. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events other than as may be specifically required by applicable securities laws and regulations.
We qualify all the forward-looking statements contained in this annual report by the foregoing cautionary statements.
Canarc Resource Corp.
Form 20-F
Unless the context otherwise requires, all references to "we"“we” or "our"“our” or the "Registrant"“Company” or the "Company"“Canagold” or "Canarc"“Canarc” refer to Canagold Resources Ltd. (formerly, Canarc Resource Corp.) and/or its subsidiaries. All monetary figures are in terms of United States dollars unless otherwise indicated.
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SUMMARY OF RISK FACTORS
Investing in our common shares involves a high degree of risk. You should carefully consider the risks summarized below and other risks that we face, a detailed discussion of which can be found under “Item 3. Key Information – D. Risk Factors” below, together with other information in this annual report on Form 20-F and our other filings with the SEC. This summary list of risks is not exhaustive of the factors that may affect any of the Company’s forward-looking statements and our business and financial results. If any of these risks actually occur, our business, financial condition and financial performance would likely be materially adversely affected. In such case, the trading price of our common shares would likely decline and you may lose part or all of your investment. Below is a summary of some of the principal risks we face:
Risks related to the Company’s Financial Condition
· | The Company’s ability to continue as a going concern is in doubt and the Company’s planned operations will require future financing and there is no assurance given by the Company that it will be able to secure the financing necessary to explore, develop and produce its mineral property interests. | |
· | The Company has a history of losses, and we do not expect to generate earnings from operations or pay dividends in the near term, if at all. | |
· | A substantial or extended decline in gold or silver prices would have a material adverse effect on the value of the Company’s assets and on the Company’s ability to raise capital and could result in lower than estimated economic returns. |
Risks related to the Company’s Business
· | The Company’s exploration activities may not be commercially successful, which could lead it to abandon its plans to develop its mineral property interests and its investments in exploration and there is no assurance given by the Company that its exploration and development programs and mineral property interests will result in the discovery, development or production of a commercially viable ore body. | |
· | The Company will be required to locate mineral reserves for its long-term success. | |
· | The figures for the Company’s resources are estimates based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated and there is no assurance given by the Company that any estimates of mineral deposits herein will not change. | |
· | Mineral operations are subject to market forces outside of the Company’s control which could negatively impact the Company’s operations. |
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· | There is no assurance given by the Company that it owns legal title to its mineral property interests. | |
· | The Company competes with larger, better capitalized competitors in the mining industry and there is no assurance given by the Company that it can compete for mineral properties, future financings and technical expertise. | |
· | A shortage of equipment and supplies could adversely affect the Company’s ability to operate its business. | |
· | The Company’s directors and officers may have conflicts of interest as a result of their relationships with other companies and there is no assurance given by the Company that its directors and officers will not have conflicts of interest from time to time. | |
· | The Company does not insure against all risks which we may be subject to in our planned operations and there is no assurance given by the Company that it is adequately insured against all risks. | |
· | The Company is subject to significant governmental and environmental regulations and there is no assurance given by the Company that it has met all environmental or regulatory requirements. | |
· | Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on the Company’s business. | |
· | Land reclamation requirements for the Company’s properties may be burdensome. | |
· | Mining is inherently dangerous and subject to conditions or events beyond the Company’s control, which could have a material adverse effect on the Company’s business. | |
· | The Company may face potential opposition from non-governmental organizations (“NGOs”) to explore, advance, develop and operate its mineral property assets. | |
· | There is uncertainty related to unsettled First Nations rights and title in British Columbia (Canada) and this may create delays in project approval or interruptions in project progress. | |
· | The Company’s properties may be located in foreign countries and political instability or changes in the regulations in these countries may adversely affect the Company’s ability to carry on its business. | |
· | Fluctuations in foreign currency exchange rates may adversely affect the Company’s future profitability. | |
· | The Company is reliant on third parties. | |
· | The Company may experience cybersecurity threats. |
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Risks Related to the Company’s United States Reporting
· | It may be difficult for U.S. shareholders to enforce civil liabilities under United States law in Canadian courts. | |
· | The Company’s possible PFIC status may have possible adverse tax consequences for United States Investors. | |
· | While we believe we have adequate internal control over financial reporting, internal controls cannot provide absolute assurance that objectives are met. | |
· | As a “foreign private issuer”, the Company is exempt from Section 14 proxy rules and Section 16 of the Securities Exchange Act of 1934. |
Risks Related to the Company’s Common Shares
· | The Company does not intend to pay dividends. | |
· | The volatility of the Company’s common shares could cause investor loss. | |
· | Penny stock classification could affect the marketability of the Company's common stock and shareholders could find it difficult to sell their stock. | |
· | Possible dilution to current shareholders based on outstanding options and warrants. |
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EXPLANATORY NOTE REGARDING PRESENTATION OF FINANCIAL INFORMATION
The annual audited consolidated financial statements contained in this Annual Report on Form 20-F are reported in United States dollars. For the years ended December 31, 2015, 2014,2023, 2022 and 2013,2021 as presented in the annual audited consolidated financials contained in this Annual Report on Form 20-F, we prepared our consolidated financial statements in accordance with International Financial Reporting Standards (''IFRS''(‘‘IFRS’’) as issued by the International Accounting Standards Board ("IASB"(“IASB”). For the years ended December 31, 2012 and 2011, which annual audited consolidated financials are not presented in this Annual Report, we prepared our consolidated financial statements in accordance with IFRS as issued by the IASB. Statements prepared in accordance with IFRS are not comparable in all respects with financial statements that are prepared in accordance with U.S. generally accepted accounting principles ("(“US GAAP"GAAP”).
CURRENCY
Unless we otherwise indicate in this Annual Report on Form 20-F, all references to "Canadian Dollars", or "CAD$" are to the lawful currency of Canada, and all references to "U.S. Dollars" or "US $""US$" are to the lawful currency of the United States.
Canarc Resource Corp.
Form 20-FCanagold Resources Ltd.
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GLOSSARY OF MINING TERMS
The following is a glossary of some of the terms used in the mining industry and referenced herein:
1933 Act
1933 Act ‑ means the United States Securities Act of 1933, as amended. |
adit – a horizontal tunnel in an underground mine driven from a hillside surface. |
Ag – silver. |
alluvial mining ‑ mining of gold bearing stream gravels using gravity methods to recover the gold, also known as placer mining. |
andesite - a volcanic rock of intermediate composition, the extrusive equivalent of diorite. |
arsenopyrite – an ore mineral of arsenic, iron, and sulphur, often containing gold. |
assay – a precise and accurate analysis of the metal contents in an ore or rock sample. |
Au ‑ gold. |
autoclave – a mineral processing vessel operated at high temperature and pressure in order to oxidize sulfide and carbon compounds, so the contained metals can be leached and concentrated. |
Commission ‑ United States Securities and Exchange Commission, or S.E.C. |
concentrate – a concentrate of minerals produced by crushing, grinding and processing methods such as gravity or flotation. |
contained gold – total measurable gold in grams or ounces estimated to be contained within a mineral deposit. Makes no allowance for economic criteria, mining dilution or recovery losses. |
Cu – copper. |
cut-off grade – deemed grade of mineralization, established by reference to economic factors, above which material is considered ore and below which is considered waste. |
diamond drill – a large machine that produces a continuous core sample of the rock or material being drilled. |
Canagold Resources Ltd.
adit – a horizontal tunnel in an underground mine driven from a hillside surface.
Ag – silver.
alluvial mining – mining of gold bearing stream gravels using gravity methods to recover the gold, also known as placer mining.
andesite – a volcanic rock of intermediate composition, the extrusive equivalent of diorite.
arsenopyrite – an ore mineral of arsenic, iron, and sulphur, often containing gold.
assay – a precise and accurate analysis of the metal contents in an ore or rock sample.
Au – gold.
auger drill – a handheld machine that produces small, continuous core samples in unconsolidated materials.
autoclave – a mineral processing vessel operated at high temperature and pressure in order to oxidize sulfide and carbon compounds, so the contained metals can be leached and concentrated.
Banka drilling – a hand operated drill specifically designed for sampling alluvial deposits. The drill rods (10 12 centimetres in diameter) are forced into the gravel and then the core sample is extracted from the rods.
Commission – United States Securities and Exchange Commission, or S.E.C.
concentrate – a concentrate of minerals produced by crushing, grinding and processing methods such as gravity or flotation.
contained gold – total measurable gold in grams or ounces estimated to be contained within a mineral deposit. Makes no allowance for economic criteria, mining dilution or recovery losses.
Cu – copper.
cut-off grade – deemed grade of mineralization, established by reference to economic factors, above which material is considered ore and below which is considered waste.
diamond drill – a large machine that produces a continuous core sample of the rock or material being drilled.
diorite – a plutonic rock of intermediate composition, the intrusive equivalent of andesite.
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epithermal
diorite – a plutonic rock of intermediate composition, the intrusive equivalent of andesite. |
dorė– bullion of gold, with minor silver and copper produced by smelting, prior to refining. |
epithermal – used to describe hydrothermal mineral deposits, typically in veins, formed at lower temperatures and pressures within 1 km of the earth surface. |
Exchange Act – means the United States Securities Exchange Act of 1934, as amended. |
Exploration stage issuer is an issuer that has no material property with mineral reserves disclosed. |
Exploration stage property is a property that has no mineral reserves disclosed. |
feasibility study – a detailed report assessing the feasibility, economics and engineering of placing a mineral deposit into commercial production. |
flotation – a mineral recovery process using soapy compounds to float finely ground metallic minerals into a concentrate. |
gold deposit ‑ means a mineral deposit mineralised with gold. |
gold equivalent ‑ a method of presenting combined gold and silver concentrations or weights for comparison purposes. Commonly involves expressing silver as its proportionate value in gold based on the relative values of the two metals. |
gold resource – see mineral resource. |
gpt ‑ grams per tonne. |
greenstone ‑ a field term for any compact dark‑green altered or metamorphosed basic igneous rock that owes its colour to green minerals such as chlorite, actinolite or epidote. |
indicated mineral resource means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve. |
inferred mineral resource means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve. |
Canagold Resources Ltd.
Exchange Act – means the United States Securities Exchange Act of 1934, as amended.
feasibility study – a detailed report assessing the feasibility, economics and engineering of placing a mineral deposit into commercial production.
flotation – a mineral recovery process using soapy compounds to float finely ground metallic minerals into a concentrate.
garimpeiros – a Brazilian term used in South America referring to small scale, artisanal miners and prospectors.
gold deposit – means a mineral deposit mineralised with gold.
gold equivalent – a method of presenting combined gold and silver concentrations or weights for comparison purposes. Commonly involves expressing silver as its proportionate value in gold based on the relative values of the two metals.
gold resource – see mineral resource.
gpt – grams per tonne.
grams per cubic meter – alluvial mineralisation measured by grams of gold contained per cubic meter of material, a measure of gold content by volume not by weight.
greenstone – a field term for any compact dark green altered or metamorphosed basic igneous rock that owes its colour to green minerals such as chlorite, actinolite or epidote.
indicated resource – means that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
inferred resource – means that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
laterite – highly weathered residual superficial soils and decomposed rocks, rich in iron and aluminum oxides, that are characteristically developed in tropical climates.
lode mining – mining of ore, typically in the form of veins or stockworks.
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lode mining – mining of ore, typically in the form of veins or stockworks. |
measured mineral resource means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve. |
mesothermal – used to describe hydrothermal mineral deposits, typically in veins, formed at higher temperatures and pressures deeper than 1 km of the earth’s surface. |
mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. |
mineral resource is a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. |
net profits interest or NPI – a royalty based on the net profits generated after recovery of all costs. |
net smelter royalty or NSR - a royalty based on the gross proceeds received from the sale of minerals less the cost of smelting, refining, freight and other related costs. |
nugget effect – an effect of high variability of gold assays, due to the gold occurring in discreet coarse grains such that their content in any given sample is highly variable. |
ore – a naturally occurring rock or material from which economic minerals can be extracted at a profit. |
ounce or oz. - a troy ounce or 20 pennyweights or 480 grains or 31.103 grams. |
mineral reserve – means the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined.Canagold Resources Ltd.
mineral resource – a body of mineralized material which has not yet been determined to be ore, and the potential for mining of which has not yet been determined; categorized as possible, probable and proven, according to the degree of certainty with which their grade and tonnage are known; sometimes referred to as a "geological resource" or "mineral inventory".
net profits interest or NPI – a royalty based on the net profits generated after recovery of all costs.
net smelter royalty or NSR – a royalty based on the gross proceeds received from the sale of minerals less the cost of smelting, refining, freight and other related costs.
nugget effect – an effect of high variability of gold assays, due to the gold occurring in discreet coarse grains such that their content in any given sample is highly variable.
ore – a naturally occurring rock or material from which economic minerals can be extracted at a profit.
ounce or oz. – a troy ounce or 20 pennyweights or 480 grains or 31.103 grams.
opt – troy ounces per ton.
porknockers – a local term used in Guyana and Suriname to refer to small scale artisanal miners and prospectors.
porphyry – an igneous rock containing coarser crystals in a finer matrix.
probable reserve – the economically mineable part of an indicated, and in some circumstances a measured resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
professional association – for the purposes of the definition of a Qualified Person below, means a self-regulatory organization of engineers, geoscientists or both engineers and geoscientists that (a) has been given authority or recognition by statute; (b) admits members primarily on the basis of their academic qualifications and experience; (c) requires compliance with the professional standards of competence and ethics established by the organization; and (d) has disciplinary powers, including the power to suspend or expel a member.
prospect – an area prospective for economic minerals based on geological, geophysical, geochemical and other criteria
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opt – troy ounces per ton. |
porphyry – an igneous rock containing coarser crystals in a finer matrix. |
probable reserve is the economically mineable part of an indicated and, in some cases, a measured mineral resource. |
professional association, for the purposes of the definition of a Qualified Person below, means a self-regulatory organization of engineers, geoscientists or both engineers and geoscientists that (a) has been given authority or recognition by statute; (b) admits members primarily on the basis of their academic qualifications and experience; (c) requires compliance with the professional standards of competence and ethics established by the organization; and (d) has disciplinary powers, including the power to suspend or expel a member. |
prospect – an area prospective for economic minerals based on geological, geophysical, geochemical and other criteria |
proven reserve is the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource. |
pyrite – an ore mineral of iron and sulphur. |
Qualified Person means an individual who (a) is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; (b) has experience relevant to the subject matter of the mineral project and the technical report; and (c) is a member in good standing of a professional association. |
quartz – a rock-forming mineral of silica and oxygen, often found in veins also. |
raise – a vertical or inclined tunnel in an underground mine driven upwards from below. |
ramp – an inclined tunnel in an underground mine driven downwards from surface. |
reverse circulation drill – a large machine that produces a continuous chip sample of the rock or material being drilled. |
saprolite ‑ a soft, earthy, clay rich and thoroughly decomposed rock with its original textures intact, formed in place by chemical weathering of igneous, sedimentary or metamorphic rocks. |
scoping study – a conceptual report assessing the scope, economics and engineering of placing a mineral deposit into commercial production. |
shaft – a vertical or inclined tunnel in an underground mine driven downward from surface. |
shear – a tabular zone of faulting within which the rocks are crushed and flattened. |
Canagold Resources Ltd.
pyrite – an ore mineral of iron and sulphur.
Qualified Person – means an individual who (a) is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; (b) has experience relevant to the subject matter of the mineral project and the technical report; and (c) is a member in good standing of a professional association.
quartz – a rock-forming mineral of silica and oxygen, often found in veins also.
raise – a vertical or inclined tunnel in an underground mine driven upwards from below.
ramp – an inclined tunnel in an underground mine driven downwards from surface.
reverse circulation drill – a large machine that produces a continuous chip sample of the rock or material being drilled.
saprolite – a soft, earthy, clay rich and thoroughly decomposed rock with its original textures intact, formed in place by chemical weathering of igneous, sedimentary or metamorphic rocks.
scoping study – a conceptual report assessing the scope, economics and engineering of placing a mineral deposit into commercial production.
shaft – a vertical or inclined tunnel in an underground mine driven downward from surface.
shear – a tabular zone of faulting within which the rocks are crushed and flattened.
stibnite – an ore mineral of antimony and sulphur.
stock or pluton – a body of intrusive rock that covers less than 40 square miles, has steep dips and is discordant with surrounding rock.
stockwork – multiple small veins of mineralisation that have so penetrated a rock mass that the whole rock mass can be considered mineralised.
strike length – the longest horizontal dimensions of a body or zone of mineralisation.
stripping ratio – the ratio of waste material to ore that is estimated for or experienced in mining an ore body.
sulphide – an ore mineral compound linking sulphur with one or more metals.
ton – short ton (2,000 pounds).
tonne – metric tonne (2,204.6 pounds).
trenching – the surface excavation of a linear trench to expose mineralization for sampling.
vein – a tabular body of rock typically of narrow thickness and often mineralized occupying a fault, shear, fissure or fracture crosscutting another pre-existing rock.
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stibnite – an ore mineral of antimony and sulphur. |
stock or pluton – a body of intrusive rock that covers less than 40 square miles, has steep dips and is discordant with surrounding rock. |
stockwork – multiple small veins of mineralisation that have so penetrated a rock mass that the whole rock mass can be considered mineralised. |
strike length ‑ the longest horizontal dimensions of a body or zone of mineralisation. |
stripping ratio ‑ the ratio of waste material to ore that is estimated for or experienced in mining an ore body. |
sulphide – an ore mineral compound linking sulphur with one or more metals. |
ton ‑ short ton (2,000 pounds). |
tonne ‑ metric tonne (2,204.6 pounds). |
trenching – the surface excavation of a linear trench to expose mineralization for sampling. |
vein – a tabular body of rock typically of narrow thickness and often mineralized occupying a fault, shear, fissure or fracture crosscutting another pre-existing rock. |
winze – an internal shaft in an underground mine. |
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For ease of reference, the following conversion factors are provided:
1 mile | = 1.609 kilometres | 1 pound | = 0.4535 kilogram |
1 yard | = 0.9144 meter | 2,000 pounds/1 short ton | = 0.907 tonne |
1 acre | = 0.405 hectare | 1 troy ounce | = 31.103 grams |
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CAUTIONARY NOTE TO U.S. INVESTORS REGARDING MINERAL RESERVE AND RESOURCE ESTIMATES
The mineral reserve and resource information in this annual report on Form 20-F has been prepared in accordance withWe are subject to the reporting requirements of the Exchange Act and applicable Canadian securities laws, and as a result we report our mineral reserves and mineral resources according to two different standards. U.S. reporting requirements are governed by subpart 1300 of Regulation S-K under the Exchange Act (“S-K 1300”). Canadian reporting requirements for disclosure of mineral properties are governed by NI 43-101. Both sets of reporting standards have similar goals in effectterms of conveying an appropriate level of confidence in the disclosures being reported, but the standards embody slightly different approaches and definitions.
In our public filings in the U.S. and Canada which differ fromand in certain other announcements not filed with the requirements of United States securities laws. The terms "mineral reserve", "proven mineral reserve"SEC, we may disclose measured, indicated and "probable mineral reserve" are Canadian mining termsinferred resources, each as defined in accordance with Canadian National Instrument 43-101 – StandardsS-K 1300 and NI 43-101. The estimation of Disclosure for Mineral Projects ("NI 43-101")measured resources and the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in the United States Securities and Exchange Commission ("SEC") Industry Guide 7 ("SEC Industry Guide 7") under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
In addition, the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount ofindicated resources involve greater uncertainty as to their existence and great uncertainty as to their economic feasibility than the estimation of proven and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investorsprobable reserves, and therefore investors are cautioned not to assume that all or any part of anmeasured or indicated resources will ever be converted into S-K 1300-compliant or NI 43-101-compliant reserves. The estimation of inferred mineral resource existsresources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources, and therefore it cannot be assumed that all or is economicallyany part of inferred resources will ever be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage and grade without reference to unit measures.
Canarc Resource Corp.or economically.
Form 20-FCanagold Resources Ltd.
Form 20-F
17 |
Table of Contents |
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
3.A Selected Financial Data[Reserved]
The following selected financial data and information (stated in United States dollars) with respect to the last five fiscal years ended December 31, 2015, 2014, 2013, 2012 and 2011 have been derived from Canarc's audited consolidated financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements as of December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014 and 2013 are set out and included in Item 18 of this annual report on Form 20-F. The selected financial data and the information of the Company as at December 31, 2012 and 2011 and for the years then ended in the following table was derived from the audited consolidated financial statements of the Company which are not presented in this Annual Report on Form 20-F.
Canarc Resource Corp.
Form 20-F
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| IFRS | |||||||||||||||||||
Selected Financial Information |
| As at and for the years ended December 31 |
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(stated in thousands of U.S. dollars, except per share amounts) |
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(a) | Total revenues(1) |
| $ | - |
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| $ | - |
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| $ | - |
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| $ | - |
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| $ | - |
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(b) | Other incomes(2) |
| $ | - |
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| $ | - |
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| $ | - |
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| $ | 77 |
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| $ | - |
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(c) | Income(loss) before extraordinary items: |
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(i) Total |
| $ | (932 | ) |
| $ | (1,831 | ) |
| $ | (1,377 | ) |
| $ | (1,206 | ) |
| $ | (1,209 | ) | |
(ii) Basic earnings(loss) pershare |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) | |
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(d) | Net income(loss): |
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(i) Total |
| $ | (932 | ) |
| $ | (1,831 | ) |
| $ | (1,377 | ) |
| $ | (1,206 | ) |
| $ | (1,209 | ) | |
(ii) Basic earnings(loss) pershare |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) | |
(iii) Diluted earnings(loss) pershare: |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) | |
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(e) | Total assets |
| $ | 11,941 |
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| $ | 12,564 |
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| $ | 12,488 |
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| $ | 13,983 |
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| $ | 13,277 |
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(f) | Totallong-term debt(3) |
| $ | 117 |
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| $ | - |
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| $ | - |
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| $ | - |
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(g) | Shareholders'equity(net assets) |
| $ | 10,814 |
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| $ | 11,650 |
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| $ | 11,412 |
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| $ | 13,054 |
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| $ | 12,470 |
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(h) | Dividends per share | No cash dividends declared in any of these periods. | |||||||||||||||||||
(i) | Shares: | ||||||||||||||||||||
Diluted number of common shares | 234,349,675 | 207,901,803 | 141,447,195 | 136,945,171 | 108,461,171 | ||||||||||||||||
Number of common shares | 191,620,557 | 157,436,305 | 114,818,195 | 110,242,171 | 94,096,171 |
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Canarc Resource Corp.
Form 20-F
The Company is involved with mineral exploration and does not have any sources of operating revenues.
On April 22, 2016, the Bank of Canada closing rate for the conversion of one United States dollar into Canadian dollars was CAD$1.2674.
The following table reflects the monthly high and low exchange rates for U.S.$1.00 to the Canadian dollar for the following periods:
Month | Year | High (CAD$) | Low (CAD$) |
October | 2015 | 1.3280 | 1.2832 |
November | 2015 | 1.3390 | 1.3039 |
December | 2015 | 1.4003 | 1.3303 |
January | 2016 | 1.4661 | 1.3873 |
February | 2016 | 1.4082 | 1.3481 |
March | 2016 | 1.3537 | 1.2859 |
April 1 to 22 | 2016 | 1.3219 | 1.2593 |
The following table lists the high, low, average and closing exchange rates for U.S.$1.00 to the Canadian dollar for the last five years:
Year | High (CAD$) | Low (CAD$) | Average Rate (CAD$) | Close (CAD$) |
2011 | 1.0658 | 0.9407 | 0.9891 | 1.0170 |
2012 | 1.0443 | 0.9642 | 0.9996 | 0.9949 |
2013 | 1.0704 | 0.9838 | 1.0298 | 1.0617 |
2014 | 1.1672 | 1.0589 | 1.1045 | 1.1601 |
2015 | 1.4003 | 1.1679 | 1.2787 | 1.3840 |
2016 (January 1 to April 22, 2016) | 1.4661 | 1.2593 | 1.3558 | 1.2674 |
Canarc Resource Corp.
Form 20-F
3.B Capitalization and Indebtedness
Not applicable.
3.C Reasons for the Offer and Use of Proceeds
Not applicable.
Canagold Resources Ltd.
Form 20-F
18 |
Table of Contents |
3.D Risk Factors
The following is a brief discussion of those distinctive or special characteristics of the Registrant'sCompany’s operations and industry that may have a material impact on, or constitute risk factors in respect of, the Registrant'sCompany’s future financial performance. You should carefully consider, among other matters, the following risk factors in addition to the other information in this annual report on Form 20-F when evaluating our business because these risk factors may have a significant impact on our business, financial condition, operating results or cash flow. If any of the material risks described below or in subsequent reports we file with the SEC actually occur, they may materially harm our business, financial condition, operating results or cash flow. Additional risks and uncertainties that we have not yet identified or that we presently consider to be immaterial may also materially harm our business, financial condition, operating results or cash flow.
Risks Related to the Registrant'sCompany’s Financial Condition
The Company’s ability to continue as a going concern is in doubt and the Company’s planned operations will require future financing and there is no assurance given by the Company that it will be able to secure the financing necessary to explore, develop and produce its mineral property interests.
The Company does not presently have sufficient financial resources or operating cash flows to undertake by itself all of its planned exploration and development programs. The development of the Company’s mineral property interests may therefore depend on the Company’s joint venture partners, if any, and on the Company’s ability to obtain additional required financing. There is no assurance the Company will be successful in obtaining the required financing, the lack of which could result in the loss or substantial dilution of its interests (as existing or as proposed to be acquired) in its mineral property interests as disclosed herein. In addition, the Company does not have sufficient experience in developing mining properties into production and its ability to do so will be dependent upon securing the services of appropriately experienced personnel or entering into agreements with other major mining companies which can provide such expertise.
Canagold Resources Ltd.
Form 20-F
19 |
Table of Contents |
As noted in its audited consolidated financial statements for the year ended December 31, 2023 the Company has no operating revenues, has incurred significant operating losses in fiscal years prior to 2023, and has an accumulated deficit of approximately $55.5 million at December 31, 2023. Furthermore, the Company lacks sufficient funds to achieve the Company’s planned business objectives. The Company’s ability to continue as a going concern is dependent on continued financial support from its shareholders and other related parties, the ability of the Company to raise equity financing, and the attainment of profitable operations, external financings and further share issuances to meet the Company’s liabilities as they become payable.
The report of our independent registered public accounting firm on the December 31, 2023 consolidated financial statements includes an additional paragraph that states the existence of material uncertainties that cast substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.
The Company has a history of losses, and we do not expect to generate earnings from operations or pay dividends in the near term, if at all.
The Company is an exploration stage enterprise. As such, the Company devotes its efforts to exploration, analysis and, if warranted, development of its projects. The Company does not currently produce gold and does not currently generate operating earnings from gold production. The Company finances its business activities principally by issuing equity securities.
The Company has incurred losses in all periods since inception. The Company expects to continue to incur losses in the future. The Company has no history of paying cash dividends and it does not expect to be able to pay cash dividends or to make any similar distribution in the foreseeable future, if at all.
Canagold Resources Ltd.
Form 20-F
20 |
Table of Contents |
A substantial or extended decline in gold prices would have a material adverse effect on the value of the Company’s assets and on the Company’s ability to raise capital and could result in lower than estimated economic returns.
The value of the Company’s assets, its ability to raise capital and its future economic returns are substantially dependent on the price of gold. Gold prices fluctuate continually and are affected by numerous factors beyond the Company’s control. Factors tending to influence gold prices include:
· | gold sales or leasing by governments and central banks or changes in their monetary policy, including gold inventory management and reallocation of reserves; |
· | speculative short or long positions on futures markets; |
· | the relative strength of the U.S. dollar; |
· | expectations of the future rate of inflation or interest rates; |
· | changes to economic conditions in the United States, China, India and other industrialized or developing countries; |
· | geopolitical conflicts; |
· | changes in jewelry, investment or industrial demand; |
· | changes in supply from production, disinvestment and scrap; and |
· | forward sales by producers in hedging or similar transactions. |
A substantial or extended decline in the gold prices could: | |
· | negatively impact the Company’s ability to raise capital on favorable terms, or at all; |
· | jeopardize the development of the New Polaris property; |
· | reduce the Company’s estimated mineral resources and reserves by removing material from these estimates that could not be economically processed at lower gold prices; |
· | reduce the potential for future revenues from gold projects in which the Company has an interest; |
· | reduce funds available to operate the Company’s business; and |
· | reduce the market value of the Company’s assets. |
Canagold Resources Ltd.
Form 20-F
21 |
Table of Contents |
Risks Related to the Company’s Business
The Registrant'sCompany’s exploration activities may not be commercially successful, which could lead it to abandon its plans to develop its mineral property interests and its investments in exploration and there is no assurance given by the RegistrantCompany that its exploration and development programs and mineral property interests will result in the discovery, development or production of a commercially viable ore body.
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. There is no assurance that the Registrant'sCompany’s mineral exploration and development activities will result in any discoveries of bodies of commercial ore. Unusual or unexpected geological structures or formations, fires, power outages, labour disruptions, floods, explosions, cave cave‑ins, land slides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the operation of mines and the conduct of exploration programs. The RegistrantCompany has relied and may continue to rely upon consultants and others for construction and operating expertise. The economics of developing gold and other mineral properties are affected by many factors including capital and operating costs, variations of the grade of ore mined, fluctuating mineral markets, costs of processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. Depending on the price of gold or other minerals produced, the RegistrantCompany may determine that it is impractical to commence or continue commercial production. Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes to extract metal from ore, and to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that funds required for development can be obtained on a timely basis. The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond the Registrant'sCompany’s control and which cannot be accurately foreseen or predicted, such as market fluctuations, the global marketing conditions for precious and base metals, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting minerals and environmental protection. In order to commence exploitation of certain properties presently held under exploration concessions, it is necessary for the RegistrantCompany to apply for an exploitation concession. There can be no guarantee that such a concession will be granted.
Canarc Resource Corp.
Form 20-FThe Company will be required to locate mineral reserves for its long-term success.
The Registrant's planned operations will require future financing and there is no assurance given by the Registrant that it will be able to secure the financing necessary to explore, develop and produce its mineral property interests.
The Registrant does not presently have sufficient financial resources or operating cash flows to undertake by itself all of its planned exploration and development programs. The developmentNone of the Registrant'sCompany’s properties currently have any proven and probable mineral property interests may thereforereserves. The Company’s long-term success will depend on the Registrant's joint venture partners,Company establishing mineral reserves on its properties and receiving revenue from the production of gold and other base and precious metals. If and when the Company begins production, the Company will have to continually replace and expand its mineral reserves, if any, and on the Registrant'sany. The Company’s ability to obtain additional required financing. There is no assurance the Registrantmaintain or increase its annual production of gold and other base or precious metals once its current properties are producing, if at all, will be successful in obtaining the required financing, the lack of which could result in the loss or substantial dilution of its interests (as existing or as proposed to be acquired) in its mineral property interests as disclosed herein. In addition, the Registrant does not have sufficient experience in developing mining properties into production anddependent almost entirely on its ability to do so will be dependent upon securing the services of appropriately experienced personnel or enteringacquire, explore, and develop new properties and bring new mines into agreements with other major mining companies which can provide such expertise.production.
As noted in its audited consolidated financial statements for the year ended December 31, 2015, the Registrant has no operating revenues, has incurred significant operating losses and has an accumulated deficit of approximately $50.9 million at December 31, 2015. Furthermore, the Registrant has a working capital deficiency of approximately $574,000 as at December 31, 2015, and lack sufficient funds to achieve the Registrant's planned business objectives. The Registrant's ability to continue as a going concern is dependent on continued financial support from its shareholders and other related parties, the ability of the Registrant to raise equity financing, and the attainment of profitable operations, external financings and further share issuances to meet the Registrant's liabilities as they become payable.
The report of our independent registered public accounting firm on the December 31, 2015 consolidated financial statements includes an additional paragraph that states the existence of material uncertainties that cast substantial doubt about the Registrant's ability to continue as a going concern. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.
The figures for the Registrant'sCompany’s resources are estimates based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated and there is no assurance given by the RegistrantCompany that any estimates of mineral deposits herein will not change.
Although all figures with respect to the size and grade of mineralized deposits included herein have been carefully prepared by the Registrant,Company, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and no assurance can be given that any identified mineralized deposit will ever qualify as a commercially viable mineable ore body that can be legally and economically exploited. Estimates regarding mineralized deposits can also be affected by many factors such as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. There can be no assurance that gold recovered in small-scale laboratory tests will be duplicated in large-scale tests under on on‑site conditions. Material changes in mineralized tonnages, grades, stripping ratios or recovery rates may affect the economic viability of projects. The existence of mineralized deposits should not be interpreted as assurances of the future delineation of ore reserves or the profitability of future operations. The refractory nature of gold mineralization at New Polaris project may adversely affect the economic recovery of gold from mining operations.
Canarc Resource Corp.
Form 20-FCanagold Resources Ltd.
Form 20-F
22 |
Table of Contents |
Changes in theMineral operations are subject to market price of gold, silver and other metals, which in the past have fluctuated widely, will affect the profitabilityforces outside of the Registrant's planned operations and financial condition and there is no assurance given byCompany’s control which could negatively impact the Registrant that mineral prices will not change.Company’s operations.
The mining industry is competitive and mineral prices fluctuate so that there is no assurance, even if commercial quantities of a mineral resource are discovered, that a profitable market will exist for the sale of same. Factors beyond the control of the Registrant may affect the marketability of any substances discovered. The prices of precious and base metals fluctuate on a daily basis, have experienced volatile and significant price movements over short periods of time, and areminerals is affected by numerous factors beyond the control of the Registrant, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the U.S. dollar relative to other currencies), interest rates, central bank transactions, world supply for precious and base metals, international investments, monetary systems, and global or regional consumption patterns (such as the development of gold coin programs), speculative activities and increased production due to improvedentity involved in their mining and processing. These factors include market fluctuations, government regulations relating to prices, taxes, royalties, allowable production, methods. Theimports, exports and supply of and demand for gold are affected by various factors, including political events, economic conditions and production costs in major gold producing regions, and governmental policies with respect to gold holdings by a nationdemand. One or its citizens. The exact effectmore of these factors cannot be accurately predicted,risk elements could have an impact on costs of an operation and if significant enough, reduce the combinationprofitability of these factors may result in the Registrant not receiving adequate returns on invested capital or the investments retaining their respective values. There is no assurance that the prices of goldoperation and other precious and base metals will be such that the Registrant's properties can be mined at a profit.threaten its continuation.
There is no assurance given by the RegistrantCompany that it owns legal title to its mineral property interests.
The acquisition of title to mineral property interests is a very detailed and time time‑consuming process. Title to any of the Registrant'sCompany’s mining concessions may come under dispute. While the RegistrantCompany has diligently investigated title considerations to its mineral property interests, in certain circumstances, the RegistrantCompany has only relied upon representations of property partners and government agencies. There is no guarantee of title to any of the Registrant'sCompany’s mineral property interests. The mineral property interests may be subject to prior unregistered agreements or transfers, and title may be affected by unidentified and undetected defects. In British Columbia and elsewhere, native land claims or claims of aboriginal title may be asserted over areas in which the Registrant'sCompany’s mineral property interests are located. To the best of the knowledge of the Registrant,Company, although the RegistrantCompany understands that comprehensive land claims submissions have been received by Indian and Northern Affairs Canada from the Taku Tlingit (Atlin) Band (which encompasses the New Polaris property) and from the Association of United Tahltans and the Nisga'aNisga’a Tribal Council (which may encompass the Eskay Creek property), no legal actions have been formally served on the RegistrantCompany to date asserting such rights with respect to mining properties in which the RegistrantCompany has an interest. Three First Nations bands (namely, Cheslatta Carrier Band, Nee-Tahi-Buhn Band and the Skin Tyee Nation Band) have claims in the Windfall Hills property.
23 |
Table of Contents |
The RegistrantCompany competes with larger, better capitalized competitors in the mining industry and there is no assurance given by the RegistrantCompany that it can compete for mineral properties, future financings and technical expertise.
Significant and increasing competition exists for the limited number of gold acquisition opportunities available in North, South and Central America and elsewhere in the world. As a result of this competition, some of which is with large established mining companies which have greater financial and technical resources than the Registrant,Company, the RegistrantCompany may be unable to acquire additional attractive gold mining properties on terms it considers acceptable. Accordingly, there can be no assurance that the Registrant'sCompany’s exploration and acquisition programs will yield any new resources or reserves or result in any commercial mining operation.
Canarc Resource Corp.
Form 20-F
The RegistrantCompany may also encounter increasing competition from other mining companies in its efforts to hire experienced mining professionals. Competition for exploration resources at all levels is currentlycan be very intense, particularly affecting the availability of manpower, drill rigs, mining equipment and production equipment. Increased competition could adversely affect the Registrant'sCompany’s ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future.
A shortage of equipment and supplies could adversely affect the Company’s ability to operate its business.
The Registrant'sCompany is dependent on various supplies and equipment to carry out its mineral exploration and, if warranted, development operations. Any shortage of such supplies, equipment and parts could have a material adverse effect on the Company’s ability to carry out its operations and therefore limit or increase the cost of potential future production.
The Company’s directors and officers may have conflicts of interest as a result of their relationships with other companies and there is no assurance given by the RegistrantCompany that its directors and officers will not have conflicts of interest from time to time.
The Registrant'sCompany’s directors and officers may serve as directors or officers of other public resource companies or have significant shareholdings in other public resource companies and, to the extent that such other companies may participate in ventures in which the RegistrantCompany may participate, the directors of the RegistrantCompany may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In particular, Bradford Cooke, a Director of the Registrant, is also a Director of Aztec Metals Corp. ("Aztec") and Endeavour Silver Corp. ("Endeavour"), companies in which the Registrant previously owned or currently owns shares. The interests of these companies may differ from time to time. In the event that such a conflict of interest arises at a meeting of the Registrant'sCompany’s directors, a director who has such a conflict will abstain from voting for or against any resolution involving any such conflict. From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another company due to the financial position of the company making the assignment. In accordance with the laws of the Province of British Columbia, Canada, the directors of the RegistrantCompany are required to act honestly, in good faith and in the best interests of the Registrant.Company. In determining whether or not the RegistrantCompany will participate in any particular exploration or mining project at any given time, the directors will primarily consider the upside potential for the project to be accretive to shareholders, the degree of risk to which the RegistrantCompany may be exposed and its financial position at that time.
Canagold Resources Ltd.
Form 20-F
24 |
Table of Contents |
The RegistrantCompany does not insure against all risks which we may be subject to in our planned operations and there is no assurance given by the RegistrantCompany that it is adequately insured against all risks.
The RegistrantCompany may become subject to liability for cave cave‑ins, pollution or other hazards against which it cannot insure or against which it has elected not to insure because of high premium costs or other reasons. The payment of such liabilities would reduce the funds available for exploration and mining activities.
The RegistrantCompany is subject to significant governmental and environmental regulations and there is no assurance given by the RegistrantCompany that it has met all environmental or regulatory requirements.
The current or future operations of the Registrant,Company, including exploration and development activities and commencement of production on its mineral property interests, require permits from various foreign, federal, state and local governmental authorities and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs, and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. There can be no assurance that approvals and permits required in order for the RegistrantCompany to commence production on its various mineral property interests will be obtained. Additional permits and studies, which may include environmental impact studies conducted before permits can be obtained, are necessary prior to operation of the other properties in which the RegistrantCompany has interests and there can be no assurance that the RegistrantCompany will be able to obtain or maintain all necessary permits that may be required to commence construction, development or operation of mining facilities at these properties on terms which enable operations to be conducted at economically justifiable costs.
Canarc Resource Corp.
Form 20-FCanagold Resources Ltd.
Form 20-F
25 |
Table of Contents |
Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations. New laws or regulations or amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation of current laws, regulations or permits, could have a material adverse impact on the RegistrantCompany and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in development of new mining properties.
As a current and prior holder of an interestinterests in a U.S. mineral property,properties, the RegistrantCompany may be subject to the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended ("CERCLA"(“CERCLA”). CERCLA, along with analogous statutes in certain states, imposes strict, joint and several liability on owners and operators of facilities which release hazardous substances into the environment. CERCLA imposes similar liability upon generators and transporters of hazardous substances disposed of at an off off‑site facility from which a release has occurred or is threatened. Under CERCLA'sCERCLA’s strict joint and several liability provisions, the RegistrantCompany could potentially be liable for all remedial costs associated with property that it currently or previously owned or operated regardless of whether the Registrant'sCompany’s activities are the actual cause of the release of hazardous substances. Such liability could include the cost of removal or remediation of the release and damages for injury to the natural resources. The Registrant'sCompany’s one prior property was located in a historic mining district and may include abandoned mining facilities (including waste piles, tailings, portals and associated underground and surface workings). Releases from such facilities or from any of the Registrant'sCompany’s current and prior U.S. properties due to past or current activities could form the basis for liability under CERCLA and its analogs. In addition, off off‑site disposal of hazardous substances, including hazardous mining wastes, may subject the RegistrantCompany to CERCLA liability. The Registrant'sCompany’s current and prior U.S. property isproperties are not, to the Registrant'sCompany’s knowledge, currently listed or proposed for listing on the National Priority List and the RegistrantCompany is not aware of pending or threatened CERCLA litigation which names the RegistrantCompany as a defendant or concerns any of its current or prior U.S. properties or operations. The RegistrantCompany cannot predict the potential for future CERCLA liability with respect to its current or prior U.S. property,properties, nor can it predict the potential impact or future direction of CERCLA litigation in the area surrounding its current and prior property.properties.
To the best of the Registrant'sCompany’s knowledge, the RegistrantCompany is operating in compliance with all applicable environmental and regulatory regulations.
Canagold Resources Ltd.
Form 20-F
26 |
Table of Contents |
Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on the Company’s business.
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on the Company, and its suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact the Company’s ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, the Company cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by the Company or other companies in its industry could harm its reputation. The potential physical impacts of climate change on the Company’s operations are highly uncertain, and would be particular to the geographic circumstances in areas in which it operates. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, potential production and financial performance of the Company’s operations.
Land reclamation requirements for the Registrant'sCompany’s properties may be burdensome.
There is a risk that monies allotted for land reclamation may not be sufficient to cover all risks, due to changes in the nature of the waste rock or tailings and/or revisions to government regulations. Therefore, additional funds, or reclamation bonds or other forms of financial assurance may be required over the tenure of the project to cover potential risks. These additional costs may have material adverse impact on the financial condition and results of the Registrant.
Canarc Resource Corp.Company.
Form 20-FCanagold Resources Ltd.
Form 20-F
27 |
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Mining is inherently dangerous and subject to conditions or events beyond the Registrant'sCompany’s control, which could have a material adverse effect on the Registrant'sCompany’s business.
Mining involves various types of risks and hazards, including:
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| environmental hazards, |
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· | power outages, | |
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· | metallurgical and other processing problems, | |
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· | unusual or unexpected geological formations, | |
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· | structural cave-ins or slides, | |
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· | flooding, fire, explosions, cave-ins, landslides and rock-bursts, | |
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· | inability to obtain suitable or adequate machinery, equipment or labour, | |
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· | metals losses, and | |
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· | periodic interruptions due to inclement or hazardous weather conditions. |
These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties, personal injury, environmental damage, delays in mining, increased production costs, monetary losses and possible legal liability. The RegistrantCompany may not be able to obtain insurance to cover these risks at economically feasible premiums. Insurance against certain environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from production, is not generally available to the RegistrantCompany or to other companies within the mining industry. The RegistrantCompany may suffer a material adverse effect on its business if it incurs losses related to any significant events that are not covered by its insurance policies.
Canarc Resource Corp.
Form 20-FThere is uncertainty related to unsettled First Nations rights and title in British Columbia (Canada) and this may create delays in project approval or interruptions in project progress.
The Company’s sole material property is located in British Columbia. The nature and extent of First Nations rights and title remains the subject of active debate, claims and litigation in British Columbia. First Nations in British Columbia have made claims of aboriginal rights and title to substantial portions of land and water in the province, creating uncertainty as to the status of competing property rights.
The Supreme Court of Canada has held that indigenous groups may have a spectrum of aboriginal rights in lands that have been traditionally used or occupied by their ancestors. Such aboriginal rights and title are not absolute and may be infringed by government in furtherance of a legislative objective, subject to meeting a justification test. The effect of such claims on any particular area of land will not be determinable until the exact nature of historical use, occupancy and rights to such property have been clarified by a decision of the Courts or definition in a treaty. First Nations in the province are seeking settlements including compensation from governments with respect to these claims, and the effect of these claims cannot be estimated at this time. The federal and provincial governments have been seeking to negotiate settlements with indigenous groups throughout British Columbia in order to resolve many of these claims, but the issues surrounding aboriginal title and rights are not likely to be resolved in the near future.
Canagold Resources Ltd.
Form 20-F
28 |
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The RegistrantGiven the unsettled nature of land claims and treaty rights in British Columbia, there can be no guarantee that there will not be delays in any required approvals, unexpected interruptions in project progress, requirements for First Nations consent, cancellation of permits and licenses or additional costs to locate mineral reserves for its long-term success.advance the Company’s sole material project.
Because mines have limited lives based on proven and probable mineral reserves, the Registrant will have to continually replace and expand its mineral reserves, if any. The Registrant's ability to maintain or increase its annual production of gold and other base or precious metals once its current properties are producing, if at all, will be dependent almost entirely on its ability to acquire, explore, and develop new properties and bring new mines into production.
The Registrant'sCompany’s properties may be located in foreign countries and political instability or changes in the regulations in these countries may adversely affect the Registrant'sCompany’s ability to carry on its business.
Certain of the Registrant'sCompany’s properties are located in countries outside of Canada, and mineral exploration and mining activities may be affected in varying degrees by political stability and government regulations relating to the mining industry. Any changes in regulations or shifts in political attitudes may vary from country to country and are beyond the control of the RegistrantCompany and may adversely affect its business. Such changes have, in the past, included nationalization of foreign owned businesses and properties. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income and other taxes and duties, expropriation of property, environmental legislation and mine safety. These uncertainties may make it more difficult for the RegistrantCompany and its joint venture partners to obtain any required production financing for its mineral properties.
Fluctuations in foreign currency exchange rates may adversely affect the Registrant'sCompany’s future profitability.
In addition to CAD dollar currency accounts, the RegistrantCompany maintains a portion of its funds in U.S. dollar denominated accounts. Certain of the Registrant'sCompany’s mineral property interests and related contracts may be denominated in U.S. dollars. Accordingly, the RegistrantCompany may take some steps to reduce its risk to foreign currency fluctuations. However, the Registrant'sCompany’s operations in countries other than Canada are normally carried out in the currency of that country and make the RegistrantCompany subject to foreign currency fluctuations and such fluctuations may materially affect the Registrant'sCompany’s financial position and results. In addition future contracts may not be denominated in U.S. dollars and may expose the RegistrantCompany to foreign currency fluctuations and such fluctuations may materially affect the Registrant'sCompany’s financial position and results. In addition, the RegistrantCompany is or may become subject to foreign exchange restrictions which may severely limit or restrict its ability to repatriate capital or profits from its mineral property interests outside of Canada to Canada. Such restrictions have existed in the past in countries in which the RegistrantCompany holds property interests and future impositions of such restrictions could have a materially adverse effect on the Registrant'sCompany’s future profitability or ability to pay dividends.
Canagold Resources Ltd.
Form 20-F
29 |
Table of Contents |
The RegistrantCompany is reliant on third parties.
The Registrant'sCompany’s rights to acquire interests in certain mineral properties may have been granted by third parties who themselves hold only a property option to acquire such properties. As a result, the RegistrantCompany may have no direct contractual relationship with the underlying property holder.
Canarc Resource Corp.
Form 20-FThe Company may experience cybersecurity threats.
Canagold relies on secure and adequate operations of information technology systems in the conduct of its operations. Access to and security of the information technology systems are critical to Canagold’s operations. To Canagold’s knowledge, it has not experienced any material losses relating to disruptions to its information technology systems. Canagold has implemented ongoing policies, controls and practices to manage and safeguard Canagold and its stakeholders from internal and external cybersecurity threats and to comply with changing legal requirements and industry practice. Given that cyber risks cannot be fully mitigated and the evolving nature of these threats, Canagold cannot assure that its information technology systems are fully protected from cybercrime or that the systems will not be inadvertently compromised, or without failures or defects. Potential disruptions to Canagold’s information technology systems, including, without limitation, security breaches, power loss, theft, computer viruses, cyber-attacks, natural disasters, and noncompliance by third party service providers and inadequate levels of cybersecurity expertise and safeguards of third party information technology service providers, may adversely affect the operations of Canagold as well as present significant costs and risks including, without limitation, loss or disclosure of confidential, proprietary, personal or sensitive information and third party data, material adverse effect on its financial performance, compliance with its contractual obligations, compliance with applicable laws, damaged reputation, remediation costs, potential litigation, regulatory enforcement proceedings and heightened regulatory scrutiny.
Canagold Resources Ltd.
Form 20-F
30 |
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Jurisdiction and Enforcement in U.S. and Canadian Courts.
Risks Related to the Company’s United States Reporting
It may be difficult for U.S. shareholders to enforce civil liabilities under United States law in Canadian courts.
The enforcement of civil liabilities under the U.S. federal and state securities laws may be affected adversely by the fact that the RegistrantCompany is incorporated under the laws of a foreign country, that certain of its officers and directors are residents of a foreign country, that the independent registered public accounting firm and some or all of the experts named in this report may be residents of a foreign country and that all or a substantial portion of the assets of the RegistrantCompany and said persons may be located outside the U.S. In particular, uncertainty exists as to whether Canadian courts would entertain claims or enforce judgments based on the civil liability provisions of the U.S. federal and state securities laws.
The Registrant'sCompany’s possible PFIC status may have possible adverse tax consequences for United States Investors.
Potential investors who are United States taxpayers should be aware that CanarcCanagold may be classified for United States tax purposes as a passive foreign investment company ("PFIC"(“PFIC”) for the current fiscaltax year and may also have beenended December 31, 2022 was likely classified as a PFIC in prior tax years, and based on current business plans and financial expectations, the Company anticipates that it may also bequalify as a PFIC infor its subsequent taxable years. This status arises due toIf the fact that Canarc's excess exploration funds may be invested in interest bearing securities creating "passive income" which, while modest and ancillary to the exploration business, has been Canarc's only substantive source of income in the past. If CanarcCompany is a PFIC for any year during a United States taxpayer'sUS shareholder’s holding period, then such a United States taxpayer,US shareholder generally will be required to treat any so-called "excess distribution" received on its common shares, or any gain realized upon a disposition of Common Shares, or any so-called “excess distribution” received on its common shares, as ordinary income, and to pay an interest charge on a portion of such distributiongain or gain,distributions, unless the taxpayershareholder makes a qualifiedtimely and effective "qualified electing fund ("QEF"fund" election (“QEF Election”) election or a mark-to-market"mark-to-market" election with respect to the shares of Canarc. In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer.Common Shares. A United States taxpayerUS shareholder who makes a QEF electionElection generally must report on a current basis its share of Canarc'sthe Company's net capital gain and ordinary earnings for any year in which Canarcthe Company is a PFIC, whether or not Canarcthe Company distributes any amounts to its shareholders. However, US shareholders should be aware that there can be no assurance that the Company will satisfy the record keeping requirements that apply to a qualified electing fund, or that the Company will supply US shareholders with information that such U.S. shareholders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, US shareholders may not be able to make a QEF Election with respect to their Common Shares. A United States taxpayerUS shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer's taxtaxpayer’s basis therein. Item 10.E provides further details.
Canagold Resources Ltd.
Form 20-F
31 |
Table of Contents |
While we believe we have adequate internal control over financial reporting, internal controls cannot provide absolute assurance that objectives are met.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we have furnished a report by management on our internal controls over financial reporting in this annual report on Form 20-F. Such report contains, among other matters, an assessment of the effectiveness of our internal control over financial reporting, including a statement as to whether or not our internal control over financial reporting is effective.
The Registrant'sCompany’s management does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the RegistrantCompany have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Canarc Resource Corp.
Form 20-F
Differences in United States and Canadian reporting of reserves and resources.
The disclosure in this Annual Report on Form 20-F, including the documents incorporated herein by reference, uses terms that comply with reporting standards in Canada. The terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in and required to be used by the Company pursuant to NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of the measured mineral resources, indicated mineral resources, or inferred mineral resources will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility, pre-feasibility studies or other economic studies, except in rare cases.
Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.
Further, the terms "Mineral Reserve", "Proven Mineral Reserve" and "Probable Mineral Reserve" are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Standards. These definitions differ from the definitions in SEC Industry Guide 7. Under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and all necessary permits or governmental authorizations must be filed with the appropriate governmental authority.
Accordingly, information contained in this Annual Report on Form 20-F and the documents incorporated by reference herein containing descriptions of the Company's mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.
As a "foreign“foreign private issuer"issuer”, the Company is exempt from Section 14 proxy rules and Section 16 of the Securities Exchange Act of 1934.
The Company is a "foreign“foreign private issuer"issuer” as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the "U.S.“U.S. Exchange Act"Act”). Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the U.S. Exchange Act pursuant to Rule 3a12-3 of the U.S. Exchange Act. Therefore, the Company is not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders. The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders'insiders’ activities in our securities.
Canarc Resource Corp.
Form 20-FCanagold Resources Ltd.
Form 20-F
32 |
Table of Contents |
Risks Related to the Registrant'sCompany’s Common Shares
The Company does not intend to pay dividends.
The Company has not paid out any cash dividends to date and has no plans to do so in the immediate future. As a result, an investor’s return on investment will be solely determined by his or her ability to sell common shares in the secondary market.
The volatility of the Registrant'sCompany’s common shares could cause investor loss.
The market price of a publicly traded stock, especially a junior resource issuer like Canarc,Canagold, is affected by many variables in addition to those directly related to exploration successes or failures. Such factors include the general condition of the market for junior resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public market for the stock. The effect of these and other factors on the market price of the common shares on the Toronto Stock Exchange (the "TSX"“TSX”) and NASD-OTC suggests that Canarc'sCanagold’s shares will continue to be volatile. Therefore, investors could suffer significant losses if Canarc'sCanagold’s shares are depressed or illiquid when an investor seeks liquidity and needs to sell Canarc'sCanagold’s shares.
Penny stock classification could affect the marketability of the Registrant'sCompany's common stock and shareholders could find it difficult to sell their stock.
The Registrant'sCompany's stock may be subject to "penny stock"“penny stock” rules as defined in the Exchange Act rule 3a51-1. The Securities and Exchange Commission has adopted rules which regulate broker-dealer practices in connection with transactions in penny stocks. The Registrant'sCompany’s common shares may be subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S.$5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
Canagold Resources Ltd.
Form 20-F
33 |
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The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer'scustomer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer'scustomer’s confirmation.
Further, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser'spurchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Registrant'sCompany’s common shares in the United States and shareholders may find it more difficult to sell their shares.
Possible dilution to current shareholders based on outstanding options and warrants.
At December 31, 2015, Canarc2023, the Company had 191,620,557157,889,394 common shares, and 11,920,000900,000 outstanding share purchase options and 30,809,118nil share purchase warrants outstanding. Under the new Omnibus Plan, there are also 1,537,255 deferred share units and 1,600,000 restricted share units outstanding at December 31, 2023. The resale of outstanding shares from the exercise of dilutive securities could have a depressing effect on the market for Canarc'sthe Company’s shares. At December 31, 2015,2023, securities that could be dilutive represented approximately 22.3%2.96% of Canarc'sthe Company’s issued shares. None of these dilutive securities were exercisable at prices below the December 31, 20152023 closing market price of CAD$0.050.21 for Canarc'sthe Company’s shares, which accordingly would not result in dilution to existing shareholders.
Canarc Resource Corp.
Form 20-F
ITEM 4. INFORMATION ON THE COMPANY
The Registrant is a Canadian mineral exploration company and is subject to National Instrument 43-101, a National Instrument adopted by all of the Securities Commissions in Canada that deals with standards of disclosure for mineral projects. It applies to all oral statements and written disclosure of scientific or technical information, including disclosure of a mineral resource or mineral reserve, made by or on behalf of a company in respect of its material mineral projects. In addition to other matters, it sets out strict guidelines for the classification of and use of the terms "mineral resource" and "mineral reserve" and it requires all technical disclosure on all material properties to be subject to review by a senior engineer or geoscientist in good standing with a relevant professional association. The full text of NI 43-101 can be found at http://www.bcsc.bc.ca/policy.asp?id=2884&scat=4&title=4%20-%20Distribution%20Requirements.
4.A History and Development of the Company
Canagold Resources Ltd.
Form 20-F
34 |
Table of Contents |
Incorporation and Reporting Status
The RegistrantCompany was incorporated under the laws of British Columbia, Canada, on January 22, 1987 under the name, "Canarc“Canarc Resource Corp."”, by registration of its Memorandum and Articles with the British Columbia Registrar of Companies. Effective December 3, 2020, the Company changed its name to Canagold Resources Ltd.
The Company was originally incorporated under the previous Company Act (British Columbia) and transitioned to the Business Corporations Act (British Columbia) in 2005; the Business Corporations Act (British Columbia) replaced the Company Act (British Columbia) on March 29, 2004.
The RegistrantCompany is a reporting company in British Columbia, Alberta, Saskatchewan, Ontario and Nova Scotia. The RegistrantCompany became a reporting issuer under the United States Securities Exchange Act of 1934, as amended, upon filing its registration statement on Form 20-F dated October 9, 1990 with the Securities and Exchange Commission.
Business AddressThe SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC at www.sec.gov. The Company’s website is at canagoldresources.com. Information on the Company’s website is not incorporated by reference herein.
Business Address
Office address: |
| #1250 – 625 Howe Street | |
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| Vancouver, British Columbia, Canada, V6C | ||
2T6 |
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| Phone: (604) 685-9700 |
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Registered address: |
| #1500-1055 West |
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Vancouver, British Columbia, Canada, | |||
| Phone: (604) |
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
35 |
Table of Contents |
Introduction
The RegistrantCompany commenced operations in 1987 and, since inception, has been engaged in the business of the acquisition, exploration and, if warranted, development of precious metal properties. The RegistrantCompany currently owns or holds, directly or indirectly, interests in several precious metal properties, as follows:
- | New Polaris property (British Columbia, Canada), |
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Windfall Hills properties (British Columbia, Canada), | |
- | Corral Canyon property (Nevada, USA). |
of which the New Polaris and El Compas properties areproperty is the only material mineral propertiesproperty of the Registrant.Company.
During the year ended December 31, 2023, Canagold impaired Windfall Hills and Corral Canyon to $Nil as the Company currently does not have any planned or budgeted expenditures for the property.
In prior years, the Fondaway Canyon project was determined to be a material property, and was later optioned to Getchell Gold Corp. (“Getchell”). On December 29, 2023, Getchell exercised the option to acquire the Fondaway Cannyon and Dixie Comstock. The Company recorded a gain of $738,000 in the 2023 Consolidated statement of comprehensive loss.
Canagold Resources Ltd.
Form 20-F
36 |
Table of Contents |
In its consolidated financial statements prepared in accordance with IFRS, the RegistrantCompany has capitalized costs, net of recoveries and write-downs, of approximately $11.4$27.5 million in connection with the acquisition, exploration and development on its currently held properties as at December 31, 20152023 and are summarized as follows for the past three fiscal years:
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British Columbia (Canada): | British Columbia (Canada): |
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New Polaris |
| $ | 3,851 |
| $ | 5,556 |
| $ | 9,407 |
| $ | 3,876 |
| $ | 7,090 |
| $ | 10,966 |
| $ | 3,892 |
| $ | 7,938 |
| $ | 11,830 |
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| $ | 3,927 |
| $ | 23,581 |
| $ | 27,508 |
| $ | 3,910 |
| $ | 18,453 |
| $ | 22,363 |
| $ | 3,941 |
| $ | 14,968 |
| $ | 18,909 |
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Windfall Hills |
| 339 |
| 356 |
| 695 |
| 401 |
| 437 |
| 838 |
| 408 |
| 92 |
| 500 |
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| 348 |
| 997 |
| 1,345 |
| 370 |
| 1,062 |
| 1,432 |
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Zacatecas (Mexico): |
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El Compas (1) |
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| 1,126 |
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| 183 |
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| 1,309 |
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| - |
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Nunavut (Canada): |
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Hard Cash (2) |
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Nigel (2) |
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| $ | 5,316 |
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| $ | 6,095 |
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| $ | 11,411 |
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| $ | 4,277 |
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| $ | 7,527 |
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| $ | 11,804 |
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| $ | 4,300 |
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| $ | 8,030 |
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| $ | 12,330 |
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Nevada (USA): |
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Fondaway Canyon (3) |
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| - |
| - |
| 655 |
| 1,361 |
| 2,016 |
| 1,289 |
| 1,547 |
| 2,836 |
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Corral Canyon (4) |
| - |
| - |
| - |
| 23 |
| 530 |
| 553 |
| 25 |
| 579 |
| 604 |
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| $ | 3,927 |
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| $ | 23,581 |
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| $ | 27,508 |
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| $ | 4,936 |
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| $ | 21,341 |
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| $ | 26,277 |
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| $ | 5,625 |
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| $ | 18,156 |
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| $ | 23,781 |
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(1) | Canagold entered into a property option agreement in December 2018 for the Princeton property which was amended in June 2019 and then assigned in October 2020. Item 4.D provides further details. | |
(2) | Canagold entered into a property option agreement in November 2018 for the Hard Cash and Nigel properties which was written of 2020. Item 4.D provides further details. | |
(3) | The | |
(4) | In 2018, Canagold staked 92 mining claims covering 742 hectares in Nevada, USA. Item 4.D provides further details. |
Further information and details regarding Canarc'sCanagold’s mineral property interests are provided in Item 4.D.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
37 |
Table of Contents |
Developments over the Last Three Financial Years
Over the course of the past three years ended December 31, 20152023 and to the date of this Form 20-F, the RegistrantCompany had been engaged in exploration and development of precious metal projects in Canada and Mexico.North America. The major events in the development of the Registrant'sCompany’s business over the last three years are set out below. Information and details regarding the Registrant'sCompany’s properties are provided in Item 4.D.
Strategic Mine Acquisition PartnershipPurchase Agreement with Canford Capital Inc. ("Canford"American Innovative Minerals, LLC (“AIM”)
In late September 2012, Canarc granted CanfordOn March 20, 2017, the Company closed the Membership Interest Purchase Agreement with AIM (the “Membership Agreement”) whereby the Company acquired 100% legal and beneficial interests in mineral properties located in Nevada, Idaho and Utah (USA) for a 120-day periodtotal cash purchase price of exclusivity$2 million in cash and honouring pre-existing NSRs.
Certain of the mineral properties are subject to complete its due diligenceroyalties. For the Fondaway Canyon project, it bears both a 3% NSR and a 2% NSR. The 3% NSR has a buyout provision for an original amount of $600,000 which is subject to executeadvance royalty payments of $35,000 per year by July 15th of each year until a propertygross total of $600,000 has been paid at which time the NSR is bought out. A balance of $425,000 with a fair value of $183,000 was outstanding upon the closing of the Membership Agreement. The 2% NSR has a buyout provision of either $2 million in cash or 19.99% interest of a public entity which owns AIM if AIM were to close an initial public offering of at least $5 million. On December 29, 2023, Getchell exercised the option agreement to earn up toacquire the Fondaway Cannyon and Dixie Comstock. The Company recorded a 51% interestgain of $738,000 in the New Polaris gold project in return for up to a CAD$30 million investment in exploration and development2023 Consolidated statement of the property. Canarc was to be the manager of the project during the property option period. In February 2013, Canarc entered into a Strategic Mine Acquisition Partnership ("SMAP") with Canford for the purpose of acquiring, expanding and operating gold mines in North America (the "Acquisition Opportunities"). The main parameters of the SMAP agreement were as follows:comprehensive loss.
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This Agreement was to be binding upon both Canarc and Canford until it was replaced by a more formal Strategic Joint Venture Partnership Agreement. Canarc and Canford agreed to use their respective commercially reasonable best efforts to complete a more formal Strategic Mine Acquisition Partnership Agreement on or before March 1, 2013. In March 2013, no formal SMAP agreement was executed, and Canford did not commit nor arrange financing for the proposed property option and joint venture to develop the New Polaris gold project nor for the SMAP to acquire operating gold mines in North America.Form 20-F
Letter of Intent with Pan American Goldfields Ltd.
In February 2014, Canarc signed a Letter of Intent (the "LOI") with Pan American Goldfields Ltd. ("Pan American") with respect to a business combination whereby Canarc may acquire all of the outstanding common shares of Pan American (the "Transaction"). The LOI was however terminated in May 2014 as a result of Canarc's due diligence.
Canarc Resource Corp.
Form 20-F
38 |
The main asset of Pan American was its interest in the La Cieneguita mine properties located in Chihuahua State, Mexico. Pan American, together with its partner operator, Minera Rio Tinto SA de CV ("MRT"), was in pilot production at its gold-silver mine at La Cieneguita whereby Pan American received 35% of net cash flow from production.
The structure of the proposed Transaction was subject to review and consultation by the parties; however, the LOI anticipated that Canarc would acquire all of the outstanding common shares of Pan American (the "Shares") and that the shareholders of Pan American would receive 0.82 (the "Exchange Ratio") of a common share of Canarc and 0.25 of a warrant of Canarc (each whole warrant being a "Warrant") for each Share held. The proposed Exchange Ratio implied a 25% premium to the volume weighted average price of the Shares over the last 20 trading days and accounted for the USD to CAD currency conversion. Each Warrant would be exercisable to purchase one common share of Canarc at an exercise price equal to CAD$0.15 for a period of 3 years.
Pan American had granted Canarc a 130 day period of exclusivity (the "Exclusivity Period") to complete its due diligence and negotiate a definitive agreement with respect to the Transaction. The LOI would terminate on June 30, 2014 unless terminated earlier by either party as a result of its due diligence.
Pursuant to the terms of the LOI, Canarc had agreed to pay $100,000 (the "Funds") to Pan American, following TSX approval; funds of $40,000 were advanced in April 2014 which bore an interest rate of 1% per month and was written off in September 2014 as collectability was doubtful. Pan American had agreed to repay the Funds to Canarc in the event that (a) Canarc terminated the LOI or determined not to proceed with the Transaction as a result of its due diligence; or (b) Pan American terminated the LOI or determined not to proceed with the Transaction for any reason.
Canarc planned to use commercially reasonable efforts to raise up to $1.8 million in working capital financing pursuant to a private placement, subject to regulatory approval. In the event that the private placement was completed, the parties had agreed to negotiate an interim loan facility (the "Loan"). Under the Loan, Canarc would lend Pan American up to a total of $250,000 prior to closing of the Transaction.
Following the completion of the Transaction, Pan American would have the right to nominate two persons to the board of directors of the combined company. The remainder of the board would be nominees of Canarc.
The Transaction was subject to the parties negotiating and entering into a definitive agreement by June 30, 2014. Entering into a definitive agreement with respect to the Transaction was subject to, among other things: (a) each party being satisfied in its sole discretion as to the results of its due diligence review, and (b) approval of the board of directors of each party. The definitive agreement would include customary provisions and deal protections, including receipt of all necessary consents and approvals, including all required stock exchange and shareholder approvals.
In May 2014, as a result of its due diligence, Canarc terminated the LOI with Pan American.
Share Exchange Agreement with Santa Fe Gold Corporation
On July 15, 2014, Canarc and Santa Fe Gold Corporation ("Santa Fe") entered into a Share Exchange Agreement (the "Share Exchange Agreement") pursuant to which Santa Fe was to issue 66,000,000 shares of its common stock to Canarc, and Canarc was to issue 33,000,000 of its common shares to Santa Fe (the "Share Exchange"). Upon consummation of the Share Exchange, Santa Fe would own approximately 17% of Canarc 's outstanding shares and Canarc would own approximately 34% of Santa Fe's outstanding common shares. The Share Exchange Agreement did not close and terminated on its own terms on October 15, 2014.
Canarc Resource Corp.
Form 20-F
The purpose of the Share Exchange was to facilitate a significant turnaround for Santa Fe and a material new opportunity for Canarc driven by the appointment of Canarc's nominees to the Santa Fe's management team and Board of Directors, the re-capitalization of Santa Fe, the re-structuring of Santa Fe's secured debt and re-development of its Summit gold-silver mine in New Mexico, USA.
In connection with the strategic Share Exchange:
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Table of Contents |
AIM owns 8 exploration properties in Nevada and owns one gold property in Idaho, and has two royalty interests on other properties. These properties include the following:
· | Clear Trunk property is located in Pershing and Humboldt Counties, Nevada on 4,500 acres of fee mineral and unpatented claims in the Sonoma Range, south of Winnemucca and near the Goldbanks gold deposit. The property contains gold-bearing epithermal quartz veins, mesothermal quartz veins with high-grade gold and copper-gold intrusion-hosted mineralization. | |
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· | Bull Run property is located in Elko County, Nevada on two large patented claim groups of 500 acres near the Jerritt Canyon gold district. | |
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· | Jarbidge propertyis locatedinElko County, Nevada on 8 patented claims along the east end of major gold veins in the Jarbidge mining district. | |
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· | Silver King propertyis located in Humboldt County, Nevada on 4 patented claims in the Iron Point mining district. Previous exploration focused on low grade gold values but the property was never been explored for silver. | |
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· | A&T property is locatedinHumboldt Co., Nevada on 2 patented claims on Winnemucca Mountain. The property contains gold-bearing veins in altered shale. | |
· | Eimis property is located in Elko County, Nevada on one 20 acre patented claim adjacent to the Coleman Canyon gold deposit controlled by Arnevut Resources Nevada LLC (“Arnevut”). Gold anomalies extend onto Eimis property and | |
· | Silver Peak property is located in Esmeralda County, Nevada on 3 patented (57 acres) and | |
· | Lightning Tree property is located inLemhi County, Idaho on 4 unpatented claims near the Musgrove gold deposit. | |
· | Tucker property is located inMadison County, Montana on 3 unpatented claims near the historic McKee Mine of |
Pursuant to the Share Exchange Agreement, in July 2014, Canarc advanced a promissory note loan of $200,000 to Santa Fe, which initially bore an interest rate of 12% per annum compounded monthly; both the principal and interest were due and payable on January 15, 2015, and any past due principal and interest shall bear an interest rate of 14%. In September 2014, further funds of $20,000 were advanced to Santa Fe. The promissory note receivable from Santa Fe along with accrued interest was determined to be impaired as collectability was doubtful, and was written off at December 31, 2014. In 2015, demand notices for repayment have been submitted by Canarc to Santa Fe, as Canarc maintains its legal rights relative to the promissory note loan.
On October 15, 2014, the conditions precedent set forth in the Share Exchange Agreement were not satisfied and the agreement terminated on that date, and Canarc's officers and directors who were appointed to the Santa Fe management and/or board, as specified in the Share Exchange Agreement, resigned from their respective roles as Santa Fe officers and/or directors.
In August 2015, Santa Fe filed voluntary petitions under Chapter 11April 2017, Canagold commissioned Techbase International, Ltd (“Techbase”) of the Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware, USA.
Canarc Resource Corp.
Form 20-F
Pre-Development and Earn-In Binding Agreement with PanTerra Gold (British Columbia) Limited
On February 24, 2015, Canarc entered into a Pre-Development and Earn-In Binding Agreement (the "Earn-In Agreement") with PanTerra Gold (British Columbia) Limited ("PanTerra"), a wholly-owned subsidiary of PanTerra Gold Limited pursuant to which PanTerra was granted a 30-month option to earn a 50% interest in the New Polaris project by spending a total of CAD$10 million in three stages of predevelopment activities including metallurgical test work, drilling, detailed mine planning, tailings dam design, environmental permitting, and completion of a definitive feasibility study. In Stage One, PanTerra shall spend CAD$500,000 for laboratory production of flotation concentrate followed by test work through the Glencore Technology Albion pilot plant and for comprehensive technical and economic review and commencement of environmental baseline data collection required for permitting. In Stage Two, PanTerra can earn a 20% interest in the New Polaris project by spending CAD$3.5 million in predevelopment expenditures which would include a 10,000 m drilling program and engineering and completion of field data required for environmental permitting. In Stage Three, PanTerra can earn an additional 30% interest in the project for a total interest of 50% by spending CAD$6 million in predevelopment expenditures which would primarily focus on the completion of a definitive feasibility study and would include further 10,000 m of infill drilling, additional metallurgical test work, and preliminary engineering. PanTerra can increase its interest in the New Polaris project to 51% by purchasing 1% from Canarc within six months of completion of the definitive feasibility study at a cost of 1% of the net present value established by the definitive feasibility study using a 10% discount rate.
Canarc received the CAD$500,000 for Stage One in 2015. As at December 31, 2015, funds of US$69,000 remain for Stage One expenditures as specified pursuant to the agreement between Canarc and PanTerra.
In August 2015, PanTerra informed Canarc that it will not be able to commit to further expenditures to commence Stage Two exploration and permitting work on Canarc's New Polaris project until PanTerra receives the approval from the Dominican Republic government for importing New Polaris gold concentrate into the country for processing and PanTerra requested a 12 month extension of the Earn-In Agreement. PanTerra declared a force majeure event under the terms of the Earn-In Agreement. Canarc does not agree with PanTerra's position. Canarc and PanTerra continue to be in communication regarding this matter, and an extension or a resolution has not yet been negotiated.
Agreement for the Purchase of All the Shares of Oro Silver Resources Ltd. with Marlin Gold Mining Ltd.
In July 2015, Canarc and Marlin Gold Mining Ltd. ("Marlin Gold") entered into a letter of intent which resulted in the Agreement for the Purchase of All the Shares of Oro Silver dated October 8, 2015 (the "Share Purchase Agreement"), whereby Canarc acquired 100% of the shares of Marlin Gold's wholly owned subsidiary, Oro Silver Resources Ltd. ("Oro Silver"), which indirectly owns 100% of the El Compas gold-silver project located in Zacatecas, Mexico, in exchange for the issuance to Marlin Gold of 19 million common shares of Canarc. Canarc's acquisition of Oro Silver closed on October 30, 2015. The terms of the agreement include the following:
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The closing of the Share Purchase Agreement resulted in Marlin Gold becoming an insider of Canarc by virtue of having more than 10% (ie. 10.79%) interest in Canarc as at the closing date of October 30, 2015.
Canarc Resource Corp.
Form 20-F
The El Compas property is a fully permitted gold silver project located in Zacatecas, Mexico and is comprised of 24 concessions totaling 3,900 hectares.
In October 2015, Canarc commissioned Mining Plus Canada Consulting Ltd. ("Mining Plus")Reno, Nevada to complete a NI 43-101 resource report and preliminary economic assessment for the El Compas project to determine the project's potential viability which was completed in January 2016.Fondaway Canyon project. Their technical report entitled "NI 43-101 Technical“Technical Report for the El Compas Project"Fondaway Canyon Project” (the "El Compas“Fondaway Canyon Technical Report"Report”) was authoredprepared by J Collins PGeo, N Schunke PEng, S Butler PGeo, L Bascome MAIGMichael Norred, SME Registered Member 2384950, President of Techbase, and F Wright PEng,Simon Henderson, MSc, MAusIMM CP 110883 (Geology), Consulting Geologist with Wairaka Rock Services Limited of Wellington, New Zealand, who are independent Qualified Persons as defined by NI 43-101, iswas dated January 19, 2016,April 3, 2017, and was prepared in compliance with NI 43-101.
In January 2016, Canarc signed a definitive agreement with the Zacatecas state government to lease and operate the permitted 500 tonne per day La Plata ore processing plant located in the city of Zacatecas, Mexico, approximately 20 kilometres from El Compas. Highlights of the lease agreement include the following: Canagold Resources Ltd.
Form 20-F
39 | ||
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Table of Contents | ||
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In October 2018, Canagold entered into a property option agreement for its Silver King property with Brownstone Ventures (US) Inc. (“Brownstone”) whereby Brownstone has an option to earn a 100% undivided interest by paying $240,000 in cash over a 10 year period with early option exercise payment of $120,000. Canagold will retain a 2% NSR of which a 1% NSR can be acquired by Brownstone for $1 million.
In March 2016, Canarcearly July 2020, Canagold entered into an indicative term sheeta non-binding letter of intent for upits Lightning Tree property located in Lemhi County, Idaho, with Ophir Gold Corp. (formerly, MinKap Resources Inc.) (“Ophir”), whereby Ophir shall acquire a 100% undivided interest in the property. On September 10, 2020, a definitive mineral property purchase agreement was executed. Over a three year period, Ophir shall pay to $10Canagold a total of CAD$137,500 in cash over a three year period and issue 2.5 million in debt financingcommon shares and 2.5 million warrants over a two year period, and shall incur aggregate exploration expenditures of at least $4 million over a three year period. If Ophir fails to incur the exploration expenditure, the property reverts back to Canagold. Canagold will retain a 2.5% NSR of which a 1% NSR can be acquired by way ofOphir for CAD$1 million. If Ophir fails to file a gold prepaid facilityNI 43-101 compliant resource on the Lightning Tree property within three years, the property will revert back to develop the El Compas gold-silver project subject to a 60 day due diligence period which is currently in process.
Canarc Resource Corp.Canagold.
Form 20-FLightning Tree property is located in Lemhi County, Idaho on 4 unpatented claims near the Musgrove gold deposit.
Confirmation and Agreement with Barrick Gold Inc. and Skeena Resources Ltd.
In December 2017, Canagold signed a Confirmation and Agreement with Barrick Gold Inc. (“Barrick”) and Skeena Resources Ltd. (“Skeena”) involving Canagold’s 33.3% carried interest in certain mining claims adjacent to the past-producing Eskay Creek Gold mine located in northwest British Columbia, whereby Canagold will retain its 33.33% carried interest. Canagold and Barrick have respectively 33.33% and 66.67% interests in 6 claims and mining leases totaling 2323 hectares at Eskay Creek. Pursuant to an option agreement between Skeena and Barrick, Skeena has the right to earn Barrick’s 66.67% interest in the property which right had been exercised in October 2020. Canagold had written off the property in 2005.
Property Option Agreement with Silver Range Resources Ltd.
In November 2018, Canagold entered into a property option agreement with Silver Range Resources Ltd. (“Silver Range”) whereby Canagold has an option to earn a 100% undivided interests in the Hard Cash and Nigel properties by paying CAD$150,000 in cash and issuing 1.5 million common shares to Silver Range over a four year period. Upon Canagold’s exercise of the option, Silver Range will retain a 2% NSR of which a 1% NSR can be acquired for CAD$1 million. Silver Range shall also be entitled to receive $1 per Au oz of measured and indicated resource estimate and $1 per Au oz of proven or probable reserve estimate, payable in either cash or common shares of Canagold at Canagold’s election. Canagold terminated the property option agreement in September 2020 and wrote off the property.
Canagold Resources Ltd.
Form 20-F
40 |
Table of Contents |
Hard Cash is located 310 km NE of Stony Rapids, Saskatchewan, on the shores of Ennadai Lake. Access is provided by float plane or helicopter, and there is an all-weather gravel strip at Ennadai Lake Lodge, 35 km east of the property. Nigel is located 15 km west of Hard Cash. Hard Cash is underlain by the Ennadai Greenstone Belt of the Churchill Province. Gold mineralization at Hard Cash and Nigel occurs in high grade quartz veins and lower grade shear zones hosted by basal mafic volcanics overlain by felsic volcanics metamorphosed to upper greenschist/lower amphibolite facies and intruded by granite.
Corral Canyon property (Nevada, USA)
In November 2018, Canagold staked 92 mining claims covering 742 hectares in Nevada, USA.
Corral Canyon property lies 35 km west of the town of McDermitt in Humboldt County along the western flank of the McDermitt caldera complex, an area of volcanic rocks that hosts significant lithium and uranium mineralization in addition to gold. It contains volcanic-hosted, epithermal, disseminated and vein gold mineralization evidenced by previous drilling.
Property Option Agreement with Universal Copper Ltd., et al.
In December 2018 and then as amended in June 2019, Canagold entered into a property option agreement jointly with Universal Copper Ltd. (formerly, Tasca Resources Ltd.) (“Universal”) and an individual whereby Canagold has an option to earn a 75% interest in the Princeton property by: incurring exploration expenditures of CAD$490,000 over a two year period; issuing 375,000 common shares to Universal by December 1, 2019 (issued); paying CAD$25,000 cash to Universal by March 16, 2021; and granting a 1% NSR to Universal which can be acquired for CAD$1 million and honoring a 2% NSR to the individual of which 1% NSR can be acquired for CAD$1 million.
In October 2020, Canagold assigned its interest in the property option agreement for the Princeton property to Damara Gold Corp. (“Damara”). Pursuant to the assignment, Damara will issue 9.9% of its outstanding common shares to Canagold on closing of the assignment. Subject to the exercise of the option by December 31, 2021, Canagold’s aggregate ownership in the capital of Damara shall increase to 19.9%. Damara shall incur exploration expenditures of CAD$300,000 by December 31, 2020.
Canagold Resources Ltd.
Form 20-F
41 |
Table of Contents |
The Princeton gold property consists of 14,650 hectares located 35 kilometers (km) south of Princeton, British Columbia, and is readily accessible by road. The property is underlain by volcanic rocks of both the Eocene Princeton Group and the Triassic-Jurassic Nicola Group.
Other Mineral Property
In December 2018, Canagold entered into a Memorandum of Understanding for an exploration and development project in South America whereby Canagold paid $10,000 in 2018 and another $10,000 is payable as a success fee to close on an acceptable agreement for such project. In October 2019, Canagold recovered $3,000 from its initial payment and wrote off the remaining balance of $7,000. A further recovery of $1,500 was received in April 2021.
Item 4.D provides further details.details regarding Canagold’s mineral property interests.
Others
In April 2013, Canarc entered into two property purchase agreements whereby Canarc acquired 100% undivided interests in two adjacent gold properties located in British Columbia, Canada, collectively known as the Windfall Hills property, which are not considered material to Canarc's business. Item 4.D provides further details.Financings and Related Transactions
On September 28, 2012, CanarcApril 21, 2017, Canagold closed a brokered private placement for 11.33.8 million unitsflow through common shares at athe purchase price of CAD$0.100.13 per unitshare for gross proceeds of CAD$1.13 million, with each unit comprised500,000. Canagold paid finder’s fees of one common shareCAD$32,500 in cash and one transferrable common share purchase warrant. Canford250,000 in warrants. Each warrant was the sole subscriber in the private placement and became an insider of the Company by virtue of holding more than 10% of the issued and outstanding share capital of Canarc at that time. Item 5.B provides further details.
In 2012, Canarc arrange demand loans of $358,000 from certain directors and an officer of Canarc. These loans were repayable on demand and bore an interest rate of 12% compounded monthly with interest payable semi-annually. In October and December 2012, Canarc repaid all principal and interest in full settlement of outstanding demand loans.
In December 2012 and January 2013, Canarc closed a non-brokered private placement in three tranches totalling 6.1 million units at a price of CAD$0.11 per unit for gross proceeds of CAD$671,000 with each unit comprised of one common share and one common share purchase warrant. Item 5.B provides further details.
In November 2013, the TSX had advised Canarc that the TSX was reviewing the eligibility for continued listing on the TSX of the securities of Canarc pursuant to Part VII of the Toronto Stock Exchange Company Manual. Canarc was being reviewed under the Remedial Review Process and had been initially granted 120 days to comply with all requirements for continued listing with subsequent extensions to comply. Specifically Canarc needed to comply with expenditures of CAD$350,000 on exploration or development work on its mineral resource properties and with adequate working capital. For the nine months ended September 30, 2014, Canarc closed private placements for gross proceeds totalling CAD$3.26 million and completed its drilling program for the Windfall Hills property. In September 2014, the TSX confirmed that Canarc satisfied the TSX's continued listing requirements.
In fiscal 2013, Canarc received demand loans of $126,000 from two directors, which were repayable on demand and bore an interest rate of 12% compounded monthly with interest payable semi-annually. In January 2014, Canarc repaid all principal and interest in full settlement of outstanding demand loans.
In January 2014, Canarc granted 500,000 stock options to an officer with an exercise price of CAD$0.05 and an expiry date of January 14, 2019, and which are subject to vesting provisions in which 20% of the options vest immediately on the grant date and 20% vest every six months thereafter.
On January 31, 2014, Canarc closed a non-brokered private placement for 18 million units at a price of CAD$0.05 per unit for gross proceeds of CAD$900,000, with each unit comprised of one common share and one-half of a whole common share purchase warrant. Item 5.B provides further details.
Canarc Resource Corp.
Form 20-F
In March and April 2014, Canarc closed a private placement in two tranches totalling 19.6 million units at a price of CAD$0.10 per unit for gross proceeds of CAD$1.96 million with each unit comprised of one common share and one-half of a whole common share purchase warrant. Item 5.B provides further details.
On July 9, 2014, Canarc closed a private placement for 5 million units at CAD$0.08 per unit for gross proceeds of CAD$400,000. Each unit was comprised of one flow-through common share and one-half of a whole common share purchase warrant; each whole warrant is exercisable to acquire one non-flow through common share at an exercise price of CAD$0.15 per share until July 9, 2016. Funds of CAD$386,000 were expended for flow-through purposes in 2014 and2015. Item 5.B provides further details.April 21, 2019.
In July 2014, Canarc granted 4,050,000 stock options to directors, officers and employees2017, Canagold extended the expiry date of warrants for 8.45 million common shares with an exercise price of CAD$0.10 and an expiry date offrom July 17, 2019, and which are subject31, 2017 to vesting provisions in which 20% of the options vest immediately on the grant date and 20% vest every six months thereafter.
In May 2015, certain directors and officers of Canarc cancelled 3,360,000 stock options with exercise prices ranging from CAD$0.10 to CAD$0.145 and expiry dates from September 2015 to June 2017.
At Canarc's annual general meeting in June 2015, disinterested shareholders passed two resolutions relating to shares for debt settlements to certain insiders of Canarc in which debts of up to CAD$63,520 owed to certain current and former directors would be settled by the issuance of up to 1.27 million shares and debts of up to CAD$127,400 owed to senior officers would be settled by the issuance of up to 2.55 million shares.
In August 2015, Canarc extended the expiry period of a total of 18.6 millionJuly 31, 2018. These warrants by a period of 18 months which were originally issued pursuant to twoa private placementsplacement which closed inon January 31, 2014. Expiry dates for 951,250 warrants which were issued to insiders in those private placements were not extended. Item 5.B provides further details.
In September and October 2015, CanarcOn July 23, 2019, Canagold closed a non-brokered private placement in two tranches totalling 13.2for 23.7 million unitsflow through common shares for gross proceeds of CAD$1.4 million; of these shares, 17.3 million were issued at a price of CAD$0.06 per unit for gross proceeds of CAD$790,000 with each unit comprised of one common share and one-half of one common share purchase warrant. Item 5.B provides further details.
On September 24, 2015, Canarc issued 26.4 million shares at aCAD$0.0625 per share. The fair value of CAD$0.07 in settlement of partial salaries owed to certain officers and fees owed to directors in which the latter also forgave a certain portion of outstanding directors fees owed,shares was CAD$0.06 per share, resulting in the recognition of a gain on debt settlementflow through premium liability of $54,000.
In December 2015, Canarc granted 5,950,000 stock optionsCAD$0.0025 per share for a total of CAD$16,000. Finder fees were comprised of CAD$91,400 in cash and 1.5 million warrants; each warrant is exercisable to directors, officers and employees withacquire one non-flow through common share at an exercise price of CAD$0.06 and an expiry date of December 8, 2020 and which are subject to vesting provisions in which 25% of the options vest immediately on the grant date and 25% vest every six months thereafter.per share until July 23, 2021.
Canagold Resources Ltd.
Form 20-F
42 |
Table of Contents |
In March 2016, CanarcOctober and November 2020, Canagold closed a private placement in two tranches totalling 22.721 million units at a price of CAD$0.090.40 per unit for gross proceeds of CAD$2.048.4 million with each unit comprised of one common share and one-half of one common share purchase warrant. Item 5.B provides further details.warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.65 per share for a period of two years. On October 7, 2020, Canagold closed the first tranche for 8 million units for gross proceeds of CAD$3.2 million. On November 12, 2020, Canagold closed the second tranche for 13 million units for gross proceeds of CAD$5.2 million; the second tranche received interested and disinterested shareholder approvals at Canagold’s special general meeting held on October 19, 2020. Finders fees included CAD$176,400 in cash and 385,200 warrants with the same terms as the underlying warrants in the private placement. If the closing market price of the common shares is at a price equal to or greater than CAD$1.00 for a period of 10 consecutive trading days on the Toronto Stock Exchange (“TSX”), Canagold will have the right to accelerate the expiry date of the warrants by giving written notice to the warrant holders that the warrants will expire on the date that is not less than 30 days from the date notice is provided by Canagold to the warrant holders.
Canarc Resource Corp.On October 28, 2021, Canagold closed a brokered private placement with Red Cloud Securities Inc. (“Red Cloud”) for 10.6 million flow through common shares at a price of CAD$0.50 per share for gross proceeds of CAD$5.3 million. Finders fees were comprised of CAD$253,555 in cash and 638,510 broker warrants with each broker warrant exercisable to acquire one non flow through common share at an exercise price of CAD$0.75 until October 28, 2023.
Form 20-FIn December 2021 and January 2022, Canagold closed a private placement in two tranches totalling 4.61 million flow through common shares at a price of CAD$0.50 per share for gross proceeds of CAD$2.3 million. On December 30, 2021, Canagold closed the first tranche for 560,000 flow through shares for gross proceeds of CAD$280,000. On January 18, 2022, Canagold closed the second tranche for 4.05 million flow through shares for gross proceeds of CAD$2.03 million.
On June 28, 2022, the Company arranged a loan for CAD$25,000 from a company controlled by a former director. The loan bore interest at a rate of 9% per annum, and the entire loan amount of CAD$25,000 was fully repaid on July 14, 2022 along with interest of CAD$99.
On August 15, 2022, the Company entered into a Bridge Loan Agreement with Sun Valley Investments AG (“Sun Valley”), which is currently a 40.06% control person of the Company for CAD$2.5 million bearing an interest rate of 5.5% per annum. The bridge loan was applied as an advance payment for the standby guaranty for the November 2022 rights offering and extinguished in December 2022 when Sun Valley purchased 20,352,577 common shares. The Company paid Sun Valley a total of CAD$46,336 in interest and a total of CAD$178,085 in fees (accounted as share issuance expense part of the Shareholder Equity) pursuant to the Standby Guaranty Agreement.
On October 19, 2022, the Company closed a private placement for 4.7 million flow through common shares at a price of CAD$0.32 per share for gross proceeds of CAD$1.5 million. The fair value of the shares was CAD$0.26 per share, resulting in the recognition of a flow through premium liability of CAD$0.06 per share for a total of CAD$282,000.
In November 2022, the Company proceeded with a rights offering whereby shareholders of the Company received one right for each common share held. Each two rights entitled holders to subscribe for one common share at a price of CAD$0.175. The Company closed the offering on December 16, 2022 and issued 25.3M common share for total gross proceeds of CAD$4.4 million. The Company also entered into a standby guaranty agreement with Sun Valley whereby Sun Valley shall purchase common shares issuable under the rights offering which remain unsubscribed under the basic subscription privilege and the additional subscription privilege. In August 2022, the Company obtained a bridge loan of CAD$2.5 million from Sun Valley as an advance payment for the standby guaranty. Pursuant to the standby guaranty agreement, Canagold issued 20.4M common shares to Sun Valley. From the CAD$3.6 million gross proceeds received from Sun Valley, the Company deducted a total of CAD$2.5 million to pay back and terminate the $2.5M loan provided by Sun Valley in August 2022 plus accrued interest of CAD$46,336, and a total of CAD$178,085 in fees pursuant to the standby guaranty agreement.
Canagold Resources Ltd.
Form 20-F
Table of Contents |
On July 28, 2023, the Company closed a financing consisting of 21,000,000 shares at CAD $0.21 per share for aggregate gross proceeds of CAD $4.4 million.
On March 28, 2024, the Company closed a private placement for 15, 700,000 flow through common shares at a price of CAD$0.2625 per share for gross proceeds of CAD$4.1 million.
Issuer Bids
In February 2017, Canagold received regulatory approval for a normal course issuer bid to acquire up to 10.9 million its common shares, representing approximately up to 5% of its issued and outstanding common shares at that time. The bid commenced on February 8, 2017 and terminated on February 7, 2018. The actual number of common shares purchased under the bid and the timing of any such purchases was at Canagold’s discretion. Purchases under the bid did not exceed 86,128 common shares per day. Canagold paid the prevailing market price at the time of purchase for all common shares purchased under the bid, and all common shares purchased by Canagold were returned to treasury and cancelled. During the term of the normal course issuer bid, Canagold purchased an aggregate of 2.6 million common shares for an aggregate purchase price of CAD$220,400, resulting in an average price of CAD$0.08 per share; these shares have been returned to treasury and accordingly cancelled.
In June 2018, Canagold again proceeded with a normal course issuer bid which received regulatory approval to acquire up to 10.9 million common shares of Canagold representing approximately up to 5% of its issued and outstanding common shares at that time. The bid was effective on June 21, 2018 and terminated on June 20, 2019. The actual number of common shares purchased under the bid and the timing of any such purchases are at Canagold’s discretion. Purchases under the bid did not exceed 23,893 common shares per day. Canagold paid the prevailing market price at the time of purchase for all common shares purchased under the bid, and all common shares purchased by Canagold were returned to treasury and cancelled. During the term of the normal course issuer bid, Canagold purchased 438,000 shares for CAD$20,595 with an average price of CAD$0.05 per share; these shares have been returned to treasury and accordingly cancelled.
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Table of Contents |
Forbearance Agreement
On February 12, 2018, Canagold entered into a Forbearance Agreement with a debtor in which the loan principal totaling $220,000, which was previously written off in 2014, will be repaid in full in 2018 as follows:
Date |
| Principal (1) |
| |
|
|
|
| |
February 14, 2018 |
| $ | 25,000 |
|
June 30, 2018 |
|
| 25,000 |
|
September 30, 2018 |
|
| 85,000 |
|
December 31, 2018 |
|
| 85,000 |
|
|
| $ | 220,000 |
|
(1) | Funds of $94,500 were received in 2018 with a balance of $59,500 received in January 2019, net of legal fees. |
Directors and Officers
From January 2018 to May 2020, Mr. Jacob Margolis, PhD, was Vice President of Exploration for Canagold. In June 2020, Mr. Troy Gill was appointed Vice President of Exploration.
In July 2020, Mr. Kai Hoffmann resigned from the Board of Directors of the Canagold (the “Board”). In August 2020, Mr. Andrew Bowering was nominated to the Board of Canagold and resigned in March 2022.
In July 2021, Mr. Knox Henderson was appointed Vice President of Corporate Development.
At the Company’s contested Annual and Special General Meeting held on July 19, 2022, shareholders voted for the election of Sofia Bianchi, Carmen Letton, Kadri Dagdelen, Andrew Trow, and Scott Eldridge as Directors for the ensuing year. Three other nominees originally proposed by the Company, namely Bradford Cooke, Martin Burian and Deepak Malhotra, elected to resign from the Board.
In August 2022, Scott Eldridge resigned as CEO and a Director of the Company, and Catalin Kilofliski was appointed as CEO, and Michael Doyle was nominated as a Director and who subsequently was appointed as Chief Technical Officer.
At the Company’s Special General Meeting held on October 17, 2022, disinterested shareholders voted in favor for the creation of a new control person with Sun Valley Investments AG (“Sun Valley”) owning more that 20% interest of the Company which allowed the closing of the flow through private placement for 4.7 million common shares, resulting in Sun Valley’s ownership interest in the Company increasing from 19.40% to 23.55%. Sun Valley participated in a rights offering in December 2022 and increased its ownership in the Company to 40.06%.
Canagold Resources Ltd.
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In February 2023, Philip Yee resigned as CFO and Corporate Secretary of the Company, and Mihai Draguleasa was appointed as CFO and Corporate Secretary of the Company.
In March 2023, Colm Keogh was appointed as Senior Vice-President of Operations of the Company.
In May 2023, Tim Caldwell was appointed as Vice-President of Sustainability; Tim resigned from this position in October 2023.
In September 2023, Troy Gill resigned as Vice-President of Exploration.
In January 2024, Chris Pharness was appointed as Senior Vice-President of Sustainability and Permitting of the Company.
4.B Business Overview
Nature of operations and principal activities
The Registrant'sCanagold’s principal business activities are the acquisition, exploration and development of mineral resource property interests. The RegistrantCanagold is in the process of exploring and developing its mineral property interests and has not yet determined whether these mineral property interests contain reserves. The recoverability of amounts capitalized for mineral property interests is dependent upon the existence of economically recoverable reserves in its mineral resource properties, the ability of the RegistrantCanagold to arrange appropriate financing to complete further work on its mineral property interests, confirmation of the Registrant'sCanagold’s interest in the underlying properties, the receipt of necessary permitting and upon future profitable activities on the Registrant'sCanagold’s mineral property interests or proceeds from the disposition thereof. The RegistrantCanagold has incurred significant operating losses and currently has no operating revenues. The RegistrantCanagold has financed its activities principally by the issuance of equity securities. The Registrant'sCanagold’s ability to continue as a going concern is dependent on continued financial support from its shareholders and other related parties, the ability of the RegistrantCanagold to raise equity financing, and the attainment of profitable operations to fund its operations.
The RegistrantCanagold and its management group have in the past been actively involved in the evaluation, acquisition and exploration of mineral properties in Canada, U.S.A., andNorth, Central and South America. Starting with grass roots exploration prospects, it progressed to more advanced properties. To date, the RegistrantCanagold has not received any operating revenues from its mineral property interests. The RegistrantCanagold plans to continue exploring and developing its mineral property interests and, if appropriate, the RegistrantCanagold intends to seek partners or buyers to purchase or to assist in further advancement (by way of joint venture or otherwise) of its mineral property interests. The RegistrantCanagold seeks to identify properties with significant potential and to acquire those properties on the basis of property option agreements relying on the representations and warranties of the vendor as to the state of title, with limited or no title work being performed by the Registrant.Canagold. Detailed title work is only undertaken once it has been determined that the property is likely to host a significant body of ore, which may not occur. Consequently, there is a significant risk that adverse claims may arise or be asserted with respect to certain of the Registrant'sCanagold’s mineral property interests. Items 3.D and 4.A provide further details.
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In 2022, Canagold’s primary focus was its drilling program, environmental baseline study and camp renovations for its New Polaris property. In 2023, the Company’s primary focus was feasibility studies for its New Polaris property. Item 4.D provides further details.
Further information and details regarding the Registrant'sCanagold’s properties are provided in Item 4.D.
Sales and revenue distribution, sources and availability of raw materials, and marketing channels
As of the date of this annual report, the RegistrantCanagold has not generated any operating revenues from its mineral property interests.
Competitive conditions
Significant competition exists for natural resource acquisition opportunities. As a result of this competition, some of which is with large, well established mining companies with substantial capabilities and significant financial and technical resources, the RegistrantCanagold may be unable to compete for nor acquire rights to exploit additional attractive mining properties on terms it considers acceptable. Accordingly, there can be no assurance that the RegistrantCanagold will be able to acquire any interest in additional projects that would yield reserves or results for commercial mining operations.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
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Table of Contents |
Government and environmental regulations
Government regulations
The Registrant'sCanagold’s operations are subject to governmental regulations in Canada and Mexico,the USA; Canagold’s material mineral property is in Canada.
The exploration and development of a mining prospect are subject to regulation by a number of federal and state government authorities. These include the United States Environmental Protection Agency (“EPA”) and the United States Bureau of Land Management (“BLM”) as well as the various state environmental protection agencies. The regulations address many environmental issues relating to air, soil and water contamination and apply to many mining related activities including exploration, mine construction, mineral extraction, ore milling, water use, waste disposal and use of toxic substances. In addition, Canagold is subject to regulations relating to labor standards, occupational health and safety, mine safety, general land use, export of minerals and taxation. Many of the regulations require permits or licenses to be obtained and the filing of Notices of Intent and Plans of Operations, the absence of which or inability to obtain will adversely affect the ability for us to conduct our exploration, development and operation activities. The failure to comply with the regulations and terms of permits and licenses may result in fines or other penalties or in revocation of a permit or license or loss of a prospect.
Mining Regulation
Federal
On lands owned by the United States, mining rights are governed by the General Mining Law of 1872, as amended, which allows the location of mining claims on certain federal lands upon the discovery of a valuable mineral deposit and compliance with location requirements. The exploration of mining properties and development and operation of mines is governed by both federal and state laws. Federal laws that govern mining claim location and maintenance and mining operations on federal lands are generally administered by the BLM. Additional federal laws, governing mine safety and health, also apply. State laws also require various permits and approvals before exploration, development or production operations can begin. Among other things, a reclamation plan must typically be prepared and approved, with bonding in the amount of projected reclamation costs. The bond is used to ensure that proper reclamation takes place, and the bond will not be released until that time. Local jurisdictions may also impose permitting requirements (such as conditional use permits or zoning approvals).
Canagold Resources Ltd.
Form 20-F
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Nevada
In Nevada, initial stage surface exploration does not require any permits. Notice-level exploration permits (less than 5 acres of disturbance) are required (through the BLM) to allow for drilling. More extensive disturbance required the application for a receipt of a “Plan of Operations” from the BLM.
In Nevada, Canagold is also required to post bonds with the State of Nevada to secure environmental and reclamation obligations on private land, with amount of such bonds reflecting the level of rehabilitation anticipated by the then proposed activities.
If Canagold is successful in the future at discovering a commercially viable mineral deposit on our property interests, then if and when Canagold commences any mineral production, Canagold will also need to comply with laws that regulate or propose to regulate our mining activities, including the management and handling of raw materials, disposal, storage and management of hazardous and solid waste, the safety of our employees and post-mining land reclamation.
Environmental Regulation
Canagold’s mineral projects are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. The development, operation, closure, and reclamation of mining projects in the United States requires numerous notifications, permits, authorizations, and public agency decisions. Compliance with environmental and related laws and regulations requires Canagold to obtain permits issued by regulatory agencies, and to file various reports and keep records of our operations. Certain of these permits require periodic renewal or review of their conditions and may be subject to a public review process during which opposition to Canagold’s proposed operations may be encountered. Canagold is currently operating under various permits for activities connected to mineral exploration, reclamation, and environmental considerations. Canagold’s policy is to conduct business in a way that safeguards public health and the environment. Canagold believes that its operations are conducted in material compliance with applicable laws and regulations.
Changes to current local, state or federal laws and regulations in the jurisdictions where Canagold operate could require additional capital expenditures and increased operating and/or reclamation costs. Although Canagold is unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the Registrant had interestseconomics of our projects.
Canagold Resources Ltd.
Form 20-F
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U.S. Federal Laws
The Comprehensive Environmental, Response, Compensation, and Liability Act (“CERCLA”), and comparable state statutes, impose strict, joint and several liability on current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous substances found at such sites. It is not uncommon for the government to file claims requiring cleanup actions, demands for reimbursement for government-incurred cleanup costs, or natural resource damages, or for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. The Federal Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes, govern the disposal of solid waste and hazardous waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. CERCLA, RCRA and comparable state statutes can impose liability for clean-up of sites and disposal of substances found on exploration, mining and processing sites long after activities on such sites have been completed.
The Clean Air Act (“CAA”), as amended, restricts the emission of air pollutants from many sources, including mining and processing activities. Any future mining operations by Canagold may produce air emissions, including fugitive dust and other air pollutants from stationary equipment, storage facilities and the use of mobile sources such as trucks and heavy construction equipment, which are subject to review, monitoring and/or control requirements under the CAA and state air quality laws. New facilities may be required to obtain permits before work can begin, and existing facilities may be required to incur capital costs in mineral properties.order to remain in compliance. In addition, permitting rules may impose limitations on our production levels or result in additional capital expenditures in order to comply with the rules.
The National Environmental Policy Act (“NEPA”) requires federal agencies to integrate environmental considerations into their decision-making processes by evaluating the environmental impacts of their proposed actions, including issuance of permits to mining facilities, and assessing alternatives to those actions. If a proposed action could significantly affect the environment, the agency must prepare a detailed statement known as an Environmental Impact Statement (“EIS”). The United States Environmental Protection Agency (“EPA”), other federal agencies, and any interested third parties will review and comment on the scoping of the EIS and the adequacy of and findings set forth in the draft and final EIS. This process can cause delays in issuance of required permits or result in changes to a project to mitigate its potential environmental impacts, which can in turn impact the economic feasibility of a proposed project.
The Clean Water Act (“CWA”), and comparable state statutes, impose restrictions and controls on the discharge of pollutants into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA regulates storm water mining facilities and requires a storm water discharge permit for certain activities. Such a permit requires the regulated facility to monitor and sample storm water run-off from its operations. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill material in wetlands and other waters of the United States unless authorized by an appropriately issued permit. The CWA and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges of pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any environmental damage caused by the release and for natural resource damages resulting from the release.
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The Safe Drinking Water Act (“SDWA”) and the Underground Injection Control (“UIC”) program promulgated thereunder, regulate the drilling and operation of subsurface injection wells. The EPA directly administers the UIC program in some states and in others the responsibility for the program has been delegated to the state. The program requires that a permit be obtained before drilling a disposal or injection well. Violation of these regulations and/or contamination of groundwater by mining related activities may result in fines, penalties, and remediation costs, among other sanctions and liabilities under the SWDA and state laws. In addition, third party claims may be filed by landowners and other parties claiming damages for alternative water supplies, property damages, and bodily injury.
Nevada
Other Nevada regulations govern operating and design standards for the construction and operation of any source of air contamination and landfill operations. Any changes to these laws and regulations could have an adverse impact on our financial performance and results of operations by, for example, requiring changes to operating constraints, technical criteria, fees or surety requirements.
The current and anticipated future operations of the Registrant,Canagold, including further exploration and/or production activities may require additional permits from governmental authorities. Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, mine safety and other matters. Unfavourable amendments to current laws, regulations and permits governing operations and activities of mineral exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the RegistrantCanagold and could cause increases in capital expenditures which could result in a cessation of operations by the Registrant.Canagold. To the best of its knowledge, the RegistrantCanagold is operating in compliance with applicable laws.
We cannot predict the impact of new or changed laws, regulations or permitting requirements, or changes in the ways that such laws, regulations or permitting requirements are enforced, interpreted or administered. Health, safety and environmental laws and regulations are complex, are subject to change and have become more stringent over time. It is possible that greater than anticipated health, safety and environmental capital expenditures or reclamation and closure expenditures will be required in the future. We expect continued government and public emphasis on environmental issues will result in increased future investments for environmental controls at our operations.
Canagold Resources Ltd.
Form 20-F
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Trends
The cumulative annual averageprices for gold prices per ounce decreased from $1,411 in 2013 to $1,266 in 2014 and then decreased to $1,160 in 2015 and closing at $1,243 on April 22, 2016. Gold prices did not achieve new highs in 2015 and 2014 relative to 2013. In 2013,for each of the previous three years were as follows:
|
| Annual Prices for Gold per ounce |
| |||||||||
|
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
Low |
| $ | 1,811 |
|
| $ | 1,626 |
|
| $ | 1,684 |
|
High |
| $ | 2,115 |
|
| $ | 2,043 |
|
| $ | 1,943 |
|
Cumulative Average |
| $ | 1,943 |
|
| $ | 1,803 |
|
| $ | 1,799 |
|
On average, the price of gold prices per ounce reached an annual highhas increased steadily over the past three years which suggests a trend of $1,694 in early January 2013, but only achieved annual highs of $1,385 in 2014 and $1,297 in 2015. The highimproving gold prices. On April 21, 2024, the closing price for 2016gold was $1,278 on March 4, 2016 which is lower than the annual highs in the prior three years.$2,391.
During the period from January 20131, 2021 to December 2015,31, 2023, the closing market price for Canarc's sharesCanagold’s decreased from CAD$0.130.81 to CAD$0.05 –0.21, with a decrease of 62%, and the3 year high of CAD$0.24 was0.85 in February 2013.January 2021. On April 22, 2016,21, 2024, the closing market share price was CAD$0.13. The lack0.24. Gold prices decreased in the first quarter of financing2021 but remained higher than comparable prior periods and remained flat within a trading range between $1,750 and $1,850 for the absenceremaining quarters in 2021. Canagold’s stock price reflected similar decreases but was also adversely affected by a dormant period as it developed and planned for mobilization and implementation of a joint venture partner to advance the drilling program for New Polaris gold project contributedin May 2021 due to the ongoing weaknessessignificant annual snow fall conditions in the marketarea which makes exploration considerably more prohibitive and expensive. Its stock price continued on a downtrend for the remainder of 2021 in spite of positive exploration results from its New Polaris project. The diverse effects of increasing gold prices and decreasing share price of Canarc's shares although the liquidity and market price ofCanagold continued into 2022 as Canagold progresses in its shares were heightened during the exclusivity period with Canford from September 2012 to early March 2013. In February 2015, the Company did enter into a Pre-Development and Earn-In Binding Agreement with PanTerra to advanceexploration activities for the New Polaris project but PanTerra declared force majeurewhich may result from market sentiment in August 2015the capital markets. In early 2023 Canagold’s stock price increased as the Company announced its 2022 drilling results and requested an extension until PanTerra received approval fromplans to move forward with the Dominican Republic government for importing New Polaris gold concentrate into the country for processing. The market price of Canarc's shares strengthened in the latter half of 2015 from the acquisition of the El Compas project and such strength continued into 2016 as the project progresses.project. Items 4.A and 4.D provide further details.
Risk factors in Item 3.D provide further details regarding competition and government regulations.
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4.C Organizational Structure
The RegistrantCanagold carries on its business in large part through its subsidiaries. The RegistrantCanagold has a number of direct or indirect wholly or majority owned subsidiaries of which the active subsidiaries are as follows:
Minera Oro Silver de Mexico SA de CV ("Minera Oro Silver") is a company duly incorporated under the laws of Mexico on November 16, 2006. The Registrant owns 100% of its issued and outstanding shares.
Oro Silver Prestadora SA de CV is a company duly incorporated under the laws of Mexico on December 3, 2015. The Registrant owns 100% of its issued and outstanding shares.
New Polaris Gold Mines Ltd. ("(“New Polaris"Polaris”) (formerly Golden Angus Mines Ltd. - name change effective April 21, 1997) is a corporation formed through the amalgamation of 2820684 Canada Inc. ("2820684"(“2820684”), a former wholly wholly‑owned subsidiary of the RegistrantCanagold incorporated under the Canada Business Corporation Act on May 13, 1992, and Suntac Minerals Inc. The RegistrantCanagold owns 100% of the issued and outstanding shares.
Canarc ResourceAIM U.S. Holdings Corp. is a corporation duly incorporated in the State of Nevada, USA, on March 14, 2017. Canagold owns 100% of its issued and outstanding shares.
Form 20-FAmerican Innovative Minerals, LLC (“AIM”) is a limited liability company existing pursuant to the laws of Nevada, USA, on January 20, 2011. Canagold owns 100% membership interest in AIM.
4.D Property, Plant and Equipment
Description of Properties
Summary of Mineral Properties
The Company currently has interests in four gold exploration properties located in British Columbia, Canada and the State of Nevada, including the New Polaris Project, the Windfall Hills Project, the Fondaway Canyon Project, and the Corral Canyon Project. The Company’s principal objective is advancing the New Polaris Project. The New Polaris Project is the only property that the Company considers material at this time.
All our properties are exploration stage properties and we are an exploration stage issuer.
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Property Summary Chart (as of December 31, 2015)2023):
Property Name | Location | Maximum % | Capitalized | Capitalized | Total |
| Location |
| Maximum % Interest Held |
|
| Capitalized Acquisition Expenditures (2) |
|
| Capitalized Exploration Expenditures (2) |
|
| Total Capitalized Expenditures (2) |
| ||||
New Polaris | BC, Canada | 100.00% | $3,851,000 | $5,556,000 | $9,407,000 |
| BC, Canada |
|
| 100.00 | % |
| $ | 3,927,000 |
|
| $ | 23,581,000 |
|
| $ | 27,508,000 |
|
El Compas | Zacatecas, Mexico | 100.00% | $1,126,000 | $183,000 | $1,309,000 | ||||||||||||||||||
Windfall Hills | BC, Canada | 100.00% | $339,000 | $356,000 | $695,000 |
| BC, Canada |
|
| 100.00 | % |
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
Corral Canyon |
| Nevada, USA |
|
| 100.00 | % |
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| |
| |
|
Net of recoveries and write-downs.
NOTE: All monetary figures are in terms of U.S.$ unless otherwise noted. See below for further details on each property.
Qualified Person
The disclosure in this annual report of scientific and technical information regarding the Company’s properties has been reviewed and approved by Garry Biles, P.Eng, President & Chief Operating Officer for the Company, who is the Qualified Person for the purposes of the foregoing technical disclosure.
Internal Controls
We have established internal controls relating to Quality Assurance and Quality Control (QA/QC) as necessary in relation to our exploration of our properties. These protocols include, but are not limited to:
1. Establish a database for project data that will contain accurate, precise, and defensible data from which resource, reserve, and feasibility studies can be made.
2. Conduct verification sampling of known mineralization.
3. Ensure that surface or drill sampling results in the highest quality sample possible. This would include down-hole surveying of drill holes as necessary.
4. Ensure the security and integrity of samples from point of origin to analytical laboratory.
5. Use industry-standard QA/QC for analytical work on sampling, including duplicate samples, inserting blanks and standards (samples with known assay values) into batches of samples being assayed, and checking the assay values from the original assay laboratory by submitting the same sample to a second laboratory.
Canagold Resources Ltd.
Form 20-F
54 |
Table of Contents |
Individual Mineral Property Disclosure
The following is a more detailed description of the mineral properties listed above in which the RegistrantCanagold has an interest.
Canarc Resource Corp.
Form 20-F
Material Mineral Projects
We do not currently have any proven and probable reserves under Industry Guide 7 standards, See "Cautionary Note to United States Investors Concerning Reserve and Resource Estimates" above. The Company's properties are currently in the exploratory stage. In order to determine if a commercially viable mineral deposit exists in any of such properties, further exploration work will need to be done and a final evaluation based upon the results obtained to conclude economic and legal feasibility. The following is a discussion of the Company's material mineral properties.
Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources. This section and certain related exhibits may use the terms "measured" and "indicated resources". We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. See "Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates" at the beginning of this annual report.
Cautionary Note to U.S. Investors concerning estimates of Inferred Resources. This section and certain related exhibits may use the term "inferred resources". We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally minable. See "Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates" at the beginning of this annual report.
New Polaris Gold Project British(British Columbia, CanadaCanada)
James Moors, P.Geo, who was ViceGarry Biles, P.Eng, President Exploration of the Registrant at that time, was& Chief Operating Officer for Canagold Resources Ltd., is the Qualified Person for the purposes of the foregoing technical disclosure on the New Polaris Gold Project. The information in the following summary on the New Polaris Gold Project has been derived in part from and is partially based on the assumptions, qualifications and procedures set out in the Technical Report titled "Resource Potential, New Polaris Project" (the "New Polaris Technical Report") dated March 14, 2007 and prepared by R.J. Morris, MSc, PGeo, of Moose Mountain Technical Services and G.H. Giroux, MASc, PEng, of Giroux Consultants Limited, who are independent Qualified Persons as defined by National Instrument 43-101 ("NI 43-101") and was prepared in compliance with NI 43-101, to the best of the Registrant's knowledge.
The following extracted from, or are accurate paraphrasing of, the executive summary, or other sections as indicated from the New Polaris Technical Report, the full copy of which is available online at www.sedar.com as filed on March 16, 2007. Defined terms and abbreviations used herein and not otherwise defined shall have the meanings ascribed to such terms in the New Polaris Technical Report.
Canarc Resource Corp.
Form 20-F
Extract of Selected Sections of the Summary from the New Polaris Technical Report
Summary
New Polaris (formerly Polaris-Taku)Polaris-Taku Mine) is an early Tertiary mesothermal gold mineralized body located in northwestern British Columbia about 100 kilometreskm south of Atlin, BC and 60 kilometreskm northeast of Juneau, Alaska.Alaska (Figure 1-1). The nearest roads in the area terminate twenty kilometers duekm south of Atlin, and 10 kilometres southeast of Juneau.approximately 100 km from the Project. Access at the present time is by aircraft. A short airstrip for light aircraft exists on the property. Shallow draft barges have been used in the past to access the site via the Taku River to transport bulk supplies and heavy equipment to site, as well as ship flotation concentrate from site.
The deposit was mined byNew Polaris project area lies on the eastern flank of the steep, rugged, Coast Range Mountains, with elevations ranging from the sea level to 2,600 metres. The climate is one of heavy rainfalls during the late summer and fall months, and comparatively heavy snowfall, interspersed with rain during the winter.
Canagold Resources Ltd.
Form 20-F
55 |
Table of Contents |
Operations will include year-round underground methods from 1938mining activities and onsite processing to 1942,produce doré, and from 1946seasonal barge shipping of supplies to early 1951, producingsite. Onsite support for the operations and management of a total of 740,000 tonnes of ore atcamp with fly-in/fly-out service to an average grade of 10.3g/t gold.onsite landing strip have been planned.
Figure 1‑1 Location Map
The property consists of 61 contiguous Crown-granted mineral claims and one modified grid claim covering 2,100 acres. All claims are 100% owned and held by New Polaris Gold Mines Ltd., a wholly owned subsidiary of Canarc Resource Corp.,CanagoldCangold Resources Ltd. subject to a 15% net profit interest held by Rembrandt Gold Mines Ltd. CanarcCanagoldCangold can reduce this net profit interest to a 10% net profit.profit by issuing 150,000 shares to Rembrandt.
Canagold Resources Ltd.
Form 20-F
56 |
Table of Contents |
The deposit is composed of three sets of veins (quartz-carbonate stringers in altered rock), the "AB"“A-B” veins are northwest striking and southwest dipping, the "Y"“Y” veins are north striking and dipping steeply east and finally the "C"“C” veins are east-west striking and dipping to the south to southeast at 65º to vertical. The "C"“C” veins appear to hook around to the north and south into the other two sets of veins so that their junctions form an arc. The gold is refractory and occurs dominantly in finely disseminated arsenopyrite grains that mineralize the altered wallrock and stockwork veins. The next most abundant mineral is pyrite, followed by minor stibnite and a trace of sphalerite. The zones of mineralization range from 15 to 250 metres in length and 0.3 to 14 metres in width.
CanarcThe deposit was mined by underground methods from 1938 to 1942, and from 1946 to early 1951, producing a total of 740,000 tonnes of ore at an average grade of 10.3 g/t gold.
CanagoldCanagold explored the "C"“C” vein system between 1988 and 1997, and carried out infill drilling in 2003 through 2006, to better define the continuity and grade of the vein systems.
An updated resource estimate was prepared by Giroux Consultants Ltd.Capping of the assays in each vein has been evaluated using ordinary kriging of 192 recent drillholescumulative probability plots (CPPs).
Property Description and 1,432 gold assay intervals constrained within four main vein segments as modeled in 3D by Canarc geologists. The total New Polaris database consists of 1,056 diamond drillholes with a total of 31,514 sample intervals.Location
The geologic continuity of the C vein has been well established through historic mining and diamond drilling. Grade continuity was quantified using a geostatistical method called the semivariogram, which measures distances (ranges) and directions of maximum continuity. The four principle veins in the semivariogram model produced ranges between 50 and 90 metres, both along strike and down plunge.
For this study, the classification for each resource block was a function of the semivariogram range. In general, blocks estimated using ¼ of the semivariogram range were classed as measured, blocks estimated using ½ of the semivariogram range were classed as indicated, and all other blocks estimated were classed as inferred.
The following tables list the undiluted resource estimate, including the "C" vein west (CWM) from the –90m elevation down, and the "C" vein east (CLOE and CHIE) from the –135m elevation down (the elevations, –90m in the west, and –135m in the east, represent the lower elevations of previous mine development and production. The resource potential above these elevations has been discounted in this study, but are listed in the History item, Section 8).
Canarc Resource Corp.
Form 20-F
Measured, undiluted resource
Cutoff grade, g/t Au | Tonnes > Cutoff (tonnes) | Grade > Cutoff Au (g/t) | Contained Metal (oz) |
2.00 | 390,000 | 9.48 | 119,000 |
4.00 | 330,000 | 10.62 | 113,000 |
6.00 | 271,000 | 11.89 | 104,000 |
8.00 | 203,000 | 13.54 | 88,000 |
Indicated, undiluted resource
Cutoff grade, g/t Au | Tonnes > Cutoff (tonnes) | Grade > Cutoff Au (g/t) | Contained Metal (oz) |
2.00 | 1,280,000 | 10.97 | 451,000 |
4.00 | 1,180,000 | 11.65 | 442,000 |
6.00 | 1,017,000 | 12.71 | 416,000 |
8.00 | 806,000 | 14.22 | 368,000 |
Measured + Indicated, undiluted resource
Cutoff grade, g/t Au | Tonnes > Cutoff (tonnes) | Grade > Cutoff Au (g/t) | Contained Metal (oz) |
2.00 | 1,670,000 | 10.62 | 570,000 |
4.00 | 1,510,000 | 11.42 | 555,000 |
6.00 | 1,288,000 | 12.54 | 519,000 |
8.00 | 1,009,000 | 14.08 | 457,000 |
Inferred, undiluted resource
Cutoff grade, g/t Au | Tonnes > Cutoff (tonnes) | Grade > Cutoff Au (g/t) | Contained Metal (oz) |
2.00 | 2,060,000 | 10.52 | 697,000 |
4.00 | 1,925,000 | 11.03 | 683,000 |
6.00 | 1,628,000 | 12.15 | 636,000 |
8.00 | 1,340,000 | 13.27 | 571,000 |
Canarc Resource Corp.
Form 20-F
The deposit represents an important gold resource and follow-up work should include test mining and infill drilling.
Property Description and Location
"The New Polaris (formerly the Polaris-Taku mine) property consistingconsists of a group of 61 contiguous crown grants, and one modified grid claim totaling, 1,196 ha (2,956 acres) located 96 km (60 miles) south of Atlin, BC and 64 km (40 miles) northeast of Juneau, Alaska. Located at approximately 133º37'W37’W Longitude and 58º42'N42’N Latitude, the deposit lies in close proximity to the "Tulsequah Chief" property of Redcorp on the eastern flank of the Tulsequah River Valley (Figure 6-1)1‑1).
Property Stage
The property is an exploration stage property. There are no known mineral resources or reserves on the property under S-K 1300 standards at this time.
Property Claims
The claims are 100% owned and held by New Polaris Gold Mines Ltd., a wholly owned subsidiary of Canarc Resource Corp.CanagoldCanagold Resources Ltd. (Canagold), and subject to a 15% net profit interest held by Rembrandt Gold Mines Ltd. (Rembrandt), which CanarcCanagold has the right to reduce to 10%. The by issuing 150,000 shares to Rembrandt. Table 4 1 summarizes the claims and the locations are shown on Figure 6-2 while Table 6-1 summarizes the claims shown on Figure 6-2. With the exception of4 1. Apart from the W.W.1 claim, the claims are crown granted and are kept in good standing through annual tax payments. The W.W.1 is a modified grid claim. The claim has sufficient work filed on it to keep it in good standing until February 4, 2015.2020. The crown granted claims were legally surveyed in 1937. The mineralized areas are shown on Figure 6-34 2 and 9-2,Figure 7 2, which shows the geology of the property on the mineral showings.
The Polaris No. 1, Silver King No. 1, Silver King No. 5, Black Diamond, Lloyd and Ant Fraction crown grants include the surface rights. Surface rights for the remainder of the property lie with the Crown.
The location ofCrown, including the known mineralization relativeareas covered by the Co-Disposal Facility (CDF) and access road to the outside boundaryCDF, and will need to be obtained from the Province of the property is shown on Figure 6-3.British Columbia.
Mining of the AB Vein system and to a lesser extent the Y and C veins was carried out during the 1930s to early 1950s. Much of the former infrastructure has been reclaimed. A $200,000$249,000 reclamation bond is in place and it is the writer'swriter’s opinion that this adequately covers the cost of reclaiming the original mill site and infrastructure. At this timeCurrently there is no legal or regulatory requirement to remove or treat the tailings on the property. It is recommended that sampling of the tailings and water be carried out to determine if there acid water or contaminants draining from the tailings and mine workings. As well, sampling of water down stream from the site to determine if drainage form the tailings and waste rock is affecting the water quality of Whitewater Creek or the Tulsequah River. If there is contamination of the waters down stream from the waste dumps and tailings a mitigation plan will be required. The cost of the mitigation will depend upon the level of contamination of the water down stream.
Prior to commencing further exploration on the property, a Notice of Work is required to be submitted to the Mining and Minerals Department of the BC Ministry of Energy and Mines. Work can only commence once approval has been received."
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
57 |
Table of Contents |
Location Map
Table 1 - LIST OF CLAIMS4-1 List of Claims
Claim Name |
| Lot No. |
|
| Folio # |
|
| Claim Name |
| Lot No. |
|
| Folio # |
| ||||
Polaris No.1 |
|
| 6109 |
|
|
| 4472 |
|
| Snow |
|
| 3497 |
|
|
| 4545 |
|
Polaris No.2 |
|
| 6140 |
|
|
| 5223 |
|
| Snow #2 |
|
| 3495 |
|
|
| 5088 |
|
Polaris No.3 |
|
| 6141 |
|
|
| 5223 |
|
| Snow #3 |
|
| 3494 |
|
|
| 5495 |
|
Polaris No.4 |
|
| 3498 |
|
|
| 4545 |
|
| Snow #4 |
|
| 3499 |
|
|
| 5495 |
|
Polaris No.5 |
|
| 6143 |
|
|
| 5223 |
|
| Snow #5 |
|
| 6105 |
|
|
| 4472 |
|
Polaris No.6 |
|
| 6144 |
|
|
| 5223 |
|
| Snow #8 |
|
| 6107 |
|
|
| 4472 |
|
Polaris No.7 |
|
| 6145 |
|
|
| 5223 |
|
| Snow #7 |
|
| 3500 |
|
|
| 4472 |
|
Polaris No.8 |
|
| 6146 |
|
|
| 5223 |
|
| Snow #6 |
|
| 6106 |
|
|
| 4472 |
|
Polaris No.9 |
|
| 6147 |
|
|
| 5223 |
|
| Snow #9 |
|
| 6108 |
|
|
| 4472 |
|
Polaris No.10 |
|
| 6148 |
|
|
| 5290 |
|
| Black Diamond |
|
| 3491 |
|
|
| 4472 |
|
Polaris No.11 |
|
| 6149 |
|
|
| 5290 |
|
| Black Diamond No.3 |
|
| 6030 |
|
|
| 4944 |
|
Polaris No.12 Fr |
|
| 6150 |
|
|
| 5290 |
|
| Blue Bird No.1 |
|
| 5708 |
|
|
| 4545 |
|
Polaris No.13 Fr |
|
| 6151 |
|
|
| 5290 |
|
| Blue Bird No.2 |
|
| 5707 |
|
|
| 4545 |
|
Polaris No.14 |
|
| 6152 |
|
|
| 5290 |
|
| Lloyd |
|
| 6035 |
|
|
| 5010 |
|
Polaris No.15 |
|
| 6153 |
|
|
| 5290 |
|
| Lloyd No.2 |
|
| 6036 |
|
|
| 5010 |
|
Silver King No.1 |
|
| 5489 |
|
|
| 4804 |
|
| Rand No.1 |
|
| 6039 |
|
|
| 5010 |
|
Silver King No.2 |
|
| 5490 |
|
|
| 4804 |
|
| Rand No.2 |
|
| 6040 |
|
|
| 5010 |
|
Silver King No.3 |
|
| 5493 |
|
|
| 4804 |
|
| Minto No.2 |
|
| 6033 |
|
|
| 4944 |
|
Silver King No.4 |
|
| 5494 |
|
|
| 4804 |
|
| Minto No.3 |
|
| 6034 |
|
|
| 4944 |
|
Silver King No.5 |
|
| 5491 |
|
|
| 4804 |
|
| Jumbo No.5 |
|
| 6031 |
|
|
| 4944 |
|
Silver King No.6 |
|
| 5492 |
|
|
| 4804 |
|
| Ready Bullion |
|
| 6032 |
|
|
| 4944 |
|
Silver King No.7 |
|
| 5495 |
|
|
| 4804 |
|
| Roy |
|
| 6042 |
|
|
| 5088 |
|
Silver King No.8 |
|
| 5717 |
|
|
| 4545 |
|
| Frances |
|
| 6041 |
|
|
| 5010 |
|
Sliver Queen No 1 |
|
| 6026 |
|
|
| 4545 |
|
| Eve Fraction |
|
| 6170 |
|
|
| 5495 |
|
Sliver Queen No 2 |
|
| 6027 |
|
|
| 4545 |
|
| Eve No.1 Fraction |
|
| 6171 |
|
|
| 5495 |
|
Sliver Queen No 3 |
|
| 6028 |
|
|
| 4944 |
|
| P.T. Fraction |
|
| 3493 |
|
|
| 5495 |
|
Sliver Queen No 4 |
|
| 6029 |
|
|
| 4944 |
|
| Ant Fraction |
|
| 3492 |
|
|
| 5088 |
|
Silver Strand |
|
| 6037 |
|
|
| 5010 |
|
| Atlin Fraction |
|
| 3496 |
|
|
| 5088 |
|
Silver Strand No.2 |
|
| 6038 |
|
|
| 5010 |
|
| Powder Fraction |
|
| 6043 |
|
|
| 5088 |
|
F.M Fraction |
|
| 6044 |
|
|
| 5088 |
|
| Jay Fraction |
|
| 6045 |
|
|
| 5088 |
|
Par Fraction |
|
| 6154 |
|
|
| 5290 |
|
|
|
|
|
|
|
|
|
|
|
Claim Name | Lot No. | Folio No. |
| Claim Name | Lot No. | Folio No. |
|
|
|
|
|
|
|
Polaris No. 1
| 6109
| 4472
|
| Snow
| 3497
| 4545
|
Polaris No. 2
| 6140
| 5223
|
| Snow No. 2
| 3495
| 5088
|
Polaris No. 3
| 6141
| 5223
|
| Snow No. 3
| 3494
| 5495
|
Polaris No. 4
| 3498
| 4545
|
| Snow No. 4
| 3499
| 5495
|
Polaris No. 5
| 6143
| 5223
|
| Snow No. 5
| 6105
| 4472
|
Polaris No. 6
| 6144
| 5223
|
| Snow No. 8
| 6107
| 4472
|
Polaris No. 7
| 6145
| 5223
|
| Snow No. 7
| 3500
| 4472
|
Polaris No. 8
| 6146
| 5223
|
| Snow No. 6
| 6106
| 4472
|
Polaris No. 9
| 6147
| 5223
|
| Snow No. 9
| 6108
| 4472
|
Polaris No. 10
| 6148
| 5290
|
| Black Diamond
| 3491
| 4472
|
Polaris No. 11
| 6149
| 5290
|
| Black Diamond No. 3
| 6030
| 4944
|
Polaris No. 12 Fr
| 6150
| 5290
|
| Blue Bird No. 1
| 5708
| 4545
|
Polaris No. 13 Fr
| 6151
| 5290
|
| Blue Bird No. 2
| 5707
| 4545
|
Polaris No. 14
| 6152
| 5290
|
| Lloyd
| 6035
| 5010
|
Polaris No. 15
| 6153
| 5290
|
| Lloyd No. 2
| 6036
| 5010
|
Silver King No. 1
| 5489
| 4804
|
| Rand No. 1
| 6039
| 5010
|
Silver King No. 2
| 5490
| 4804
|
| Rand No. 2
| 6040
| 5010
|
Silver King No. 3
| 5493
| 4804
|
| Minto No. 2
| 6033
| 4944
|
Silver King No. 4
| 5494
| 4804
|
| Minto No. 3
| 6034
| 4944
|
Silver King No. 5
| 5491
| 4804
|
| Jumbo No. 5
| 6031
| 4944
|
Silver King No. 6
| 5492
| 4804
|
| Ready Bullion
| 6032
| 4944
|
Silver King No. 7
| 5495
| 4804
|
| Roy
| 6042
| 5088
|
Silver King No. 8
| 5717
| 4545
|
| Frances
| 6041
| 5010
|
Silver Queen No. 1
| 6026
| 4545
|
| Eve Fraction
| 6170
| 5495
|
Silver Queen No. 2
| 6027
| 4545
|
| Eve No. 1 Fraction
| 6171
| 5495
|
Silver Queen No. 3
| 6028
| 4944
|
| P.T. Fraction
| 3493
| 5495
|
Silver Queen No. 4
| 6029
| 4944
|
| Ant Fraction
| 3492
| 5088
|
Silver Strand No. 1
| 6037
| 5010
|
| Atlin Fraction
| 3496
| 5088
|
Silver Strand No. 2
| 6038
| 5010
|
| Powder Fraction
| 6043
| 5088
|
F.M. Fraction
| 6044
| 5088
|
| Jay Fraction
| 6045
| 5088
|
Par Fraction | 6154 | 5290 |
|
|
|
|
Canarc Resource Corp.W.W.1 Tenure No. 353540 Issue date February 4, 1997. Expiry date: February 4, 2020.
Canagold Resources Ltd.
Form 20-F
58 |
Table of Contents |
Accessibility, Climate, Locate Resources, Infrastructure and Physiography
"The New Polaris project area lies on the eastern flank of the steep, rugged, Coast Range Mountains. Relief is extremeMountains, with elevations ranging from the sea level to 2,600 metres.
Extensive recent glaciation was the dominant factor in topographic development. The Taku and Tulsequah Rivers are the most prominent topographic feature offeatures: broad valleyvalleys bounded by steep mountains. Numerous tributary streams flow from valleys filled with glaciers. The majorityMost of the glaciers are fingers branching from the extensive Muir ice cap, lying to the northwest of the Taku River. The Tulsequah glacier, which terminates in the Tulsequah valley about 16 kilometreskm north of the New Polaris mine site, is one of the largest glaciers in the immediate area. It forms a dam causing a large lake in a tributary valley that breaks through the ice barrier (Jakülhlaup) during the spring thaw every year, flooding the Tulsequah and Taku valleys below for three to five days.
Small aircraft providesprovide site access from the nearest population centers in Atlin, BC, 100 km north of the Property, or Juneau, Alaska, 60 km southwest of the Property. A short airstrip for light aircraft exists on the property. The nearest roads in the area terminate 20 km due south of Atlin and 10 km southeast of Juneau. Ocean-goingShallow draft barges have been used in the past to access the site when heaviervia the Taku River to transport bulk supplies and heavy equipment is required. Redcorp Ventures Ltd. (Redcorp) has applied to complete a road to their project site, across the river and to the north, which could change the infrastructure to theas well as ship flotation concentration from site. The property can be operated year round, however access would be difficult during break up and freeze up.year-round.
The climate is one of heavy rainfalls during the late summer and fall months, and comparatively heavy snowfall, interspersed with rain during the winter. The annual precipitation is approximately 1.5 metresm of which 0.7 metresm occurs as rainfall. The snow seldom accumulates to a depth greater than 1.5 metresm on the level. Winter temperatures are not severe and rarely fall below –15ºC. Summer temperatures, in July, average 10ºC with daytime temperatures reaching the high 20's20’s on occasion. The vegetation is typical of northern temperature rain forest, consisting primarily of fir, hemlock, spruce and cedar forest on the hillsides and aspen and alder groves in the river valley."
HistoryThere is sufficient land available within the mineral tenure held by Canagold for installations such as the process plant and related mine infrastructure. Surface rights for the areas covered by the CDF, and access road to the CDF, lie with the Crown and will need to be obtained from the Province of British Columbia.
Montgomery Consultants were commissioned to conduct a Geostatistical Study of the Geological Resource for the Polaris-Taku Deposit in 1991. G.H. Giroux carried out this review and calculated a total resource of 2,225,000 tons grading 0.433 opt gold based on a geostatistical approach using a cut-off grade of 0.25 opt gold. These reserves were divided into 333,000 tons at 0.437 opt gold (probable) and 1,892,000 tons at 0.432 opt gold (possible). The estimate discounted much of the reserves around the old workings and did not include dilution and minimum mining width provisions. These estimates were based on both old and new drilling and extended the resource base down to roughly 1200 feet BSL. This estimate does not meet the definition requirements of NI 43 – 101 for a resource. The Author has not done sufficient work to classify them as current reserves or resources and is not treating them as current. This estimate, therefore, should not be relied upon.Canagold Resources Ltd.
Watts, Griffis, and McQuat were contracted to review the previous reserves in August 1992. Their review incorporated the residual reserves within the mine workings, as estimated by Beacon Hill in 1989, into their overall estimate of a total (diluted) mineral resource of 1,600,000 tons at 0.46 opt gold. Their estimations were based upon a minimum mining width of 5 feet or 15 % dilution and a cut-off grade of 0.25 opt gold. The improvement in grade stems from the inclusion of new deeper holes that extend the known mineralization to a depth of 1200 feet BSL and exclusion of lower grade material previously included in the Montgomery estimate. This estimate does not meet the definition requirements of NI 43 – 101 for a resource. The Author has not done sufficient work to classify them as current reserves or resources and is not treating them as current. This estimate, therefore, should not be relied upon.Form 20-F
Canarc Resource Corp.
Form 20-F
59 |
Table of Contents |
Geological Setting
Giroux was further contracted to provide resource updates throughout 1992 and in February 1995 he re-estimate the resources for the newly drilled portions of the "C" Zone. Recent drilling has also confirmed the existence of a new "North" Zone, which, although it appears to be low grade (0. 18 opt gold) has exhibited possible significant widths in the order of 22 feet. Giroux has included estimations for this zone, which for purposes of this review have been excluded due to grade. The results of his re-estimate show that the "C" Vein discovered just prior to mine closure represents a significant new addition to the resource base. He has estimated a total of 85,700 tons grading 0.426 opt gold (probable) and 595,000 tons grading 0.425 opt gold (possible) for this zone below the 450 Level (elev. 313 ft BSL) and 1000 feet BSL.
Most of this resource lies above 800 feet BSL and within 200 feet of the existing shaft bottom. The total resources estimated by Giroux to date are summarized on Table 4.2. His estimates were in situ based on a 0.25 opt gold cut-off and did not include dilution provisions as shown below and considered to be relevant as they are based on a significant amount of data and were independently calculated.
In order to summarize the variety of estimations identified above; Godfrey Walton did the following: Beacon Hill estimation of residual reserves within and around the workings was totaled. To this total, the geostatistical resource estimation of Giroux was added after applying a general dilution factor of 25% at zero grade to Giroux's figures for the " Y " Zone and 15% at zero grade for the "AB" and "C" Zones. The in-situ resource base is presently estimated as 582,910 tons at 0.359 opt gold (Probable), and 2,614,210 tons at 0.363 opt gold (Possible) including appropriate dilution factors. The dilution factors were estimated based on vein characteristics. The "Y" veins are described as being high grade, but narrow which makes them prone to high dilution from over-break during mining as well as over mining. The "AB" veins in-situ grade, as estimated by Giroux, already contains internal dilution from a parallel dyke. To this total, Walton added overall additional dilution of 15 %, which, he felt, was appropriate, as the "C" vein would not experience much dilution since it is generally thought to be fairly thick. This estimate does not meet the definition requirements of NI 43 – 101 for a resource. The Author has not done sufficient work to classify them as current reserves or resources and is not treating them as current. This estimate, therefore, should not be relied upon.
In the Author's opinion, the residual reserves in and around the workings included in the Beacon Hill estimation are unlikely to contribute significantly to any new mining operation. For the most part it is in remnants scattered amongst the old stopes and will be difficult to access and develop."
Geological Setting
"The New Polaris Mine lies on the western edge of a large body of Upper Triassic Stuhini Group volcanic rocks, which has been intruded by a Jurassic-Cretaceous granodiorite body north of the mine. Older Triassic volcanic rocks and earlier sediments underlie the Stuhini volcanic rocks. The granodiorite is part of the Coast Plutonic Complex (Figure 9-1).7-1)
The structural trend in the area is northwest-southeast, paralleling major faults and folds to the east and intrusive alignment to the west. The Triassic volcanic rocks and older sedimentary rocks have been folded and sheared with the Stuhini Group rocks being deformed into broad to isoclinal, doubly plunging symmetrical folds with large amplitudes."
"CanarcCanagold has carried out extensive mapping of the Polaris-Taku property since the early1990's.early 1990’s. The work has been done by a number ofseveral employees and contractors and is shown in Figure 9-2.7-2. The gold deposit is hosted within an assemblage of mafic (basalt and andesite units) volcanic rocks altered to greenschist metamorphic facies. The orientation of these units is inconclusive because there are no marker beds in the sequence. It is thought that the units are steeply dipping (70º to 80º) to the north based on the orientation of the limestone/basalt interface at the southern portion of the property.
A serpentinite unit is located to the northeast, which was identified in recent (1996/97) drilling and underground mapping. This unit appears to form the eastern extent of the mineralization. The age relationship is unclear, but it is assumed that the serpentinite is a later stage feature possibly associated with tectonism in the area.
Canarc Resource Corp.
Form 20-F
The 'vein'‘vein’ zones are structurally controlled shear zones and are typified by silicification and carbonatization cross cutting actual quartz-carbonate veins. These zones have sharp contacts with the wall rock and form anastamosing ribbons and dilations. These zones have been deformed several times, which makes original textures difficult to determine. The zones are generally tabular in geometry forming en-echelon sheets within the more competent host lithologies.
All of the strata within the property have been subjected to compression, rotation and subsequent extension. The plunge of folds appears to be variable though generally shallow. Small-scale isoclinal folds strike north-northwesterly and plunge moderately to the north. Numerous faults are found on the property, the more significant of which are discussed later.below.
The possible extension of the Llewellyn fault, termed the South Llewellyn fault, continues south from the Chief Cross fault along mine grid coordinate 4400 East. Slightly north of Whitewater Creek it is offset to the west by an east-west fault, the 101 fault, to continue in a more southeast orientation of the opposite side of Whitewater Creek. This northwest-southeast orientation structure was named the Limestone Fault due to its bedding parallel attitude within a discontinuous limestone/marble horizon. It marks the southwest boundary of the "mine wedge"“mine wedge”: the wedge shapedwedge-shaped package of rock within which all past production took place. The northern boundary of the "mine wedge"“mine wedge” is further defined as mentioned above by the Whitewater Creek Schist Zone, a zone of schistose chlorite-amphibolite-serpentinite less than 300 feet100 m thick. A complex network of brittle faults is also found within this zone.
Canagold Resources Ltd.
Form 20-F
60 |
Table of Contents |
Three major faults, Numbers 1 and 5, and an unnamed fault, lie within the mine wedge. The No.1 and No.5 faults strike northwest-southeast, dipping approximately 45º to the northeast, and are sub-parallel to the unnamed fault, which dips steeply to the southwest. The No.1 fault has reverse displacement of up to 100 feet30 m while the displacement of the No.5 fault is poorly defined. The southwest dipping, unnamed fault showed no displacement, as it apparently parallels the A-B vein system. The mined outmined-out areas indicate the wedge shape, the predominant orientations and continuity of the zones, and the overall plunge of the system to the southeast. An early interpretation of the structure showed that various veins appear to meet and form "junction arcs"“junction arcs” where both thickness and grade improve.
Mineralization
Mineralization of the New Polaris deposit bears strong similarities to many Archean lode gold deposits such as the arsenical gold camp of Red Lake, Ontario where the gold-bearing arsenopyrite is disseminated in the altered rock and in quartz-carbonate stringers.
The vein mineralization consists of arsenopyrite, pyrite, stibnite and gold in a gangue of quartz and carbonates. The sulphide content is up to 10% with arsenopyrite the most abundant and pyrite the next important. Stibnite is fairly abundant in some specimens but overall comprises less than one-tenth of 1% of the vein matter. Alteration minerals include fuchsite, silica, pyrite, sericite, carbonate and albite.
In general, the zones of mineralization ranging from 15 to 250 m in length with widths up to 14 m appear to have been deposited only on the larger and stronger shears. Their walls pinch and swell showing considerable irregularity both vertically and horizontally. Gold values in the veins have remarkable continuity and uniformity and are usually directly associated with the amount of arsenopyrite present. The prominent strike directions are north-south and northwest-southeast, which is interpreted to be within a major shear zone. Up to 80% of the mine production was from “structural knots” or what is now known as “C” zones. In detail the “C” zones are arcuate structures. Figure 7-3 shows a 3D view of the “C” vein system.
The vein mineralization has well marked contacts with the wall rock. The transition from mineralized to non-mineralized rock occurs over a few centimeters. The mineralization consists of at least three stages of quartz veining. The initial stage of quartz-ankerite introduced into the structure was accompanied by a pervasive hydrothermal alteration of the immediately surrounding wall rock. Arsenopyrite, pyrite and lesser stibnite were deposited with the alteration. Later stages of quartz-ankerite veining are barren and have the effect of diluting the gold grades in the structure. The sulphide minerals are very fine-grained and disseminated in both the wall rock and early quartz and ankerite veins. Free gold is extremely rare and to the end of 2005 had not been recognized in core samples. The majority of the gold occurs in arsenopyrite and to a lesser extent in pyrite and stibnite. Because there is no visible gold and the host sulphides are very fine-grained and disseminated there is little nugget effect and gold values even over short intervals rarely exceed 1 oz/ton.
Canagold Resources Ltd.
Form 20-F
61 |
Table of Contents |
Mineralization was observed by Morris during the site visit both in drill core and underground. The description of the regional setting, local geology, and mineralization appears applicable to the New Polaris project and is sufficiently well understood to support the estimation of Mineral Resources.
Deposit Types
The New Polaris deposit is classified as a mesothermal lode-gold deposit Hodgson, (1993)(Hodgson, 1993).
"In general, it is quartz-vein-related, with associated carbonatized wall rocks. The deposits are characterized by a high gold/silver ratio, great vertical continuity with little vertical zonation, and a broadly syn-tectonic time of emplacement. They are commonly associated with pyrite, arsenopyrite, tourmaline and molybdenite. Mineralization may occur in any rock type and ranges in form from veins, to veinlet systems, to disseminated replacement zones. Most mineralized zones are hosted by and always related to steeply dipping reverse- or oblique-slip brittle-fracture to ductile-shear zones."
"The exploration target on the New Polaris project is orogenic lode gold deposits also known as Mesothermal vein deposits. Numerous examples of this type of deposit are known through outthroughout the work including the CambellCampbell Red Lake deposits in Ontario and the Bralorne deposit in British Columbia. Past exploration studies have demonstrated that the New Polaris vein systems have all of the attributes of the orogenic vein gold deposit including, but not limited to association with major structural break, quartz-carbonate vein association, low-sulphide assemblage of pyrite and arsenopyrite, chloritic and sericitically altered wall rocks and persistent gold mineralization over a vertical distance of nearly 1 km."
The deposit type and model isare considered by the QP as appropriate for a Mesothermal lode-gold deposit.
Canarc Resource Corp.Drilling
Form 20-FDiamond drill programs were carried out on the New Polaris project when the project was reactivated in 1988 until 2006. Initially, the drilling focused on the down dip and along strike extensions of the Y veins. This work showed that the Y veins, while good grade were narrow and less continuous than the AB vein system. It also showed that the Y vein system is comprised of about 12 separate veins all of which are narrow and of short strike length.
Canagold Resources Ltd.
Form 20-F
62 |
Table of Contents |
Mineralization
"Mineralization of the New Polaris deposit bears strong similarities to many Archean lode gold deposits such as the arsenical gold camp of Red Lake, Ontario where the gold- bearing arsenopyrite is disseminated in the altered rock and in quartz-carbonate stringers.
The vein mineralization consists of arsenopyrite, pyrite, stibnite and gold in a gangue of quartz and carbonates. The sulphide content is up to 10% with arsenopyrite the most abundant and pyrite the next important. Stibnite is fairly abundant in some specimens but overall comprises less then one-tenth of 1% of the vein matter. Alteration minerals include fuchsite, silica, pyrite, sericite, carbonate and albite.
In general,1990, drilling shifted to the zonesarea beneath the lowest most C vein stopes. This drilling found that the vein system continued to depth and that gold grades in the 0.30 to 0.45 oz/ton range over an average true thickness of mineralization ranging from 153 m were present. From 1991 to 250 metres in length1993 most of the drillholes tested the C veins with widths up to 14 metres appear to have been deposited onlyfewer drilled on the larger and stronger shears. Their walls pinch and swell showing considerable irregularity both vertically and horizontally. Gold values in the veins have remarkable continuity and uniformity, and are usually directly associated with the amount of arsenopyrite present. The prominent strike directions are north-south and northwest-southeast, which is interpreted to be within a major shear zone. Up to 80% of the mine production was from "structural knots" or what is now known as "C" zones. In detail the "C" zones are arcuate structures. Figure 11-1 shows a 3D view of the "C"Y vein system.
TheIn 1994, the North Zone was discovered and was tested with a total of 30 drillholes during the 1994 and 1995 period. Although thicknesses of the North Zone are up to 6.7 m, the grades are relatively low compared to the C vein mineralization has well marked contacts(less than 0.2 oz/ton). This combined with the wall rock. The transition from mineralizedlimited extent due to nonmineralized rock occurs over a few centimeters. The mineralization consistsstructural termination of at least 3 stages of quartz veining. The initial stage of quartz-ankerite introduced into the structure was accompaniedzone by a pervasive hydrothermal alterationfault resulted in a decision to terminate exploration of the immediately surrounding wall rock. Arsenopyrite, pyrite and lesser stibnite were deposited withNorth Zone.
Encouraging drill results from the alteration. Later stages of quartz-ankerite veining are barren and have the effect of diluting the gold grades in the structure. The sulphide minerals are very fine- grained and disseminated in both the wall rock and early quartz and ankerite veins. Free gold is extremely rare and to the end of 2005 had not been recognized in core samples. The majority of the gold occurs in arsenopyriteC veins and to a lesser extent from the Y vein system led to further drilling on these two vein systems. Drilling on the C vein showed the veins to be open to depth and to have gold grades that ranged from 0.2 to 0.6 oz/ton over true thicknesses of 3 m. The increased interest in pyritethe C vein system was due to its greater continuity and stibnite. Because there is no visible goldthickness compared to the Y vein. The narrow width and lesser continuity of the host sulphides are very fine-grained and disseminated there is little nugget effect and gold values even over short intervals rarely exceed 1 opt."Y vein system made it a secondary exploration target.
Mineralization was observed by Morris duringIn 1996 and 1997 the site visit both in drill coreY, C and AB veins were explored from underground. The descriptionplan was to closely test the upper portions of the Y, C and AB veins in order to allow calculation of a resource that might form the basis for resumption of mining. The results of the underground drilling program were mixed. The underground workings were for the most part driven along the vein structures with few crosscuts from which holes could be drilled to cut the down dip and along strike extension of the veins. As a result, except for those holes that tested the area immediately below the workings, most cut the veins at shallow angles. The very shallow angles that in places approach parallel to the vein make the use of these intersections inappropriate for a resource calculation. Despite the number of holes drilled during 1996 and 1997, the work did little to expand the extent of the mineralization appears applicablein the AB, C or Y vein systems. The work did confirm that the mineralized shoots in the lower most stopes on the Y and C veins were open to the New Polaris project.depth.
[EndDrilling restarted on the property in 2003 with the objective of Extract]
The economic analysis contained intesting the PEA is considered preliminary in nature and there is no certainty that the preliminary economic assessment will be realized. No inferred mineral resources form partextent of the PEA economic evaluation and no mineral reserves for the PEA have been established. Mineral resources are not mineral reserves and have not demonstrated economic viability. There is no certainty that economic forecasts outlined in the PEA will be realized. The PEA and the Mineral Resource (as presented above) may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors.
In April 2011, Canarc completed a preliminary economic assessment of the New Polaris property. The report which is dated April 10, 2011 is titled "New Polaris Project - Preliminary Assessment Update". J.H.Gray, P.Eng., R.J. Morris, M.Sc., P.Geo. and G.H. Giroux, MASc.,C vein mineralization. Godfrey Walton, P. Eng. were the Qualified Persons for that Report. The Qualified Person ("QP") pursuant to NI 43-101 for the updated preliminary economic assessment report is Jim Gray, P. Eng.
Efforts had commenced on the application for an underground development and exploration programGeo., at the New Polaris project in 2011 which was halted in February 2012, due to the lackrequest of financial resources.
Canarc Resource Corp.
Form 20-F
In July 2012 Canarc significantly reduced the estimated cost of the proposed work program to completeCanagold, undertook a feasibility study for commercial developmentreview of the New Polaris project from CAD$26 million to approximately CAD$9 million. Canarc previously planned a CAD$26 million work program which included underground mine developmentand recommended additional drilling in order to test the continuity of the “C” vein zone mineralization at depth below the lower most mine workings. To this end, limited drill programs were carried in 2003 to 2005 to target the “C” vein extensions below the existing mine workings.
Canagold Resources Ltd.
Form 20-F
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Table of Contents |
The results of the 2003 to 2005 drilling of the C vein system confirmed the continuity of gold mineralization and the vein structure between the earlier drilled holes. As can be seen in the sections below, drill results show the C vein system to be an arc-like structure oriented east-west in the west swinging to a northeastern strike in the east. The change in strike occurs across the No.1 fault. To the east of the No.1 fault, the vein splays into two or more branches. The dip of the vein system is to the south and southeast and has an average dip of about 50º, although east of the No.1 fault the vein appears to flatten and thicken in a simoid-like feature. The exact nature of the apparent flattening of the vein’s dip is not clear and requires additional drilling to be resolved.
The thickness of the C veins varies from 0.30 m to a maximum of 15.2 m. The thicker parts of the vein occur to the east of the No. 1 fault where the dip of the vein flattens due to an apparent folding of the vein.
Depending upon the angle of intersection, the true thickness of the core length of the vein material ranges from 100% to about 70%. The average core length thickness of the intersections is approximately 4.5 m and the average grade is 14.4 g/t (0.4 oz/ton) gold. The estimated average true thickness of the vein is 3.0 m.
All of the holes in this period were drilled from surface and intersected a similar geologic sequence. From the collar, the holes penetrated from 15.2 m to 79.2 m of overburden followed by inter-layered ash and lapilli tuff, volcanic wacke, and foliated andesite. The C vein system crosscuts the strike of the volcanic and volcaniclastic rocks at steep angles.
In 2021, the Company completed its 47-hole, 24,000 meter (m) infill drilling program designed to upgrade the Inferred Resources of the CWM vein system to an Indicated Resource category for inclusion in a future feasibility study. The infill drill holes range in depth from 300 to 650 m and are designed to provide greater density of drill intercepts (20 – 25 m spacing) in areas of Inferred Resources between 150 and 600 m below surface. The drill program was extended with an additional 6,000 m and 7 drill holes completed by the end of February 2022. The infill drill holes intercepted gold grades over widths throughout the CWM vein system that support the current resource at depth as predicted by the geological model and defined in the Preliminary Economic Assessment. Additionally, the infill drill program has defined new areas of significant gold mineralization such as the C-9 and C-10 veins that have potential to add resource to the deposit. By mid July 2022, assay results were received for all 54 holes of the drill program.
In August 2022, the Company mobilized an 8,000 m drilling program targeting the shallower high-grade Y-vein system which consists of two parallel, steeply dipping veins striking north–south and located just north of the C-West Main vein. This target provides an opportunity to define high grade resources at a shallow depth that could be accessed early in the mine life. High grade intercepts from previous drill holes in this area included 30.6 grams per tonne (“gpt”) gold (“Au”) over 3.2 m, 13.0 gpt Au over 6.8 m and 22.7 gpt Au over 8.0 m. The drilling program was designed to upgrade the Y-vein resources from Inferred to Indicated category for inclusion in the feasibility study and to explore this vein system for extensions at depth. By late January 2023 assay results were received for all 25 drill holes of the Y vein drill program.
Canagold Resources Ltd.
Form 20-F
64 |
Table of Contents |
In October 2022, the Company retained Ausenco Engineering Canada Inc. to complete a feasibility study for the New Polaris gold project. UnderKey objectives for the revised program,feasibility study include:
· | Resource model update (to include nearly 40,000 metres of additional drilling completed) |
· | Mining reserves calculation and detailed underground mine plan development |
· | Engineer and design all surface infrastructure and processing facilities to include among others: flotation, bio- oxidation, leaching and gold doré bar production |
· | Engineer and design surface dry stack tailings and waste rock disposal facility (with no long-term adverse impact on the environment) |
· | Evaluate all renewable power alternatives that may be feasible for New Polaris |
· | Complete detailed capital and operating cost estimates, including a detailed financial model for the life of the project The feasibility study is expected to conclude in 2024. |
In October 2022, the underground mine development work will be deferredCompany signed the Hà Khustìyxh / “Our Way” agreement that establishes the framework for a cooperative and mutually respectful working relationship with the Taku River Tlingit First Nation (“TRTFN”) to support Canagold’s exploration and advancement activities at New Polaris while ensuring to minimize any adverse impacts of mining activity on the rights and interests of the TRTFN. The agreement also lays the foundation for negotiation of future long-term agreements as the project progresses through its permitting, construction and production phases.
In March 2023, the Company submitted its Initial Project Description (IPD) and Engagement Plan submission to the post-feasibility mine development program. Instead, Canarc planned to carry out an additional 15,000 meters of infill core drilling in approximately 35 holes in order to provide sufficient measured and indicated resources for feasibility. About CAD$4 millionB.C. Environmental Assessment Office. The Company’s IPD submission formally initiates the early engagement phase of the CAD$9provincial assessment process. In the IPD, the Company provides an overview and detailed description of the Company’s plans to develop, operate, and eventually decommission the New Polaris Gold Project.
In May 2023, the resource model was updated to:
· | 89% increase in the Indicated category contained ounces of gold compared to the 2019 preliminary economic assessment resource due to a very successful 2021-22 infill drill program. |
· | 23% increase to the overall resource tonnage due to the additional veins defined by the 2021-22 infill drilling that were integrated into the new geological model |
· | Gold grade improvement by 8% in the indicated category to 11.61 gpt Au, up from 10.8 gpt Au in the 2019 preliminary economic assessment due to the refined geological model constrained by the additional drilling. |
· | The updated 2023 MRE provides the Indicated category resource required to underpin the feasibility study announced on October 11, 2022. |
· | Underground mineral resource estimate 2.97 million tonnes (Mt)@ 11.6 grams per tonne gold (gpt Au) for 1.11 million ounces (Moz) contained gold indicated and 0.93 Mt @ 8.93 gpt Au for 0.27 Moz contained gold inferred. |
Canagold Resources Ltd.
Form 20-F
65 |
Table of Contents |
Further details of the 2021 and 2022 drilling programs are provided in the Company’s news releases:
· | News release dated July 6, 2021 and titled, “Canagold Announces Initial 2021 Drill Results From New Polaris Project Including 24.2 gpt Gold over 6.6 m and 15.8 gpt Gold Over 13.0 m”; |
· | News release dated July 19, 2021 and titled, “Canagold Announces Additional Results From New Polaris Drill Program Including 14.3 gpt Au Over 2.7 m and 15.3 gpt Au Over 1.7 m”; |
· | News release dated July 27, 2021 and titled, “Canagold Drills 30.8 gpt Gold Over 3.9 Meters at New Polaris Project”; |
· | News release dated September 22, 2021 and titled, “Canagold Intersects 17.1 gpt Au Over 8.4 m in Hanging-Wall C10 Vein and 25.7 gpt Au Over 2.1 m in C West Main Vein at New Polaris, BC”; |
· | News release dated November 10, 2021 and titled, “Canagold Intersects 11.1 gpt Au over 17.8 m and 11 gpt over 8.9 m in 2 Separate Hanging-Wall Veins Adjacent to C West Main Vein at New Polaris Gold Project, BC”; |
· | News release dated November 10, 2021 and titled, “Canagold Intersects 11.1 gpt Au over 17.8 m and 11 gpt over 8.9 m in 2 Separate Hanging-Wall Veins Adjacent to C West Main Vein at New Polaris Gold Project, BC”; |
· | News release dated November 30, 2021 and titled, “Summary of High-Grade Drill Intercepts in the C-9 and C-10 Veins at the New Polaris Project in BC”; |
· | News release dated January 26, 2022 and titled, “Canagold Announces High-Grade Drill Intercepts Containing Visible Gold from the C-West Main Zone at New Polaris Project, B”; |
· | News release dated February 24, 2022 and titled, “Canagold Continues to Intersect High-Grade Gold Mineralization in C-West Main Vein at New Polaris Project, BC”; |
· | News release dated March 2, 2022 and titled, “Canagold Drilling Intersects Deep Extension of C-West Main Vein, and Discovers New High-Grade Parallel C-Vein at New Polaris Project, BC”; |
· | News release dated March 21, 2022 and titled, “Canagold Announces Additional High-Grade Gold Drill Intercepts from the C-10 and the C-West Main Veins at New Polaris Project, BC”; |
· | News release dated April 21, 2022 and titled, “Canagold Continues to Intersect High-Grade Gold Mineralization in C-West Main Vein Including 42.5 gpt Au over 2 m at New Polaris Project, BC”. |
· | News release dated June 14, 2022 and titled, “Canagold Drilling Intersects New Vein Grading 7.54 gpt Gold over 18.6 m Length at New Polaris Project, BC, Additional High-Grade Mineralization Outlined in C-West Main Vein”; |
· | News release dated June 28, 2022 and titled, “Canagold Drilling Reports Two Highest Grade Drill Results of 54 Hole Program Including 13.6 gpt Gold over 25.1 m Length and 34.4 gpt over 6.6 m Length at New Polaris Project, BC”; |
· | News release dated July 12, 2022 and titled, “Canagold Summarizes Results of 30,000 m Infill Drill Program at New Polaris Project, BC, Highlights Include 13.6 gpt Over 25.1 m”; |
· | News release dated August 18, 2022 and titled, “Canagold Mobilizes Drill Crews and Restarts Resource Expansion Drilling at the New Polaris Project”; |
· | News release dated October 11, 2022 and titled, “Canagold Retains Ausenco Engineering to Complete Feasibility Study on New Polaris Project”; |
· | News release dated October 27, 2022 and titled, “Canagold Drills 22.1 Grams per Tonne Gold over 4.3 Metres in Y-Vein System at New Polaris”; |
· | News release dated January 25, 2023 and titled, “Canagold Announces Agreement with Taku River Tlingit First Nation for Flagship New Polaris Project”; and |
· | News release dated February 6, 2023 and titled, “Canagold Confirms Near Surface High-Grade Gold, Including 53.8 gpt Au over 2.78 m and 18.0 gpt Au over 5.64 m in Y-Vein System at New Polaris”. |
· | News release dated May 16, 2023 and titled, “Canagold Increases Indicated Gold Resource by 89% in Updated Mineral Resource Estimate for New Polaris Gold Project, BC”. |
Mineral Processing and Metallurgical Testing
Gold in the New Polaris deposit is refractory and occurs dominantly in finely disseminated arsenopyrite grains. A 150-ton per day flotation mill was operated from 1937 to 1942 and again from 1946 to 1951 producing 231,604 oz of gold from a head grade of approximately 10 g/t.
Recent metallurgical test work has yielded positive results with a process flowsheet using flotation, bio-oxidation and CIL leaching.
The preliminary flowsheet for the New Polaris project is given below in Figure 13-8.
Test work has demonstrated that both BIOX and POX are potential pre-oxidation process options for New Polaris. BIOX has been selected by Canagold as the base case treatment route due to the lower capital cost and ease of operation compared to a POX circuit.
Various process stage recoveries are listed in Table 13‑1.
Table 13‑1 New Polaris Projected Metallurgical Recoveries
Area | Recovery (%) | |||
Sulphide Flotation | 94.9 | |||
BIOX and CIL Leach | 95.6 | |||
Carbon Loss | 0.1 | |||
EW | 99.9 |
An overall gold recovery for the process flowsheet in Figure 13-8 is estimated at 90.5%.
Canagold Resources Ltd.
Form 20-F
66 |
Table of Contents |
In September 2020, Canagold was granted a Multi Year Area Based Notice of Work Mineral and Coal Exploration Activities and Reclamation Permit by the BC Ministry of Energy, Mines and Petroleum Resources to conduct exploration work on the property. Site preparation and refurbishment was completed to facilitate environmental baseline study and infill drilling to advance to a feasibility study. In late 2020, Canagold had initiated twelve months of continuous environmental baseline studies which are required for an Environmental Assessment Certificate application and which is a critical first step in advancing the project through the BC mine permitting process. The environmental baseline study continued in 2021 and into 2022.
In 2022, the Company expended $5.3 million revisedon exploration expenditures for its New Polaris. The drilling program accounts for $2 million and continuous monthly environmental baseline studies for $557,000. Given the remote location of New Polaris, another significant exploration related cost wasis transportation ($541,000). The crew and equipment are brought into the camp by air transportation. Labour cost related to drillingdeveloping the New Polaris camp and supporting the balance was relatedexploration programs accounted to permitting$503,000 in 2022.
In 2023, the Company spent $4.5 million on advancing New Polaris, with most of the spending being attributable to feasibility studies ($2.4 million) and engineering. The proposed work programenvironmental studies ($586,000).
2023 Project development and plans
In October 2022, the Company retained Ausenco Engineering Canada Inc. to complete a feasibility study was subject to securing a partner for the project and/or financing.
In late September 2012, Canarc granted Canford a 120-day period of exclusivity to complete its due diligence and to execute an option agreement to earn up to a 51% interest in the New Polaris gold project in return for up to a CAD$30 million investment in exploration and development of the property. Canarc was to be the manager of the project during the option period. Pursuant to an agreement to form a SMAP dated February 1, 2013, Canarc granted Canford a further 60-day period of exclusivity on the date on which Canarc was to close an acquisition opportunity subject to the execution of a formal SMAP agreement on or before March 1, 2013. However, in March 2013, no formal SMAP agreement was executed, and Canford was not able to commit or arrange financingproject. Key objectives for the proposed option and joint venture to develop the New Polaris gold project.feasibility study include:
On February 24, 2015, Canarc entered into a Pre-Development and Earn-In Binding Agreement with PanTerra. PanTerra has a 30-month option to earn a 50% interest in the New Polaris project by spending a total of CAD$10 million in three stages of predevelopment activities including metallurgical test work, drilling, detailed mine planning, tailings dam design, environmental permitting, and completion of a definitive feasibility study. In Stage One, PanTerra shall spend CAD$500,000 for laboratory production of flotation concentrate followed by test work through the Glencore Technology Albion pilot plant, and for comprehensive technical and economic review and commencement of environmental baseline data collection required for permitting. In Stage Two, PanTerra can earn a 20% interest in the New Polaris project by spending CAD$3.5 million in predevelopment expenditures which would include 10,000 m drilling program and engineering and completion of field data required for environmental permitting. In Stage Three, PanTerra can earn an additional 30% interest in the project for a total interest of 50% by spending CAD$6 million in predevelopment expenditures which would primarily focus on the completion of a definitive feasibility study and would include further 10,000 m of infill drilling, additional metallurgical test work, and preliminary engineering. PanTerra can increase its interest in the New Polaris project to 51% by purchasing 1% from Canarc within six months of completion of the definitive feasibility study at a cost of 1% of the net present value established by the definitive feasibility study using a 10% discount rate.
Canarc received the CAD$500,000 for Stage One in 2015. As at December 31, 2015, funds of US$69,000 remain for Stage One expenditures as specified pursuant to the agreement between Canarc and PanTerra.
In August 2015, PanTerra informed Canarc that it will not be able to commit to further expenditures to commence Stage Two exploration and permitting work on Canarc's New Polaris project until PanTerra receives the approval from the Dominican Republic government for importing New Polaris gold concentrate into the country for processing and PanTerra requested a 12 month extension of the Earn-In Agreement. PanTerra declared a force majeure event under the terms of the Earn-In Agreement. Canarc does not agree with PanTerra's position. Canarc and PanTerra continue to be in communication regarding this matter, and an extension or a resolution has not yet been negotiated.
Canarc Resource Corp.
Form 20-F
El Compas Project, Zacatecas, Mexico
On October 8, 2015, Canarc and Marlin Gold entered into a Share Purchase Agreement, whereby Canarc acquired 100% of the shares of Oro Silver, which indirectly owns 100% of the El Compas gold-silver project located in Zacatecas, Mexico, in exchange for 19 million common shares of Canarc. Canarc's acquisition of Oro Silver closed on October 30, 2015. The terms of the agreement include the following:
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detailed underground mine plan development | ||
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gold doré bar production | ||
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The closing of the Share Purchase Agreement resulted in Marlin Gold becoming an Insider of Canarc by virtue of having more than 10% (ie. 10.79%) interest in Canarc as at the closing date of October 30, 2015.
The El Compas property is a fully permitted gold silver project located in Zacatecas, Mexico, and is comprised of 24 concessions totaling 3,900 hectares.
Canarc Resource Corp.
Form 20-F
In January 2016, Canarc signed a definitive agreement with the Zacatecas state government to lease and operate the permitted 500 tonne per day La Plata ore processing plant located in the city of Zacatecas, Mexico. Highlights of the lease agreement include the following:
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New Polaris | ||
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Canarc will pay a monthly lease payment of MXP 136,000;
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Grace period of 6 months to allow time for plant refurbishing;
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Power and water are available for plant operations;
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Plant capacity is 500 tonnes per day with the possibility to expand;
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Permitted tailings facilities has a current capacity for approximately 1 million tonnes;
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Certain plant refurbishment costs will be reimbursed to Canarc by lease payment offsets; and
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Canarc will reserve up to 100 tonnes per day for toll mining of ore produced by local small miners.
Canarc Resource Corp.The feasibility study is expected to conclude in 2024.
In March 2023, the Company filed its Initial Project Description (IPD) and Engagement Plan submission to the B.C. Environmental Assessment Office on behalf of the New Polaris Project (“Project”), located in northwest British Columbia, Canada. The Company’s IPD submission formally initiates the Early Engagement phase of the provincial assessment process. The IPD provides an overview and detailed description of the Company’s plans to develop, operate, and eventually decommission the New Polaris Gold Project.
Canagold Resources Ltd.
Form 20-F
67 |
Table of Contents |
In March 2016, Canarc2023, the Company entered into an indicative term sheet for upa collaborative engagement agreement with the Taku River Tlingit First Nation (“TRTFN”) to $10 millionenshrine its commitment to the spirit of reconciliation and sustainability in debt financing by way of a gold prepaid facility to develop the El Compas gold-silver project subject to a 60 day due diligence period.
The El Compas property consists of 24, semi-contiguous mineral concessions covering approximately 3,943 Ha. All concessions are held by Minero Oro Silver. Tableeconomic development in respect of the mineral concessions is set out below:
Canarc Resource Corp.
Form 20-F
All minerals found in Mexico areCompany’s New Polaris project. The agreement establishes the property of Mexico and may be exploited by private entities under concessions granted by the Mexican government. The process was defined under the Mexican Mining Law of 1992 and excludes petroleum and nuclear resources from consideration. The Mining Law also requires that non-Mexican entities must either establish a Mexican corporation, or partner with a Mexican entity.
Under current Mexican mining law, amended April 29, 2005, the Director General of Mines ("DGM") grants mineral concessionsframework for a periodlong-term cooperative and mutually respectful working relationship between the parties in support of 50 year terms with maintenance obligations. There is no distinction between mineralCanagold’s New Polaris exploration and exploitation concessions. As partadvancement activities while undertaking to minimize any adverse impacts on the rights and interests of the requirements to maintainTRTFN. In addition, this initial accord creates a concession in good standing, bi-annual fees must be paid, and a report must be submitted to the DGM each May. This report covers work conducted over the previous year on the concession.
The semi-annual fee is calculated on a per-hectare basis. For concessions granted prior to January 2006, the fee is updated based on the amountplatform for future negotiation of time that has passed since granting of the concession and the Mexican Consumer Price Index. For concessions granted after January 2006, a per-hectare escalating fee applies. Many of the concessions that comprise the El Compas property, including the El Compas concession, were granted prior to January 2006.
There are two royalties on the El Compas project properties. The Altiplano group of concessions include La Virgen 2, La Casi Virgen 3 Fracc A, La Casi Virgen 3 Fracc B, La Casi Virgen 6, Don Luis del Oro and Don Luis del Oro. These concessions have a three percent NSR royalty on them payable to the previous owners including Exploraciones del Altiplano. The remaining concessions have 1.5 % NSR royalty payable to Marlin Gold. This includes the El Compas and El Orito concessions on which the present Mineral Resource estimate and PEA is located on.
The El Compas project is located in Zacatecas state, Mexico. It is located on the southern outskirts of Zacatecas city, Mexico. The property is centred about UTM coordinates 747,200E, and 2,515,500N, (WGS84 Zone 13 North) at a mean elevation of about 2,430 metres. Its location map isagreements as follows:
In October 2015, Canarc commissioned Mining Plus Canada Consulting Ltd. ("Mining Plus") to complete a NI 43-101 resource report and preliminary economic assessment for the El Compas project to determine the project's potential viability, which was completed in January 2016. Their technical report entitled "NI 43-101 Technical Report for the El Compas Project" (the "El Compas Technical Report") was authored by J Collins PGeo, N Schunke PEng, S Butler PGeo, L Bascome MAIG and F Wright PEng, who are independent Qualified Person as defined by NI 43-101, dated January 19, 2016, and was prepared in compliance with NI 43-101. The information in the following section has been derived from and is based on the assumptions, qualifications and procedures set out in the El Compas Technical Report.
Canarc Resource Corp.
Form 20-F
The following extract is selected from certain sections of the executive summary from the El Compas Technical Report, the full copy of which is available online atwww.sedar.com as filed on February 5, 2016. Defined terms and abbreviations used herein and not otherwise defined shall have the meanings ascribed to such terms in the El Compas Technical Report.
Extract of Selected Sections of the Summary from the El Compas Technical Report
Property Description and Location
The El Compas property is 3,943 hectares in size and covers approximately 2.4km of strike length over the El Compas vein system and 1.2km of strike length over the El Orito vein system. The 24 mineral concessions are located on the southern outskirts of Zacatecas city, Zacatecas, Mexico. The concessions are 100% owned by Oro Silver, now a subsidiary of Canarc. The La Plata processing facility is located north of Zacatecas city and owned by the state government of Zacatecas with a Letter of Intent to lease it to Oro Silver.
There is a surface access contract in place between Oro Silver and Maricela Bañuelos Arellano for a 53 hectare plot covering some of the key ground at El Compas, specifically on the Don Luis del Oro and La Virgen concessions with a small block kept out of the agreement for a surface quarry. The term of the surface access contract expires in 2024 and is adequate for surface facilities and underground portal access.
The quarry which is on the south side of the project continues to operate regularly and trucks are used to transport supplies to and from this projectprogresses through the nearby suburb.
Oro Silver has acquired also 12 hectares of land for installation of the surface support facilities required for theits permitting, construction and operation of the project.
The El Compas and El Orito Mineral Resources are located near the centre of the property, entirely within the El Compas, El Orito and Don Luis Del Oro concessions. There is a surface access agreement for part of the project to allow development of the mine portal and required surface support.
Accessibility, Climate, Local Resources, Infrastructure and Physiography
El Compas is accessed by an all-weather gravel road, one kilometre from the paved roads in the southern part of the city of Zacatecas. Land use in the area is open range cattle ranching, building stone quarries and some recently constructed nearby housing. Zacatecas city is the second largest city in the state after Fresnillo with a population of 138,000 (2005, http: //www.en.wikipedia.org/wiki/Zacatecas). Highways 45 and 49 connect the city to other major centres in Mexico by road, and an international airport (at 2,140 metres elevation) connects Zacatecas with Mexico City and the U.S. by daily flights. The Central Mexican railroad connects Zacatecas to Mexico City and the USA at Juarez as well as international ports. The El Compas property is generally gently rolling to flat, just outside the city, and all parts are accessible. The La Plata processing facility is located on the northern side of Zacatecas and connected via the road network of Zacatecas to the El Compas project site. Roads are well maintained gravel for the final few kilometres to the mine and processing facility sites from Zacatecas.
The climate and vegetation in Zacatecas is typical of the high altitude physiographic region known as the Mesa Central, with a summer rainy season from May to September averaging 15.6°C, and dry winters from December to February, with an average temperature of 10°C. Total annual precipitation is about 430 millimetres, and the average annual temperature is about 13.4°C (http://www.zacatecas.climatemps.com/). The elevation of the city of Zacatecas in the project area lies at about 2,430 metres.
Canarc Resource Corp.
Form 20-F
Work can continue year round in the Zacatecas region.
Zacatecas the state capital along with the adjoining City of Guadalupe, are modern and fully serviced cities. Electrical power, water, sewage treatment and telecommunications are available on or near to the property. Many local resources, such as experienced labour, operational services, petroleum products, equipment and materials are available in the city.
The region can provide a wide range of manpower skilled in all aspects of mining, processing and administration.
There is access to power via power line and transformer installations at the existing mine access area. The line capacity allows for 480V usage with conversion to 120V. This power supply is currently available for basic dewatering of the underground workings and will also be required for ventilation.
The processing plant with a tailings facility is existing, permitted, road accessible and located near the mine on the other side of Zacatecas from the El Compas mine site. There is grid electricity at the processing facility. The processing facility has an agreement with Minera Capstone to provide water for processing. The existing road network around Zacatecas will be used for moving material from the mine to the processing facility and supplying both the mine and processing facility with material and staff access.
Other infrastructure includes:
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Canarc Resource Corp.
Form 20-F
The physiography of the region is dominated by basin-and-range type topography, with broad north-north-east trending valleys separated by narrow mountain ranges. Zacatecas city, and the property, occurs in the Sierras de Zacatecas. The Graben de Calera lies to the west of the property. Topographic relief on the property is low, gentle and vegetation is dominantly cactus, maguey, sage and grass.
Mexico is the largest silver producer in the world, due significantly to production from Zacatecas state, at Fresnillo and Somberete. Zacatecas city was founded in 1546, after the discovery of silver vein systems by Juan de Tolosa. The first record of mine development in the El Orito district was in 1570 with intermittent development up to the Mexican Revolution in 1910. Modern exploration work is from the mid 1990's until 2011 and includes multiple diamond drilling campaigns. From 2002 to 2006, Contracuna mined approximately 55,000 tonnes of ore from El Compas and processed it at a processing facility north of Zacatecas.
History
The modern history of exploration at El Compas has references to work by Boliden before 2005 but no specific date. Minera Hochschild de Mexico S.A. de C.V. (MHM) completed work in 2005 that included surface mapping, chip sampling and almost 6,000 metres of diamond drilling. Oro Silver started working at El Compas in the fall of 2006. Oro Silver completed multiple drill programs to evaluate the El Compas property. Work also included a survey and chip sampling of the underground workings and ASTER satellite imagery analysis. Three programs of diamond drilling with some reverse circulation drilling were completed by Oro Silver between 2007 and 2011, for a total of 17,686m of drilling.
Deposit Type
Low sulfidation style epithermal veins occur in the El Orito Zone at El Compas and are unique in the Zacatecas district. They are gold-rich, silver-poor (Ag/Au of about 6.7:1 to 20:1), with very low total sulfide and base metal content. Epithermal veins with a low sulfidation style occur in both the andesite and phyllite of the Chilitos Formation, and overlying felsic volcanic rocks of the La Virgen Formation.
Sample Preparation, Analysis and Security
The sample preparation procedures for chip and drill core sampling are consistent with industry standards and adequate for a study of this detail.
Environmental Studies, Permitting and Social or Community Impacts
Oro Silver has obtained Environmental permits from the Mexican government for the development of an underground mine at El Compas and the construction of a 750 tpd leach plant and tailings facility at the El Compas property and has acquired 12 hectares of land on which to construct these facilities. Canarc has signed a Letter of Intent with the Zacatecas government for rental of the idle 500 tpd La Plata processing facility that is located on the northern outskirts of Zacatecas for processing the El Compas potentially economic material. The government processing facility is a fully permitted processing plant and tailings facility as a 500 tpd crushing, grinding and flotation operation and will need to be modified to add a gravity concentrator, a concentrate leaching circuit and a cyanide destruction circuit.
The new El Compas portal is located on the southern outskirts of Zacatecas, approximately 0.7 kilometres from existing residences. However, the closest underground workings to existing residences is approximately 125m (lateral offset between the northern most El Orito upper level and the nearest residence). To minimise impacts of mining operations on the community, the portal and operations area chosen are facing away from the city and are inside an existing rock quarry. Other than the 12 hectares which Canarc owns, the surface rights to other areas of the claims are held by a number of different local families with whom Minera Oro Silver has signed access agreements in place.
The area around Zacatecas has many historic mining properties and operating mines from pre-colonial days and onward with an abundance of mine workings.
Canarc Resource Corp.
Form 20-F
Mineralization and Mineral Resources
The El Compas Mineral Resource has been reported by mineralised vein system, above defined gold cut-off grades and by resource category, which is presented in the table below. The Resource has been depleted for historic mining and therefore is considered in-situ.phases.
Table 1-2 El Compas Mineral Resource Inventory
Mineral Resource Estimate for the El Compas Deposit | ||||||
Vein | Cut off Au g/t | Tonnes | Au g/t | Ag g/t | Au Oz | Ag Oz |
Indicated | ||||||
El Compas | 2.0 | 507,000 | 6.7 | 66.7 | 110,000 | 1,087,000 |
El Orito | 2.0 | 45,000 | 4.3 | 60.5 | 6,000 | 88,000 |
Total | 552,000 | 6.5 | 66.2 | 116,000 | 1,175,000 | |
Inferred | ||||||
El Compas | 2.0 | 129,000 | 3.4 | 58.0 | 14,000 | 240,000 |
El Orito | 2.0 | 292,000 | 4.5 | 60.8 | 42,000 | 571,000 |
Total | 421,000 | 4.2 | 59.9 | 57,000 | 812,000 |
Notes:
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[End of extract]
Canarc Resource Corp.
Form 20-F
Other Mineral Projects
The following projects are considered not material by the RegistrantCanagold, do not have any Guide 7S-K 1300 compliant mineral reserves and are not compliant with NI 43-101 unless otherwise stated.or resources. There is currently no ongoing or proposed exploration or development programs for the properties set out below, other than as specifically stated.
Tay-LP Property, Yukon, CanadaPurchase Agreement with American Innovative Minerals, LLC
On August 24, 2009, CanarcIn 2017, Canagold closed a Membership Interest Purchase Agreement (the “Membership Agreement”) with American Innovative Minerals, LLC (“AIM”) and securityholders of AIM (“the AIM Securityholders”) to acquire either a direct or indirect 100% legal and beneficial interests in mineral resource properties located in Nevada, Idaho and Utah (USA) for a purchase price of $2 million in cash and honouring pre-existing NSRs. Certain of the mineral properties are subject to royalties.
Canagold Resources Ltd.
Form 20-F
68 |
Table of Contents |
AIM owns 8 gold properties in Nevada, one gold property in Idaho, and has two royalty interests on other properties. The following properties are not considered material by Canagold:
· | Clear Trunk property is located in Pershing and Humboldt Counties, Nevada on 4,500 acres of fee mineral and unpatented claims in the Sonoma Range, south of Winnemucca and near the Goldbanks gold deposit. The property contains gold-bearing epithermal quartz veins, mesothermal quartz veins with high-grade gold and copper-gold intrusion-hosted mineralization. |
· | Bull Run property is located in Elko County, Nevada on two large patented claim groups of 500 acres near the Jerritt Canyon gold district. |
· | Jarbidge property is located in Elko County, Nevada on 8 patented claims along the east end of major gold veins in the Jarbidge mining district. |
· | Lightning Tree property is located in Lemhi County, Idaho on 4 unpatented claims near the Musgrove gold deposit. |
· | Silver King property is located in Humboldt County, Nevada on 4 patented claims in the Iron Point mining district. Previous exploration focused on low grade gold values but the property was never been explored for silver. |
· | A&T property is located in Humboldt Co., Nevada on 2 patented claims on Winnemucca Mountain. The property contains gold-bearing veins in altered shale. |
· | Eimis property is located in Elko County, Nevada on one 20 acre patented claim adjacent to the Coleman Canyon gold deposit controlled by Arnevut Resources Nevada LLC (“Arnevut”). Gold anomalies extend onto Eimis property and Arnevut holds a 20 year lease to explore on the property since 2010. |
· | Silver Peak property is located in Esmeralda County, Nevada on 3 patented (57 acres) and 3 unpatented mining claims covering 50 acres. The property is adjacent to the Mineral Ridge mine controlled by Scorpio Gold Corporation. The 3 unpatented mining claims are under agreement with Legacy Mining to pay $1,000 at commencement of mining and an 8% NSR. |
· | Tucker property is located in Madison County, Montana on 3 unpatented claims near the historic McKee Mine of the Washington mining district. The property is under agreement with Legacy Mining to pay $1,000 at commencement of mining and an 8% NSR. |
Silver King (Nevada, USA)
The Silver King property is located in Humboldt County, Nevada on 4 patented claims near Golconda Summit. Previous exploration focused on low grade gold values but the property was never been explored for silver.
In October 2018, Canagold entered into a property option agreement for its Silver King property with Ross River Minerals Inc. and Ross River Gold Ltd. (collectively, "Ross River")Brownstone whereby Brownstone has an option to acquire up toearn a 100% undivided interest by paying $240,000 in cash over a 10 year period with early option exercise payment of $120,000. Canagold will retain a 2% NSR of which a 1% NSR can be acquired by Brownstone for $1 million.
Lightning Tree (Idaho, USA)
Lightning Tree property is located in Lemhi County, Idaho, on 4 unpatented claims near the Musgrove gold deposit.
In early July 2020, Canagold entered into a non-binding letter of intent for its Lightning Tree property located in Lemhi County, Idaho, with Ophir Gold Corp. (formerly, MinKap Resources Inc.) (“Ophir”), whereby Ophir shall acquire a 100% undivided interest in the Tay-LP goldproperty. On September 10, 2020, a definitive mineral property by payingpurchase agreement was executed. Over a three year period, Ophir shall pay to Canagold a total of CAD$1 million137,500 in cash and/orover a three year period and issue 2.5 million common shares and spending CAD$1.52.5 million on explorationwarrants over a three-yeartwo year period, which can occur in two stages. In the first stage, Canarc could have earned a 51% interest by paying CAD$150,000 in cash and spending CAD$900,000 on exploration over a two-year period. In the second stage, Canarc could have earned an additional 49%, thereby totalling 100% interest, by paying CAD$850,000 in cash or shares at Canarc's discretion and spending CAD$600,000 on exploration by the third year. If Canarc did not proceed with the second stage, then a joint venture would have been formed. Canarc was to pay to the optionors a gold bonus equal to CAD$1 per ounce of gold for all proven and probable gold reserves and measured and indicated gold resources to a maximum of 1 million oz gold. The property option agreement was subject to net smelter returns ("NSR") totalling 3% which could be reduced to 1.5% by payments totalling $1.95 million. Commencing on or before October 31, 2009 and continuing on or before October 31 of each subsequent year until the property was put into commercial production, Canarc was to pay to the NSR holders an annual advance NSR royalty payments totalling CAD$25,000 or that number of common shares of Canarc and which was to be deducted from NSR obligations. The NSR of 3% was subject to maximum total payments based on one million payable ounces of gold being mined by commercial production but could have been reduced to 500,000 payable ounces of gold if the NSR was reduced to 1.5%.
On September 3, 2011, Canarc and Ross River amended the property option agreement by increasing the cash payment of CAD$50,000 to CAD$75,000 due by October 31, 2011 (paid), deferring theshall incur aggregate exploration expenditures of CAD$500,000 from October 31, 2011at least $4 million over a three year period. If Ophir fails to October 31, 2012 andincur the exploration expendituresexpenditure, the property reverts back to Canagold. Canagold will retain a 2.5% NSR of which a 1% NSR can be acquired by Ophir for CAD$600,000 from October 31, 20121 million. If Ophir fails to October 31, 2013, and includingfile a cash payment of CAD$25,000 due by October 31, 2012.NI 43-101 compliant resource on the Lightning Tree property within three years, the property will revert back to Canagold.
In October 2012, Canarc amended the property option agreement by extending the due date for the cash payment of CAD$25,000 from October 31, 2012 to December 15, 2012 (paid); exploration expenditures of CAD$500,000 for a 51% interest which were due on October 31, 2012 were increased to CAD$700,000 and its due date extended to December 15, 2013; the due date of October 31, 2013 for both the payment of CAD$850,000 in cash or that number in common shares and exploration expenditures of CAD$600,000 for the remaining 49% interest was extended to December 15, 2014. Also the due date for annual advance NSR royalty payments of CAD$25,000 or that number of common shares was extended from October 31, 2012 to December 15, 2012 and for each subsequent year thereafter.Windfall Hills properties (British Columbia, Canada)
In late March 2010, Canarc entered intoThe Windfall Hills gold project is located 65 km south of Burns Lake, readily accessible by gravel logging roads and a property option agreement with Cap-Ex Ventures Ltd. ("Cap-Ex") whereby Cap-Ex can acquire 50% of Canarc's interestlake ferry crossing in the Tay-LP gold property,summer-time, or by paying CAD$100,000charter aircraft year-round. The project consists of which CAD$25,000 have been paid, issuing 200,000 common sharesthe Atna properties, comprised of which 100,000 common shares have been received, incurring exploration expenditures2 mineral claims totalling 959 hectares and the Dunn properties, comprised of CAD$675,000, and maintaining Canarc's underlying option agreement in good standing until October 2011. Cap-Ex terminated the property option agreement with Canarc in March 2011.8 mineral claims totalling 2820 hectares.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
69 |
Canarc completed a Phase 1 exploration program for 10 holes including 2,000 m of diamond drilling in the third and fourth quarters of 2009. The objective of the program was to extend known mineralization along strike and down-dip of existing gold intercepts in three principle target areas.
David St. C. Dunn, P.Geo., and James Moors, P.Geo, who was Vice President Exploration of the Registrant at that time, were the Qualified Persons for the purposes of the technical disclosure on the Tay-LP property as set out in the Technical Report titled "2009 Diamond Drilling Program on the Tay-LP Property" dated March 30, 2010, prepared by David St. C. Dunn, P.Geo., and James G. Moors, PGeo (BC), who was Vice-President, Exploration, of the Registrant at that time (the "Tay-LP Technical Report").
The following information was extracted from, or includes accurate paraphrasings of, the executive summary, or other sections as indicated, from the Tay-LP Technical Report, the full copy of which is available online at www.sedar.com as filed on April 1, 2010. Defined terms and abbreviations used herein and not otherwise defined shall have the meanings ascribed to such terms in the Tay-LP Technical Report.
Property Description
The Tay-LP project of Ross River Gold Ltd. is a gold exploration project, covering an area of approximately 8150 hectares, located in south-central Yukon near the Village of Ross River. The project comprises 413 mineral claims. The Tay-LP area was first staked, following a prospecting discovery in 1984. The property has since been explored intermittently by various companies for intrusion-related gold deposits. Gold is associated with pyrrhotite-dominant, quartz-sulphide veins and replacement zones hosted by folded Paleozoic meta-sedimentary rocks.
The 2009 exploration program was carried out between September 9th and September 25th and comprised 1868 metres of diamond drilling. Personnel included: one of the authors, James Moors, P.Geo., who was V.P. Exploration of Canarc Resource Corp. at that time; Robin S. Tolbert, Project Geologist; Lyle Hansen, Assistant Geologist; and core cutters Robert Smallwood and John Dicks of Atlin. Diamond drilling was performed by Hy-Tech Diamond Drilling of Smithers, B.C.
A road accessible tent camp located near the centre of the property was the base of operations.
The cost of field work and analysis on the property in 2009 was $480,000.
Reserves or resources have not been calculated for the property.
The primary author was part of the 2003 Prospecting and Geochemical surveying program on the Tay-LP claims (Schmidt, U., 2004).
Canarc Resource Corp.
Form 20-F
Summary
The Tay-LP project of Canarc Resource Corp. is a gold exploration project, covering an area of approximately 7575 hectares, located in south-central Yukon, approximately 50 km south of the Village of Ross River and 160 kilometres northeast of Whitehorse. The project comprises 410 contiguous mineral claims. Option agreements give Canarc the right to earn 100% of the property. The property is accessible by road during the summer months via the South Canol Road and a 20 km long dirt branch road.
The region surrounding the property is underlain by variably metamorphosed, folded and faulted Paleozoic miogeoclinal rocks of the Pelly-Cassiar Platform. They range in age from Late Proterozoic to Triassic and include miogeoclinal clastic, carbonate and volcanic rocks. They are considered North American in origin and were deformed during Mesozoic arc -continent collision. These rocks have been intruded by mid-Cretaceous intrusions of intermediate composition.
Gold mineralization on the property is hosted by Cambro-Ordovician calcareous phyllite, marble and schist. Mineralization fits the intrusion-related epigenetic gold mineralization model of the "Tintina Gold Belt", based on gold-bismuth-tellurium chemistry, mineralogy, tectonic setting and age of intrusion. Mineralization occurs in structurally controlled veins and in replacement zones which parallel and in some cases cross-cut the dominant foliation. The exploration objective is to define sufficient structurally controlled or skarn style gold mineralization to support a profitable mine.
The 2009 program consisted of 10 drill holes totaling 1868 metres, drilled in 3 target areas. Results confirmed the presence and continuity of gold bearing structures. The total cost of the field program for 2009 was $480,000.
It is recommended that a first phase of work including an airborne geophysical survey with more advanced systems than those utilized in the 1999 survey should be carried out. This survey will better and more accurately define the geology beneath the glacial overburden that covers the most prospective portions of the property.
Ground Max-Min geophysical surveys should also be carried out to extend the known anomalies and test for mineralization on the peripheries of the known intrusive bodies. This work is estimated to take six weeks to complete at a cost of $252,328.
Following the interpretation of the surveys recommended in Phase 1, a second phase of work consisting of systematic drilling along strike and down dip of current pierce points that returned significant gold content and along the full range of Max-Min and aerially defined geophysical anomalies. This program should consist of at least 2,500 meters of diamond drilling and is estimated to take eight weeks to complete at a cost of $504,000.
Canarc Resource Corp.
Form 20-F
Location Map
David St. C. Dunn, P.Geo., and James Moors, P.Geo, who was Vice President Exploration of the Registrant at that time, are the Qualified Persons for the Tay-LP Technical Report.
Canarc Resource Corp.
Form 20-F
In 2010, Cap-Ex completed a 470 kilometer airborne geophysical survey at Tay-LP which identified several new EM conductors and magnetic anomalies within prospective geological settings. In March 2011, Cap-Ex terminated its property option agreement with Canarc.
Canarc completed the permitting process for exploration work at the Tay-LP property in 2012.
Canarc decided not to proceed with any further expenditure on the Tay-LP property which was written off in 2013.
Windfall Hills properties, British Columbia, Canada
In April 2011, Canarc entered into two property option agreements to purchase2013, Canagold acquired 100% undivided interests in the two adjacent gold properties (Uduk Lake and Dunn properties) located in British Columbia. In April 2011, Canarc entered into a property option agreement with Atna Resources Ltd. ("Atna") whereby Canarc can acquire a 100% interest in theThe Uduk Lake properties by making $750,000 in cash payments overare subject to a four year period of which $125,000 has been paid, honouring a pre-existing 1.5% NSR production royalty that can be purchased for CAD$1 million and granting the vendor a 2%another 3% NSR production royalty. In March 2012, Canarc amended the property option agreement in which the option payment of $100,000 due on April 21, 2012 was payable in 12 monthly installments of $8,333 over a twelve month period beginning April 21, 2012. In April 2013, Canarc entered into a property purchase agreement with Atna whereby Canarc acquired a 100% undivided interest in the Uduk Lake properties by the issuance of 1,500,000 common shares at a fair value of CAD$0.10 per share, honouring a pre-existing 1.5% NSR production royalty that can be purchased for CAD$1 million, and granting Atna a 3% NSR production royalty.
In April 2011, Canarc entered into a property option agreement with a vendor whereby Canarc can acquire a 100% interest in theThe Dunn properties by making CAD$250,000 in cash payments over a four year period, and a final bonus payment based on all gold resources estimated in an independent NI 43-101 technical report. The formula for the bonus payment is $30 per oz for measured resources, $20 per oz for indicated resources, and $10 per oz for inferred resources. In March 2012, Canarc amended the property option agreement in which the option payment of CAD$25,000 due on April 20, 2012 was payable in three monthly installments of CAD$8,333 over a three month period beginning April 21, 2012 which were paid. In April 2013, Canarc entered into a property purchase agreement whereby Canarc acquired a 100% undivided interest in the Dunn properties by the issuance of 500,000 common shares at a fair value of CAD$0.10 per share and granting the vendorare subject to a 2% NSR royalty which can be reduced to 1% NSR royalty for $500,000.
CanarcIn the third quarter of 2020, Canagold completed a Phase 1 exploration program on its Windfall Hills project which included detailed soil and rock geochemical sampling over known target areas in 2011. A2 diamond drill program. Six drill holes were completed for a total of 340 geochemical soil samples were collected on a 100 meter by 25 meter grid1,500 meters of core over an area of 30 hectares designed to follow up from gold-silver mineralization intersected in the main 2.8 sq. km. prospect area. Two anomalies were delineated on2014 Phase 1 drill holes. In 2023, the basis of multi-element geochemistry.Company impaired this property to $Nil as no budget or plans are allocated to it.
Corral Canyon property (Nevada, USA)
In June 2014, Canarc received government permit for2018, Canagold staked 92 mining claims covering 742 hectares in Nevada, USA.
Corral Canyon property lies 35 km west of the town of McDermitt in Humboldt County along the western flank of the McDermitt caldera complex, an area of volcanic rocks that hosts significant lithium and uranium mineralization in addition to gold. It contains volcanic-hosted, epithermal, disseminated and vein gold mineralization evidenced by previous drilling.
In the first half of fiscal 2019, Canagold had completed detailed geologic mapping, a district-scale soil sampling program, rock-chip sampling, re-logging of previous core holes and an analysis of historical geophysical data in an effort to identify drill targets to expand on the known gold mineralization. In the third quarter of 2019, four high priority targets were identified on the property. In November 2019, a five hole, 1600 meter drilling program which was mobilized in July 2014 and was financed by a flow-through financing of CAD$400,000 which closed in July 2014. Funds of CAD$386,000 were expended for flow through purposes is 2014 and 2015. Canarc completed 3 holes and 1,149 metres of drilling that intersected an alteration zone anomalous in gold-silver. The Company is evaluating the possibility of additional geochemical and geophysical surveys in 2016 in order to better target the mineralized zone, subject to financing.completed.
Canarc Resource Corp.In 2023, the Company impaired this property in its financial statements to $Nil as no budget or plans are allocated to it.
Form 20-FPrinceton Property (British Columbia, Canada)
The Princeton gold property consists of 22 mineral claims over 14,650 hectares located 35 kilometers (km) south of Princeton, British Columbia, and is readily accessible by road. The property contains quartz veins with high grade gold (> 10 g/t) hosted in Triassic Nicola Group metasedimentary and metavolcanic rocks intruded by undated granitic dikes and stocks.
In December 2018 and then as amended in June 2019, Canagold entered into a property option agreement jointly with Universal Copper Ltd. (formerly, Tasca Resources Ltd.) (“Universal”) and an individual whereby Canagold has an option to earn a 75% interest in the Princeton property by: incurring exploration expenditures of CAD$490,000 over a two year period; issuing 375,000 common shares to Universal by December 1, 2019 (issued); paying CAD$25,000 cash to Universal by March 16, 2021; granting a 1% NSR to Universal which can be acquired for CAD$1 million; and honoring a 2% NSR to the individual of which 1% NSR can be acquired for CAD$1 million.
Canagold Resources Ltd.
Form 20-F
70 |
Table of Contents |
In October 2020, the Company assigned its interest in the property option agreement for the Princeton property to Damara Gold Corp. (“Damara”). Pursuant to the assignment, Damara issued 9.9% of its outstanding common shares to the Company on closing of the assignment at a fair value of $228,500. Subject to the exercise of the option by December 31, 2022, the Company’s aggregate ownership in the capital of Damara shall increase to 19.9% which Damara did exercise by the issuance of 9.8 million Damara shares to the Company at a fair value of $588,800.
In 2018, Canagold completed a 2,350 line-kilometer aeromagnetic survey on the property to assist in its geologic evaluation. The survey covered about 16 km by 10 km, extending well beyond the known area of gold vein mineralization. In July 2019, Canagold reviewed the results of the survey and the results were used to delineate geologic units, including intrusive rocks, and to clarify the broad geologic setting and structural fabric of the area that helped identify and prioritize exploration targets.
In July 2019, Canagold commenced an exploration program of general prospecting, mapping, sampling and trenching of existing gold vein prospects, as well as evaluating whether additional geophysical methods might be utilized to detect buried veins. The program included a machine trenching program in the area of the main gold vein prospect. The trenching was to test a much broader area than was trenched in late 2018 and was to attempt to trace the previously-trenched main vein along strike as well as explore for adjacent veins, particular in areas of mineralized float.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Management'sManagement’s discussion and analysis in this Item 5 are intended to provide the reader with a review of factors that affected the Registrant'sCanagold’s performance during the years presented and factors reasonably expected to impact on future operations and results. The following discussion of the financial condition, changes in financial condition and results of operations of the RegistrantCanagold for the three fiscal years ended December 31, 2015, 20142023, 2022, and 20132021 should be read in conjunction with the consolidated financial statements of the RegistrantCanagold and related notes included therein.
The Registrant'sCanagold Resources Ltd.
Form 20-F
71 |
Table of Contents |
Canagold’s consolidated financial statements are prepared in accordance with IFRS as issued by the IASB, and all dollar amounts are expressed in United States dollars unless otherwise indicated.
This discussion contains "forward-looking statements"“forward-looking statements” that are subject to risk factors set out under the heading "Item“Item 3. Key Information – D. Risk Factors"Factors”. See "Cautionary“Cautionary Note Regarding Forward-Looking Statements"Statements” above.
5.A Operating Results
In accordance with IFRS, all costs related to investments in mineral property interests are capitalized on a property-by-property basis. Such costs include mineral property acquisition costs and exploration expenditures, net of any recoveries and write-downs.
The Registrant'sCanagold’s ability to continue as a going concern is dependent on continued financial support from its shareholders and other related parties, the ability of the RegistrantCanagold to raise equity financing, and the attainment of profitable operations, external financings and further share issuances to meet the Registrant'sCanagold’s liabilities as they become payable and for settlement of expenditures.
The RegistrantCanagold is not aware of any seasonality in the business that has a material effect upon its financial condition, results of operations or cash flows. The RegistrantCanagold is not aware of any changes in the results of its operations that are other than those normally encountered in its ongoing business.
Fiscal Year 2015– Year ended December 31, 20152023 compared with December 31, 20142022
CanarcThe Company has no sources of operating revenues. Operating losses were incurred for ongoing activities of the Company in acquiring and exploring its mineral property interests, advancing the New Polaris property, and pursuing mineral projects of merit. The Company incurred a net loss of $932,000$3.1 million for the year ended December 31, 2015fiscal 2023 which is lowerhigher than the net loss of $2.7 million in fiscal 2022 (2021- $1.8 million for fiscal 2014, with commensurately lower operating expenses in the current period. million).
Canagold Resources Ltd.
Form 20-F
72 |
Table of Contents |
Net losses were impacted by different functional expense items.
Canarc Resource Corp.items:
Form 20-F
( in $000s) |
| 2023 |
|
| 2022 |
|
| Variance |
| |||
|
|
|
|
|
|
|
|
|
| |||
Expenses: |
|
|
|
|
|
|
|
|
| |||
General and administrative |
|
| 403 |
|
|
| 837 |
|
|
| (434 | ) |
Employee and director remuneration |
|
| 598 |
|
|
| 700 |
|
|
| (102 | ) |
Change in fair value of marketable securities |
|
| 364 |
|
|
| 425 |
|
|
| (61 | ) |
Shareholder relations |
|
| - |
|
|
| 384 |
|
|
| (136 | ) |
Share-based payments |
|
| 391 |
|
|
| 154 |
|
|
| (116 | ) |
Corporate development |
|
| 152 |
|
|
| 112 |
|
|
| 40 |
|
Gain on sale of long-term investment |
|
| (738 | ) |
|
| - |
|
|
| (738 | ) |
Interest and finance charges |
|
| 38 |
|
|
| 71 |
|
|
| (33 | ) |
Impairment of mineral properties |
|
| 1,898 |
|
|
| - |
|
|
| 1,898 |
|
Amortization |
|
| 89 |
|
|
| 60 |
|
|
| 29 |
|
Interest income |
|
| (65 | ) |
|
| (1 | ) |
|
| (64 | ) |
Foreign exchange gain (loss) |
|
| (36 | ) |
|
| (172 | ) |
|
| 136 |
|
Mineral property option income |
|
| (12 | ) |
|
| (545 | ) |
|
| 533 |
|
Deferred income tax expense |
|
| - |
|
|
| 1,399 |
|
|
| (1399 | ) |
Income tax recovery |
|
| (32 | ) |
|
| (719 | ) |
|
| 687 |
|
Net loss for the year |
|
| 3,050 |
|
|
| 2,705 |
|
|
| 345 |
|
Canarc has no sources of operating revenues. Operating losses continue to be incurred for ongoing activities of Canarc in acquiring, developing and advancing the El Compas project, seeking an appropriate joint venture partner to advance the New Polaris property, and pursuing mining projects of merit.
Corporate development expenses were substantially lower in the current fiscal year than in the prior fiscal year. In the first and second quarters of fiscal 2015, efforts were focused on the viability of the Albion process for Canarc's New Polaris project. Then in the remaining quarters of fiscal 2015, Canarc focused its due diligence on the El Compas project in Mexico which culminated in the Share Purchase Agreement with Marlin Gold in October 2015. Corporate development expenses were higher in the comparable period in fiscal 2014, and were focused on the La Cieneguita mine properties in Mexico and the Santa Fe mine/mill project in New Mexico; the latter project has a mine and mill which necessitated more technical due diligence resulting in higher expenses in the third quarter of fiscal 2014.
Remuneration for employees was lower in the current year relative to the prior year. Employee remuneration directly related to mineral exploration projects was allocated to those specific projects rather than to operations, in which Canarc had active exploration programs for its New Polaris project in the current period in terms of assessing the Albion process, arranging concentrates from prior drill core samples and initiating environmental baseline data collection for environmental permitting, and such expenses were also allocated to property investigation and project generation efforts as warranted. In the latter half of 2015, Canarc focused on its due diligence on the El Compas project including its mineral resource estimate and economic assessment. In the fourth quarter of 2015, Canarc accrued a severance settlement with a former senior officer and a bonus payable to another senior officer. In the first quarter of 2014, severance settlements for two senior officers contributed to higher employee remuneration along with no active exploration programs to Canarc's projects at that time.
General and administrative expenses were lower for 2015 than for 2014. The principle factor was legal services rendered in 2014 to Canarc in relation to the letter of intent for the La Cieneguita mine project, TSX delisting review, appointment of a new officer, severance settlements with two officers, and corporate finance issues relating to its working capital. In 2015, legal services were for assistance to Canarc's continuous disclosure obligations. Office and sundry and rent reflect the ongoing expenditures for ancillary office support facilities which are lower as Canarc reduced its personnel. Regulatory fees were lower in the current period as Canarc was less active in its corporate finance activities and expiry of the shareholders rights plan in April 2015 and reduced legal fees for its AGM. Relative to prior periods in 2015,Overall general and administrative expenses would increase nominally subsequentof $403,000 were lower in 2023 in contrast to $837,000 for the same period in 2022. In June 2022, a shareholder provided an advance notice for the nomination of three new directors for the Company at its upcoming annual and special general meeting, which led the Company to engage a proxy solicitation firm and legal counsel in the proxy contest, thus contributing to higher regulatory expenses in the second quarter of 2022. This resulted in the election of three new directors and resignations of three previous directors.
Overall remuneration for employees and directors has been consistent for 2023 vs. 2022, with the higher 2022 amount being attributed mainly to the acquisitionseverance paid to the former CEO.
The change in the fair value of Oro Silvermarketable securities is attributable to changes in October 2015 for carethe quoted market prices of the investments up to their date of disposal or through to period end if continued to be held. In 2023, gains were realized from disposition of marketable securities and maintenance support fora loss was recognized at the El Compas projectend of the period because of the decrease in Mexico.the fair market value of investments in the Company’s portfolio; in 2022, losses were realized from disposition of marketable securities with further losses being recognized at the end of the period from lower fair values.
Shareholder activities continued from commitments fromrelations expenses were reduced in 2023. The proxy contest in July 2022 partly contributed to this difference. For financial statements purposes, the first half of 2014Company combined 2023 shareholder relations costs with no new shareholder initiatives being implemented in the first half of 2015. In the fourth quarter of fiscal 2015, shareholder communications and marketing programs were initiated to create market awareness of Canarc's due diligence and acquisition of the El Compas project and its progress in advancing and developing the project. Canarc had initiated and completed a new resource estimate and preliminary economic assessment of the El Compas project, signed a lease agreement for the La Plata processing plant with the Zacatecas government, and entered into an indicative term sheet with a resource fund for debt financing of up to $10 million as a gold prepaid facility in 2016. Shareholder relations activities were heightened in early 2014 for shareholder communications and marketing services principally in Europe to attract a greater breadth of investor base, to promote new interest in Canarc's mineral properties, and to create greater awareness of its letter of intent with Pan American for the La Cieneguita mine project at that time. Such activities provided the catalyst for Canarc to close equity financings of CAD$3.26 million with a geographically diverse group of overseas shareholders in 2014 and CAD$790,000 in 2015 and CAD$2.04 million in March 2016.
Canarc Resource Corp.corporate development costs.
Form 20-FCanagold Resources Ltd.
Form 20-F
73 |
Table of Contents |
Share-basedShare based payments were higher in 2023 compared to 2022, as in August 2023, under the fourth quarter of fiscal 2015 but remain comparatively lower in fiscal 2015 than innew Omnibus Incentive Plan, DSUs and RSUs were issued to the prior fiscal year. At the beginning of fiscal 2015, Canarc had 4.9 million stock options which were subject to vesting provisions as opposed to 2.5 million unvested stock options at the beginning of fiscal 2014 which resulted in a comparatively higher expense in the first two quarters of 2015. In May 2015, certain directors and officers of Canarc cancelled 3,360,000 stock options with exercise prices ranging from CAD$0.10 to CAD$0.145 and expiry dates from September 2015 to June 2017. The retirement of a director in June 2015 resulted in forfeitures. Then in December 2015, Canarc granted 5,950,000 stock options to directors, officers and employees with an exercise price of CAD$0.06 and an expiry date of December 8, 2020, and which are subject to vesting provisions in which 25% of the options vest immediately on the grant date and 25% vest every six months thereafter, which contributed to a higher expense in the fourth quarter. The forfeitures of stock options in January 2014 and April 2014 due to the retirement of two senior officers reduced share-based payments. In July 2014, Canarc granted 4,050,000 stock options with an exercise price of CAD$0.10 and an expiry date of July 17, 2019, and which were subject to vesting provisions in which 20% of the options vest immediately on the grant date and 20% vest every six months thereafter, which contributed to the higher expense in the third quarter of fiscal 2014. Also the 105,000 stock options which were granted in June 2012 with an exercise price of CAD$0.145 and an expiry date of June 18, 2017 which will only vest when Canarc consummates a major transaction or at the discretion of its Board of Directors have vested in December 2015.
Interest income is realized from Canarc's premium investment savings account which is cashable at any time.
Canarc recognized a flow-through financing cost of $4,000 from the tax impact for using the look-back rule in 2015 for the flow-through financing of CAD$400,000 in 2014 and for the tax indemnification for the short fall in the flow-through expenditures thereto.Company.
In September 2015,2023, the shares for debt settlements with certain directors included forgiveness of directors fees owed, resulting inCompany recognized a $738,000 gain on debt settlementthe sale of $54,000.the Fondaway property to Getchell and an impairment loss of
$1.89 million of the accounting book value of Corral Canyon and Windfall Hills, as the Company does not have budgeted activities for these two properties in the near future.
Mineral property income of $540,000 in 2022 was from the sale of a USA non material property in Nevada, the sale of physical historical geological data library, and the cash option receipt for its Idaho property, as the Company advances its sole material property. In 2023, the $12,000 mineral property income is the cash option receipt for its Idaho property.
The gain in derivative liabilityincome tax recovery is attributable to the fluctuationallocation of the premium in the spot pricesflow through private placement on a pro rata basis of qualified exploration expenditures incurred during the period. Income tax recovery of $32,000 for gold2023 (2022 - $719,000) was recognized for the 55 gold ounces per year which are payable by Canarc to Marlin Gold over 3 years for the acquisition of the El Compas project for total of 165 payable gold ounces (or in U.S. dollar equivalents).
Interest expense in 2014 was attributable to the demand loans. Canarc repaid all principal and interest in full settlement of outstanding demand loans in January 2014. Canarc has no outstanding demand loans in 2015.
Foreign exchange gain or loss reflects the transactional impact in the foreign exchange fluctuations of the US$ relative to the CAD$, and not attributable to translation effects, as Canarc's functional currency is the CAD$ and its reporting or presentation currency is the US$.pro rata flow through exploration expenditures.
The write-offs$1.4 million deferred tax expenses in 2022 is mainly the result of promissory notes receivablethe timing difference between the accounting value and tax value of $275,000 in 2014 were for promissory notes and loans advanced and owed to Canarc in 2014 which were determined to be uncollectible.
Canarc Resource Corp.the mineral properties, the main driver of the difference being the renunciation of the flow-through renunciations.
Form 20-FCanagold Resources Ltd.
Form 20-F
74 |
Table of Contents |
As at December 31, 2015, Canarc had mineral property interests which were comprised of the following:
|
| British Columbia (Canada) |
|
| Mexico |
|
|
|
| |||||||
($000s) |
| New Polaris |
|
| Windfall Hills |
|
| El Compas |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition Costs: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance, December 31, 2013 |
| $ | 3,892 |
|
| $ | 408 |
|
| $ | - |
|
| $ | 4,300 |
|
Additions |
|
| - |
|
|
| 27 |
|
|
| - |
|
|
| 27 |
|
Foreign currency translation adjustment |
|
| (16 | ) |
|
| (34 | ) |
|
| - |
|
|
| (50 | ) |
Balance, December 31, 2014 |
|
| 3,876 |
|
|
| 401 |
|
|
| - |
|
|
| 4,277 |
|
Acquisition of Oro Silver |
|
| - |
|
|
| - |
|
|
| 1,120 |
|
|
| 1,120 |
|
Additions |
|
| - |
|
|
| 3 |
|
|
| - |
|
|
| 3 |
|
Foreign currency translation adjustment |
|
| (25 | ) |
|
| (65 | ) |
|
| 6 |
|
|
| (84 | ) |
Balance, December 31, 2015 |
| $ | 3,851 |
|
| $ | 339 |
|
| $ | 1,126 |
|
| $ | 5,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Exploration Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 |
| $ | 7,938 |
|
| $ | 92 |
|
| $ | - |
|
| $ | 8,030 |
|
Additions, net of recoveries |
|
| 23 |
|
|
| 352 |
|
|
| - |
|
|
| 375 |
|
Foreign currency translation adjustment |
|
| (871 | ) |
|
| (7 | ) |
|
| - |
|
|
| (878 | ) |
Balance, December 31, 2014 |
|
| 7,090 |
|
|
| 437 |
|
|
| - |
|
|
| 7,527 |
|
Additions, net of recoveries |
|
| 23 |
|
|
| (11 | ) |
|
| 183 |
|
|
| 195 |
|
Foreign currency translation adjustment |
|
| (1,557 | ) |
|
| (70 | ) |
|
| - |
|
|
| (1,627 | ) |
Balance, December 31, 2015 |
| $ | 5,556 |
|
| $ | 356 |
|
| $ | 183 |
|
| $ | 6,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
| $ | 10,966 |
|
| $ | 838 |
|
| $ | - |
|
| $ | 11,804 |
|
Balance, December 31, 2015 |
|
| 9,407 |
|
|
| 695 |
|
|
| 1,309 |
|
|
| 11,411 |
|
Canarc Resource Corp.
Form 20-F
Fiscal Year 2014– Year ended December 31, 2014 compared with December 31, 2013
Canarc incurred a net loss of $1.83 million for the year ended December 31, 2014 which is higher than the net loss of $1.38 million for fiscal 2013, with commensurately higher operating expenses in the current year. Net losses were impacted by different functional expense items.
Canarc2023, Canagold has no sources of operating revenues. Operating losses continue to be incurred for ongoing activities of Canarc in seeking an appropriate joint venture partner to advance the New Polaris property and in pursuing mining projects of merit.
Corporate development expenses were lower in the first quarter of 2014 than the same quarter in 2013, but were higher in the remaining quarters of 2014. In the second quarter of fiscal 2014, Canarc conducted due diligence work on the main asset of Pan American which was its interest in the La Cieneguita mine properties located in Chihuahua State, Mexico. This resulted in the signing of a letter of intent in February 2014 which anticipated that Canarc would acquire all of the outstanding common shares of Pan American, but was terminated in May 2014 due to results from Canarc's due diligence. In the second quarter, Canarc focused its efforts on Santa Fe and its gold-silver mine and mill and the organic growth potential in the district which culminated in the execution of the Share Exchange Agreement in July 2014 whereby Canarc would issue 33 million common shares to Santa Fe and Santa Fe would issue 66 million common shares to Canarc; effectively Canarc would have a 34% interest in Santa Fe and Santa Fe would have a 17% interest in Canarc. In October 2014, the conditions precedent set forth in the Share Exchange Agreement was not satisfied and the agreement terminated on its own terms. Corporate development activities in the fourth quarter of fiscal 2014 focused on evaluating an alternative metallurgical process which resulted in the Pre-Development and Earn-In Binding Agreement with PanTerra in February 2015 to advance Canarc's New Polaris project. Major expenses incurred for corporate development include: legal fees for drafting and finalizing agreements, corporate and securities due diligence and property title opinions; geological and metallurgical assessments; salary allocations; and travel expenses for Mexico and the USA. In early 2013, Canarc was involved in a strategic mine acquisition partnership which intensified Canarc's efforts to identify acquisition opportunities which were to be debt financed but such arrangement ceased in March 2013. Corporate development expenses were negligible for the remaining quarters of 2013.
Remuneration for employees was higher in the current period relative to the prior period in 2013. The employment of a full time senior officer along with severance settlements for two other senior officers contributed to higher employee remuneration. Such employment contributed to Canarc's ability to close three private placements totalling CAD$3.26 million, letter of intent with Pan American which was subsequently terminated, share exchange agreement with Santa Fe which was subsequently terminated, and the pre-development and earn-in agreement in February 2015. Salary allocations during the term of the share exchange agreement prior to its termination resulted in lower salaries incurred for general administration in the third quarter of fiscal 2014 in comparison to prior comparative quarters of 2014 and 2013; these expenses have been accordingly allocated to corporate development efforts.
General and administrative expenses were higher in 2014 than in 2013. The principle factor was legal services rendered to Canarc in relation to TSX delisting review, advisory services rendered to the Board on compensation matters, appointment of a new senior officer, severance settlements with two other senior officers, and corporate finance issues relating to its working capital. In 2013, legal services were mainly for the strategic mine acquisition partnership which was terminated in March 2013. Office and sundry and rent reflect the ongoing expenditures for ancillary office support facilities in which the former was higher in the current period due to increased level of corporate activity related to project due diligence, equity financings and exploration program for the Windfall Hills project. Regulatory fees were higher for the current fiscal year from the proposed shares-for-debt settlement for directors' fees payable which required shareholder approval at Canarc's annual general meeting held in June 2014 which resolution did not pass. In 2013, Canarc had reduced discretionary expenses due to limited cash resources.
Canarc Resource Corp.
Form 20-F
Shareholder relations activities were heightened in 2014 than in 2013 for shareholder communications and marketing services principally in Europe to attract a greater breadth of investor base, to promote new interest in Canarc's mineral properties, and to create greater awareness of its letter of intent with Pan American for the La Cieneguita mine project at that time. Such activities provided the catalyst for Canarc to close equity financings of CAD$3.26 million with a geographically diverse group of overseas shareholders. Shareholder activities continued from commitments from prior quarters with no new shareholder activities being implemented in the remaining quarters of fiscal 2014 as the primary focus was the Share Exchange Agreement with Santa Fe and arranging financing for Santa Fe, which agreement was terminated in October 2014.
Share-based payments were higher in the current period than in the prior comparable period. Canarc granted 500,000 stock options in January 2014 which are subject to vesting provisions in which 20% of the options vest immediately on the grant date and 20% vest every six months thereafter. Then in July 2014, Canarc granted 4,050,000 stock options to directors, officers and employees with an exercise price of CAD$0.10 and an expiry date of July 17, 2019, and which are subject to vesting provisions in which 20% of the options vest immediately on the grant date and 20% vest every six months thereafter; this resulted in the increase in share based payments expenses in the third quarter of 2014. Two million stock options with vesting provisions were granted in the second quarter of 2013. The forfeiture of stock options in January 2014 and April 2014 due to the retirement of two senior officers reduced share-based payments. Also the 1,460,000 stock options which were granted in June 2012 with an exercise price of CAD$0.145 and an expiry date of June 18, 2017 will only vest when Canarc consummates a major transaction or at the discretion of its Board of Directors, and such stock options have not vested as at December 31, 2014. No probable likelihood of a material transaction was attributed to these June 2012 stock option grants, and therefore no share-based payments have been recognized.
Interest income is realized from Canarc's premium investment savings account which is cashable at any time and for the accrued interest for the $40,000 loan owed by Pan American and the $200,000 promissory note and a further loan of $20,000 owed by Santa Fe in which such demand loans were written off due to impairment issues as collectability was doubtful. In 2015, demand notices for repayment have been submitted by Canarc to Santa Fe, as Canarc maintains its legal rights relative to the promissory note loan.
Interest expense was higher in 2013 from the demand loans and for the estimated flow through indemnity obligation from ineligible Canadian exploration expenditures for flow-through purposes; the latter was derecognized at the end of fiscal 2013 as Canarc determined that it was improbable that any further cash outlays would be required. Demand loans were repayable on demand and bore an interest rate of 12% compounded monthly with interest payable semi-annually. In January 2014, Canarc repaid all principal and interest in full settlement of outstanding demand loans.
Foreign exchange gain or loss reflects the transactional impact in the foreign exchange fluctuations of the US$ relative to the CAD$, and not attributable to translation effects.
Canarc Resource Corp.
Form 20-F
As at December 31, 2014, Canarc had mineral property interests which are comprised of the following:
|
| British Columbia (Canada) |
|
| Yukon (Canada) |
|
|
|
| |||||||
($000s) |
| New Polaris |
|
| Windfall Hills |
|
| Tay-LP |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition Costs: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance, December 31, 2012 |
| $ | 3,905 |
|
| $ | 210 |
|
| $ | 174 |
|
| $ | 4,289 |
|
Additions |
|
| - |
|
|
| 212 |
|
|
| - |
|
|
| 212 |
|
Foreign currency translation adjustment |
|
| (13 | ) |
|
| (14 | ) |
|
| (11 | ) |
|
| (38 | ) |
Write-off |
|
| - |
|
|
| - |
|
|
| (163 | ) |
|
| (163 | ) |
Balance, December 31, 2013 |
|
| 3,892 |
|
|
| 408 |
|
|
| - |
|
|
| 4,300 |
|
Additions |
|
| - |
|
|
| 27 |
|
|
| - |
|
|
| 27 |
|
Foreign currency translation adjustment |
|
| (16 | ) |
|
| (34 | ) |
|
| - |
|
|
| (50 | ) |
Balance, December 31, 2014 |
| $ | 3,876 |
|
| $ | 401 |
|
| $ | - |
|
| $ | 4,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Exploration Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2012 |
| $ | 8,643 |
|
| $ | 117 |
|
| $ | 495 |
|
| $ | 9,255 |
|
Additions |
|
| 17 |
|
|
| (18 | ) |
|
| 10 |
|
|
| 9 |
|
Foreign currency translation adjustment |
|
| (722 | ) |
|
| (7 | ) |
|
| (32 | ) |
|
| (761 | ) |
Write-off |
|
| - |
|
|
| - |
|
|
| (473 | ) |
|
| (473 | ) |
Balance, December 31, 2013 |
|
| 7,938 |
|
|
| 92 |
|
|
| - |
|
|
| 8,030 |
|
Additions, net of recoveries |
|
| 23 |
|
|
| 352 |
|
|
| - |
|
|
| 375 |
|
Foreign currency translation adjustment |
|
| (871 | ) |
|
| (7 | ) |
|
| - |
|
|
| (878 | ) |
Balance, December 31, 2014 |
| $ | 7,090 |
|
| $ | 437 |
|
| $ | - |
|
| $ | 7,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 |
| $ | 11,830 |
|
| $ | 500 |
|
| $ | - |
|
| $ | 12,330 |
|
Balance, December 31, 2014 |
|
| 10,966 |
|
|
| 838 |
|
|
| - |
|
|
| 11,804 |
|
Canarc Resource Corp.
Canagold Resources Ltd.
Form 20-F
Table of Contents |
Fiscal Year 2022 – Year ended December 31, 2022 compared with December 31, 2021
The Company incurred a net loss of $2.7 million for fiscal 2022 which is higher than the net loss of $1.8 million in fiscal 2021 (2020 - $1.7 million).
Overall general and administrative expenses of $837,000 were significantly higher in 2022 with certain specific differences in contrast to $295,000 for the same period in 2021:
Regulatory fees increased in 2022 as in June 2022, a shareholder provided an advance notice for the nominaton of three new directors for the Company at its upcoming annual and special general meeting, which lead the Company to engage a proxy solicitation firm and legal counsel in the proxy contest, thus contributing to higher regulatory expenses of $260,000 in the second quarter of 2022. This resulted in the election of three new directors and resignations of three previous directors. Regulatory expenses continued to be higher in the third quarter of 2022 from the proxy contest as well as additional costs from the special general meeting for the new control person of the Company which was held on October 17, 2022. Regulatory expenses also increased as the transfer agent manages its warrant indentures and from higher filing and annual listing fees.
Legal fees increased in 2022 with legal counsel acting as a corporate advisor to the new Board who reside overseas, corporate issues with Sun Valley possibly becoming a new control person, and recommendations to improve the Company’s corporate governance policies and charters. Nominal legal services were rendered in 2021 for corporate maintenance and annual filings.
Other general and administrative expenses have seen slightly increases with the company intensifying its efforts to advance New Polaris.
Canagold Resources Ltd.
Form 20-F
76 |
Table of Contents |
Overall remuneration for employees and directors has been consistent for 2022 vs. 2021, with the higher 2022 amount being attributed mainly to the severance paid to the former CEO.
The change in the fair value of marketable securities is attributable to changes in the quoted market prices of the investments up to their date of disposal or through to period end if continued to be held. In 2022, losses were realized from disposition of marketable securities with further losses being recognized at the end of the year from lower fair values. In 2021 gains were realized from the disposition of market securities but losses from remaining shareholdings at year end canceled such gains. The Company’s marketable securities consist of mainly investments in other mining companies, and the 2022 and 2021 fair value loss is a result of a general decline in valuations of precious metals and mining companies after the 2020 surge.
The Company continued to incur shareholder relations costs in order to raise the profile and market awareness. In July 2021, a VP Corporate Development was hired to assist with shareholder relations activities. Starting 2022, the remuneration of the VP Corporate Development is reported as a separate item - Corporate development expense - in the financial statements.
Share based payments were significantly lower in 2022 compared to 2021 due to forfeitures of unvested stock options from the resignations of former Board members and CEO, resulting in reversals of share-based payment expenses from prior periods, given Board members held a significant proportion of outstanding stock options.
The $172,000 gain recognized in 2022 is a non-cash item resulted from revaluation of certain assets/investments of the Company.
Mineral property income in 2022 was from the sale of a USA non material property in Nevada, the sale of physical historical geological data library, and the cash option receipt for its Idaho property.
The income tax recovery is the allocation of the premium in the flow through private placement on a pro rata basis of qualified exploration expenditures incurred during the year. Flow through premiums from private placements were recognized in October and December 2021 and then again in January 2022 and October 2022. Given that the flow through funds were raised late in 2021, and therefore used mainly in 2022, the income tax recovery is significantly higher in 2022.
The $1.4 million deferred tax expenses is mainly the result of the timing difference between the accounting value and tax value of the mineral properties, the main driver of the difference being the renunciation of the flow-through renunciations. See Note 15 of 2022 consolidated financial statements of the Company for details of the calculation.
Canagold Resources Ltd.
Form 20-F
77 |
Table of Contents |
As at December 31, 2022, Canagold has mineral property interests which are comprised of the following:
Canagold Resources Ltd.
Form 20-F
78 |
Table of Contents |
Environmental Liabilities
The Registrant's
Canagold’s policy is to maintain all operations at North American standards, notwithstanding that certain of the countries within which it may operate may not yet have fully developed such standards in respect to environmental concerns. In accordance with government requirements in Canada, refundable deposits of CAD$250,000$224,000 have been placed with regulatory agencies in respect to the Registrant'sCanagold’s New Polaris gold property in British Columbia. There are no known environmental contingencies in respect to these or any of the other Registrant'sCompany’s mineral property interests.
5.B Liquidity and Capital Resources
Canagold is in the exploration stage and has not yet determined whether its mineral property interests contain reserves. The recoverability of amounts capitalized for mineral property interests is entirely dependent upon the existence of reserves, the ability of Canagold to obtain the necessary financing to complete the development and upon future profitable production. Canagold knows of no trends, demands, commitments, events or uncertainties that may result in Canagold’s liquidity either materially increasing or decreasing at the present time or in the foreseeable future. Material increases or decreases in Canagold’s liquidity are substantially determined by the success or failure of Canagold’s exploration programs and overall market conditions for smaller mineral exploration companies. Since its incorporation in 1987, Canagold has endeavoured to secure mineral property interests that in due course could be brought into production to provide Canagold with cash flow which would be used to undertake work programs on other projects. To that end, Canagold has expended its funds on mineral property interests that it believes have the potential to achieve cash flow within a reasonable time frame. As a result, Canagold has incurred losses during each of its fiscal years since incorporation. This result is typical of smaller exploration companies and will continue unless positive cash flow is achieved.
The following table contains selected financial information of Canagold’s liquidity:
Canagold Resources Ltd.
Form 20-F
79 |
Table of Contents |
Canagold has no sources of operating revenues, and ongoing operating expenses continue to reduce its cash resources and working capital. Operating losses continued to be incurred for ongoing activities of Canagold in seeking to advance the New Polaris property, and in exploring the Windfall Hills and AIM properties and staking additional property claims and in pursuing new projects of merit.
Based on Canagold’s available cash and working capital, Canagold anticipates it will be able to continue its current plan of operations and exploration programs for at least the next 12 months without having to seek additional financing or cut-back on planned operations. Additional financing will be sought through private and public equity financings or debt financings if available to Canagold at acceptable terms in the interests of the shareholders and Canagold.
On October 28, 2021, Canagold closed a brokered private placement with Red Cloud Securities Inc. for 10.6 million flow through common shares at a price of CAD$0.50 per share for gross proceeds of CAD$5.3 million. Finders fees were comprised of CAD$253,555 in cash and 638,510 broker warrants with each broker warrant exercisable to acquire one non flow through common share at an exercise price of CAD$0.75 until October 28, 2023.
In December 2021 and January 2022, Canagold closed a private placement in two tranches totalling 4.61 million flow through common shares at a price of CAD$0.50 per share for gross proceeds of CAD$2.3 million. On December 30, 2021, Canagold closed the first tranche for 560,000 flow through shares for gross proceeds of CAD$280,000. On January 18, 2022, Canagold closed the second tranche for 4.05 million flow through shares for gross proceeds of CAD$2.03 million.
In 2021, stock options for 650,000 shares were exercised for proceeds of $204,100 and $179,700 was reallocated from reserve for share-based payments to share capital. Stock options for 210,000 common shares were cancelled for the exercise of share appreciation rights for 104,884 common shares at a fair value of CAD$0.68 per share. Also warrants for 301,624 common shares were exercised for proceeds of $72,000, and $33,100 was reallocated from reserve for share-based payments to share capital.
In fiscal 2021, the Company granted the following stock options:
- | 3.6 million stock options to directors, officers and employees with an exercise price of CAD$0.50 and an expiry date of June 24, 2026, and which are subject to vesting provisions in which 25% of the options vest immediately on the grant date and 25% vest every six months thereafter; and |
- | 715,000 stock options to an officer and a consultant with an exercise price of CAD$0.52 of which 500,000 stock options have an expiry date of July 12, 2026 and 215,000 stock option with an expiry date of July 12, 2023, and which are subject to vesting provisions in which 25% of the options vest immediately on the grant date and 25% vest every six months thereafter. |
Canagold Resources Ltd.
Form 20-F
80 |
Table of Contents |
In 2021, the Company received proceeds of $204,000 from the exercise of stock options and $72,000 from exercise of warrants and proceeds of $656,000 were realized from the disposition of marketable securities.
In 2021, the Company received the following cash and shares for property option agreements:
- | $100,000 cash and 537,550 shares from Getchell for the Fondaway Canyon and Dixie Comstock properties; |
- | CAD$25,000 cash, 1.25 million shares and 1.25 million warrants from Ophir for the Lightening Tree property; |
- | 9.8 million shares from Damara for the Princeton property; and |
- | $12,000 cash from Brownstone for the Silver King property. |
As at December 31, 2021, Canagold’s marketable securities have a fair value of $1.3 million.
On June 28, 2022, the Company arranged a loan for CAD$25,000 from a company controlled by a former director. The loan bore interest at a rate of 9% per annum, and the entire loan amount of CAD$25,000 was fully repaid on July 14, 2022 along with interest of CAD$99.
On August 15, 2022, the Company entered into a Bridge Loan Agreement with Sun Valley which is currently a 40.06% control person of the Company for CAD$2.5 million bearing an interest rate of 5.5% per annum. The bridge loan was applied as an advance payment for the standby guaranty for the November 2022 rights offering and extinguished in December 2022 when Sun Valley purchased 20,352,577 common shares. The Company paid Sun Valley a total of CAD$46,336 in interest and a total of CAD$178,085 in fees (accounted as share issuance expense part of the Shareholder Equity) pursuant to the Standby Guaranty Agreement.
On October 19, 2022, the Company closed a private placement for 4.7 million flow through common shares at a price of CAD$0.32 per share for gross proceeds of CAD$1.5 million. The fair value of the shares was CAD$0.26 per share, resulting in the recognition of a flow through premium liability of CAD$0.06 per share for a total of CAD$282,000.
In November 2022, the Company proceeded with a rights offering whereby shareholders of the Company received one right for each common share held. Each two rights entitled holders to subscribe for one common share at a price of CAD$0.175. The Company closed the offering on December 16, 2022 and issued 25.3M common share for total gross proceeds of CAD$4.4 million. The Company also entered into a standby guaranty agreement with Sun Valley whereby Sun Valley shall purchase common shares issuable under the rights offering which remain unsubscribed under the basic subscription privilege and the additional subscription privilege. In August 2022, the Company obtained a bridge loan of CAD$2.5 million from Sun Valley as an advance payment for the standby guaranty. Pursuant to the standby guaranty agreement, Canagold issued 20.4M common shares to Sun Valley. From the CAD$3.6 million gross proceeds received from Sun Valley, the Company deducted a total of CAD$2.5 million to pay back and terminate the $2.5M loan provided by Sun Valley in August 2022 plus accrued interest of CAD$46,336, and a total of CAD$178,085 in fees pursuant to the standby guaranty agreement.
No stock options or warrants were exercised or issued in 2022.
Canagold Resources Ltd.
Form 20-F
81 |
Table of Contents |
In 2022, cash of $325,000 was received from sales of marketable securities.
In 2022, the Company received the following cash and shares for property option agreements:
· | $100,000 cash and 1,122,000 shares from Getchell for the Fondaway Canyon and Dixie Comstock properties. | |
· | $12,000 cash from Brownstone for the Silver King property | |
· | AD$50,000 cash from Ophir for the Lightening Tree property | |
· | In July 2022, the Company entered into a Real Estate Purchase and Sale Agreement for the Hot Springs Point property located in Eureka County, Nevada, with a third party (the “Purchaser”), whereby the Purchaser acquired a 100% interest for cash $480,000 (received). The Purchaser also grants a 3% NSR to the Company. Hot Springs was incidental to the Fondaway Canyon property when they were acquired together. |
As at December 31, 2022, Canagold’s marketable securities have a fair value of $855,000.
As at December 31, 2022, to maintain Canagold’s interest and/or to fully exercise the options under various property agreements covering its properties, the Company must make payments as follows:
|
| Cash |
|
| Cash |
|
| Annual |
|
| Number of |
| ||||
|
| Payments |
|
| Payments |
|
| Payments |
|
| Shares |
| ||||
|
| (CADS$000) |
|
| (US$000) |
|
| (US$000) |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
New Polaris: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net profit interest reduction or buydown |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
| 150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fondaway Canyon: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance royalty payment for buyout of 3% net smelter return (1) |
|
| - |
|
|
| - |
|
|
| 35 |
|
|
| - |
|
Buyout provision for net smelter return of 2% (2) |
|
| - |
|
|
| 2,000 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Windfall Hills: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buyout provision for net smelter return of 1.5% |
|
| 1,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
Reduction of net smelter return of 2% to 1% |
|
| - |
|
|
| 500 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,000 |
|
| $ | 2,500 |
|
| $ | 35 |
|
|
| 150,000 |
|
(1) | Advance royalty payments of $215,000 remain payable as at December 31, 2022 with annual payments of $35,000. Pursuant to the option agreement, Getchell will be obligated to pay the annual advance royalty. |
(2) | The 2% NSR has a buyout provision of either $2 million in cash or 19.99% interest of a public entity which owns AIM if AIM were to close an initial public offering of at least $5 million. |
Canagold Resources Ltd.
Form 20-F
82 |
Table of Contents |
On July 28, 2023, the Company closed a financing consisting of 21,000,000 shares at CAD $0.21 per share for aggregate gross proceeds of CAD $4,410,000. Sun Valley subscribed for an aggregate of 13,500,000 shares and has increased its ownership in the Company from 40.06% to 43.28%.
On March 28, 2024, subject to receiving the final approval from the TSX Exchange, the Company closed a financing for 15,700,000 flow through common shares at a price of CAD$0.2625 per share for gross proceeds of CAD$4.1 million. Sun Valley subscribed for 15,700,000 shares and has increased its ownership in the Company from 43.28% to 48.41%.
Canagold has entered into a number of option agreements for mineral property interests that involve payments in the form of cash and/or shares of Canagold as well as minimum exploration expenditure requirements. Under Item 5.F, further details of contractual obligations are provided as at December 31, 2023.
As Canagold performs exploration on its mineral property interests, it decides which ones to proceed with and which ones to abandon. Accordingly, the minimum expenditure commitments are reduced as Canagold narrows its interests. To fully exercise the options under various agreements for the acquisition of interests in properties located in Canada and the USA, Canagold must make payments to the optionors and lease liability obligations for its office facilities as follows as at December 31, 2023:
Canagold Resources Ltd.
Form 20-F
83 |
Table of Contents |
In February 2017, the Company entered into an office lease arrangement for a term of five years with a commencement date of August 1, 2017 which ended on July 31, 2022.
In January 2022, the Company entered into an office lease arrangement for a term of five years with a commencement date of September 1, 2022. The basic rent per year is CAD$84,700 for years 1 to 2, CAD$87,300 for years 3 to 4, and CAD$89,900 for year 5. As at December 31, 2023, the Company is committed to the following payments for base rent at its corporate head office in Vancouver, BC, as follows:
Canagold’s ability to continue as a going concern is dependent on the ability of Canagold to raise debt or equity financings, and the attainment of profitable operations. Management would need to raise the necessary capital to meet its planned business objectives.
Canagold will continue to rely upon debt and equity financings as its principal source of financing its projects and its ongoing working capital needs.
5.C Research and Development, Patents and Licenses, etc.
Canagold does not currently carry out research and development activities.
Items 4.A, 4.D, 5.A and 5.F provide details of Canagold’s mineral property interests, exploration activities, acquisitions and write-downs.
Canagold Resources Ltd.
Form 20-F
84 |
Table of Contents |
5.D Trend Information
Canagold knows of no trends, demand, commitments, events or uncertainties that are reasonably likely to have a material effect on Canagold’s net sales or revenues, income from continuing operations, profitability, liquidity or capital resources or that would cause financial information not necessarily to be indicative of future operating results or financial condition, other than disclosed or inferred in this Form 20-F.
Canagold currently has no active business operations that would be affected by recent trends in productions, sales, etc. Canagold has no material net sales or revenues that would be affected by recent trends.
To date, Canagold has experienced a decline in the value of its common shares and expects to incur ongoing costs while certain corporate objectives may be delayed. These and other conditions may ultimately have a material adverse impact on Canagold’s financial condition and results of operations. See “Key Information – D. Risk Factors” for additional information.
5.E Critical Accounting PoliciesEstimates
For the Registrant'sCanagold’s exploration activities, there is no product, sales or inventory in the conventional sense. The recoverability of costs capitalized to mineral property interests and the Registrant'sCanagold’s future financial success are dependent upon the extent to which it can discover mineralization and the economic viability of advancing such mineral property interests beyond the exploration stage. Such activities may take years to complete and the amount of resulting income, if any, is difficult to determine with any certainty. Many of the key factors are outside of the Registrant'sCanagold’s control. The sales value of any mineralization discovered by the RegistrantCanagold is largely dependent upon factors beyond the Registrant'sCanagold’s control such as the market value of the metals.
As the carrying value and amortization of mineral property interests and capital assets are, in part, related to the Registrant'sCanagold’s mineral reserves, the estimation of such reserves is significant to the Registrant'sCanagold’s position and results of operations. As of the date of this annual report, the RegistrantCanagold has not established any reserves on its mineral property interests.
Canagold Resources Ltd.
Form 20-F
85 |
Table of Contents |
In accordance with an acceptable accounting policy under IFRS, all costs related to investments in mineral property interests are capitalized on a property-by-property basis. Such costs include mineral property acquisition costs and exploration and development expenditures, net of any recoveries. The costs related to a mineral property interest from which there is production, together with the costs of mining equipment, will be amortized using the unit-of-production method. When there is little prospect of further work on a mineral property interest being carried out by the RegistrantCanagold or its partners or when a property interest is abandoned or when the capitalized costs are not considered to be economically recoverable, the related mineral property costs are written down to the amount recoverable. The amounts for mineral property interests as shown in the Registrant'sCanagold’s consolidated financial statements represent costs incurred to date, less write-downs and any recoveries, and are not intended to reflect present or future values.
The RegistrantCanagold accounts for share-based payments using a fair value-based method with respect to all stock-based payments to directors, officers, employees and non-employees. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The offset to the recorded cost is to the reserve for share-based payments. Consideration received on the exercise of stock options is recorded as share capital and the related reserve for share-based payments is transferred to share capital. Upon expiry, the recorded fair value is transferred from reserve for share-based payments to deficit.
Canarc Resource Corp.
Form 20-F
5.B Liquidity and Capital Resources
The Registrant is in the exploration stage and has not yet determined whether its mineral property interests contain reserves. The recoverability of amounts capitalized for mineral property interests is entirely dependent upon the existence of reserves, the ability of the Registrant to obtain the necessary financing to complete the development and upon future profitable production. The Registrant knows of no trends, demands, commitments, events or uncertainties that may result in the Registrant's liquidity either materially increasing or decreasing at the present time or in the foreseeable future. Material increases or decreases in the Registrant's liquidity are substantially determined by the success or failure of the Registrant's exploration programs and overall market conditions for smaller mineral exploration companies. Since its incorporation in 1987, the Registrant has endeavoured to secure mineral property interests that in due course could be brought into production to provide the Registrant with cash flow which would be used to undertake work programs on other projects. To that end, the Registrant has expended its funds on mineral property interests that it believes have the potential to achieve cash flow within a reasonable time frame. As a result, the Registrant has incurred losses during each of its fiscal years since incorporation. This result is typical of smaller exploration companies and will continue unless positive cash flow is achieved.
The following table contains selected financial information of Canarc's liquidity:
|
| December 31, |
| |||||
($000s) |
| 2015 |
|
| 2014 |
| ||
|
|
|
|
|
|
| ||
Cash |
| $ | 354 |
|
| $ | 675 |
|
Working capital (deficiency) |
|
| (574 | ) |
|
| (156 | ) |
Canarc has no sources of operating revenues, and ongoing operating expenses continue to reduce its cash resources and working capital. Operating losses continued to be incurred for ongoing activities of Canarc in seeking an appropriate joint venture partner for the New Polaris property, in advancing the El Compas project, and in pursuing new projects of merit.
On January 31, 2014, Canarc closed a private placement for 18 million units at a price of CAD$0.05 per unit for gross proceeds of CAD$900,000 with each unit was comprised of one common share and one-half of a whole common share purchase warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.10 per share until January 31, 2016. Finder's fees of CAD$22,500 were paid for the private placement.
In March and April 2014, Canarc closed a private placement in two tranches totalling 19.6 million units at a price of CAD$0.10 per unit for gross proceeds of CAD$1.96 million with each unit comprised of one common share and one-half of a whole common share purchase warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.15 per share for a three year period. On March 18, 2014, Canarc closed the first tranche for 10.6 million units for CAD$1.06 million, and paid CAD$66,170 in cash and issued 661,718 in warrants as finders' fees. On April 3, 2014, Canarc closed the second tranche for 9 million units for CAD$900,000, and paid CAD$6,070 in cash and issued 60,725 in warrants as finders' fees. The finders' fee warrants have the same terms as the underlying warrants in the unit private placement.
On July 9, 2014, Canarc closed a private placement for 5 million units at CAD$0.08 per unit for gross proceeds of CAD$400,000 with each unit comprised of one flow-through common share and one-half of a whole common share purchase warrant; each whole warrant is exercisable to acquire one non-flow through common share at an exercise price of CAD$0.15 per share until July 9, 2016. Funds of CAD$386,000 were expended for flow-through purposes in 2014 and 2015.
Canarc Resource Corp.
Form 20-F
In October 2014, Canarc received 358,000 shares from Aztec Metals Corp., a company sharing certain common directors, ("Aztec") in settlement of debt owed to Canarc which Canarc had written off in 2013.
On February 24, 2015, Canarc entered into a Pre-Development and Earn-In Binding Agreement with PanTerra. PanTerra has a 30-month option to earn a 50% interest in Canarc's New Polaris project by spending a total of CAD$10 million in three stages of predevelopment activities including metallurgical test work, drilling, detailed mine planning, tailings dam design, environmental permitting, and completion of a definitive feasibility study. In August 2015, PanTerra informed Canarc that it will not be able to commit to further expenditures to commence Stage Two exploration and permitting work on Canarc's New Polaris project until PanTerra receives the approval from the Dominican Republic government for importing New Polaris gold concentrate into the country for processing and PanTerra requested a 12 month extension of the Earn-In Agreement. PanTerra declared a force majeure event under the terms of the Earn-In Agreement. Canarc does not agree with PanTerra's position. Canarc and PanTerra continue to be in communication regarding this matter, and an extension or a resolution has not yet been negotiated. Items 4.A and 4.D provide further details.
In May 2015, certain directors and officers of Canarc cancelled 3,360,000 stock options with exercise prices ranging from CAD$0.10 to CAD$0.145 and expiry dates from September 2015 to June 2017.
In August 2015, Canarc extended the expiry period of a total of 18.6 million warrants by a period of 18 months which were issued pursuant to two private placements which closed in 2014. Expiry dates for 951,250 warrants which were issued to insiders in those private placements were not extended. Material terms of the extended warrants are as follows:
Number of Warrants | Exercise Price | Original Grant Date | Original Expiry Date | New Expiry Date |
8,450,000 | $0.10 | January 31, 2014 | January 31, 2016 | July 31, 2017 |
5,915,773 | $0.15 | March 18, 2014 | March 18, 2017 | September 18, 2018 |
4,214,475 | $0.15 | April 3, 2014 | April 3, 2017 | October 3, 2018 |
18,580,248 | Total |
In September and October 2015, Canarc closed a non-brokered private placement in two tranches totalling 13.2 million units at a price of CAD$0.06 per unit for gross proceeds of CAD$790,000, with each unit comprised of one common share and one-half of one common share purchase warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.08 per share for a three year period. On September 21, 2015, Canarc closed the first tranche of the private placement for 11.5 million units at a price of CAD$0.06 per unit for gross proceeds of CAD$690,000. Canarc paid CAD$36,200 in cash and issued 594,844 in warrants as finders' fees. The finders' fee warrants have the same terms as the underlying warrants in the unit private placement. On October 30, 2015, Canarc closed the second tranche of the private placement for 1.67 million units at a price of CAD$0.06 per unit for gross proceeds of CAD$100,000 with Marlin Gold.
Canarc Resource Corp.
Form 20-F
On September 24, 2015, Canarc issued 2 million shares at a value of CAD$0.07 in settlement of partial salaries owed to certain officers and fees owed to directors in which the latter also forgave a certain portion of outstanding directors fees owed, resulting in a gain on debt settlement of $54,000.
On October 8, 2015, Canarc entered into the Share Purchase Agreement with Marlin Gold which closed on October 30, 2015 whereby Canarc issued 19 million common shares at a value of CAD$0.07 per share to Marlin Gold to acquire a 100% interest in Marlin Gold's wholly-owned subsidiary, Oro Silver, which owns the El Compas project through its wholly-owned Mexican subsidiary, Minera Oro Silver.
At December 31, 2015, to maintain its interest and/or to fully exercise the options under various property agreements covering its property interests, Canarc must incur exploration expenditures on the properties and/or make payments in the form of cash and/or shares to the optionors as follows:
|
| Number of Shares |
|
| Number of Troy Ounces of Gold (1) |
| ||
|
|
|
|
|
|
| ||
New Polaris: |
|
|
|
|
|
| ||
Net profit interest reduction or buydown |
|
| 150,000 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
El Compas: |
|
|
|
|
|
|
|
|
October 30, 2016 |
|
| - |
|
|
| 55 |
|
October 30, 2017 |
|
| - |
|
|
| 55 |
|
October 30, 2018 |
|
| - |
|
|
| 55 |
|
|
|
|
|
|
|
|
|
|
|
|
| 150,000 |
|
|
| 165 |
|
|
These amounts may be reduced in the future as Canarc determines which properties to continue to explore and which to abandon.
Canarc has entered into a number of option agreements for mineral property interests that involve payments in the form of cash and/or shares of Canarc as well as minimum exploration expenditure requirements. Under Item 5.F, further details of contractual obligations are provided as at December 31, 2015.
Canarc Resource Corp.
Form 20-F
In March 2016, Canarc closed a private placement in two tranches totalling 22.7 million units at a price of CAD$0.09 per unit for gross proceeds of CAD$2.04 million with each unit comprised of one common share and one-half of one common share purchase warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.12 per share for a period of three years. On March 3, 2016, the Company closed the first tranche for 17.7 million units for gross proceeds of CAD$1.59 million. On March 14, 2016, the Company closed the second tranche for 5 million units for gross proceeds of CAD$449,500 with a finder's fee of 311,111 units issued with the same terms as the units in the private placement.
In March 2016, Canarc entered into an indicative term sheet for up to $10 million in debt financing by way of a gold prepaid facility to develop the El Compas gold-silver project subject to a 60 day due diligence period.
Canarc's ability to continue as a going concern is dependent on the ability of Canarc to raise debt or equity financings, and the attainment of profitable operations. Management would need to raise the necessary capital to meet its planned business objectives.
Canarc will continue to rely upon debt and equity financings as its principal source of financing its projects and its ongoing working capital needs.
5.C Research and Development, Patents and Licenses, etc.
The Registrant does not currently carry out research and development activities.
Items 4.A, 4.D, 5.A and 5.F provide details of the Registrant's mineral property interests, exploration activities, acquisitions and write-downs.
5.D Trend Information
The Registrant knows of no trends, demand, commitments, events or uncertainties that are reasonably likely to have a material effect on the Registrant's net sales or revenues, income from continuing operations, profitability, liquidity or capital resources or that would cause financial information not necessarily to be indicative of future operating results or financial condition, other than disclosed or inferred in this Form 20-F.
The Registrant currently has no active business operations that would be affected by recent trends in productions, sales, etc. The Registrant has no material net sales or revenues that would be affected by recent trends other than the general effect of mineral prices on its ability to raise capital and those other general economic items as set out in Item 3.D.
5.E Off-Balance Sheet Arrangements
There are no known significant or material off-balance sheet arrangements other than those disclosed in this Form 20-F and in the Registrant's audited consolidated financial statements for the years ended December 31, 2015, 2014 and 2013.
Canarc Resource Corp.
Form 20-F
Shareholder Rights Plan
On May 31, 2005, the shareholders of the Registrant approved a shareholder rights plan (the "Plan"), that became effective on April 30, 2005. The Plan was intended to ensure that any entity seeking to acquire control of the Registrant made an offer that represented fair value to all shareholders and provided the board of directors with sufficient time to assess and evaluate the offer, to permit competing bids to emerge, and, as appropriate, to explore and develop alternatives to maximize value for shareholders. Under the Plan, each shareholder at the time of the Plan's adoption was issued one Right for each common share of the Registrant held. Each Right entitled the registered holder thereof, except for certain "Acquiring Persons" (as defined in the Plan), to purchase from treasury one common share at a 50% discount to the prevailing market price, subject to certain adjustments intended to prevent dilution. The Rights were exercisable after the occurrence of specified events set out in the Plan generally related to when a person, together with affiliated or associated persons, acquired, or made a take-over bid to acquire, beneficial ownership of 20% or more of the outstanding common shares of the Registrant. The Rights expired on April 30, 2015. Item 10.B provides further details.
Share Appreciation Rights
At the discretion of the Board, certain stock option grants provide the stock option holder the right to receive the number of common shares, valued at the quoted market price at the time of exercise of the stock options, that represent the share appreciation since granting the stock options.
5.F Tabular Disclosure of Contractual Obligations
As the Registrant performs exploration on its mineral property interests, it decides which ones to proceed with and which ones to abandon. Accordingly, the minimum expenditure commitments are reduced as the Registrant narrows its interests. To fully exercise the options under various agreements for the acquisition of interests in properties located in Canada and Mexico, the Registrant must incur exploration expenditures on the properties and make payments to the optionors as follows as at December 31, 2015:
|
| Payments due by Period |
| Payments due by Period |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
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| (CAD$000s) |
| (US$000s) |
| Others |
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| Number of Troy Ounces of Gold (1) |
|
|
| |||||||||||||||||||||
|
| Total |
| Less than 1 year |
| 1-3 years |
| 3-5 years |
| More than 5 years |
| Total |
| Less than 1 year |
| 1-3 years |
| 3-5 years |
| More than 5 years |
| Total |
| Less than 1 year |
| 1-3 years |
| More than 3 years |
| Number of Shares |
| |||||||||||||||
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|
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New Polaris: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net profit interest reduction or buydown |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
El Compas: |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Troy Ounces of Gold |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
|
| 165 |
|
| 55 |
|
| 110 |
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
|
| 165 |
|
| 55 |
|
| 110 |
|
| - |
|
| 150,000 |
|
|
Canarc Resource Corp.
Form 20-F
These amounts may be reduced in the future as the Registrant determines which properties continue to be of merit and abandons those with which it does not intend to proceed.
In January 2016, Canarc signed a definitive agreement with the Zacatecas state government to lease and operate the permitted 500 tonne per day La Plata ore processing plant located in the city of Zacatecas, Mexico, approximately 20 kilometres from El Compas. Highlights of the lease agreement include the following (Item 4.D provides further details):
|
| |
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| |
|
| |
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|
In March 2016, Canarc entered into an indicative term sheet for up to $10 million in debt financing by way of a gold prepaid facility to develop the El Compas gold-silver project subject to a 60 day due diligence period which is currently in process.
5.G Safe Harbor
This document may contain forward-looking statements. See "Caution – Forward-Looking Statements" at the beginning of this annual report. The Registrant desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protections of the safe harbor with respect to all forward-looking statements. Several important factors, in addition to the specific factors discussed in connection with such forward-looking statements individually, could affect the future results of the Registrant and could cause those results to differ materially from those expressed in the forward-looking statements contained herein.
Canarc Resource Corp.
Form 20-F
The Registrant's estimated or anticipated future results or other non-historical facts are forward-looking and reflect the Registrant's current perspective of existing trends and information. These statements involve risks and uncertainties that cannot be predicted or quantified, and consequently actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others:
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as well as other risks and uncertainties detailed in this annual report and from time to time in the Registrant's other SEC filings.
Therefore, the Registrant cautions each reader of this document to consider carefully these factors as well as the specific factors that may be discussed with each forward-looking statement in this document or disclosed in the Registrant's filings with the SEC as such factors, in some cases, could affect the ability of the Registrant to implement its business strategy and may cause actual results to differ materially from those contemplated by the statements expressed therein. Forward-looking statements are subject to a variety of risks and uncertainties including, but not limited to, the risks referred under the section "Risk Factors" under Item 3.D above.
Canarc Resource Corp.
Form 20-F
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A Directors and Senior Management
In accordance with the provisions of the Business Corporations Act (British Columbia) the overall control of the business and affairs of the RegistrantCanagold is vested in its board of directors. The board of directors of the RegistrantCanagold currently consists of five members elected by the shareholders of the RegistrantCanagold at each annual meeting of shareholders of the Registrant.Canagold.
Canagold Resources Ltd.
Form 20-F
86 |
Table of Contents |
The directors and senior management of CanarcCanagold as of April 22, 201623, 2024 are:
Name and Province/State and Country of Residence | Principal Occupation and Occupation during the Past 5 Years (1) | Current Position with and Period of Service |
BC, Canada |
| Chair of Board of Directors (since July 19, 2022) |
Andrew Trow (3),(4),(5) Cape Town, South Africa | Managing Director at Fresh Beverages (Pty) Ltd (since January
| Director ( |
Carmen Letton (3),(6),(7) Australia | Managing Director at Malett Pty Ltd (since February 2022); Head of RDP and LoAP at Anglo American (from October 2018 to January | Director (since July 19, 2022) |
Michael Doyle(6),(8) Medellin, Columbia | Chief Technical Officer of Canagold Resources Ltd (since August 2022); Partner and Vice President of | Director and Chief Technical Officer ( |
Kadri Dagdalen (6) Colorado, USA | Professor at Colorado School of Mines (since 1992); President of Optitech Engineering Solutions (since 2005) | Director (since July 19, 2022) |
Catalin Kilofliski BC, Canada | Chief Executive Officer
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| Chief Executive Officer (since |
Canagold Resources Ltd.
Form 20-F
87 |
Table of Contents |
British Columbia, Canada | Vice-President, Mining, of (from March 1, 2007 to May 31, 2008)
| President and Chief Operating Officer (since June 1, 2008) |
British Columbia, Canada | VP Sustainable Development of Osisko Development Corp(from 2019 to 2023); VP Environment and Sustainability of Barkerville Goldmines Ltd (prior to 2019) | Vice-President (Sustainability and Permitting) (since January 2024) |
Knox Henderson British Columbia, Canada | Vice-President (Corporate Development) of Canagold (since July 2021) Investor Relations Advisor of Great Bear Resources Ltd. and Kodiak Cooper Corp. (from October 2016 to June 2021) | Vice-President (Corporate Development) (since July 2021) |
Colm Keogh British Columbia, Canada | Vice-President (Operations) of Canagold (since March 2023) Manager of Operations Support & Engineering / Operations Manager at Eldorado Gold Corporation (from November 2017 to June 2022) Mining Consultant at Druid Mining (from June 2022 to April 2023) | Vice-President (Operations) (since March 2023) |
Mihai Draguleasa British Columbia, Canada | Chief Financial Officer,
Chief Financial Officer,
Chief Financial Officer,
| Chief Financial Officer (since
|
Canagold Resources Ltd.
Form 20-F
88 |
Table of Contents |
(1) | The information as to residence and principal occupation during the past five years is not within the knowledge of the Company and has been furnished by the respective directors and officers. |
(2) | Unless otherwise stated above, each of the |
(3) |
|
(4) | Member of Compensation Committee. |
(5) |
|
(6) | Member of Technical, Environmental, Social and Safety. |
(7) | Member of Investment Committee. |
(8) | Micheal Doyle is |
Andrew Bowering resigned from the Board of Directors in March 2022.
At the Company’s contested Annual and Special General Meeting held on July 19, 2022, shareholders voted for the election of Sofia Bianchi, Carmen Letton, Kadri Dagdelen, Andrew Trow, and Scott Eldridge as Directors for the ensuing year. Three other nominees originally proposed by the Company, namely Bradford Cooke, Martin Burian and Deepak Malhotra, elected to resign from the Board.
In August 2022, Scott Eldridge resigned as CEO and a Director of the Company, and Catalin Kilofliski was appointed as CEO, and Michael Doyle was nominated as a Director and who subsequently was appointed as Chief Technical Officer.
At the Company’s Special General Meeting held on October 17, 2022, disinterested shareholders voted in favor for the creation of a new control person with Sun Valley Investments AG (“Sun Valley”) owning more that 20% interest of the Company which allowed the closing of the flow through private placement for 4.7 million common shares, resulting in Sun Valley’s ownership interest in the Company increasing from 19.40% to 23.55%. Sun Valley participated in a rights offering in December 2022 and increased its ownership in the Company to 40.06%.
Canagold Resources Ltd.
Form 20-F
89 |
Table of Contents |
In February 2023, Philip Yee resigned as CFO and Corporate Secretary of the Company, and Mihai Draguleasa was appointed as CFO and Corporate Secretary of the Company.
In March 2023, Colm Keogh was appointed as Senior Vice-President of Operations of the Company.
In May 2023, Tim Caldwell was appointed as Vice-President of Sustainability; Tim Caldwell resigned from this position in October 2023.
In September 2023, Troy Gill resigned as Vice-President of Exploration.
In January 2024, Chris Pharness was appointed as Senior Vice-President of Sustainability and Permitting of the Company.
No director or officer has any family relationship with any other director or officer. The term of office of each of the directors will continue until the next annual general meeting, or until his successor is duly elected, unless his office is vacated in accordance with the articles of the Registrant.Canagold. Officers hold office at the pleasure of the directors.
To the best of the Registrant'sCanagold’s knowledge, there are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any of the Registrant'sCanagold’s officers or directors was selected as an officer or director of the Registrant,Canagold, other than as disclosed in this Form 20-F.
6.B Compensation
Statement of Executive Compensation
The Registrant
Canagold is required, under applicable securities legislation in Canada, to disclose to its shareholders details of compensation paid to its directors and officers. The following fairly reflects all material information regarding compensation paid to the Registrant'sCanagold's directors and officers that has been disclosed to the Registrant'sCanagold’s shareholders under applicable Canadian law.
During the fiscal period ended December 31, 2015,2023, the aggregate compensation incurred by the RegistrantCanagold to all individuals who were directors and officers, at the time of their remuneration, in all capacities as a group was CAD$800,000 of which CAD$180,000 was for severance and CAD$35,000 for bonus.1,328,270.
The table below discloses information with respect to executive compensation paid by the RegistrantCanagold to its directors and officers for the fiscal year ended December 31, 2015.2023. The following table sets forth, for the periods indicated, the compensation of the directors and officers.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
90 |
Table of Contents |
SUMMARY OF COMPENSATION
SUMMARY OF COMPENSATION
PAID TO DIRECTORS AND OFFICERS
(in terms of Canadian dollars)
Name and principal position | Year | Salary(1) ($) | Share-based awards | Option-based awards(2) | Non-equity incentive plan compensation(3) ($) | Pension value(5) | All other compensation(6) | Total compensation(7) | |
Annual Incentive plans(3) | Long-term incentive | ||||||||
Bradford J. Cooke (8) Director, Chairman and former CEO | 2015 | Nil | Nil | $60,265 | $180,000 | Nil | Nil | Nil | $240,265 |
2014 | Nil | Nil | $63,620 | Nil | Nil | Nil | $4,000 | $67,620 | |
2013 | $18,511 | Nil | $31,639 | Nil | Nil | Nil | $8,000 | $58,150 | |
Leonard Harris Director | 2015 | Nil | Nil | $23,179 | Nil | Nil | Nil | $3,000 | $26,179 |
2014 | Nil | Nil | $23,858 | Nil | Nil | Nil | $5,000 | $28,858 | |
2013 | Nil | Nil | $12,656 | Nil | Nil | Nil | $8,000 | $20,656 | |
Martin Burian(9) Director | 2015 | Nil | Nil | $9,272 | Nil | Nil | Nil | $5,500 | $14,772 |
2014 | Nil | Nil | $23,858 | Nil | Nil | Nil | $6,000 | $29,858 | |
2013 | Nil | Nil | Nil | Nil | Nil | Nil | $1,326 | $1,326 | |
Bruce Bried (10) Former Director | 2015 | Nil | Nil | Nil | Nil | Nil | Nil | $2,000 | $2,000 |
2014 | Nil | Nil | $23,858 | Nil | Nil | Nil | $5,000 | $28,858 | |
2013 | Nil | Nil | $12,656 | Nil | Nil | Nil | $8,000 | $20,656 | |
Deepak Malhotra (11) Director | 2015 | Nil | Nil | $9,272 | Nil | Nil | Nil | $3,500 | $12,772 |
2014 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
2013 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
Akiba Leisman (12) Director | 2015 | Nil | Nil | $9,272 | Nil | Nil | Nil | Nil | $9,272 |
2014 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
2013 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
Catalin Chiloflischi(13) Chief Executive Officer | 2015 | $175,652 | Nil | $50,993 | $35,000 | Nil | Nil | Nil | $261,645 |
2014 | $154,852 | Nil | $99,193 | Nil | Nil | Nil | Nil | $254,045 | |
2013 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
Garry D. Biles President and COO | 2015 | $214,615 | Nil | $64,901 | Nil | Nil | Nil | Nil | $279,516 |
2014 | $207,925 | Nil | $63,620 | Nil | Nil | Nil | Nil | $271,545 | |
2013 | $201,095 | Nil | $25,311 | Nil | Nil | Nil | Nil | $226,406 | |
Stewart Lockwood (14) Former Secretary | 2015 | Nil | Nil | Nil | Nil | Nil | Nil | $75,825 (13) | $75,825 |
2014 | Nil | Nil | $3,976 | Nil | Nil | Nil | $112,235 (13) | $116,211 | |
2013 | Nil | Nil | $6,328 | Nil | Nil | Nil | $69,435 (13) | $75,763 | |
Philip Yee Chief Financial Officer and Vice-President, Finance and Secretary (Interim) | 2015 | $105,048 | Nil | $27,815 | Nil | Nil | Nil | Nil | $132,863 |
2014 | $106,273 | Nil | $31,810 | Nil | Nil | Nil | Nil | $138,083 | |
2013 | $90,877 | Nil | $18,984 | Nil | Nil | Nil | Nil | $109,861 |
Canarc Resource Corp.
Canagold Resources Ltd.
Form 20-F
91 |
Table of Contents |
Notes:
(1) | Includes the dollar value of cash and | |
(2) | The amount represents the fair value, on the date of grant and on each vesting date, as applicable, of awards made under | |
(3) | These amounts include annual non-equity incentive plan compensation, such as severance, bonuses and discretionary amounts for the | |
(4) | N/A. | |
(5) | N/A. | |
(6) | These amounts cover all compensation other than amounts already set out in the table for the | |
(7) | These amounts include dollar value of total compensation for the covered year. This is the sum of all amounts reported in columns with footnotes 1 to 6 above for each director and officer. | |
Mr. Bradford Cooke resigned as Chief Executive Officer effective January 13, 2014 but remain Chairman and Director. In 2015, Canarc accrued a severance of CAD$180,000 which was paid in March 2016.
Mr. Martin Burian was nominated to the Board of Directors effective November 1, 2013.
Mr. Bruce Bried retired as a Director effective June 29, 2015.
Mr. Deepak Malhotra was nominated to the Board of Directors effective June 29, 2015.
Mr. Akiba Leisman was nominated to the Board of Directors effective October 30, 2015 pursuant to the Share Purchase Agreement with Marlin Gold. Items 4.A and 4.D provide further details.
Mr. Catalin Chiloflischi was appointed Chief Executive Officer effective January 13, 2014.
Legal fees charged to Canarc by a law firm in which Mr. Stewart Lockwood is a partner. Mr. Lockwood resigned a Secretary of Canarc effective December 8, 2015.
Item 10.C provides further details of employment contracts and agreements with current and former senior officers of the Registrant.Canagold.
Stock Options and other share based compensation
The following table sets forth information concerning outstanding stock options under the Registrant'sCanagold’s Stock Option Plan as at December 31, 2015to2023to each director and officer of the Registrant.Canagold. No SARs were outstanding.
Canarc Resource Corp.
Form 20-FCanagold Resources Ltd.
Form 20-F
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Table of Contents |
Options and Stock Appreciation Rights ("SARs")
The following table discloses incentiveIn fiscal 2023, Canagold did not grant any stock options whichto directors, officers, employees and/or consultants. No performance share units (PSUs) were granted during 2023. Total PSUs available for granting are 1,000,000. From the available 6,500,000 restricted share units (“RSUs”) under the Omnibus plan, 1,600,000 RSUs were granted to the officers of the Company in Q3 2023. From the available 2,500,000 restricted share units (“DSUs”) under the Omnibus plan, 1,537,255 DSUs were granted to the directors and officersof the Company during the fiscal year ended December 31, 2015:2023.
SUMMARY OF STOCK OPTIONS
GRANTED TO DIRECTORS AND OFFICERS
From January 1, 2015 to December 31, 2015
Name and Principal Position | Date of | Title of Underlying | Number of Underlying Security | Exercise Price per | Expiry Date |
Bradford J. Cooke Chairman and Director | December 8, 2015 | Common shares | 1,300,000 | $0.06 | December 8, 2020 |
Martin Burian Director | December 8, 2015 | Common shares | 200,000 | $0.06 | December 8, 2020 |
Leonard Harris Director | December 8, 2015 | Common shares | 500,000 | $0.06 | December 8, 2020 |
Akiba Leisman Director | December 8, 2015 | Common shares | 200,000 | $0.06 | December 8, 2020 |
Deepak Malhotra Director | December 8, 2015 | Common shares | 200,000 | $0.06 | December 8, 2020 |
Catalin Chiloflischi Chief Executive Officer | December 8, 2015 | Common shares | 1,100,000 | $0.06 | December 8, 2020 |
Garry Biles President and Chief Operating Officer | December 8, 2015 | Common shares | 1,400,000 | $0.06 | December 8, 2020 |
Philip Yee Chief Financial Officer and Vice-President (Finance) and Secretary (Interim) | December 8, 2015 | Common shares | 600,000 | $0.06 | December 8, 2020 |
At the discretion of the directors, certain option grants provide the holder with the right to receive the number of common shares, valued at the quoted market price at the time of exercise of the stock options, that represent the share appreciation since granting the stock options.
Canarc Resource Corp.Pension Plan
Form 20-F
Pension Plan
The RegistrantCanagold does not have any pension plan arrangements in place.
Report on Executive Compensation
The Registrant'sCanagold’s executive compensation program is administered by the Compensation Committee on behalf the board of directors (the "Board"“Board”).
Compensation of Directors
Mr. Bradford J. Cooke, the former Chief Executive Officer and a Director of Canarc,Canagold, previously received compensation as consideration for his duties as an operating officer of Canarc as disclosed in the Summary Compensation Table above;Canagold; Mr. Cooke resigned aswas Chief Executive Officer on January 13, 2014(Interim) from June 29, 2018 to October 17, 2018 but remains Chairman and a Director. Mr. Cooke was awarded a severance of CAD$180,000 in 2015 which was accrued by Canarc and was paid in March 2016.
At a Compensation Committee meeting held onin 2020, Mr. Cooke received bonuses of CAD$30,000 in his capacity as Chairman in providing strategic guidance and assisting with mergers and acquisitions.
In March 22, 2013, it was resolved2018, the Compensation Committee approved quarterly stipends to Board members in which the Chairman shall receive CAD$2,500 per quarter and each Director shall receive CAD$1,000 per quarter, excluding a director who is an executive officer. In March 2019, the Compensation Committee re-approved Board and Committee fees for 2019. In March 2020, the Compensation Committee approved that each director shall earn a remuneration ofno Board stipends and no Board Committee fees will be payable for 2020 given the negative global economic impacts from the COVID-19 pandemic. In June 2020, the Compensation Committee reinstated directors stipend at CAD$2,000 per quarter as compensation in his capacity as aper non executive director and such remuneration shall continue to be accrued.
At aeffective July 1, 2020. In March 2021, the Compensation Committee meeting held on June 26, 2014, it was resolved that fees for members of the Audit, Compensation and Nomination Committees will bere-approved directors stipend at CAD$1,0002,000 per quarter per Committee Chairman and CAD$500 per quarter per Committee Member, and are to be paid each quarter. It was further resolved that no directors fees shall be payable to directors in their capacity as Directors. These resolutions were effective July 1, 2014.non executive director.
At Canarc's annual general meeting in June 2015, disinterested shareholders passed a resolution relating to shares for debt settlements to certain insiders of Canarc in which debts of up to CAD$63,520 owed to certain current and former directors would be settled by the issuance of up to 1.27 million shares. On September 24, 2015, Canarc issued 1.27 million shares at a value of CAD$0.07 in settlement of fees owed to certain former and current directors in which they also forgave a certain portion of outstanding directors fees owed, resulting in a gain on debt settlement of US$54,000.Canagold Resources Ltd.
Form 20-F
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Table of Contents |
During the fiscal year ended December 31, 2015, Canarc2021, Canagold granted 2.42.45 million stock options to directors withdirectors. The stock options have an exercise price of CAD$0.060.50 and an expiry date of December 8, 2020June 24, 2026, and which are subject to vesting provisions in which 25% of the options vest immediately on the grant date and 25% vest every six months thereafter.
Canarc Resource Corp.During the fiscal year ended December 31, 2022, Canagold incurred the following director fees in Canadian dollars:
Form 20-F
Andrew Trow - $28,000
Kadri Dagdelen – $25,000
Sofia Bianchi – $38,000
Carmen Letton - $25,000
Executive Compensation Program
The Registrant'sCanagold’s executive compensation program is based on a pay for performance philosophy. The executive compensation program is designed to encourage, compensate and reward employees on the basis of individual and corporate performance, both in the short and the long term. Base salaries are set at levels which are competitive with the base salaries paid by companies within the mining industry having comparable capitalization to that of the Registrant,Canagold, thereby enabling the RegistrantCanagold to compete for and retain executives critical to the Registrant'sCanagold’s long term success. Incentive compensation is directly tied to corporate and individual performance. Share ownership opportunities are provided to align the interests of executive officers with the longer term interests of shareholders.
Canagold Resources Ltd.
Form 20-F
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Compensation for directors and officers, as well as for executive officers as a whole, consists of a base salary, along with annual incentive compensation inprogram named the form of an annual bonus, and a longer term incentive in the form of stock options.Omnibus Plan As an executive officer'sofficer’s level of responsibility increases, a greater percentage of total compensation is based on performance (as opposed to base salary and standard employee benefits) and the mix of total compensation shifts towards stock options, thereby increasing the mutuality of interest between executive officers and shareholders.
No funds were set aside or accrued by the RegistrantCanagold or its subsidiaries during the year ended December 31, 20152023 to provide pension, retirement or similar benefits for directors or officers of the RegistrantCanagold pursuant to any existing plan provided or contributed to by the RegistrantCanagold or its subsidiaries under applicable Canadian laws.
Base Salary
The Board approves ranges for base salaries for executive employees of the RegistrantCanagold based on reviews of market data from peer groups and industry in general. The level of base salary for each employee within a specified range is determined by the level of past performance, as well as by the level of responsibility and the importance of the position to the Registrant.Canagold.
The Registrant'sCanagold’s Chief Executive Officer prepares recommendations for the Compensation Committee which are then presented to the Board with respect to the base salary to be paid to the CEO and other senior executive officers. The CEO'sCEO’s recommendations for base salaries for the senior executive officers, including the Chief Executive Officer, President and Chief Operating Officer, and theChief Technical Officer, Chief Financial Officer, and Vice Presidents (Operations, Sustainability and Permitting, and Corporate Development ), are then submitted for approval by the Board from the Compensation Committee.
At Canarc's annual general meeting in June 2015, disinterested shareholders passed a resolution relating to shares for debt settlements to certain insiders of Canarc in which debts of up to CAD$127,400 owed to senior officers would be settled by the issuance of up to 2.55 million shares. On September 24, 2015, Canarc issued 748,300 shares at a value of CAD$0.07 in settlement of partial salaries owed to certain officers.
Bonus
The Board, based upon recommendations from the Compensation Committee, annually evaluates performance and allocates an amount for payment of bonuses to executive officers and senior management. The aggregate amount for bonuses to be paid will vary with the degree to which targeted corporate performance was achieved for the year. The individual performance factor allows the RegistrantCanagold effectively to recognize and reward those individuals whose efforts have assisted the RegistrantCanagold to attain its corporate performance objective.
The CEO prepares recommendations for the Compensation Committee which in turn makes a recommendation to the Board with respect to the bonuses to be paid to the executive officers and to senior management.
A bonus of CAD$35,000 was accrued for the CEO for fiscal 2015 and paid in March 2016. No other bonuses were distributed nor paid to executive officers and senior management of Canarc in the 2013, 2014 and 2015 fiscal years.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
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In 2020, Canagold paid bonuses of CAD$103,100 related to corporate performance for 2019 fiscal year; in 2021 paid bonuses of CAD$146,360 for 2020 fiscal year; and in 2022, approved bonuses of CAD$195,140 for 2021 fiscal year. Canagold has made significant corporate advancements over the past years including substantial gains and significantly improved its financial resources and working capital as well as advancing its material mineral project, New Polaris, and optioning out certain of its immaterial mineral properties.
Stock Options
A Stock OptionThe Company’s Share Incentive Plan is administeredwas first adopted by shareholders on June 29, 2006, and ratified by the Board. The Stock Optionshareholders on June 25, 2013, and June 2, 2017. (the “Original Incentive Plan”).
On April 6, 2023, the Company’s directors adopted resolutions approving a new Omnibus Equity Incentive Compensation Plan (the “Omnibus Plan”) to replace the Original Incentive Plan.The Omnibus Plan is designed to give each option holder an interest in preserving and maximizing shareholder value in the longer term, to enable the RegistrantCanagold to attract and retain individuals with experience and ability, and to reward individuals for current performance and expected future performance. The Board considersPursuant to the Board's authority to govern the implementation and administration of the Omnibus Plan, all previously granted and outstanding stock option grants when reviewing executive officer compensation packages as a whole.options granted under the Original Incentive Plan, shall be governed by the provisions of the Omnibus Plan.
During the fiscal year ended December 31, 2015, Canarc granted 3.1 million stock options to officers with an exercise price of CAD$0.06 and an expiry date of December 8, 2020 and which are subject to vesting provisions in which 25%As of the current date there are a total of 900,000 outstanding options vest immediately onunder the grant dateOriginal Incentive Plan and 25% vest every six months thereafter.Nil options outstanding under the Omnibus Plan.
Other Compensation
Mr. Bradford J. Cooke formerly CEOreceived a bonus of CAD$30,000 in 2020 in his capacity as Chairman in providing strategic guidance and who remains Chairmanassisting with mergers and Director of Canarc, is a party to an employment arrangement with Endeavour Silver Corp., a company in which Mr. Cooke is its Chief Executive Officer and a Director, ("Endeavour") whereby Endeavour is reimbursed by Canarcacquisitions for time spent by Mr. Cooke on a cost recovery basis. During the financial year ended December 31, 2015, Canarc incurred CAD$Nil (2014 - CAD$Nil and 2013 - CAD$18,511) in salary paid or payable to Endeavour for services rendered by Mr. Cooke to Canarc.2019.
Mr. Cooke resigned as Chief Executive Officer of Canarc effective January 13, 2014 but remains its ChairmanDirectors’ and a Director. Mr. Cooke was awarded a severance of CAD$180,000 in 2015 which was accrued by Canarc and was paid in March 2016.Officers’ Liability Insurance
Directors' and Officers' Liability Insurance
Canarc has an insurance policy for itself andFrom 2021 to 2023, Canagold maintains its directors and officers against liability incurred by them in the performance of their duties as directors and officers of Canarc. In January 2014, Canarc renewed its policy which had a CAD$1 million limit of liability, retentions of up to CAD$50,000, and a policy period from January 1, 2014 to January 1, 2015 for a premium of CAD$14,000. In October 2014, Canarc increased its coverage to CAD$5 million limit of liability and extended the term to October 17, 2015 for a net premium of $25,048. On October 17, 2015, Canarc renewed its annualinsurance coverage of CAD$5 million for a net premium of CAD$15,000.10 million.
Canagold Resources Ltd.
Form 20-F
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6.C Board Practices
Statement of Corporate Governance Practices
The RegistrantCanagold is required to report annually to its shareholders on its corporate governance practices and policies with reference to National Policy 58-201, Corporate Governance Guidelines (the "Policy"“Policy”) and National Instrument 58-101, Disclosure of Corporate Governance Practices, as adopted by the Canadian Securities Administrators, and effective June 30, 2005.
The Board of Directors
The Board currently consists of five directors, of which threefour directors (Martin Burian, Deepak Malhotra( Sofia Bianchi, Andrew Trow, Carmen Letton, and Leonard Harris)Kadri Dagdelen) are currently "independent"“independent” in the context of the Policy. Mr. Bradford J. CookeMike Doyle is not an independent director because he wasis an officer of the ChiefCompany (Chief Technical Officer) and Executive Officer of Canarc until his resignation on January 13, 2014 but remains its Chairman and a Director. Mr. Akiba Leisman is not considered as an independent director because he is the interim Chief Executive Officer and a Director of Marlin Gold, a company which was an Insider of Canarc by virtue of having more than 10% (ie. 10.79%) interest in Canarc as at the closing date of October 30, 2015 for the Share Purchase Agreement between Canarc and Marlin.Sun Valley.
Directors are elected at the Registrant'sCanagold’s annual general meeting and are re-elected for the ensuing year.
Canarc Resource Corp.
Form 20-F
The number of years which each director has served is as follows:
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Certain directors of the Registrant are presently directors of other issuers that are reporting issuers (or the equivalent) in any jurisdiction including foreign jurisdictions, as follows:
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The independent directors do not hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. However, during the course of a directors'directors’ meeting, if a matter is more effectively dealt with without the presence of members of management, the independent directors request members of management to leave the meeting, and the independent directors then meet.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
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Table of Contents |
Bradford J. CookeSofia Bianchi is the ChairmanChair of the Board of Directors of Canarc. Martin Burian, as an independent director, was appointedCanagold and Andrew Trow is the Lead DirectorChair of the Board, with the mandate to ensure that the Board's Agenda will enable it to successfully carry out its duties and to do so without interference from the Chairman of the Board that could result from potential conflicts from his status as a non-independent Board member given that Mr. Cooke as Chairman was the Chief Executive Officer until his resignation on January 13, 2014.Audit Committee.
Since January 1, 2007, the RegistrantCanagold has held board meetings at least quarterly and at which the majority, if not all, Board members have attended, either in person or by telephoneaudio or video conference call, during the time in which they were directors of the Registrant.Canagold.
Board Mandate
The Board of Directors is responsible for supervising management in carrying on the business and affairs of the Registrant.Canagold. Directors are required to act and exercise their powers with reasonable prudence in the best interests of the Registrant.Canagold. The Board agrees with and confirms its responsibility for overseeing management's performance in the following particular areas:
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Canagold; | ||
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Canagold; | ||
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· | Canagold's policies regarding communications with its shareholders and others; and | |
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In carrying out its mandate, the Board relies primarily on management to provide it with regular detailed reports on the operations of the RegistrantCanagold and its financial position. The Board reviews and assesses these reports and other information provided to it at meetings of the Board and/or of its committees. The CEO reports directly to the Board, giving the Board direct access to information in his areas of responsibility. Other management personnel regularly attend Board meetings to provide information and answer questions. Directors also consult from time to time with management and have, on occasion, visited the properties of the Registrant.Canagold. The reports and information provided to the Board include details concerning the monitoring and management of the risks associated with the Registrant'sCanagold's activities, such as compliance with safety standards and legal requirements, environmental issues and the financial position and liquidity of the Registrant.Canagold. At least annually, the Board reviews management's report on its business and strategic plan and any changes with respect to risk management and succession planning.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
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Position Descriptions
The Board of Directors has not yet developed written position descriptions for the Chairman, the chairman of any Board committees, the CEO, the President or the CFO. The Board is of the view that given the size of the Registrant,Canagold, the relatively frequent discussions between Board members, the CEO, the President and the CFO and the experience of the individual members of the Board and Board committees, the responsibilities of such individuals are known and understood without position descriptions being reduced to writing. The Board will evaluate this position from time to time, and if written position descriptions appear to be justified, they will be prepared.
Orientation and Continuing Education
The Board does not have a formal policy relating to the orientation of new directors and continuing education for directors. The appointment of a new director is a relatively infrequent event in the Registrant'sCanagold’s affairs, and each situation is addressed on its merits on a case-by-case basis. The RegistrantCanagold has a relatively restricted scope of operations, and most candidates for Board positions will likely have past experience in the mining business; they will likely be familiar therefore with the operations of a resource company of the size and complexity of the Registrant.Canagold. The Board, with the assistance of counsel, keeps itself apprised of changes in the duties and responsibilities of directors and deals with material changes of those duties and responsibilities as and when the circumstances warrant. The Board will evaluate these positions, and if changes appear to be justified, formal policies will be developed and followed.
Ethical Business Conduct
The RegistrantCanagold has adopted a whistle blower policy, which is set out in its Charter of the Audit Committee which is available for viewing on SEDAR as a schedule to the Registrant'sCanagold’s Annual Information Form dated March 24, 2016.28, 2024.
Nomination of Directors
The Board has neither a formal policy for identifying new candidates for Board nomination. If and when the Board determines that its size should be increased or if a director needs to be replaced, the nomination committee meeting shall be convened. The terms of reference of such a committee will be determined, but are expected to include the determination of the independence of the candidate, his or her experience in the mining business and compatibility with the other directors.
Canagold Resources Ltd.
Form 20-F
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Compensation
Taking into account the Registrant'sCanagold’s present status as an exploration-stage enterprise, the Board of Directors reviews the adequacy and form of compensation provided to Directors on a periodic basis to ensure that the compensation is commensurate with the responsibilities and risks undertaken by an effective director.
At aIn 2023, the Compensation Committee meeting held on March 22, 2013 which was ratified by aapproved for independent Board of Directors meeting on that same day , it was resolved that each director shall earn a remuneration of CAD$2,000 per quarter asmembers to receive the following annual compensation in his capacity as a director for fiscal 2013 and such remuneration shall continue to be accrued.
Canarc Resource Corp.Canadian dollars:
Form 20-FChair of Board - $32,000
At a Compensation Committee meeting held on June 26, 2014, it was resolved that fees for members of the Audit, Compensation and Nomination Committees will be CAD$1,000 per quarter per Committee Chairman and CAD$500 per quarter per Committee Member, and are to be paid each quarter. It was further resolved that no directors fees shall be payable to directors in their capacity as Directors. These resolutions were effective July 1, 2014.
At Canarc's annual general meeting in June 2015, disinterested shareholders passed a resolution relating to shares for debt settlements to certain insiders of Canarc in which debts of up to CAD$63,520 owed to certain current and former directors would be settled by the issuance of up to 1.27 million shares. On September 24, 2015, Canarc issued 1.27 million shares at a value of CAD$0.07 in settlement of fees owed to certain former and current directors in which they also forgave a certain portion of outstanding directors fees owed, resulting in a gain on debt settlement of US$54,000.Director - $22,000
Audit committee chair: $6,000
Other committee chair: $3,000
Audit Committee
The Audit Committee is comprised of:
The mandate of the Audit Committee is as follows:
The Audit Committee will assist the Board of Directors (the Canagold Resources Ltd. Form 20-F
In carrying out its oversight responsibilities, the Audit Committee will:
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(e)
Canagold Resources Ltd. Form 20-F
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Canagold Resources Ltd.
Form 20-F
Other Board Committees
Canagold Resources Ltd. Form 20-F
The Board has also a Disclosure Committee comprised of the following management persons and its mandate:
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Assessments
The Board has no formal process for the assessment of the effectiveness and contribution of the individual directors. Each director has extensive public company experience and is familiar with what is required of him. Frequency of attendance at Board and committee meetings and the quality of participation in such meetings are two of the criteria by which the performance of a director will be assessed.
6.D Employees
Canagold Resources Ltd. Form 20-F
6.E Share Ownership
As at April
Canagold Resources Ltd.
Form 20-F
As at April 26, 2024, 425,552 common shares of Canagold were beneficially owned, directly or indirectly, by the directors and executives, as a group, representing 0.25% of Canagold’s issued and outstanding voting securities (173,589,394 common shares). In June 2018, Canagold again proceeded with a normal course issuer bid which received regulatory approval to acquire up to 10.9 million common shares of Canagold representing approximately up to 5% of its issued and outstanding common shares at that time. The bid is effective on June 21, 2018 and will terminate on June 20, 2019, or on such earlier date as the bid was completed. The actual number of common shares purchased under the bid and the timing of any such purchases was at Canagold’s discretion. Purchases under the bid shall not exceed 23,893 common shares per day. Canagold paid the prevailing market price at the time of purchase for all common shares purchased under the bid, and all common shares purchased by Canagold were cancelled. During the term of the normal course issuer bid, Canagold purchased an aggregate of 438,000 common shares for an aggregate purchase price of CAD$20,595, resulting in an average price of CAD$0.05 per share; these shares have been returned to treasury and accordingly cancelled. At the Company’s Special General Meeting held on October 17, 2022, disinterested shareholders voted in favor for the creation of a new control person with Sun Valley owning more that 20% interest of the Company which allowed the closing of the flow through private placement for 4.7 million common shares, resulting in Sun Valley’s ownership interest in the Company increasing from 19.40% to 23.55%. Sun Valley participated in a rights offering in December 2022 and increased its ownership in the Company to 40.06%. Michael Doyle is a Partner and Vice President of Technical Services for Sun Valley and, as of August 9, 2022, is a director of Cangold. Sun Valley and its beneficial owners, do not have any material interest, directly or indirectly, in any transaction that has materially affected or will materially affect Canagold, to the best of Canagold’s knowledge, except as disclosed in this 20-F.
All of
Details of all total outstanding options, warrants and other rights to purchase securities of
Stock Option Summary
Stock options which are outstanding as of April
Canagold Resources Ltd.
Warrant Summary Chart
Stock Option/Share Incentive Plan
The
Pursuant to the
Pursuant to the Board's authority to govern the implementation and administration of the Omnibus Plan, all previously granted and outstanding stock options granted under the Original Incentive Plan, shall be governed by the provisions of the Omnibus Plan. Canagold Resources Ltd. Form 20-F
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A Major Shareholders
To the best of
As of April 28, 2024 SunValley owned 84,034,626 common shares for an 48.41% interest. All three of its nominees, Carmen Letton, Sofia Bianchi and Andrew Trow, were elected to Canagold’s board of directors at In June 2018, Canagold again proceeded with a normal course issuer bid which received regulatory approval to
Canagold Resources Ltd.
Form 20-F
All shares of
Control by Another Corporation, Foreign Government or Other Persons
To the best of
Change of Control
As of the date of this Form 20-F being April
7.B Related Party Transactions
For the fiscal year ended December 31,
Key management includes directors (executive and non-executive) and senior management. The compensation paid or payable to key management for employee services is disclosed in the table below.
Canagold Resources Ltd. Form 20-F
Except as may be disclosed elsewhere in the Form 20-F, general and administrative costs during
The above transactions were incurred in the normal course of business and are recorded at the exchange amount, being the amount agreed upon by the related parties.
Items 4.A,
In each case the transactions described below were, in
Canagold Resources Ltd. Form 20-F
Compensation to Directors and Senior Officers and Options to Purchase Securities
Item 6 provides further details of compensation paid to, and options granted to and held by, directors and senior officers of
Indebtedness of Directors and Senior Officers
At any time during
Interest of Insiders in Material Transactions
Other than as set forth below and in the Form 20-F and in
Canagold Resources Ltd. Form 20-F
7.C Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
8.A Consolidated Statements and Other Financial Information
Consolidated financial statements audited by an independent registered public accounting firm and accompanied by an audit report are comprised of the following, which are attached hereto and form a part hereof.
Canagold Resources Ltd. Form 20-F
Dividend Policy
During its last three completed financial years,
The Directors of
Any dividend declared on shares of any class by the Directors may be made payable on such date as is fixed by the Directors.
Subject to the rights of shareholders (if any) holding shares with special rights as to dividends, all dividends on shares of any class shall be declared and paid according to the number of such shares held.
The Directors may, before declaring any dividend, set aside out of the funds properly available for the payment of dividends such sums as they think proper as a reserve or reserves, which shall, at the discretion of the Directors, be applicable for meeting contingencies, or for equalizing dividends, or for any other purpose to which such funds of
If several persons are registered as joint holders of any share, any one of them may give an effective receipt for any dividend, bonuses or other moneys payable in respect of the share.
Canagold Resources Ltd. Form 20-F
No dividend shall bear interest against
Any dividend, bonuses or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder, or in the case of joint holders, to the registered address of that one of the joint holders who is first named in the register, or to such person and to such address as the holder or joint holders may direct in writing. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. The mailing of such cheque or warrant shall, to the extent of the sum represented thereby (plus the amount of any tax required by law to be deducted) discharge all liability for the dividend, unless such cheque or warrant shall not be paid on presentation or the amount of tax so deducted shall not be paid to the appropriate taxing authority.
Notwithstanding anything contained in
Legal Proceedings
8.B Significant Changes
There has been no significant change in the financial condition of
Form 20-F
ITEM 9. THE OFFER AND LISTING
9.A Offer and Listing Details
In the United States,
In relation to the OTCBB and OTCQB,
9.B Plan of Distribution
Not applicable.
9.C Markets
Since November 2, 1994,
9.D Selling Shareholders
Not applicable.
Canagold Resources Ltd. Form 20-F
9.E Dilution
Not applicable.
9.F Expenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
10.A Share Capital
Not applicable.
10.B Notice of Articles and Articles of Association
Canagold Resources Ltd. Form 20-F
3. All common shares of Canagold rank equally as to dividends, voting powers and participation in assets (in the event of liquidation) and in all other respects. Dividend entitlement is set by way of the shareholders status as a shareholder on the chosen record date and does not lapse over time. Each share carries one vote per share at meetings of the shareholders of Canagold. Directors do not stand for re-election on staggered terms at present. There are no indentures or agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre‑emptive rights or subscription rights attached to the common shares. The shares presently issued are not subject to any calls or assessments. 4. The rights of holders of common shares may not be modified other than by vote of 2/3 of the common shares voting on such modification. The quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting. Due to the quorum requirements, the rights of holders of common shares may be modified by the votes of less than a majority of the issued common shares of Canagold. Notwithstanding the foregoing, at the annual general meeting of shareholders of Canagold held on June 2, 2017, the shareholders of Canagold approved an amendment to Canagold’s articles to allow the directors of Canagold to approve, subject to the BCBCA, by directors’ resolution the alteration in certain respects of the authorized share capital of Canagold. Pursuant to the amended articles, among other things, the directors of Canagold may approve by directors’ resolution the creation of new classes of shares, and the subdivision or consolidation of outstanding classes of shares. 5. The directors of Canagold call all annual general meetings and extraordinary general meetings. The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any solicitor for Canagold, the auditor of Canagold and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting. 6. There are no limitations on the rights to own securities. 7. There are no provisions in Canagold’s Articles that would have an effect on delaying, deferring or preventing a change of control other than that Canagold may remove any director before the expiration of his or her term of office only by way of special resolution. Canagold Resources Ltd. Form 20-F
8. There are no by-law provisions governing the ownership threshold above which shareholder ownership must be disclosed. 9. The law of British Columbia, Canada, relating to Items 2-8 is not significantly different from the law of the United States. 10. There are no conditions in the Memorandum and Articles governing changes in capital that are more stringent than is required by law. 11. The BCBCA permits an unlimited authorized share capital, and shares may be created with or without par value. 12. There are no residency requirements for directors under the BCBCA. 13. Special Resolutions of shareholders can be passed by a minimum of a two-thirds majority at a meeting of shareholders. 14. General meetings can be held outside British Columbia if the location is approved by resolution of the directors. 15. The BCBCA provides for shareholder proposals to be made at general meetings. Generally, shareholders holding at least 1% of the voting shares may submit proposals to Canagold three months prior to the anniversary of the last annual general meeting of shareholders of Canagold. 16. Under the BCBCA, dividends may be declared out of profits, capital or otherwise. As well, the BCBCA does not automatically make directors liable to Canagold for the declaration of dividends while Canagold is insolvent. 17. The BCBCA does not require that a company’s offer to purchase or redeem its own shares be made on a pro-rata basis to all shareholders. Canagold Resources Ltd. Form 20-F
18. The BCBCA permits a company to indemnify its directors without court approval, and may also require reimbursement of expenses in certain cases for claims that are successfully defended. Defense costs may also be advanced by a company in certain cases. 19. All filings with the Registrar under the BCBCA must be made electronically. 20. Directors’ and shareholders’ meetings may be held by any form of communications medium permitted under the Articles, including internet chat lines and telephones. In addition, directors’ consent resolutions may be passed in the manner provided under the Articles, including e-mail. 21. A company may provide financial assistance in connection with the purchase of its shares under the BCBCA. 22. A company may, in limited circumstances, amalgamate with a foreign company under the BCBCA, without the requirement to first continue the second company into British Columbia. Amalgamations do not require court approval, although court approval may still be requested. 23. The requisite majority to pass a special resolution at a meeting of shareholders is a two-thirds majority. 24. General meetings of shareholders may, if the location is approved by directors’ resolution, be held outside British Columbia. 25. General Meetings of shareholders of Canagold are required to be held each calendar year and not more than 15 months after the holding of the last preceding annual general meeting. 26. Any offer by Canagold to purchase or redeem its own shares, need not be made pro-rata to all the shareholders. 27. Changes to Canagold’s capital structure may be effected by ordinary resolution or a directors’ resolution, subject to the BCBCA. Canagold Resources Ltd. Form 20-F
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29. The removal of court approval of any agreement to indemnify a director or officer in most cases, as well as mandatory indemnification on certain eligible cases.
30. The remuneration of the auditor of Canagold may be set by the directors, without the need of seeking a resolution of the shareholders authorizing the directors to set such remuneration.
31. A director of Canagold may be removed as a director of Canagold before the expiration of the director’s term of office pursuant to an ordinary resolution of the shareholders.
For further information, refer to the full text of the Notice of Articles and Articles of the Registrant,Canagold, which are available online at www.sedar.com as part of the Registrant'sCanagold’s publicly available filings under the heading "Other"“Other”, as filed on November 10, 2005.
Summary of the Shareholder Rights Plan
The following is a summary of the terms of the Shareholder Rights Plan which was approved at the Registrant's annual and extraordinary meeting held in May 2005, and ratified and confirmed at the Registrant's annual general meetings in April 2008 and again in June 2011. The Shareholder Rights Plan expired in April 2015.
General
The rights will be issued pursuant to a shareholder rights plan agreement dated and effective April 30, 2005, between the Registrant and Computershare Trust Company of Canada as the rights agent. Each right will entitle the holder to purchase from the Registrant one common share at the exercise price of CAD$50.00 per share, subject to adjustments, at any time after the separation time (defined below). However, if a flip-in event (defined below) occurs, each right will entitle the holder to receive, upon payment of the exercise price, common shares having a market value equal to two-times the exercise price. The rights are non-exercisable until the separation time.
Trading of Rights
Until the separation time, the rights will be evidenced by the outstanding certificates for common shares and the rights will be transferred with, and only with, the common shares. As soon as practicable following the separation time, separate certificates evidencing the rights will be mailed to holders of record of common shares as of the close of business at the separation time and the separate rights certificates will thereafter evidence the rights.
Canarc Resource Corp.
Form 20-F
Separation Time and Acquiring Person
The rights will separate and trade apart from the common shares and become exercisable at the separation time. "Separation time" generally means the close of business on the 10th trading day following the commencement or announcement of the intent of any person to commence a take-over bid, other than a permitted bid or a competing bid, but under certain circumstances can mean the eighth trading day after a person becomes an "acquiring person" by acquiring 20% or more of the voting shares of any class.
Flip-in Event
A "flip-in event" will, in general terms, occur when a person becomes an acquiring person. Upon the occurrence of a flip-in event, each right will entitle the holder to acquire, on payment of the exercise price, that number of common shares having a market value equal to two-times the exercise price. However, any rights beneficially owned by an acquiring person or by any direct or indirect transferees of such person, will be void. The term "beneficial ownership" is defined to include, under certain circumstances, shares owned indirectly through affiliates, associates, trusts and partnerships, other situations of ownership deemed by operation of law, shares subject to acquisition or voting agreements and shares owned by persons acting jointly or in concert. There are several exceptions, including exceptions directed towards investment managers, trust companies, and independent managers of pension plans who are not participating in a take-over bid.
Permitted Bids
Permitted bids are exempted from the operation of the Shareholder Rights Plan. In summary, a permitted bid is a take-over bid made by way of take-over bid circular which complies with the following provisions:
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The Shareholder Rights Plan contains provisions designed to ensure that, if considered appropriate, the time for tendering to two or more competing permitted bids will occur on the same date.
Permitted Bid Expiry Date
The Permitted Bid provisions require that for a Take-Over to be a Permitted Bid it must be left open until the Permitted Bid Expiry Date. The "Permitted Bid Expiry Date" means 60 days following the date of the Take-Over Bid.
Canarc Resource Corp.
Form 20-F
Exchange Option
Under certain circumstances, the board of directors of the Registrant can, on exercise of a right and payment of the exercise price, issue other securities or assets of the Registrant in lieu of common shares. The board of directors of the Registrant can also determine to issue in exchange for the rights, but without payment of the exercise price, common shares having a value equal to the exercise price or other securities or assets of the Registrant having the same value.
Adjustments
The exercise price, the number and kind of shares subject to purchase upon exercise of each right and the number of rights outstanding are subject to adjustment from time to time to prevent dilution in the event that the Registrant takes certain actions involving the Registrant's share capital which would otherwise have a dilutive effect.
Redemption
At any time before the occurrence of a flip-in event, the board of directors may elect to redeem the rights in whole at a redemption price of $0.0001 per right.
Waiver
The board of directors may waive the application of the Shareholder Rights Plan to any flip-in event if it determines that a person became an acquiring person by inadvertence, conditional upon such person having, within 10 days after the determination by the board of directors, reduced its beneficial ownership of shares such that it is no longer an acquiring person. The board of directors may also, until a flip-in event has occurred, waive the application of the Shareholder Rights Plan to any particular flip-in event, but in that event, the board of directors shall be deemed to have waived the application of the Shareholder Rights Plan to any other flip-in event which may arise under any take-over bid then in effect.
Amendments
The board of directors may amend the Shareholder Rights Plan to correct clerical or typographical errors, to maintain the validity of the plan as a result of any changes in any applicable legislation or to increase or decrease the exercise price. Any amendments required to maintain the validity of the Shareholder Rights Plan must be submitted to the shareholders of the Registrant or, after the separation time, to the holders of the rights for confirmation.
Other amendments can only be made with the approval of the shareholders of the Registrant or, after the separation time, the holders of the rights. Any supplements or amendments to the Shareholder Rights Plan require the prior written consent of the TSX.
Term
The Shareholder Rights Plan has a term of 10 years; however, it is subject to ratification at the Meeting, and also at each of the shareholder meetings following the third and sixth anniversaries of the effective date of the Shareholder Rights Plan. If the Shareholder Rights Plan is not so ratified at any meeting, the Shareholder Rights Plan shall terminate forthwith.
The text of the ordinary resolution, in substantially the form which was presented to the shareholders, subject to such changes not affecting the general intent of the said resolution as may be required by the regulatory authorities or by counsel for the Registrant, is set forth below:
"BE IT RESOLVED, with or without amendment, as an ordinary resolution, that the Shareholder Rights Plan Agreement, dated for reference April 30, 2005, between the Company and Computershare Trust Company of Canada, as described in the Information Circular of the Company dated as at April 26, 2005, be and it is hereby approved, ratified and confirmed."
The Shareholder Rights Plan expired in April 2015.
Canarc Resource Corp.
Form 20-F
10.C Material Contracts
The following executive employment agreements are in effect:
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For the twoofficers of the Company the are contracts in place with the CEO, Catalin Kilofliski, Knox Henderson, Vice President, Corporate Development and Garry Biles, President. There are also compensation contracts with the directors of the Company. There are no severance clauses for any if the contracts.
For the three years immediately preceding April 22, 2016,28, 2024, there were no other material contracts entered into, other than contracts entered into in the ordinary course of business, to which the RegistrantCanagold or any member of the group was a party, and other than as disclosed in this Form 20-F.20-F and in its continuous disclosure filings. For a description of those contracts entered into in the ordinary course of business refer to Items 4.A and 4.D.
10.D Exchange Controls
There are no governmental laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends or other payments to non non‑resident holders of the Registrant'sCanagold’s common shares. Any remittances of dividends to United States residents are, however, subject to a 15% withholding tax (10% if the shareholder is a corporation owning at least 10% of the outstanding common shares of the Registrant)Canagold) pursuant to Article X of the reciprocal tax treaty between Canada and the United States.
Except as provided in the Investment Canada Act (the "Act"“Act”), there are no limitations under the laws of Canada, the Province of British Columbia or in the charter or any other constituent documents of the RegistrantCanagold on the right of foreigners to hold or vote the common shares of the Registrant.
Canarc Resource Corp.
Form 20-F
Canagold.
Management of the RegistrantCanagold considers that the following general summary is materially complete and fairly describes those provisions of the Investment Canada Act pertinent to an investment by an American investor in the Registrant.Canagold.
The following discussion summarizes the principal features of the Investment Canada Act for a non-resident who proposes to acquire the common shares.
Canagold Resources Ltd.
Form 20-F
121 |
Table of Contents |
The Investment Canada Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an "entity"“entity”) that is not a "Canadian" as defined in the Investment Canada Act (a "non-Canadian"“non-Canadian”), unless after review, the Director of Investments appointed by the minister responsible for the Investment Canada Act is satisfied that the investment is likely to be of net benefit to Canada. An investment in the common shares by a non-Canadian other than a "WTO Investor"“WTO Investor” (as that term is defined by the Investment Canada Act, and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when the CompanyCanagold was not controlled by a WTO Investor, would be reviewable under the Investment Canada Act if it was an investment to acquire control of the RegistrantCanagold and the value of the assets of the Registrant,Canagold, as determined in accordance with the regulations promulgated under the Investment Canada Act, equals or exceeds $5 million for direct acquisition and over $50 million for indirect acquisition, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada's cultural heritage or national identity, regardless of the value of the assets of the Registrant.Canagold. An investment in the common shares by a WTO Investor, or by a non-Canadian when the RegistrantCanagold was controlled by a WTO Investor, would be reviewable under the Investment Canada Act if it was an investment to acquire control of the RegistrantCanagold and the value of the assets of the Registrant,Canagold, as determined in accordance with the regulations promulgated under the Investment Canada Act was not less than a specified amount. A non-Canadian would acquire control of the RegistrantCanagold for the purposes of the Investment Canada Act if the non-Canadian acquired a majority of the common shares. The acquisition of one third or more, but less than a majority of the common shares would be presumed to be an acquisition of control of the RegistrantCanagold unless it could be established that, on the acquisition, the RegistrantCanagold was not controlled in fact by the acquirer through the ownership of the common shares.
Certain transactions relating to the common shares would be exempt from the Investment Canada Act, including: (a) an acquisition of the common shares by a person in the ordinary course of that person's business as a trader or dealer in securities; (b) an acquisition of control of the RegistrantCanagold in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act; and (c) an acquisition of control of the RegistrantCanagold by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Registrant,Canagold, through the ownership of the common shares, remained unchanged.
10.E Taxation
ALL SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE INCOME AND OTHER TAX CONSEQUENCES ARISING IN THEIR PARTICULAR CIRCUMSTANCES. THE FOLLOWING IS A SUMMARY ONLY AND OF A GENERAL NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, TO BE LEGAL OR TAX ADVISE TO ANY PARTICULAR SHAREHOLDER.
United States Federal Income Tax ConsequencesCanagold Resources Ltd.
Form 20-F
122 |
Table of Contents |
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussiongeneral summary of certain material United StatesU.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership and disposition of Canagold’s Common Shares.
This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of Common Shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences under current law, applicableto such U.S. Holder, including, without limitation, specific tax consequences to a USU.S. Holder (as hereinafter defined) of common shares of the Registrant.under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This discussionsummary does not address the U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences peculiar to persons subjectU.S. Holders of the acquisition, ownership, and disposition of Common Shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to special provisionsthe acquisition, ownership and disposition of Common Shares.
No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax law, such as those described below as excludedconsequences of the acquisition, ownership, and disposition of Common Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the definition of a US Holder.positions taken in this summary. In addition, because the authorities on which this discussion does not cover any state, localsummary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or foreign tax consequences. (Refer to "Certain Canadian Federal Income Tax Considerations" for material Canadian federal income tax consequences).more of the conclusions described in this summary.
The following discussionScope of this Summary
Authorities
This summary is based upon the sections ofon the Internal Revenue Code of 1986, as amended (the "Code"“Code”), Treasury Regulations (whether final, temporary, or proposed), published Internal Revenue Service ("IRS") rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are currently applicable, any or alland, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be materiallychanged in a material and adversely changed, possibly on a retroactive basis,adverse manner at any time, and which are subject to differing interpretations.any such change could be applied retroactively. This discussionsummary does not considerdiscuss the potential effects, bothwhether adverse andor beneficial, of any proposed legislation that, if enacted, could be applied, possibly on a retroactive basis, at any time. This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Registrant and no opinion or representation with respect to the United States federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Registrant should consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Registrant.legislation.
Canarc Resource Corp.U.S. Holders
Form 20-F
U.S. Holders
As used herein, aFor purposes of this summary, the term "U.S. Holder" means a holderbeneficial owner of common shares of the Registrant whoCanagold’s Common Shares that is (i) a citizen or individual resident of the United States, (ii) a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate whosefor U.S. federal income tax purposes:
· | an individual who is a citizen or resident of the United States; | |
· | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia; | |
· | an estate whose income is | |
· | a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
U.S. Holders Subject to the primary supervision of a court within the United States and control of a United States fiduciary as described Section 7701(a)(30) of the Code. Special U.S. Federal Income Tax Rules Not Addressed
This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such asconsiderations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, andor other tax-deferred accounts,accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies,companies; (c) are broker-dealers, personsdealers, or entitiestraders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a "functional currency"“functional currency” other than the U.S. dollar, shareholders subject to the alternative minimum tax, shareholders who hold common sharesdollar; (e) own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position, and shareholders who acquired their common shares throughposition; (f) acquire Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common sharesservices; (g) hold Common Shares other than as a capital assetsasset within the meaning of Section 1221 of the Code.Code (generally, property held for investment purposes); (h) are required to accelerate the recognition of any item of gross income with respect to Common Shares as a result of such income being recognized on an applicable financial statement; or (i) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold Common Shares in connection with carrying on a business in Canada; (d) persons whose Common Shares constitute “taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of Common Shares.
If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants) of entities or arrangements that are classified as partnerships or as “pass-through” entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership and disposition of Common Shares.
Canagold Resources Ltd.
Form 20-F
123 |
Table of Contents |
Passive Foreign Investment Company Rules
PFIC Status of the Company
If the Company were to constitute a “passive foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”, as defined below) for any year during a U.S. Holder’s holding period, then certain potentially adverse rules would affect the U.S. federal income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition of Common Shares. The Company believes that it likely was classified as a PFIC during the tax year ended December 31, 2019, and based on current business plans and financial expectations, the Company expects that it will be a PFIC for the current tax year and may be a PFIC in future tax years. No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or is currently planned to be requested. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status. Each U.S. Holder should consult its own tax advisors regarding the PFIC status of the Company and each subsidiary of the Company.
In any year in which the Company is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.
The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the “PFIC income test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the “PFIC asset test”). “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.
For purposes of the PFIC income test and PFIC asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and PFIC asset test described above, and assuming certain other requirements are met, “passive income” does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related persons” (as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable to the income of such related person that is not passive income.
Canagold Resources Ltd.
Form 20-F
124 |
Table of Contents |
Under certain attribution rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or entity holding anindirect equity interest in any company that is also a shareholderPFIC (a ‘‘Subsidiary PFIC’’), and will generally be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC and (b) a disposition or the consequences to a persondeemed disposition of the ownership, exercisestock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of any options, warrantsCommon Shares. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions are received and no redemptions or other rightsdispositions of Common Shares are made.
Default PFIC Rules Under Section 1291 of the Code
If the Company is a PFIC for any tax year during which a U.S. Holder owns Common Shares, the U.S. federal income tax consequences to acquire common shares.such U.S. Holder of the acquisition, ownership, and disposition of Common Shares will depend on whether and when such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF” under Section 1295 of the Code (a “QEF Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”
A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of Common Shares and (b) any “excess distribution” received on the Common Shares. A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for the Common Shares, if shorter).
Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on Common Shares or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective Common Shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible.
If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds Common Shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such Common Shares were sold on the last day of the last tax year for which the Company was a PFIC.
Distribution on Common Shares of the CompanyCanagold Resources Ltd.
Form 20-F
125 |
Table of Contents |
QEF Election
A U.S. Holders receiving dividend distributions (including constructive dividends)Holder that makes a timely and effective QEF Election for the first tax year in which the holding period of its Common Shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to common sharesits Common Shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain of the RegistrantCompany, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are requiredthe excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to includeU.S. federal income tax on such amounts for each tax year in grosswhich the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.
A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.
The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding period for the Common Shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder’s holding period for the Common Shares, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a “purging” election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such Common Shares were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder makes a QEF Election but does not make a “purging” election to recognize gain as discussed in the preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under the rules of Section 1291 discussed above with respect to its Common Shares. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.
A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.
Canagold Resources Ltd.
Form 20-F
126 |
Table of Contents |
A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax purposesreturn. However, if the Company does not provide the required information with regard to the Company or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.
Mark-to-Market Election
A U.S. Holder may make a Mark-to-Market Election only if the Common Shares are marketable stock. The Common Shares generally will be “marketable stock” if the Common Shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the U.S. Exchange Act, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Provided that the Common Shares are “regularly traded” as described in the preceding sentence, the Common Shares are expected to be marketable stock. However, each U.S. Holder should consult its own tax advisor in this matter.
A U.S. Holder that makes a Mark-to-Market Election with respect to its Common Shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such Common Shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holding period for the Common Shares for which the Company is a PFIC and such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the Common Shares.
A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder’s adjusted tax basis in such Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in the Common Shares, over (b) the fair market value of such Common Shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).
A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of Common Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.
Canagold Resources Ltd.
Form 20-F
127 |
Table of Contents |
A U.S. Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the Common Shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.
Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the Common Shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.
Other PFIC Rules
Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which Common Shares are transferred.
Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.
Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.
The PFIC rules are complex, and each U.S. Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.
General Rules Applicable to the Ownership and Disposition of Common Shares
The following discussion describes the general rules applicable to the ownership and disposition of the Common Shares but is subject in its entirety to the special rules described above under the heading “Passive Foreign Investment Company Rules.”
Canagold Resources Ltd.
Form 20-F
128 |
Table of Contents |
Distributions on Common Shares
A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distributions, equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Registrant has current or accumulated earnings and profits, withoutdistribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subjectdistribution) to certain limitations, against the extent of the current and accumulated “earnings and profits” of the Company, as computed for U.S. Holder's federal income tax liabilitypurposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC for the tax year of such distribution or alternatively, may be deducted in computing the U.S. Holder's federal taxable income by those who itemize deductions. (The section, "Foreign Tax Credit", below provides more details).preceding tax year. To the extent that distributions exceeda distribution exceeds the current orand accumulated earnings“earnings and profitsprofits” of the Registrant, theyCompany, such distribution will be treated first as a tax-free return of capital up to the extent of a U.S. Holder's adjustedtax basis in the common sharesCommon Shares and thereafter as gain from the sale or exchange of such Common Shares. (See “Sale or Other Taxable Disposition of Common Shares” below). However, the common shares. Company may not maintain the calculations of its earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder may have to assume that any distribution by the Company with respect to the Common Shares will constitute ordinary dividend income. Dividends received on Common Shares by corporate U.S. Holders generally will not be eligible for the “dividends received deduction.” Subject to applicable limitations and provided the Company is eligible for the benefits of the Canada-U.S. Tax Convention or the Common Shares are readily tradable on a United States securities market, dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.
Sale or Other Taxable Disposition of Common Shares
Upon the sale or other taxable disposition of Common Shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such Common Shares sold or otherwise disposed of. A U.S. Holder’s tax basis in Common Shares generally will be such holder’s U.S. dollar cost for such Common Shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the Common Shares have been held for more than one year.
Preferential tax rates forcurrently apply to long-term capital gains are applicable togain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gains forgain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.
In the caseAdditional Considerations
Receipt of Foreign Currency
The amount of any distribution paid to a U.S. Holder in foreign currency, received as a dividend that is not converted byor on the recipient intosale, exchange or other taxable disposition of Common Shares, generally will be equal to the U.S. dollarsdollar value of such foreign currency based on the exchange rate applicable on the date of receipt a(regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gainAny U.S. Holder who converts or loss recognized upon a subsequent sale or other dispositionotherwise disposes of the foreign currency includingafter the date of receipt may have a foreign currency exchange for U.S. dollars, willgain or loss that would be treated as ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.
Dividends paid on the common shares of the Registrantloss, and generally will not be eligibleU.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the dividends received deduction provided to corporations receiving dividends from certain United States corporations. Aaccrual method of tax accounting. Each U.S. Holder which is a corporation and which owns shares representing at least 10% ofshould consult its own U.S. tax advisors regarding the voting power and value of the Registrant may, under certain circumstances, be entitled to a 70% (or 80% if the U.S. Holder owns shares representing at least 20% of the voting power and value of the Registrant) deduction of the United States source portion of dividends received from the Registrant (unless the Registrant qualifies as a "passive foreign investment company," as defined below). The availability of this deduction is subject to several complex limitations that are beyond the scope of this discussion.
Certain information reporting and backup withholding rules may apply with respect to the Registrant's common shares. In particular, a payor or middleman within the U.S., or in certain cases outside the U.S., will be required to withhold 31% of any payments to a holder of the Registrant's common shares of dividends on, or proceeds from the sale of, such common shares within the U.S., unless the holder is an exempt recipient, if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, the backup withholding tax requirements. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder's U.S. federal income tax liability, provided the required information is furnished to the IRS. U.S. Holders are urged to consult their own tax counsel regarding the information reportingconsequences of receiving, owning, and backup withholding rules applicable to the Registrant's common shares.
Canarc Resource Corp.disposing of foreign currency.
Canagold Resources Ltd.
Form 20-F
129 |
Table of Contents |
Foreign Tax Credit
ASubject to the PFIC rules discussed above, a U.S. Holder whothat pays (or has withheld from distributions)(whether directly or through withholding) Canadian income tax with respect to dividends paid on the ownership of common shares of the Registrant mayCommon Shares generally will be entitled, at the optionelection of thesuch U.S. Holder, to receive either receive a deduction or a tax credit for such foreign tax paid or withheld.Canadian income tax. Generally, it will be more advantageous to claim a credit becausewill reduce a credit reduces United StatesU.S. Holder’s U.S. federal income taxestax liability on a dollar-for-dollar basis, whilewhereas a deduction merely reduces the taxpayer'swill reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by (or withheld from) thea U.S. Holder during thata year. ThereThe foreign tax credit rules are significantcomplex and complex limitations that apply to the credit among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder's United States income tax liability that the U.S. Holder's foreign source income bears to his or its worldwide taxable income. In the determination ofinvolve the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as "passive income", "high withholdingthat depend on a U.S. Holder’s particular circumstances. Accordingly, each U.S. Holder should consult its own U.S. tax interest," "financial services income," "shipping income," and certain other classifications of income. Dividends distributed by the Registrant will generally constitute "passive income" or, in the case of certain U.S. Holders, "financial services income" for these purposes. In addition, U.S. Holders which are corporations that own 10% or more of the voting stock of the Registrant may be entitled to an "indirect" foreign tax credit under Section 902 with respect to the payment of dividends by the Registrant under certain circumstances and subject to complex rules and limitations. The availability ofadvisors regarding the foreign tax credit rules.
Backup Withholding and the applicationInformation Reporting
Under U.S. federal income tax law, certain categories of the limitations on the credit are fact specific, and U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of common sharescertain thresholds. The definition of the Registrantspecified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their Common Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding their particular circumstances.the requirements of filing information returns, including the requirement to file an IRS Form 8938.
Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Common Shares will generally be subject to information reporting and backup withholding tax if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.
Disposition of Common Shares of the CompanyCanagold Resources Ltd.
Form 20-F
130 |
Table of Contents |
The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A U.S. Holder will recognize gain or loss upon the sale of common sharesfailure to satisfy certain reporting requirements may result in an extension of the Registrant equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder's tax basis in the common shares of the Registrant. Preferential tax rates apply to long-term capital gains of U.S. Holders that are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the common shares of the Registrant are held for more than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders which are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.
Other Considerations
In the following circumstances, the above sections of this discussion may not describe the United States federal income tax consequences resulting from the holding and disposition of common shares:
Foreign Investment Company
If 50% or more of the combined voting power or total value of the Registrant's outstanding shares is held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or companies, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Registrant is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Registrant may be treated as a "foreign investment company" as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain. The Registrant does not believe that it currently qualifies as a foreign investment company. However, there can be no assurance that the Registrant will not be considered a foreign investment company for the current or any future taxable year.
Passive Foreign Investment Company
As a foreign corporation with U.S. Holders, the Registrant could potentially be treated as a passive foreign investment company ("PFIC"), as defined in Section 1297 of the Code, depending upon the percentage of the Registrant's income which is passive, or the percentage of the Registrant's assets which produce or are held for the production of passive income. U.S. Holders owning common shares of a PFIC are subject to the highest rate of tax on ordinary income in effect for the applicable taxable year and to an interest charge based on the value of deferral of tax for thetime period during which the common sharesIRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of the PFIC are owned with respectamounts unrelated to certain "excess distributions" on and dispositions of PFIC stock. However, if theany unsatisfied reporting requirement. Each U.S. Holder makes a timely election to treat a PFIC as a qualified electing fund ("QEF") with respect to such shareholder's interest therein,should consult its own tax advisors regarding the above-described rules generally will not apply. Instead, the electing U.S. Holder would include annually in his gross income his pro rata share of the PFIC's ordinary earningsinformation reporting and net capital gain regardless of whether such income or gain was actually distributed. A U.S. Holder of a QEF can, however, elect to defer the payment of United States federal income tax on such income inclusions. Special rules apply to U.S. Holders who own their interests in a PFIC through intermediate entities or persons. In addition, subject to certain limitations, U.S. Holders owning, actually or constructively, marketable (as specifically defined) stock in a PFIC will be permitted to elect to mark that stock to market annually, rather than be subject to the excess distribution regime of section 1291 described above. Amounts included in or deducted from income under this alternative (and actual gains and losses realized upon disposition, subject to certain limitations) will be treated as ordinary gains or losses. This alternative will apply to taxable years of U.S. Holders beginning after 1997 and taxable years of foreign corporations ending with or within such taxable years of U.S. Holders.backup withholding rules.
Canarc Resource Corp.THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
Form 20-F
Because the PFIC determination is made annually on the basis of income and assets, there can be no assurance that the Registrant will not be classified a PFIC in the current or in a subsequent year. In addition, there can be no assurance that the Registrant's determination concerning its PFIC status will not be challenged by the IRS, or that it will be able to satisfy record keeping requirements which will be imposed on QEFs in the event that it qualifies as a PFIC.
Controlled Foreign Registrant
If more than 50% of the total combined voting power of all classes of shares entitled to vote or the total value of the shares of the Registrant is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), each of which own, actually or constructively, 10% or more of the total combined voting power of all classes of shares entitled to vote of the Registrant ("United States Shareholder"), the Registrant could be treated as a controlled foreign corporation ("CFC") under Subpart F of the Code. This classification would affect many complex results, one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes United States shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States shareholders are generally treated as having received a current distribution out of the CFC's Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFC's earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Registrant which is or was a United States Shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Registrant attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States Shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign Registrants ending with or within such taxable years of United States Shareholders. Special rules apply to United States Shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion. The Registrant does not believe that it currently qualifies as a CFC. However, there can be no assurance that the Registrant will not be considered a CFC for the current or any future taxable year.
Certain Canadian Federal Income Tax Considerations
A brief description of certain provisions of the tax treaty between Canada and the United States is included below, together with a brief outline of certain taxes, including withholding provisions, to which United States security holders are subject under existing laws and regulations of Canada. The consequences, if any, of provincial, state and local taxes are not considered.
The following information is general, and security holders should seek the advice of their own tax advisors, tax counsel or accountants with respect to the applicability or effect on their own individual circumstances of the matters referred to herein and of any provincial, state, or local taxes.
The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of common stock of the RegistrantCanagold for a shareholder of the RegistrantCanagold who is not a resident of Canada but is a resident of the United States and who will acquire and hold shares of common stock of the RegistrantCanagold as capital property for the purposes of the Income Tax Act (Canada) (the "Canadian“Canadian Tax Act"Act”). This summary does not apply to a shareholder who carries on business in Canada through a "permanent establishment"“permanent establishment” situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholder'sshareholder’s holding in the RegistrantCanagold is effectively connected with such permanent establishment or fixed base. This summary is based on the provisions of the Canadian Income Tax Act and the regulations thereunder and on an understanding of the administrative practices of Canada Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof. It has been assumed that there will be no other relevant amendment of any governing law although no assurance can be given in this respect. This discussion is general only and is not a substitute for independent advice from a shareholder'sshareholder’s own Canadian and U.S. tax advisors.
The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is a party, including the Canada-United States Income Tax Convention (1980), as amended (the "Convention"“Convention”).
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
131 |
Table of Contents |
Dividends on Common Shares and Other Income
Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the rate of 25 percent on dividends paid or deemed to have been paid to him or her by a corporation resident in Canada. The Convention limits the rate to 15 percent if the shareholder is a resident of the United States and the dividends are beneficially owned by and paid to such shareholder, and to 5 percent if the shareholder is also a corporation that beneficially owns at least 10 percent of the voting stock of the payor corporation.
The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up or stated capital of the RegistrantCanagold had increased by reason of the payment of such dividend. The RegistrantCanagold will furnish additional tax information to shareholders in the event of such a dividend. Interest paid or deemed to be paid on the Registrant'sCanagold’s debt securities held by non-Canadian residents may also be subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty.
The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an organization operated exclusively to administer or provide pension, retirement or employee benefit fund, if the organization is a resident of the United States and is generally exempt from income tax under the laws of the United States provided it is not carrying on a trade or business.
Dispositions of Common Shares
Under the Canadian Tax Act, subject to certain restrictions, a taxpayer'staxpayer’s capital gain or capital loss from a disposition of a share of common stock of the RegistrantCanagold is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of disposition. The capital gain or loss must be computed in Canadian currency using a weighted average adjusted cost base for identical properties. Fifty percent of the capital gains net of losses are included in income. The amount by which a shareholder'sshareholder’s capital loss exceeds the capital gain in a year may be deducted from a capital gain realized by the shareholder in the three previous years or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.
Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and may deduct allowable capital losses, realized on a disposition of "taxable Canadian property"property”. Shares of common stock of the RegistrantCanagold will constitute taxable Canadian property of a shareholder at a particular time if the shareholder used the shares in carrying on business in Canada, or if at any time in the five years immediately preceding the disposition 25% or more of the issued shares of any class or series in the capital stock of the RegistrantCanagold belonged to one or more persons in a group comprising the shareholder and persons with whom the shareholder and persons with whom the shareholder did not deal at arm'sarm’s length and in certain other circumstances.
Canagold Resources Ltd.
Form 20-F
132 |
Table of Contents |
The Convention relieves United States residents from liability for Canadian tax on capital gains derived on a disposition of shares unless:
| |
| |
|
Canarc Resource Corp.(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding the disposition, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him or her when he or she ceased to be resident in Canada; or
Form 20-F(c) the shares formed part of the business property of a “permanent establishment” that the holder has or had in Canada within the 12 months preceding the disposition.
10.F Dividends and Paying Agents
Not applicable.
10.G Statement by Experts
Not applicable.
10.H Documents on Display
We are subject to the informational requirements of the Exchange Act and file reports and other information with the SEC. You may read and copy any of our reports and other information at, and obtain copies upon payment of prescribed fees from, the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In addition, the SEC maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov.www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Canagold Resources Ltd.
Form 20-F
133 |
Table of Contents |
We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") (www.sedar.com)(www.sedar.com), the Canadian equivalent of the SEC's electronic document gathering and retrieval system.
We "incorporate by reference" information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this Form 20-F and more recent information automatically updates and supersedes more dated information contained or incorporated by reference in this Form 20-F.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders.
We will provide without charge to each person, including any beneficial owner, to whom a copy of this Annual Report on Form 20-F has been delivered, on the written or oral request of such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this Annual Report on Form 20-F (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to us at the following address: Suite #301 - 700 West Pender#1250 – 625 Howe Street, Vancouver, British Columbia, Canada, V6C 1G8. The Company2T6. Canagold is required to file financial statements and other information with the Securities Commission in each of the Provinces of Canada, except Quebec, electronically through SEDAR which can be viewed at www.sedar.com.www.sedar.com.
10.I Subsidiary Information
Not applicable.
Canarc Resource Corp.
10.J Annual Report to Security Holders
Not applicable.
Canagold Resources Ltd.
Form 20-F
134 |
Table of Contents |
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Canarc'sCanagold’s audited consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB, and all dollar amounts are expressed in United States dollars unless otherwise indicated.
Quantitative and qualitative disclosures about market risk are provided in Canarc'sCanagold’s audited consolidated financial statements for the year ended December 31, 20152023 and the notes thereto.
Item 3.D provides information concerning risk factors.
Management of Capital
The RegistrantCanagold is an exploration stage company and this involves a high degree of risk. The RegistrantCanagold has not determined whether its mineral property interests contain reserves of ore and currently has not earned any revenues from its mineral property interests and, therefore, does not generate cash flows from operations. The Registrant'sCanagold’s primary source of funds comes from the issuance of share capital and proceeds from notes payable.debt. The RegistrantCompany has generated cash inflows from the disposition of marketable securities Canagold is not subject to any externally imposed capital requirements.
The RegistrantCanagold defines its capital as debt and share capital. Capital requirements are driven by the Registrant'sCanagold’s exploration activities on its mineral property interests. To effectively manage the Registrant'sCanagold’s capital requirements, the RegistrantCanagold has a planning and budgeting process in place to ensure that adequate funds are available to meet its strategic goals. The RegistrantCanagold monitors actual expenses to budget on all exploration projects and overhead to manage costs, commitments and exploration activities.
The RegistrantCanagold Resources Ltd.
Form 20-F
135 |
Table of Contents |
Canagold has in the past invested its capital in liquid investments to obtain adequate returns. The investment decision is based on cash management to ensure working capital is available to meet the Registrant'sCanagold’s short-term obligations while maximizing liquidity and returns of unused capital.
Although the RegistrantCanagold has been successful at raising funds in the past through the issuance of share capital, it is uncertain whether it will be able to continue this financing in the future. The RegistrantCanagold will continue to rely on debt and equity financings to meet its commitments as they become due, to continue exploration work on its mineral property interests, and to meet its administrative overhead costs for the coming periods.
There were no changes in the Registrant'sCanagold’s approach to capital management during the year ended December 31, 2015.2023.
Management of Financial Risk
The RegistrantCanagold is exposed in varying degrees to a variety of financial instrument related risks, including credit risk, liquidity risk, and market risk which includes foreign currency risk, interest rate risk and other price risk. The types of risk exposure and the way in which such exposure is managed are provided as follows.
The fair value hierarchy categorizes financial instruments measured at fair value at one of three levels according to the reliability of the inputs used to estimate fair values. The fair value of assets and liabilities included in Level 1 are determined by reference to quoted prices in active markets for identical assets and liabilities. Assets and liabilities in Level 2 are valued using inputs other than quoted prices for which all significant inputs are based on observable market data. Level 3 valuations are based on inputs that are not based on observable market data.
Canarc Resource Corp.
Form 20-F
The fair values of the Registrant'sCanagold’s receivables promissory note receivable,and accounts payable and accrued liabilities and notes payable approximate their carrying values due to the short terms to maturity. Cash isand certain marketable securities are measured at fair values using Level 1 inputs. Disclosure is not madeOther marketable securities are measured using Level 3 of the fair value of the long-term investments as the shares do not have a quoted market price in an active market. There is no separately quoted market value for the Registrant's investment in the shares of Aztec,hierarchy. Deferred royalty and the fair value cannot be reliably determined. Therefore they were recorded at cost in 2012 and written down to a nominal value of CAD$100 in 2013 due to the lack of liquidity in the stock. In October 2014, the Registrant received 358,000 shares from Aztec in settlement of debt owed to the Registrant which the Registrant had written off in 2013. All gains and losseslease liabilities are included in operations in the period in which they arise. Derivative liability is measured using Level 12 inputs.
Canagold Resources Ltd.
Form 20-F
136 |
|
Table of Contents |
(a) | Credit risk: |
Credit risk is the risk of potential loss to the RegistrantCanagold if the counterparty to a financial instrument fails to meet its contractual obligations.
The Registrant'sCanagold's credit risk is primarily attributable to its liquid financial assets including cash. The RegistrantCanagold limits exposure to credit risk on liquid financial assets through maintaining its cash with high-credit quality Canadian financial institutions.
Management has reviewed the items comprising the accounts receivable balance which may include amounts receivable from certain related parties, provincial tax credit for qualified mineral expenditures, and goods and services tax refunds due from the government, and determined that all accounts are collectible; accordingly there has been no allowance for doubtful accounts recorded.
(b) |
| Liquidity risk: |
Liquidity risk is the risk that the RegistrantCanagold will not be able to meet its financial obligations as they become due.
The RegistrantCanagold ensures that there is sufficient capital in order to meet short-term business requirements, after taking into account the Registrant'sCanagold's holdings of cash and its ability to raise equity financings. As at December 31, 2015,2023, the RegistrantCompany had a working capital deficiency(current assets less current liabilities) of $574,000 (2014 - $156,000)$4.6 million (2022 – $4.4 million). The Registrant will require additionalCanagold has sufficient funding to meet its short-term liabilities and administrative overhead costs, and to maintain its mineral property interests in 2016.2023.
Canagold Resources Ltd.
Form 20-F
137 |
Table of Contents |
The following schedule provides the contractual obligations related to the deferred royalty payments and lease liability payments as at December 31, 2023 and 2022:
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| Payments due by Period |
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| Payments due by Period |
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| (CAD$000) |
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| (US$000) |
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| Less than |
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| After |
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| Less than |
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| After |
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| Total |
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| 1 year |
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| 1-3 years |
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| 3-5 years |
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| 5 years |
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| Total |
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| 1 year |
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| 1-3 years |
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| 3-5 years |
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| 5 years |
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Basic office lease |
| $ | 321 |
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| $ | 86 |
|
| $ | 175 |
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| $ | 60 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
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| $ | - |
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Total, December 31, 2023 |
| $ | 321 |
|
| $ | 86 |
|
| $ | 175 |
|
| $ | 60 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
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| $ | - |
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| $ | - |
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Basic office lease |
| $ | 406 |
|
| $ | 85 |
|
| $ | 173 |
|
| $ | 148 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
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| $ | - |
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| $ | - |
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Advance royalty payments |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 215 |
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|
| 35 |
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|
| 105 |
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|
| 75 |
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|
| - |
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Total, December 31, 2022 |
| $ | 406 |
|
| $ | 85 |
|
| $ | 173 |
|
| $ | 148 |
|
| $ | - |
|
| $ | 215 |
|
| $ | 35 |
|
| $ | 105 |
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| $ | 75 |
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| $ | - |
|
Accounts payable and accrued liabilities are due in less than 90 days, and the notes payable, if any, are due on demand.
(c) |
| Market risk: |
The significant market risk exposures to which the RegistrantCanagold is exposed are foreign currency risk, interest rate risk and other price risk.
| Foreign currency risk: |
The Registrant'sCertain of Canagold’s mineral property interests and operations are in Canada and Mexico. A certain portionCanada. Most of its operating expenses are incurred in Canadian dollars and Mexican pesos.dollars. Fluctuations in the Canadian dollar would affect the Registrant'sCanagold’s consolidated statements of comprehensive lossincome (loss) as its functional currency is the Canadian dollar, and fluctuations in the U.S. dollar would impact its cumulative translation adjustment as its consolidated financial statements are presented in U.S. dollars.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
138 |
Table of Contents |
The RegistrantCanagold is exposed to currency risk for its U.S. dollar equivalent of assets and liabilities denominated in currencies other than U.S. dollars as follows:
|
| Stated in U.S. Dollars |
| |||||||||
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| Held in |
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| Total |
| ||||||
($000s) |
| Canadian Dollars |
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| Mexican Pesos |
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| |||
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| |||
Cash |
| $ | 70 |
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| $ | 11 |
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| $ | 81 |
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Accounts receivable |
|
| 11 |
|
|
| 50 |
|
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| 61 |
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Accounts payable and accrued liabilities |
|
| (792 | ) |
|
| (13 | ) |
|
| (805 | ) |
Derivative liability |
|
| (175 | ) |
|
| - |
|
|
| (175 | ) |
Net financial assets (liabilities), December 31, 2015 |
| $ | (886 | ) |
| $ | 48 |
|
| $ | (838 | ) |
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Cash |
| $ | 643 |
|
| $ | - |
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| $ | 643 |
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Receivables |
|
| 10 |
|
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| - |
|
|
| 10 |
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Accounts payable and accrued liabilities |
|
| (799 | ) |
|
| - |
|
|
| (799 | ) |
Net financial assets (liabilities), December 31, 2014 |
| $ | (146 | ) |
| $ | - |
|
| $ | (146 | ) |
Based upon the above net exposure as at December 31, 20152023 and assuming all other variables remain constant, a 15% (201410% (2022 - 10%) depreciation or appreciation of the U.S. dollar relative to the Canadian dollar and Mexican peso could result in a decrease (increase) of approximately $125,700 (2014$416,000 (2022 - $14,600)$426,000) in the cumulative translation adjustment in the Reigstrant's shareholders'Company’s shareholders’ equity.
The RegistrantCanagold has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.
(ii) |
| Interest rate risk: |
In respect of financial assets, the Registrant'sCanagold's policy is to invest cash at floating rates of interest in cash equivalents, in order to maintain liquidity, while achieving a satisfactory return. Fluctuations in interest rates impact on the value of cash equivalents. Interest rate risk is not significant to the RegistrantCanagold as it has no cash equivalents at period-end and the promissory notes receivable and notes payable, if any, are stated at fixed interest rates.
(iii) |
| Other price risk: |
Other price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market and commodity prices.
The Registrant'sCanagold Resources Ltd.
Form 20-F
139 |
Table of Contents |
Canagold’s other price risk includes equity price risk, whereby investmentsinvestment in marketable securities are subject tois held for trading financial assets with fluctuations in quoted market price fluctuations. The Registrant's long-term investmentprices recorded at FVTPL. There is no separately quoted market value for Canagold’s investments in the shares of Aztec does not have a quoted market price in an active market and is therefore measured at cost, net of any write-downs.certain strategic investments.
The Registrant has recognized a derivative liability pursuant to the share purchase agreement with Marlin Gold which closed on October 30, 2015, whereby the Registrant shall pay 55 troy ounces of gold to Marlin Gold on eachAs certain of the first three anniversariesCompany’s marketable securities are carried at market value and are directly affected by fluctuations in value of the closing dateunderlying securities, the Company considers its financial performance and cash flows could be materially affected by such changes in the future value of the agreement (or its U.S. dollar equivalent), for a total of 165 troy ounces of gold. The derivative liability fluctuates with the gold spot prices resulting in the recognition of gains and losses in profit or loss in which the Registrant has not hedged the payable gold ounces.Company’s marketable securities. Based upon the net exposure as at December 31, 20152023 and assuming all other variables remain constant, a 20% depreciationnet increase or appreciationdecrease of 10% (2022 - 10%) in the market prices of the gold spot prices could result in a decrease/underlying securities would increase of approximately $35,000 (2014or decrease respectively net (loss) income by $153,400 (2022 - $Nil) in the Registrant's net losses.$85,500).
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. – D.
Not applicable.
Canarc Resource Corp.Applicable.
Canagold Resources Ltd.
Form 20-F
140 |
Table of Contents |
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
14.A - D
None.
14.E Use of Proceeds
Not Applicable.
ITEM 15. CONTROLS AND PROCEDURES
A. Disclosure Controls and Procedures
|
At the end of the period covered by this report, an evaluation was carried out under the supervision of and with the participation of the Registrant'sCanagold’s management, including the Chief Executive Officer ("CEO"(“CEO”) and Chief Financial Officer ("CFO"(“CFO”), of the effectiveness of the design and operations of the Company'sCanagold’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation the CEO and the CFO have concluded that as of the end of the period covered by this report, the Registrant'sCanagold’s disclosure controls and procedures were adequately designed and effective to give reasonable assurance that: (i) information required to be disclosed by the RegistrantCanagold in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms; and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to the Registrant'sCanagold’s management, including its CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
Canagold Resources Ltd.
Form 20-F
141 |
|
Table of Contents |
The Registrant'sB. Management’s Report on Internal Control over Financial Reporting
Canagold’s management, including the CEO and CFO, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the RegistrantCanagold have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Registrant'sCanagold’s controls include policies and procedures that:
- | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of | |
- | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS; | |
- | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of | |
- | statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting. |
Canagold Resources Ltd.
Canarc Resource Corp.Form 20-F
Form 20-F
142 |
Table of Contents |
Management conducted an evaluation of the design and operation of the Registrant'sCanagold’s internal control over financial reporting as of December 31, 20152023 based on the criteria in a framework developed by the Registrant'sCanagold’s management pursuant to and in compliance with the SEC's SEC’s Guidance Regarding Management'sManagement’s Report on Internal Control Over Financial Reporting Under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, Release No. 33-8810 and based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO 2013 framework). This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based upon its assessment, management, including the Registrant'sCanagold’s Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2015, the Registrant's2023, Canagold’s internal control over financial reporting was effective.
On January 1, 2014,C. Attestation Report of the Company adopted the COSO 2013 framework, which did not have a material impact on the Company's disclosure controls and procedures and internal controls over financial reporting.Registered Public Accounting Firm
|
The Registrant's independent registered public accounting firm is not required to provide an attestation on management's report on internal control over financial reporting, because the Registrant was not an accelerated filer or large accelerated files. Therefore, this reportForm 20-F does not include an attestation report of the Registrant'sour independent registered public accounting firm regarding internal controlscontrol over financial reportingreporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rulesSection 404(c) of the Securities and Exchange CommissionSarbanes-Oxley Act of 2002, as amended, which provides that permitissuers that are not an “accelerated filer” or “large accelerated filer” are exempt from the Registrantrequirement to provide only management's report in this annualan auditor attestation report.
D. Changes in Internal Controls over Financial Reporting
|
There were no changes in the Registrant'sCanagold’s internal controls over financial reporting identified in connection with the evaluation described above that occurred during the period covered by this annual report that has materially affected or is reasonably likely to materially affect the Registrant'sCanagold’s internal control over financial reporting.
ITEM 16. AUDIT COMMITTEE FINANCIAL EXPERT, CODE OF ETHICS AND PRINCIPAL ACCOUNTANT FEES AND SERVICES [RESERVED]
16.A16A. Audit Committee Financial Expert
The Registrant'sCanagold’s Board of Directors has determined that Martin BurianMr. Andrew Trow qualifies as aan audit committee financial expert (as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act) and is independent (as determined under Exchange Act Rule 10A-3 and Section 803A of the NYSE MKTAmerican Company Guide).
16.BCanagold Resources Ltd.
Form 20-F
143 |
Table of Contents |
16B. Code of Ethics
The RegistrantCanagold has not adopted a formal written code of ethics givenas posted on its relatively small size.website at https://www.canagoldresources.com/_resources/governance/Code-of-Ethics.pdf?v=0.752.
Directors, including the director/employee of the Registrant,Canagold, are subject to the laws of the Province of British Columbia, Canada, whereby they are required to act honestly, in good faith and in the best interests of the Registrant.Canagold. Also, the Registrant'sCanagold’s legal counsel is available to the management of the RegistrantCanagold to provide a high standard of due care in the activities of the RegistrantCanagold and to provide guidance when needed.
Canarc Resource Corp.
Form 20-F
The RegistrantCanagold expects all directors, officers and employees to abide by the following code of ethics which have been communicated to them:
- | act with honesty and integrity and in an ethical manner resolve any actual or apparent conflicts of interest between personal and professional relationships; |
- | ensure that any public filings or announcements, whether they are statutory or regulatory filings or other documents submitted for public disclosure and communication, are accurate, complete, fair, timely and understandable in all material respects, taking into consideration applicable standards and regulations; |
- |
|
- | prompt internal reporting of any violations, whether actual or potential, in the code of ethics. |
During the fiscal year ended December 31, 2023, Canagold did not substantively amend, waive or implicitly waive any provision of the Code with respect to any of the directors, officers or employees subject to it.
Canagold Resources Ltd.
Form 20-F
144 |
Table of Contents |
16.C Principal Accountant Fees and Services
The following table discloses accounting fees and services of the Registrant:Canagold:
(Stated in terms of Canadian dollars)
Type of Services Rendered |
| 2015 Fiscal Year |
|
| 2014 Fiscal Year |
| ||
|
| (CAD$) |
|
| (CAD$) |
| ||
|
|
|
|
|
|
| ||
(a) Audit Fees |
| $ | 31,000 |
|
| $ | 33,000 |
|
|
|
|
|
|
|
|
|
|
(b) Audit-Related Fees |
| Nil |
|
| Nil |
| ||
|
|
|
|
|
|
|
|
|
(c) Tax Fees |
| Nil |
|
| Nil |
| ||
|
|
|
|
|
|
|
|
|
(d) All Other Fees |
| Nil |
|
| Nil |
|
At an Audit Committee meeting held in March 2016,2024, the Audit Committee pre-approved all services to be performed by the auditors including certain non-audit services requested by management for the 20162024 fiscal year until the next Audit Committee meeting concerning the financial statements for the year ended December 31, 2016,2024, which services are not prohibited services under the independence requirements of the Securities and Exchange Commission or professional standards in Canada or the United States.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
145 |
Table of Contents |
The Audit Committee pre-approves all non-audit services to be performed by the auditor in accordance with the Audit Committee Charter. There were no hours expended on the principal accountant's engagement to audit Canagold's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
16.D Exemptions from the Listing Standards for Audit Committees
Not applicable.
16.E Purchases of Equity Securities by the RegistrantCompany and Affiliated Purchasers
None.
16.F Change in Registrant'sCompany’s Certifying Accountant
None.
16.G Corporate Governance
Not applicable.
16.H Mine Safety Disclosure
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities with respect to mining operations and properties in the United States that are subject to regulation by the Federal Mine Safety and Health Administration ("MSHA"(“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"“Mine Act”). During the year ended December 31, 2015, the Company2023, Canagold had no mines in the United States that were subject to regulation by the MSHA under the Mine Act.
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
Table of Contents |
16I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.
16J. Insider Trading Policies
Not applicable.
16K. Cybersecurity
To Canagold’s knowledge, it has not experienced any material losses relating to disruptions to its information technology systems. Canagold has implemented ongoing policies, controls and practices to manage and safeguard Canagold and its stakeholders from internal and external cybersecurity threats and to comply with changing legal requirements and industry practice. In particular, a third party IT firm with required expertise has been engaged to monitor and manage the Company’s IT infrastructure. The Audit and Risk Committee is also actively engaged in the ongoing discussion and governmence of this critical area of the business.
Given that cyber risks cannot be fully mitigated and the evolving nature of these threats, Canagold cannot assure that its information technology systems are fully protected from cybercrime or that the systems will not be inadvertently compromised, or without failures or defects.
Canagold Resources Ltd.
Form 20-F
147 |
Table of Contents |
PART III
ITEM 17. FINANCIAL STATEMENTS
Not Applicable
ITEM 18. FINANCIAL STATEMENTS
The consolidated financial statements of the CompanyCanagold have been prepared in accordance with IFRS as issued by the IASB, and all dollar amounts are expressed in United States dollars unless otherwise indicated.
The following financial statements and related schedules are included in this Item:
| Financial Statements |
|
1.1 | Report of Independent Registered Public Accounting Firm dated March 23, 2016 | 101 |
1.2 | Consolidated statements of financial position as at December 31, 2015 and 2014 together with the consolidated statements of comprehensive loss, changes in shareholders' equity and cash flows for each of the years ended December 31, 2015, 2014 and 2013. | 102-106 |
ITEM 19. EXHIBITS
| ||
| Report of Independent Registered Public Accounting Firm dated March 28, 2024 |
|
1.2 | Consolidated statements of financial position as at December 31, 2023 and 2022 together with the consolidated statements of comprehensive loss, changes in shareholders’ equity and cash flows for each of the years ended December 31, 2023, 2022, and 2021. | 102-106 |
Canagold Resources Ltd.
Form 20-F
148 |
|
Table of Contents |
ITEM 19. EXHIBITS
Exhibits | ||
Exhibit # | Description | |
| ||
|
| |
|
| |
|
| |
|
| |
|
|
Canarc Resource Corp.Canagold Resources Ltd.
Form 20-F
149 |
Table of Contents |
SIGNATURE
The RegistrantCanagold hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.
DATED at Vancouver, British Columbia, Canada, as of April 27, 2016.26, 2024.
CANAGOLD RESOURCES LTD. | |||
Per: |
| ||
|
| ||
/s/ Catalin | |||
Catalin Kilofliski, Chief Executive Officer |
Canagold Resources Ltd.
Form 20-F
150 |
Table of Contents |
CANAGOLD RESOURCES LTD.
Consolidated Financial Statements
(expressed in United States dollars)
Years ended December 31, 2023, 2022 and 2021
Report of Independent Registered Public Accounting Firm
To the Shareholders and Directors of
Canagold Resources Ltd.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of financial position of Canagold Resources Ltd. (the “Company”), as of December 31, 2023, and the related consolidated statements of comprehensive loss, changes in shareholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023 in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred a significant net loss, has a significant deficit and has negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Page 1 |
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Assessment of Impairment Indicators of Mineral Property Interests
As described in Note 7 to the financial statements, the carrying amount of the Company’s mineral property interests was $27,508,000 as of December 31, 2023. As more fully described in Notes 2 and 3 to the financial statements, management assesses its mineral property interests for indicators of impairment at each reporting period or when events or changes in circumstances indicate that the carrying amount may not be recoverable.
The principal considerations for our determination that the assessment of impairment indicators of the Company’s mineral property interest is a critical audit matter are that there was judgment made by management when assessing whether there were indicators of impairment for the mineral property, specifically relating to the assets’ carrying amount which is impacted by the Company’s intent and ability to continue to explore and evaluate its asset. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of the mineral property.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. Our audit procedures included, among others:
· | Obtaining and assessing management’s impairment analysis. | |
| · | Evaluating the intent for the mineral property through discussion and communication with management. |
| · | Reviewing the Company’s recent expenditure activity and expenditure budgets for future periods. |
· | Obtaining, on a test basis through government websites, confirmation of title to ensure mineral rights underlying the mineral property interest are in good standing. |
We have served as the Company’s auditor since 2023.
Canarc Resource Corp./s/ DAVIDSON & COMPANY LLP
Form 20-F Chartered Professional Accountants
Vancouver, Canada
March 28, 2024
Page 2 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THESHAREHOLDERSAND DIRECTORS OF CANAGOLD RESOURCES LTD.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Canagold Resources Ltd. (the “Company”) as of December 31, 2022, and the related consolidated statements of comprehensive loss, changes in shareholders’ equity, and cash flows for the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the years ended December 31, 2022 and 2021, in conformity with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.
Material Uncertainty Related to Going Concern
Without modifying our opinion, we draw attention to Note 1 of the consolidated financial statements, which indicates that the Company has a net loss of $2.7 million for the year ended December 31, 2022 and as at that date, an accumulated deficit of $52.8 million. As stated in Note 1 to the consolidated financial statements, this condition, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that casts substantial doubt on the Company’s ability to continue as a going concern.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Page 3 |
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current-period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
“Smythe LLP”
Chartered Professional Accountants
We have served as the Company's auditor since 2008.
Vancouver, Canada
March 24, 2023
Auditor firm ID: 995
Page 4 |
CANAGOLD RESOURCES LTD. Consolidated Statements of Financial Position (expressed in thousands of United States dollars) |
|
|
|
| December 31, |
| |||||||
|
| Notes |
|
| 2023 |
|
| 2022 |
| |||
|
|
|
|
|
|
|
|
|
| |||
ASSETS |
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
CURRENT ASSETS |
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
|
|
| $ | 2,811 |
|
| $ | 3,825 |
| |
Marketable securities |
|
| 6 |
|
|
| 1,534 |
|
|
| 855 |
|
Receivables and prepaids |
|
| 15(d) |
|
| 924 |
|
|
| 1,131 |
| |
Total Current Assets |
|
|
|
|
|
| 5,269 |
|
|
| 5,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property interests |
|
| 7 |
|
|
| 27,508 |
|
|
| 26,277 |
|
Mineral property deposits |
|
|
|
|
|
| 152 |
|
|
| 166 |
|
Equipment |
|
| 8 |
|
|
| 297 |
|
|
| 374 |
|
Total Non-Current Assets |
|
|
|
|
|
| 27,957 |
|
|
| 26,817 |
|
Total Assets |
|
|
|
|
| $ | 33,226 |
|
| $ | 32,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
| 12 |
|
| $ | 652 |
|
| $ | 1,296 |
|
Flow through premium liability |
|
| 9(a) |
|
| - |
|
|
| 32 |
| |
Deferred royalty liability, current |
|
| 9(b) |
|
| - |
|
|
| 35 |
| |
Lease liability, current |
|
| 9(c) |
|
| 62 |
|
|
| 62 |
| |
Total Current Liabilities |
|
|
|
|
|
| 714 |
|
|
| 1,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG TERM LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred royalty liability, long term |
|
| 9(b) |
|
| - |
|
|
| 96 |
| |
Lease liability, long term |
|
| 9(c) |
|
| 153 |
|
|
| 195 |
| |
Deferred compensation liability |
|
| 10(c) |
|
| 244 |
|
|
| - |
| |
Deferred income tax liability |
|
| 15(a)and(b) |
|
| 1,377 |
|
|
| 1,399 |
| |
Total Long Term Liabilities |
|
|
|
|
|
| 1,774 |
|
|
| 1,690 |
|
Total Liabilities |
|
|
|
|
|
| 2,488 |
|
|
| 3,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
| 10(b) |
|
| 88,768 |
|
|
| 85,465 |
| |
Reserve for share-based payments |
|
| 10(c)and(d) |
|
| 656 |
|
|
| 815 |
| |
Accumulated other comprehensive loss |
|
|
|
|
|
| (3,170 | ) |
|
| (3,990 | ) |
Deficit |
|
|
|
|
|
| (55,516 | ) |
|
| (52,777 | ) |
Total Shareholders' Equity |
|
|
|
|
|
| 30,738 |
|
|
| 29,513 |
|
Total Liabilities and Shareholders' Equity |
|
|
|
|
| $ | 33,226 |
|
| $ | 32,628 |
|
Nature of operations and going concern (Note 1)
Subsequent events (Note 16)
Consolidated Financial Statements
(expressed in United States dollars)
Years ended December 31, 2015, 2014 and 2013
INDEPENDENT AUDITORS’ REPORT
TOTHESHAREHOLDERSOFCANARCRESOURCECORP.
WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofCanarcResourceCorp.,whichcomprisethe consolidatedstatementsoffinancial positionasat December31,2015and2014,andtheconsolidated statementsof comprehensiveloss, changesinshareholders’ equityand cashflowsfor theyears ended December31,2015,2014 and2013,andasummaryofsignificantaccountingpoliciesandotherexplanatory information.
Management'sResponsibilityforthe ConsolidatedFinancialStatements
Managementisresponsibleforthepreparationandfairpresentationoftheseconsolidatedfinancialstatementsin accordancewithInternationalFinancialReportingStandards,asissued by theInternationalAccountingStandardsBoard, andforsuch internal controlasmanagementdeterminesisnecessaryto enablethepreparationof consolidatedfinancial statementsthat arefreefrom materialmisstatement,whetherduetofraudorerror.
Auditors’Responsibility
Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudits.We conducted our auditsin accordancewithCanadiangenerally acceptedauditingstandards and thestandardsof thePublicCompanyAccounting OversightBoard(United States).Thosestandards requirethat we complywith ethicalrequirements and planand perform theauditto obtainreasonable assurance aboutwhether theconsolidatedfinancialstatements arefree frommaterial misstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthe consolidatedfinancialstatements.Theproceduresselecteddependon theauditors’judgement,includingthe assessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudor error.Inmakingthose riskassessments,theauditor considersinternalcontrolrelevanttotheentity'spreparation andfairpresentationoftheconsolidatedfinancialstatements inorder todesignauditproceduresthatareappropriatein the circumstances,butnotfor thepurposeof expressing anopinionon the effectivenessof the entity's internal control.Anauditalsoincludes evaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessof accountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.
Webelievethattheaudit evidencewehaveobtainedin ourauditsissufficientandappropriateto provideabasisforourauditopinion.
Opinion
Inouropinion,theconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionofCanarcResourceCorp.asatDecember31,2015and2014, anditsfinancialperformance anditscashflowsfortheyears endedDecember31,2015,2014and2013inaccordancewithInternationalFinancialReportingStandards, as issuedby theInternationalAccounting StandardsBoard.
EmphasisofMatter
Without qualifyingouropinion,wedrawattentiontoNote1intheconsolidatedfinancialstatements,whichdescribesmattersandconditionsthatindicatetheexistenceofmaterialuncertaintiesthat cast substantialdoubtabout the Company’s abilitytocontinueasagoingconcern.
/s/ Smythe LLP
CharteredProfessionalAccountants
Vancouver,Canada
March23,2016
CANARC RESOURCE CORP.
Consolidated Statements of Financial Position
(expressed in thousands of United States dollars)
December 31, | ||||||||
Notes | 2015 | 2014 | ||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ 354 | $ 675 | ||||||
Receivables and prepaids | 15 | 82 | 83 | |||||
Total Current Assets | 436 | 758 | ||||||
NON-CURRENT ASSETS | ||||||||
Restricted cash | 7(a)(i) | 69 | - | |||||
Mineral property interests | 7 | 11,411 | 11,804 | |||||
Equipment | 8 | 25 | 2 | |||||
Total Non-Current Assets | 11,505 | 11,806 | ||||||
Total Assets | $ 11,941 | $ 12,564 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | 12 and 15 | $ 952 | $ 914 | |||||
Derivative liability, current portion | 6 and 10 | 58 | - | |||||
Total Current Liabilities | 1,010 | 914 | ||||||
LONG TERM LIABILITIES | ||||||||
Derivative liability, long term portion | 6 and 10 | 117 | - | |||||
Total Liabilities | 1,127 | 914 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Share capital | 13 | 64,537 | 62,912 | |||||
Reserve for share-based payments | 530 | 681 | ||||||
Accumulated other comprehensive loss | (3,339) | (1,624) | ||||||
Deficit | (50,914) | (50,319) | ||||||
Total Shareholders' Equity | 10,814 | 11,650 | ||||||
Total Liabilities and Shareholders' Equity | $ 11,941 | $ 12,564 |
Commitment (Note 14)
Refer to the accompanying notes to the consolidated financial statements.
Approved on behalf of the Board:
/s/ | /s/ | |||
Director | Director |
Page 5 |
CANAGOLD RESOURCES LTD. Consolidated Statements of Comprehensive Loss (expressed in thousands of United States dollars) |
CANARC RESOURCE CORP.
Consolidated Statements of Comprehensive Loss
(expressed in thousands of United States dollars, except per share amounts)
Years ended December 31, | ||||||||
Notes | 2015 | 2014 | 2013 | |||||
Expenses: | ||||||||
Amortization | $ 1 | $ 1 | $ 1 | |||||
Corporate development | 14 | 42 | 345 | 19 | ||||
Employee and director remuneration | 15 | 489 | 514 | 452 | ||||
General and administrative | 14 and 15 | 194 | 290 | 223 | ||||
Shareholder relations | 91 | 227 | 111 | |||||
Share-based payments | 13(c) and 15 | 161 | 209 | 72 | ||||
Loss before the undernoted | (978) | (1,586) | (878) | |||||
Interest and other income | 3 | 20 | - | |||||
Flow through financing costs | 12 | (4) | - | - | ||||
Gain from debt settlement | 13(b)(ii) | 54 | - | - | ||||
Gain from derivative liability | 10 | 13 | - | - | ||||
Derecognition of accounts payable | 12 | - | - | 99 | ||||
Derecognition of flow-through obligations | 12 | - | - | 213 | ||||
Interest and finance charges | 11 | - | (1) | (17) | ||||
Foreign exchange (loss) gain | (20) | 11 | 4 | |||||
Write-down of long term investments | 9 | - | - | (91) | ||||
Write-off of receivable and tax recoveries | 15 | - | - | (54) | ||||
Write-off of promissory notes receivable | - | (275) | - | |||||
Write-off of mineral property interests, net of recoveries | 7(a)(iii) | - | - | (653) | ||||
Net loss for the year | (932) | (1,831) | (1,377) | |||||
Other comprehensive loss: | ||||||||
Items that will not be reclassified into profit or loss: | ||||||||
Foreign currency translation adjustment | (1,715) | (922) | (764) | |||||
Comprehensive loss for the year | $ (2,647) | $ (2,753) | $ (2,141) | |||||
Basic and diluted loss per share | $ (0.01) | $ (0.01) | $ (0.01) | |||||
Weighted average number of common shares outstanding | 164,670,698 | 148,771,663 | 113,830,108 |
|
|
|
| Years Ended December 31, |
| |||||||||||
|
| Notes |
| 2023 |
|
| 2022 |
|
| 2021 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Amortization |
|
| 8 |
|
| $ | 89 |
|
| $ | 60 |
|
| $ | 55 |
|
Corporate development |
|
| 11,12 |
|
|
| 152 |
|
|
| 112 |
|
|
| - |
|
Employee and/or director remuneration |
|
| 12 |
|
|
| 598 |
|
|
| 700 |
|
|
| 591 |
|
General and administrative |
|
| 11,12 |
|
|
| 403 |
|
|
| 837 |
|
|
| 295 |
|
Shareholder relations |
|
|
|
|
|
| - |
|
|
| 384 |
|
|
| 446 |
|
Share-based payments |
|
| 10(c),12 |
|
|
| 391 |
|
|
| 154 |
|
|
| 974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
|
|
|
| (1,633 | ) |
|
| (2,247 | ) |
|
| (2,361 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
| 65 |
|
|
| 1 |
|
|
| 7 |
|
Foreign exchange (loss) gain |
|
|
|
|
|
| 36 |
|
|
| 172 |
|
|
| (29 | ) |
Change in fair value of marketable securities |
|
| 6 |
|
|
| (364 | ) |
|
| (425 | ) |
|
| (384 | ) |
Gain on sale of mineral property |
|
| 7(b)(I) |
|
|
| 738 |
|
|
| - |
|
|
| - |
|
Impairment of mineral property interest |
|
| 7(a)(ii)and(b)(ii) |
|
|
| (1,898 | ) |
|
| - |
|
|
| - |
|
Mineral property option income |
|
| 7(a)and(b) |
|
|
| 12 |
|
|
| 545 |
|
|
| 762 |
|
Interest and finance expense |
|
| 9(b),(c),(d) |
|
|
| (38 | ) |
|
| (71 | ) |
|
| (33 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before income tax |
|
|
|
|
|
| (3,082 | ) |
|
| (2,025 | ) |
|
| (2,038 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax recovery |
|
| 9(a) |
|
|
| 32 |
|
|
| 719 |
|
|
| 206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before deferred income tax |
|
|
|
|
|
| (3,050 | ) |
|
| (1,306 | ) |
|
| (1,832 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax expense |
|
| 15(a) |
|
|
| - |
|
|
| (1,399 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year |
|
|
|
|
|
| (3,050 | ) |
|
| (2,705 | ) |
|
| (1,832 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified into profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
|
|
|
| 820 |
|
|
| (1,941 | ) |
|
| (5 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss for the year |
|
|
|
|
| $ | (2,230 | ) |
| $ | (4,646 | ) |
| $ | (1,837 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
|
|
|
|
| $ | (0.02 | ) |
| $ | (0.03 | ) |
| $ | (0.03 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding - Basic and diluted |
|
|
|
|
|
| 145,864,736 |
|
|
| 89,358,246 |
|
|
| 72,717,550 |
|
Refer to the accompanying notes to the consolidated financial statements.
Page 6 |
CANARC RESOURCE CORP.
Consolidated Statements of Changes in Shareholders’ Equity
(expressed in thousands of United States dollars)
CANAGOLD RESOURCES LTD. Consolidated Statements of Changes in Shareholders’ Equity (expressed in thousands of United States dollars, except per share amounts) |
Accumulated | |||||||||||
Share Capital | Reserve for | Other | |||||||||
Number of | Share-Based | Comprehensive | |||||||||
Shares | Amount | Payments | Income (Loss) | Deficit | Total | ||||||
Balance, December 31, 2012 | 110,242,171 | $ 59,682 | $ 836 | $ 62 | $ (47,526) | $ 13,054 | |||||
Private placement, net of share issue costs | 1,600,000 | 155 | - | - | - | 155 | |||||
Property acquisition | 2,000,000 | 196 | - | - | - | 196 | |||||
Exercise of stock options | 769,000 | 116 | (40) | - | - | 76 | |||||
Exercise of share appreciation rights | 207,024 | 29 | (34) | - | 5 | - | |||||
Share-based payments | - | - | 72 | - | - | 72 | |||||
Expiry of stock options | - | - | (236) | - | 236 | - | |||||
Other comprehensive income: | |||||||||||
Foreign currency translation adjustment | - | - | (8) | (764) | 8 | (764) | |||||
Net loss for the year | - | - | - | - | (1,377) | (1,377) | |||||
Balance, December 31, 2013 | 114,818,195 | 60,178 | 590 | (702) | (48,654) | 11,412 | |||||
Private placement, net of share issue costs | 42,618,110 | 2,780 | - | - | - | 2,780 | |||||
Share-based payments | - | - | 209 | - | - | 209 | |||||
Expiry of stock options | - | - | (168) | - | 168 | - | |||||
Finders fee warrants | - | (46) | 46 | - | - | - | |||||
Other comprehensive income: | |||||||||||
Foreign currency translation adjustment | - | - | 4 | (922) | (2) | (920) | |||||
Net loss for the year | - | - | - | - | (1,831) | (1,831) | |||||
Balance, December 31, 2014 | 157,436,305 | 62,912 | 681 | (1,624) | (50,319) | 11,650 | |||||
Acquisition of subsidary (Note 6) | 19,000,000 | 1,017 | - | - | - | 1,017 | |||||
Private placement, net of share issue costs | 13,165,552 | 523 | - | - | - | 523 | |||||
Shares for debt settlement | 2,018,700 | 106 | - | - | - | 106 | |||||
Share-based payments | - | - | 161 | - | - | 161 | |||||
Cancellation and expiration of stock options | - | - | (243) | - | 243 | - | |||||
Finders fee warrants | - | (21) | 21 | - | - | - | |||||
Modification of finders fee warrants | - | - | 5 | - | (5) | - | |||||
Expiry of finders fee warrants | - | - | (97) | - | 97 | - | |||||
Other comprehensive income: | |||||||||||
Foreign currency translation adjustment | - | - | 2 | (1,715) | 2 | (1,711) | |||||
Net loss for the year | - | - | - | - | (932) | (932) | |||||
Balance, December 31, 2015 | 191,620,557 | $ 64,537 | $ 530 | $ (3,339) | $ (50,914) | $ 10,814 |
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
| ||||||
|
| Share Capital |
|
| Reserve for |
|
| Other |
|
|
|
|
|
|
| |||||||||
|
| Number of |
|
|
|
| Share-Based |
|
| Comprehensive |
|
|
|
|
|
|
| |||||||
| Shares |
|
| Amount |
|
| Payments |
|
| Income (Loss) |
|
| Deficit |
| Total |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance, December 31, 2020 |
|
| 70,251,239 |
|
| $ | 73,595 |
|
| $ | 821 |
|
| $ | (2,044 | ) |
| $ | (49,258 | ) |
| $ | 23,114 |
|
Private placement |
|
| 11,201,849 |
|
|
| 4,126 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,126 |
|
Exercise of stock options |
|
| 650,000 |
|
|
| 384 |
|
|
| (180 | ) |
|
| - |
|
|
| - |
|
|
| 204 |
|
Exercise of share appreciation rights |
|
| 104,884 |
|
|
| 56 |
|
|
| (59 | ) |
|
| - |
|
|
| 3 |
|
|
| - |
|
Exercise of warrants |
|
| 301,624 |
|
|
| 105 |
|
|
| (33 | ) |
|
| - |
|
|
| - |
|
|
| 72 |
|
Share issue expenses |
|
| - |
|
|
| (363 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (363 | ) |
Finders fee warrants |
|
| - |
|
|
| (150 | ) |
|
| 150 |
|
|
| - |
|
|
| - |
|
|
| - |
|
Share-based payments |
|
| - |
|
|
| - |
|
|
| 974 |
|
|
| - |
|
|
| - |
|
|
| 974 |
|
Comprehensive loss for the year |
|
| - |
|
|
| - |
|
|
| 3 |
|
|
| (5 | ) |
|
| (1,832 | ) |
|
| (1,834 | ) |
Balance, December 31, 2021 |
|
| 82,509,596 |
|
|
| 77,753 |
|
|
| 1,676 |
|
|
| (2,049 | ) |
|
| (51,087 | ) |
|
| 26,293 |
|
Private placement |
|
| 8,750,000 |
|
|
| 2,151 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,151 |
|
Exercise of share appreciation rights |
|
| 45,629,798 |
|
|
| 5,873 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 5,873 |
|
Share issue expenses |
|
| - |
|
|
| (312 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (312 | ) |
Share-based payments |
|
| - |
|
|
| - |
|
|
| 154 |
|
|
| - |
|
|
| - |
|
|
| 154 |
|
Cancellation and expiration of stock options |
|
| - |
|
|
| - |
|
|
| (1,015 | ) |
|
| - |
|
|
| 1,015 |
|
|
| - |
|
Comprehensive loss for the year |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,941 | ) |
|
| (2,705 | ) |
|
| (4,646 | ) |
Balance, December 31, 2022 |
|
| 136,889,394 |
|
|
| 85,465 |
|
|
| 815 |
|
|
| (3,990 | ) |
|
| (52,777 | ) |
|
| 29,513 |
|
Private placement |
|
| 21,000,000 |
|
|
| 3,315 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,315 |
|
Share issue expenses |
|
| - |
|
|
| (12 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (12 | ) |
Share based payments |
|
| - |
|
|
| - |
|
|
| 152 |
|
|
| - |
|
|
| - |
|
|
| 152 |
|
Cancellation and expiration of stock options |
|
| - |
|
|
| - |
|
|
| (311 | ) |
|
| - |
|
|
| 311 |
|
|
| - |
|
Comprehensive income (loss) for the year |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 867 |
|
|
| (3,097 | ) |
|
| (2,230 | ) |
Balance, December 31, 2023 |
|
| 157,889,394 |
|
| $ | 88,768 |
|
| $ | 656 |
|
| $ | (3,123 | ) |
| $ | (55,563 | ) |
| $ | 30,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021 |
|
| 82,509,596 |
|
|
| 77,753 |
|
|
| 1,676 |
|
|
| (2,049 | ) |
|
| (51,087 | ) |
|
| 26,293 |
|
Private placement |
|
| 4,050,000 |
|
|
| 1,264 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,264 |
|
Share issue expenses |
|
|
|
|
|
| (31 | ) |
|
|
|
|
|
| - |
|
|
| - |
|
|
| (31 | ) |
Share-based payments |
|
| - |
|
|
| - |
|
|
| 129 |
|
|
| - |
|
|
| - |
|
|
| 129 |
|
Cancellation and expiration of stock options |
|
| - |
|
|
| - |
|
|
| (915 | ) |
|
| - |
|
|
| 915 |
|
|
| - |
|
Comprehensive income (loss) for the period |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,865 | ) |
|
| (1,431 | ) |
|
| (3,296 | ) |
Balance, December 31, 2022 |
|
| 86,559,596 |
|
| $ | 78,986 |
|
| $ | 890 |
|
| $ | (3,914 | ) |
| $ | (51,603 | ) |
| $ | 24,359 |
|
Refer to the accompanying notes to the consolidated financial statements.
Canagold Resources Ltd. | Page 7 |
CANARC RESOURCE CORP.
Consolidated Statements of Cash Flows
(expressed in thousands of United States dollars)
CANAGOLD RESOURCES LTD. Consolidated Statements of Cash Flows (expressed in thousands of United States dollars) |
Years ended December 31, | |||||||
2015 | 2014 | 2013 | |||||
Cash provided from (used by): | |||||||
Operations: | |||||||
Net loss for the year | $ (932) | $ (1,831) | $ (1,377) | ||||
Items not involving cash: | |||||||
Accrued interest | - | (15) | 17 | ||||
Amortization | 1 | 1 | 1 | ||||
Share-based payments | 161 | 209 | 72 | ||||
Flow through financing costs | 2 | - | - | ||||
Derecognition of accounts payable | - | - | (99) | ||||
Derecognition of flow-through obligations | - | - | (213) | ||||
Gain from debt settlement | (54) | - | - | ||||
Gain on derivative liability | (13) | - | - | ||||
Write-down of long term investment | - | - | 91 | ||||
Write-off of promissory notes receivable | - | 275 | - | ||||
Write-off of mineral property interest | - | - | 653 | ||||
Write-off of receivable and tax recoveries | - | - | 54 | ||||
(835) | (1,361) | (801) | |||||
Changes in non-cash working capital items: | |||||||
Receivables and prepaids | 54 | 22 | 11 | ||||
Accounts payable and accrued liabilities | 197 | (26) | 322 | ||||
Cash used by operating activities | (584) | (1,365) | (468) | ||||
Financing: | |||||||
Issuance of common shares, net of share issuance costs | 523 | 2,780 | 231 | ||||
Proceeds from demand loans | - | - | 126 | ||||
Repayment of demand loans | - | (128) | - | ||||
Cash provided from financing activities | 523 | 2,652 | 357 | ||||
Investing: | |||||||
Acquisition of subsidiary (Note 6) | 8 | - | - | ||||
Restricted cash | 69 | - | - | ||||
Promissory notes receivables | - | (260) | - | ||||
Mineral property interests, net of recoveries | (337) | (402) | (9) | ||||
Cash used by investing activities | (260) | (662) | (9) | ||||
(Decrease) increase in cash | (321) | 625 | (120) | ||||
Cash, beginning of year | 675 | 50 | 170 | ||||
Cash, end of year | $ 354 | $ 675 | $ 50 |
|
|
|
|
| Years ended December 31, |
| ||||||||||
|
| Notes |
|
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash provided from (used by): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operations: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
|
|
| $ | (3,050 | ) |
| $ | (2,705 | ) |
| $ | (1,832 | ) | |
Items not involving cash: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Accrued interest |
|
| 9(c) |
|
| 38 |
|
|
| 31 |
|
|
| 33 |
| |
Amortization |
|
|
|
|
|
| 89 |
|
|
| 60 |
|
|
| 55 |
|
Share-based payments |
|
|
|
|
|
| 391 |
|
|
| 154 |
|
|
| 974 |
|
Change in fair value of marketable securities |
|
|
|
|
|
| 364 |
|
|
| 425 |
|
|
| 384 |
|
Income tax recovery |
|
|
|
|
|
| (34 | ) |
|
| (719 | ) |
|
| (206 | ) |
Deferred tax recovery |
|
|
|
|
|
| - |
|
|
| 1,399 |
|
|
| - |
|
Gain on sale of mineral property |
|
|
|
|
|
| (738 | ) |
|
| - |
|
|
| - |
|
Write-off of mineral property interest |
|
|
|
|
|
| 1,898 |
|
|
| - |
|
|
| - |
|
Mineral property option income |
|
|
|
|
|
| - |
|
|
| 505 |
|
|
| (753 | ) |
Unrealized foreign exchange gain |
|
|
|
|
|
| (32 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
| (1,074 | ) |
|
| (850 | ) |
|
| (1,345 | ) |
Changes in non-cash working capital items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables and prepaids |
|
|
|
|
|
| 221 |
|
|
| (847 | ) |
|
| (153 | ) |
Accounts payable and accrued liabilities |
|
|
|
|
|
| (880 | ) |
|
| 367 |
|
|
| 605 |
|
Net cash used by operating activities |
|
|
|
|
|
| (1,733 | ) |
|
| (1,330 | ) |
|
| (893 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from loans |
|
|
|
|
|
| - |
|
|
| 1,940 |
|
|
| - |
|
Repayment of loan |
|
|
|
|
|
| - |
|
|
| (1,940 | ) |
|
| - |
|
Issuance of common shares, net of share issue expenses |
|
|
|
|
|
| 3,303 |
|
|
| 8,249 |
|
|
| 4,165 |
|
Exercise of stock options |
|
|
|
|
|
| - |
|
|
| - |
|
|
| 204 |
|
Exercise of warrants |
|
|
|
|
|
| - |
|
|
| - |
|
|
| 72 |
|
Lease payments |
|
|
|
|
|
| (63 | ) |
|
| (42 | ) |
|
| (38 | ) |
Cash provided from financing activities |
|
|
|
|
|
| 3,240 |
|
|
| 8,207 |
|
|
| 4,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from disposition of marketable securities |
|
|
|
|
|
| 159 |
|
|
| 325 |
|
|
| 656 |
|
Sale of long term investments |
|
|
|
|
|
| 1,600 |
|
|
| - |
|
|
| - |
|
Expenditures for mineral properties, net of recoveries |
|
|
|
|
|
| (4,542 | ) |
|
| (4,486 | ) |
|
| (8,190 | ) |
Expenditures for leasehold improvements and equipment |
|
|
|
|
|
| (5 | ) |
|
| (117 | ) |
|
| (16 | ) |
Cash used by investing activities |
|
|
|
|
|
| (2,788 | ) |
|
| (4,278 | ) |
|
| (7,550 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign exchange gain (loss) on cash |
|
|
|
|
|
| 267 |
|
|
| (783 | ) |
|
| (69 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash |
|
|
|
|
|
| (1,014 | ) |
|
| 1,817 |
|
|
| (4,109 | ) |
Cash, beginning of year |
|
|
|
|
|
| 3,825 |
|
|
| 2,008 |
|
|
| 6,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year |
|
|
|
|
| $ | 2,811 |
|
| $ | 3,825 |
|
| $ | 2,008 |
|
Refer to the accompanying notes to the consolidated financial statements.
Canagold Resources Ltd. | Page 8 |
CANARC RESOURCE CORP.
Consolidated Statements of Cash Flows
(expressed in thousands of United States dollars)
CANAGOLD RESOURCES LTD. Consolidated Statements of Cash Flows (expressed in thousands of United States dollars) |
Years ended December 31,
| ||||||||
Notes | 2015 | 2014 | 2013 | |||||
Non-cash financing and investing activities: | ||||||||
Issuance of shares for: | ||||||||
Mineral property interests | 7(a)(ii) | $ - | $ - | $ 196 | ||||
Shares for debt settlement | 13(b)(ii) | 106 | - | - | ||||
Fair value of finders fee warrants from: | ||||||||
Issuance of finders fee warrants | 13 | 21 | 46 | - | ||||
Modification of finders fee warrants | 13(d) | 5 | - | - | ||||
Expiration of: | ||||||||
Stock options | 243 | 168 | 236 | |||||
Finders fee warrants | 97 | - | - | |||||
Fair value allocated to common shares issued on exercise of: | ||||||||
Stock options | 13 | - | - | 40 | ||||
Share appreciation rights | 13 | - | - | 29 | ||||
Income taxes paid | - | - | - | |||||
Interest received | - | 5 | - | |||||
Interest paid | - | 7 | - | |||||
|
|
|
|
| Years ended December 31, |
| ||||||||||
|
| Notes |
|
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||
Non-cash financing and investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fair value of marketable securities received from option on mineral property interests |
|
|
|
| $ | 1,192 |
|
| $ | 376 |
|
| $ | 1,010 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fair value allocated to common shares issued on exercise of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Stock options |
|
|
|
|
| - |
|
|
| - |
|
|
| 180 |
| |
Share appreciation rights |
|
| 8(b)(I) |
|
| - |
|
|
| - |
|
|
| 59 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value allocated to lease liability: |
|
|
|
|
|
| - |
|
|
| 273 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of finders fee warrants from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of finders fee warrants |
|
| 8(b)(i)and(ii) |
|
| - |
|
|
| - |
|
|
| 150 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration and cancellation of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
|
|
|
|
|
| 311 |
|
|
| 1,015 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
Interest paid |
|
|
|
|
|
| - |
|
|
| 36 |
|
|
| 21 |
|
Refer to the accompanying notes to the consolidated financial statements.
| Page 9 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
1. Nature of Operations and Going Concern
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
Canarc Resource Corp.Canagold Resources Ltd. (the “Company”), a company incorporated under the laws of British Columbia on January 22, 1987, is in the mineral exploration business and has not yet determined whether its mineral property interests contain reserves. The recoverability of amounts capitalized for mineral property interests is dependent upon the existence of reserves in its mineral property interests, the ability of the Company to arrange appropriate financing and receive necessary permitting for the exploration and development of its mineral property interests, and upon future profitable production or proceeds from the disposition thereof. The address of the Company’s registered office is #910#1500 – 8001055 West PenderGeorgia Street, Vancouver, BC, Canada, V6C 2V6V6E 4N7 and its principal place of business is #301#1250 – 700 West Pender625 Howe Street, Vancouver, BC, Canada, V6C 1G8.2T6.
The Company has no operating revenues, has incurred a significant net lossesloss of $932,000 for the year ended December 31, 2015 (2014$3.1 million in 2023 (2022 - $2.7 million and 2021 - $1.8 million and 2013 - $1.4 million), and has a deficit of $51$55.6 million as at December 31, 2015 (20142023 (2022 - $50.3$52.8 million and 20132021 - $48.7$51.1 million). Furthermore,.In addition, the Company has a working capital deficiency of $574,000 (2014 - $156,000).negative cash flows from operations. These consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidationrepayment of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on the ability of the Company to raise debt or equity financings, and the attainment of profitable operations. Management would needcontinues to find opportunities to raise the necessary capital to meet its planned business objectives and continues to seek financing opportunities. There can be no assurance that management’s plans will be successful. These matters indicate the existence of material uncertainties that may cast substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern, and such adjustments could be material.
2. Basis of Presentation
(a) Statement of compliance:
These consolidated financial statements have been prepared in accordance with International Financial ReportingIFRS Accounting Standards, (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).Board.
(b) Approval of consolidated financial statements:
These consolidated financial statements were approved by the Company’s Board of Directors on March 23, 2016.26, 2024.
(c) Basis of presentation:
These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value, as disclosed in Note 5. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014(d) Functional currency and 2013presentation currency:
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
The Company’s functional currency of the Company and its subsidiaries is the Canadian dollar, and accounts denominated in currencies other than the Canadian dollar have been translated as follows:
Canagold Resources Ltd. | Page 10 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
2. Basis of Presentation (continued)
(d) Functional currency and presentation currency: (continued)
· | Monetary assets and liabilities at the exchange rate at the consolidated statement of financial position date; |
· | Non-monetary assets and liabilities at the historical exchange rates, unless such items are carried at fair value, in which case they are translated at the date when the fair value was determined; |
· | Shareholders’ equity items at historical exchange rates; and |
· | Revenue and expense items at the rate of exchange |
The Company’s presentation currency is the United States dollar. For presentation purposes, all amounts are translated from the Canadian dollar functional currency to the United States dollar presentation currency for each periodperiod. Statement of financial position accounts, with the exception of equity, are translated using the exchange rate at the end of each reporting period.period, transactions on the statement of comprehensive loss are recorded at the average rate of exchange during the period, and equity accounts are translated using historical actual exchange rates.
Exchange gains and losses arising from translation to the Company’s presentation currency are recorded as a cumulative translation adjustment in other comprehensive income (loss), which is included in accumulated other comprehensive income (loss).loss.
(e) Critical accounting estimates and judgments:
The preparation of the consolidated financial statements in accordance with IFRS Accounting Standards requires management to make estimates, assumptions and judgementsjudgments that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements along with the reported amounts of revenues and expenses during the period. Actual results may differ from these estimates and, as such, estimates and judgementsjudgments and underlying assumptions are reviewed on an ongoing basis. Revisions are recognized in the period in which the estimates are revised and in any future periods affected.
Significant areas requiring the use of management estimates relate to determining the recoverability of promissory notes receivable, mineral property interests and receivables and long-term investments; the determination of accrued liabilities; the fair value of derivative liabilities; accrued site remediation; amount of flow-through obligations and recognition of deferred income tax liability; the variables used in the determination of the fair value of stock optionsbased compensation granted and finder’s fees warrants issued; and the recoverability of deferred tax assets.issued or modified. While management believes the estimates are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.
The Company applies judgment in assessing the functional currency of each entity consolidated in these consolidated financial statements. The functional currency of the Company and its subsidiaries is measureddetermined using the currency of the primary economic environment in which that entity operates.
For right of use assets and lease liability, the Company applies judgment in determining whether the contract contains an identified asset, whether they have the right to control the asset, and the lease term. The lease term is based on considering facts and circumstances, both qualitative and quantitative, that can create an economic incentive to exercise renewal options. Management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option.
The Company applies judgment in assessing whether material uncertainties exist that would cast substantial doubt as to whether the Company could continue as a going concern.
Canagold Resources Ltd. |
Page |
CANARC RESOURCE CORP.11
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
2. Basis of Presentation (continued)
(e) Critical accounting estimates and judgments: (continued)
The Company is required to spend proceeds received from the issuance of flow-through shares on qualifying resources expenditures. The Company is also entitled to refundable mining tax credits on qualified resource expenditures incurred in Canada. Differences in judgment between management and regulatory authorities with respect to qualified expenditures may result in disallowed expenditures by the tax authorities. Any amount disallowed may result in the Company’s required expenditures not being fulfilled or refundable tax credits not being recoverable. The Company accrues for refundable mining tax credits when management is reasonably assured that the amount is collectable.
At the end of each reporting period, the Company assesses each of its mineral resource properties to determine whether any indication of impairment exists. Judgment is required in determining whether indicators of impairment exist, including factors such as: the period for which the Company has the right to explore; expected renewals of exploration rights; whether substantive expenditures on further exploration and evaluation of resource properties are budgeted or planned; and results of exploration and evaluation activities on the exploration and evaluation assets. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.3. Material Accounting Policy Information
In the acquisition of Oro Silver Resources Ltd. (“Oro Silver”), judgement was required to determine if the acquisition represented a business combination or an asset purchase. More specifically, management concluded that Oro Silver did not represent a business as the assets acquired were not an integrated set of activities with inputs, processes and outputs. Since it was concluded that the acquisition represented the purchase of assets, there was no goodwill generated on the transaction and acquisition costs were capitalized to the assets purchased rather than expensed. The fair values of the net assets acquired were determined using estimates and judgements. (Note 6).
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(i) The following standard has become effective during the current year:
Annual Improvements 2010-2012 Cycle
Makes amendments to the following standards:
The following standard will become effective in future periods:
IFRS 9Financial Instruments (2014)
This is a finalized version of IFRS 9, which contains accounting requirements for financial instruments, replacing IAS 39Financial Instruments: Recognition and Measurement. The standard contains requirements in the following areas:
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(ii) (continued)
Applicable to the Company's annual periods beginning January 1, 2018.
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.
(a) Basis of consolidation:
These consolidated financial statements include the accounts of the Company and its wholly-owendwholly owned subsidiaries including New Polaris Gold Mines Ltd. (Canada), Oro Silver Resources Ltd.AIM U.S Holdings Corporation (USA), American Innovative Minerals LLC (“Oro Silver”AIM”) (USA), Fondaway LLC (“USA”), and Minera Oro Silver de Mexico SA de CV (“Minera Oro Silver”)Canarc (Barbados) Mining Ltd (inactive) (Barbados). The financial statements of subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases. All significant intercompany transactions and balances are eliminated on consolidation.
Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Canagold Resources Ltd. | Page 12 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
3. Material Accounting Policy Information (continued)
(b) Financial instruments:
(i) Financial assets:
The Company classifies itsInitial recognition and measurement
A financial assets in the following categories:asset is measured initially at fair value plus, for an item not at fair value through profit or loss, (“FVTPL”), loanstransaction costs that are directly attributable to its acquisition or issue. On initial recognition, a financial asset is classified as measured at amortized cost or fair value through profit or loss. A financial asset is measured at amortized cost if it meets the conditions that: (i) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and receivables, held-to-maturity (“HTM”) and available-for-sale (“AFS”). The classification dependsinterest on the purpose for which the financial assets were acquired. Management determines the classificationprincipal amount outstanding; and (iii) is not designated as fair value through profit or loss.
Subsequent measurement
The subsequent measurement of financial assets at initial recognition.depends on their classification as follows:
Financial assets at FVTPLfair value through profit or loss
Financial assets measured at FVTPLfair value through profit and loss are initially recognizedcarried in the consolidated statements of financial position at fair value with changes in fair value recorded throughtherein, recognized in profit or loss. Cash and restricted cash are included in this category of financial assets.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(i) Financial assets: (continued)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non-current assets based on their maturity date. Loans and receivables are carried at amortized cost less any impairment. Loans and receivables comprise trade and other receivables.
Held to maturity
These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. HTM investments are initially recognized on their trade-date at fair value, and subsequently are measured at amortized cost using the effective interest rate method. If there is objective evidence that the investment is impaired, determined by reference to external credit ratings and other relevant indicators, the financial asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the investment, including impairment losses,Associated transaction costs are recognized in profit or loss. The Company has no HTM financial assets as at December 31, 2015 and 2014.loss in the period in which it arises.
Available-for-sale financialFinancial assets measured at amortized cost
AFS financial assets are non-derivatives that are either designated as available-for-sale or not classified in any of the otherA financial asset categories. Changes in the fair value of AFS financial assets are recognized as other comprehensive income (loss) and classified as a component of equity. AFS assets include investments in equities of other entities.
Management assesses the carrying value of AFS financial assets at least annually and any impairment charges are also recognized in profit or loss. When financial assets classified as AFS are sold, the accumulated fair value adjustments recognized in other comprehensive income (loss) are included in profit or loss.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(ii) Financial liabilities:
The Company classifies its financial liabilities in the following categories: FVTPL and other financial liabilities.
Financial liabilities at FVTPL
Financial liabilities at FVTPL are initially recognized at fair value with changes in fair value recorded through profit or loss.
Derivatives are initially recognized at their fair value on the date the derivative contract is entered into and are subsequently re-measured at their fair value at each reporting period with changes in the fair value recognized in profit or loss.
Liabilities which are to be settled in payable ounces (or the U.S. dollar equivalent) are recorded using the spot price of the commodity.
Other financial liabilities
Other financial liabilities are non-derivatives and are recognized initially at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest method. Any difference between
(ii) Derecognition:
A financial asset or, where applicable a part of a financial asset or part of a group of similar financial assets is derecognized when:
· | The contractual rights to receive cash flows from the asset have expired; or | |
· | The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either: (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. |
(iii) Financial liabilities:
Financial liabilities are recognized when the amounts originally received, netCompany becomes a party to the contractual provisions of transaction costs, and the redemptionfinancial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial liabilities are classified as either financial liabilities at fair value is recognizedthrough profit or loss or financial liabilities subsequently measured at amortized cost. All interest-related charges are reported in profit or loss over the period to maturity using the effectivewithin interest method.expense, if applicable.
Canagold Resources Ltd. | Page 13 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
3. Material Accounting Policy Information (continued)
Other financial liabilities are classified as current or non-current based on their maturity date.(b) Financial liabilities include trade accounts payable and accrued liabilities.instruments: (continued)
(iii)(iv) Fair value hierarchy:hierarchy
The Company categorizes financial instruments measured at fair value at one of three levels according to the reliability of the inputs used to estimate fair values. The fair value of financial assets and financial liabilities included in Level 1 are determined by reference to quoted prices in active markets for identical assets and liabilities. Financial assets and liabilities in Level 2 are valued using inputs other than quoted prices for which all significant inputs are based on observable market data. Level 3 valuations are based on inputs that are not based on observable market data.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(iv)(c) Impairment of financialnon-financial assets:
The Company assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. An evaluation is made as to whether a decline in fair value is “significant” or “prolonged” based on indicators such as significant adverse changes in the market, economic or legal environment.
Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized.
(v) Derecognition of financial assets and liabilities:
Financial assets are derecognized when the investments mature or are sold, and substantially all the risks and rewards of ownership have been transferred. A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired. Gains and losses on derecognition are recognized within other income and finance costs.
The carrying amounts of non-current assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If there are indicators of impairment, the recoverable amount of the asset is estimated in order to determine the extent of the impairment. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount and is recorded as an expense in profit or loss.
The recoverable amount is the higher of an asset’s “fair value less costs to sell” for the asset's highest and best use, and “value-in-use”. Where the asset does not generate cash flows that are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is determined. “Fair value less costs to sell” is determined as the amountprice that would be obtained fromreceived to sell an asset in an orderly transaction between market participants at the salemeasurement date less incremental costs directly attributable to disposal of the asset, in an arm’s length transaction between knowledgeableexcluding financing costs and willing parties.income tax expenses. For mining assets this would generally be determined based on the present value of the estimated future cash flows arising from the continued development, use or eventual disposal of the asset. In assessing these cash flows and discounting them to the present value, assumptions used are those that an independent market participant would consider appropriate. In assessing “value-in-use”, the estimated future cash flows expected to arise from the continuing use of the assets in their present form and from their disposal are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
For the purposes of impairment testing, mineral property interests are allocated to cash-generating units to which the exploration or development activity relates. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.periods. A reversal of an impairment loss is recognized immediately in profit or loss.
(d) Mineral property interests:
All costs related to investments in mineral property interests are capitalized on a property-by-property basis. Such costs include mineral property acquisition costs and exploration and development expenditures, net of any recoveries. The costs related to a mineral property from which there is production, together with the costs of mining equipment, will be amortized using the unit-of-production method. When there is little prospect of further work on a property being carried out by the Company or its partners or when a property is abandoned or when the capitalized costs are not considered to be economically recoverable, the related property costs are written down to the amount recoverable.
Canagold Resources Ltd. | Page 14 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
3. Material Accounting Policy Information (continued)
(d) Mineral property interests: (continued)
From time to time, the Company may acquire or dispose of a mineral property interest pursuant to the terms of a property option agreement. As the property options are exercisable entirely at the discretion of the optionee, the amounts payable or receivable are not recorded. Property option payments are recorded as property costs or recoveries when the payments are made or received. Proceeds received on the sale or property option of the Company’s property interest is recorded as a reduction of the mineral property cost. The Company recognizes in income those costs that are recovered on mineral property interests when amounts received or receivable are in excess of the carrying amount.
The amounts shown for mineral property interests represent costs incurred to date and include advance net smelter return (“NSR”) royalties, less recoveries and write-downs, and are not intended to reflect present or future values.
(e) Equipment:
Equipment isLeasehold improvements, office equipment and furnishings, and right-of-use assets are recorded at cost, and for equipment subject to amortization, the Company uses the declining balance method at rates of up to 30% annually.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)are amortized as follows:
Leasehold improvements | Straight line over lease term |
Office equipment | Double declining rate of 30% |
Office furnishings | Double declining rate of 20% |
Right-of-use | Straight line over lease term |
Additions during the year are amortized on a pro-rated basis.
(f) Proceeds on unit offerings:
Proceeds received on the issuance of units, consisting of common shares and warrants, are first allocated to the fair value of the common shares with any residual value then allocated to warrants. Consideration received on the exercise of warrants is recorded as share capital and any related reserve for share-based payments is transferred to share capital.
(g) Non-monetary transactions:
Common shares issued for consideration other than cash are valued based on the fair market value of the goods or services received and if not determinable, the common shares are valued at their quoted market price at the date of issuance.
(h) Flow-through common shares:
The Company will, from time to time, issue flow-through common shares to finance a significant portion of its exploration program. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through shares into: (i) a flow-through share premium equal to the estimated premium,excess, if any, which investors pay for the flow-through feature,common share over the market price of common shares on closing date and which is recognized as a liabilityliability; and (ii) share capital. Upon expenses being incurred, the Company derecognizes the liability and recognizes a deferred tax liability or tax recovery for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.
Canagold Resources Ltd. | Page 15 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
3. Material Accounting Policy Information (continued)
(h) Flow-through common shares: (continued)
Proceeds received from the issuance of flow-through shares are restricted to be used only for Canadian resource property exploration expenditures withwithin a two-year period. The portion of the proceeds received but not yet expended at the end of the Company’s period is disclosed separately as flow-through share proceeds.
The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule, in accordance with the Government of Canada flow-through regulations. When applicable, this tax is accrued as a finance expense until paid.
(i) Share-based payments:
The Company has a stock optionan Omnibus plan that is described in Note 13(c)10(c). Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The offset to the recorded cost is to the reserve for share-based payments. Consideration received on the exercise of stock options is recorded as share capital and the related reserve for share-based payments is transferred to share capital. Upon expiry, the recorded fair value is transferred from reserve for share-based payments to deficit.
The Company has a share appreciation rights plan, which provides stock option holders the right to receive the number of common shares that are equal in value to the intrinsic value of the stock options at the date of exercise. Amounts transferred from the reserve for share-based payment to share capital are based on the ratio of shares actually issued to the number of stock options originally granted. The remainder is transferred to deficit.
CANARC RESOURCE CORP.(j) Environmental rehabilitation:
Notes
The Company recognizes liabilities for statutory, contractual, constructive, or legal obligations associated with the retirement of mineral property interests and equipment, when those obligations result from the acquisition, construction, development, or normal operation of the assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
TheCompany recognizes liabilities forstatutory, contractual,constructive orlegal obligationsassociated with the retirement of mineral property interests andequipment,when those obligations resultfrom the acquisition,construction,development or normal operation ofthe assets.The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation workis capitalized to mining assetsrelated asset along with along witha correspondingincrease corresponding increase in the rehabilitation provisioninthe periodincurred.Discountrehabilitation provision in the period incurred. Discount rates using a pre-taxratepre-tax rate that reflect the time valuetime value of money are used to calculatethecalculate the netpresent value.The rehabilitation present value. The rehabilitation assetis depreciated is depreciated on the same basisbasis as mining assets.mining assets.
TheCompany’s estimatesThe Company’s estimates of reclamationreclamation costs could change asa resultas a result of changesin regulatory requirements,discountchanges in regulatory requirements, discount rates and assumptions regardingassumptions regarding the amount and timingtiming of thefuture expenditures.Thesethe future expenditures. These changesare recordeddirectly are recorded directly to mining assets with acorrespondingthe related asset with a corresponding entry to the rehabilitation provision.rehabilitation provision. The Company’s estimatesestimates are reviewed annuallyforchangesin regulatory requirements, discountreviewed annually for changes in regulatory requirements, discount rates, effectsofinflationandeffects of inflation and changesin estimates. in estimates.
Changesin in the net present value, excluding changesinpresent value, excluding changes in the Company’s estimatesestimates of reclamationcosts, are charged to profit orloss forthe period.
Thenet present value ofrestorationreclamation costs, arising from subsequent site damage thatisincurred on an ongoing basis during production are charged to profit or lossin for the periodincurred.period.
Canagold Resources Ltd. | Page 16 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
3. Material Accounting Policy Information (continued)
Thecosts(j) Environmental rehabilitation: (continued)
The net present value of rehabilitatirestoration costs arising from subsequent site damage that is incurred on an ongoing basis during production are charged to profit or loss in the period incurred.
The costs of rehabilitation projects thatwereincludedinthat were included in the rehabilitation provisionrehabilitation provision are recordedagainstrecorded against the provisionprovision asincurred.The incurred. The cost of ongoing current programsprograms to prevent and controlpollutionisand control pollution is chargedagainst profit against profit orloss loss asincurred. incurred.
(k) Earnings (loss) per share:
Basic earnings (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common sharesoutstandingsharesoutstanding during the period. The treasury stock method is used to calculate diluted earnings (loss) per common share amounts. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of the diluted per common share amount assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. In the Company’s case, diluted loss per share presented is the same as basic loss per share as the effect of outstanding options and warrants in the loss per common share calculation would be anti-dilutive.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)(l) Provisions:
Provisions are recordedwhen apresentlegalor constructive obligation existsasProvisions are recorded when a resultpresent legal or constructive obligation exists as a result ofpast past eventswhereitisprobable where it is probable that an outflow ofresources embodyingoutflow of resources embodying economic benefitswill will be required to settlesettle the obligation,obligation, and areliablea reliable estimate of the amount of the obligationobligation can be made.
Theamount recognizedThe amount recognized as a provisionisprovision is the best estimateestimate of the considerationconsideration required to settlesettle the present obligpresent obligation ation atthe the consolidated statement of financial positiondate, takingintoaccountfinancial position date, taking into account the risks and uncertainties surroundinguncertainties surrounding the obligation.Whereobligation. Where a provisionismeasured usingprovision is measured using the cash flowsflows estimated to settlesettle the presentobligation,its carrying obligation, its carrying amountis thepresent value is the present value of those cash flows.Whenflows. When some or allofall of the economic benefits requiredeconomic benefits required to settlesettle a provisionprovision are expectedexpected to be recovered from a thirdparty,the receivableis recognizedthird party, the receivable is recognized as an asset ifitis virtuallycertain that reimbursementwillbe received if it is virtually certain that reimbursement will be received and the amount receivablereceivable canbemeasuredreliably. be measured reliably.
(m) Income taxes:
The Company follows the asset and liability method for accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and losses carried forward. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss in the period that includes the substantive enactment date. Deferred tax assets are recognized to the extent that recovery is considered probable.
Canagold Resources Ltd. | Page 17 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
3. Material Accounting Policy Information (continued)
(n) Right-of-use asset and lease liability:
The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognizes a right-of-use asset (“ROU asset”) and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, at the commencement of the lease, with the following exceptions:
(i) | ||
(ii) | For leases of |
The payments for such leases are recognized in the consolidated statements of loss and comprehensive loss over the lease term.
The ROU asset is initially measured based on the present value of lease payments, lease payments made at or before the commencement day, and any initial direct costs. They are subsequently measured at cost less accumulated amortization and impairment losses. The ROU asset is depreciated over the shorter of the lease term or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an indicator of impairment.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. Lease payments include fixed payments less any lease incentives and any variable lease payments where variability depends on an index or rate. When the lease contains an extension or purchase option that the Company considers reasonably certain to be exercised, the cost of the option is included in the lease payments.
Variable lease payments that do not depend on an index or rate are not included in the measurement of the ROU asset and lease liability. The related payments are recognized as an expense in the period in which the triggering event occurs and are included in the consolidated statements of loss and comprehensive loss.
(o) Mining exploration tax recoveries:
The Company recognizes mining exploration tax recoveries in the period in which there is reasonable expectation, based on management’s estimate, of receiving a refund. The amount of refundable mining tax credits receivable is subject to review and approval by the taxation authorities and is adjusted for in the period when such approval is confirmed.
(o) Adoption of new accounting standards:
Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements.
Canagold Resources Ltd. | Page 18 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
4. Management of Capital
The Company is an exploration stage company and this involves a high degree of risk. The Company has not determined whether its mineral property interests contain reserves of ore and currently has not earned any revenues from its mineral property interests and, therefore, does not generate cash flows from operations. The Company’s primary source of funds comes from the issuance of share capital and proceeds from debt. The Company has generated cash inflows from the disposition of marketable securities. The Company is not subject to any externally imposed capital requirements.
The Company defines its capital as debt and share capital. Capital requirements are driven by the Company’s exploration activities on its mineral property interests. To effectively manage the Company’s capital requirements, the Company has a planning and budgeting process in place to ensure that adequate funds are available to meet its strategic goals. The Company monitors actual expenses to budget on all exploration projects and overhead to manage costs, commitments and exploration activities.
The Company has in the past invested its capital in liquid investments to obtain adequate returns. The investment decision is based on cash management to ensure working capital is available to meet the Company’s short-term obligations while maximizing liquidity and returns of unused capital.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
Although the Company has been successful at raising funds in the past through the issuance of share capital, it is uncertain whether it will be able to continue this financing in the future. The Company will continue to rely on debt and equity financings to meet its commitments as they become due, to continue exploration work on its mineral property interests, and to meet its administrative overhead costs for the coming periods.
The Company is not subject to any external capital requirements.
There were no changes in the Company’s approach to capital management during the year ended December 31, 2015.2023.
5. Management of Financial Risk
The Company has classified its cashfinancial instruments under IFRS 9 Financial Instruments (“IFRS 9”) as financial assets at FVTPL; long-term investments as AFS financial assets; receivables as loans and receivables; accounts payable and accrued liabilities as other financial liabilities; and derivative liability as FVTPL.follows:
IFRS 9 | |
Financial Assets | |
Cash and cash equivalents | Amortized cost |
Marketable securities | FVTPL |
Receivables | Amortized cost |
Financial Liability | |
Accounts payable and accrued liabilities | Amortized cost |
Lease liability | Amortized cost |
The Company’s long-term investment in shares
Canagold Resources Ltd. | Page 19 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5. Management of Aztec Metals Corp. (“Aztec”), a company sharing two common directors, is classified as AFS but does not have a quoted market price in an active market and is therefore measured at cost, net of any write-downs.Financial Risk (continued)
The fair values of the Company’s cash and cash equivalents, receivables and accounts payable and accrued liabilities approximate their carrying values due to the short terms to maturity. Cash isCertain marketable securities are measured at fair values using Level 1 inputs. Derivative liability isOther marketable securities are measured using Level 3 of the fair value hierarchy. Lease liabilities are measured at amortized cost. There were no transfers between levels 1, inputs.2 or 3 during the years ended December 31, 2023 and 2022.
The Company is exposed in varying degrees to a variety of financial instrument related risks, including credit risk, liquidity risk and market risk which includes foreign currency risk, interest rate risk and other price risk. The types of risk exposure and the way in which such exposure is managed are provided as follows.
(a) Credit risk:
Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations.
The Company's credit risk is primarily attributable to its liquid financial assets including cash.cash and cash equivalents. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash and cash equivalents with high-credit quality Canadian financial institutions.
Management has reviewedTo reduce credit risk, the items comprisingCompany regularly reviews the accountscollectability of its amounts receivable, balance which may include amounts receivable from certain related parties, and determinedrecords an expected credit loss based on its best estimate of potentially uncollectible amounts. Management believes that all accounts are collectible; accordingly, there has been no allowance for doubtful accounts recorded.the credit risk with respect to these financial instruments is remote.
CANARC RESOURCE CORP.
NotesThe financial instruments that potentially subject the Company to credit risk comprise cash and cash equivalents and certain receivables, the Consolidated Financial Statements
Forcarrying value of which represents the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)Company’s maximum exposure to credit risk.
(b) Liquidity risk:
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due.
The Company ensures that there is sufficient capital in order to meet short-term business requirements, after taking into account the Company's holdings of cash and its ability to raise equity financings. As at December 31, 2015,2023, the Company had a working capital deficiency(current assets less current liabilities) of $574,000 (2014$4.6 million (2022 - $156,000)$4.4 million). The Company will require significant additionalhas sufficient funding to meet its short-term liabilities and administrative overhead costs, and to maintain its mineral property interests in 2016.2023. The Company will need additional funding to advance its projects.
Canagold Resources Ltd. | Page 20 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5. Management of Financial Risk (continued)
(b) Liquidity risk: (continued)
The following schedule provides the contractual obligations related to the deferred royalty and lease liability payments (Notes 9(b) and (c)) as at December 31, 2023 and 2022:
|
| Payments due by Period |
|
| Payments due by Period |
| ||||||||||||||||||||||||||||||||||
|
| (CAD$000) |
|
| (US$000) |
| ||||||||||||||||||||||||||||||||||
|
|
|
|
| Less than |
|
|
|
|
|
|
|
| After |
|
|
|
|
| Less than |
|
|
|
|
|
|
|
| After |
| ||||||||||
|
| Total |
|
| 1 year |
|
| 1-3 years |
|
| 3-5 years |
|
| 5 years |
|
| Total |
|
| 1 year |
|
| 1-3 years |
|
| 3-5 years |
|
| 5 years |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Basic office lease |
| $ | 321 |
|
| $ | 86 |
|
| $ | 175 |
|
| $ | 60 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total, December 31, 2023 |
| $ | 321 |
|
| $ | 86 |
|
| $ | 175 |
|
| $ | 60 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic office lease |
| $ | 406 |
|
| $ | 85 |
|
| $ | 173 |
|
| $ | 148 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance royalty payments |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 215 |
|
|
| 35 |
|
|
| 105 |
|
|
| 75 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total , December 31, 2022 |
| $ | 406 |
|
| $ | 85 |
|
| $ | 173 |
|
| $ | 148 |
|
| $ | - |
|
| $ | 215 |
|
| $ | 35 |
|
| $ | 105 |
|
| $ | 75 |
|
| $ | - |
|
Accounts payable and accrued liabilities are due in less than 90 days, and the notes payable, if any, are due on demand.days.
Canagold Resources Ltd. | Page 21 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5. Management of Financial Risk (continued)
(c) Market risk:
The significant market risk exposures to which the Company is exposed are foreign currency risk, interest rate risk and other price risk.
(i) Foreign currency risk:
TheCertain of the Company’s mineral property interests and operations are in Canada and Mexico. A certain portionCanada. Most of its operating expenses are incurred in Canadian dollars and Mexican pesos.dollars. Fluctuations in the Canadian dollar would affect the Company’s consolidated statements of comprehensive loss as its functional currency is the Canadian dollar, and fluctuations in the U.S. dollar would impact its cumulative translation adjustment as its consolidated financial statements are presented in U.S. dollars.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(i) Foreign currency risk: (continued)
The Company is exposed to currency risk for its U.S. dollar equivalent of assets and liabilities denominated in currencies other than U.S. dollars as follows:
Stated in U.S. Dollars | ||||
Held in | Total | |||
Canadian Dollars | Mexican Pesos | |||
Cash | $ 70 | $ 11 | $ 81 | |
Accounts receivable | 11 | 50 | 61 | |
Accounts payable and accrued liabilities | (792) | (13) | (805) | |
Derivative liability | (175) | - | (175) | |
Net financial assets (liabilities), December 31, 2015 | $ (886) | $ 48 | $ (838) | |
Cash | $ 643 | $ - | $ 643 | |
Receivables | 10 | - | 10 | |
Accounts payable and accrued liabilities | (799) | - | (799) | |
Net financial assets (liabilities), December 31, 2014 | $ (146) | $ - | $ (146) |
|
| December 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Cash |
| $ | 2,811 |
|
| $ | 3,825 |
|
Marketable securities |
|
| 1,534 |
|
|
| 855 |
|
Receivables and prepaids |
|
| 924 |
|
|
| 1,131 |
|
Accounts payable and accrued liabilities |
|
| (652 | ) |
|
| (1,296 | ) |
Lease liability |
|
| (215 | ) |
|
| (257 | ) |
Deferred compensation liability |
|
| (244 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
Net financial assets (liabilities) |
| $ | 4,158 |
|
| $ | 4,258 |
|
Based upon the above net exposure as at December 31, 20152023 and assuming all other variables remain constant, a 15% (201410% (2022 - 10%) depreciation or appreciation of the U.S. dollar relative to the Canadian dollar and Mexican peso could result in a decrease (increase) of approximately $125,700 (2014$416,000 (2022 - $14,600)$426,000) in the cumulative translation adjustment in the Company’s shareholders’ equity.
The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.
Canagold Resources Ltd. | Page 22 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5. Management of Financial Risk (continued)
(c) Market risk: (continued)
(ii) Interest rate risk:
In respect of financial assets, the Company's policy is to invest excess cash at floating rates of interest in cash equivalents, in order to maintain liquidity, while achieving a satisfactory return. Fluctuations in interest rates impact on the value of cash equivalents. The Company’s investments in guaranteed investment certificates bear a fixed rate and are cashable at any time prior to maturity date. Interest rate risk is not significant to the Company as it has no cash equivalentsinterest-bearing debt at period-end and the promissory notes receivable and notes payable, if any, are stated at fixed interest rates.year-end.
CANARC RESOURCE CORP.(iii) Other price risk:
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
Other price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market and commodity prices.
The Company’s other price risk includes equity price risk, whereby investmentsinvestment in marketable securities are subject toheld for trading financial assets with fluctuations in quoted market price fluctuations. Theprices recorded at FVTPL. There is no separately quoted market value for the Company’s long-term investmentinvestments in the shares of Aztec does not have a quoted market price in an active market and is therefore measured at cost, net of any write-downs.certain strategic investments.
The Company has recognized a derivative liability pursuant toAs certain of the share purchase agreement with Marlin Gold Mining Ltd. (“Marlin Gold”) which closed on October 30, 2015, wherebyCompany’s marketable securities are carried at market value and are directly affected by fluctuations in value of the underlying securities, the Company shall pay 55 troy ounces of gold to Marlin Gold on eachconsiders its financial performance and cash flows could be materially affected by such changes in the future value of the first three anniversaries of the closing date of the agreement (or its U.S. dollar equivalent), for a total of 165 troy ounces of gold. The derivative liability fluctuates with the gold spot prices resulting in the recognition of gains and losses in profit or loss in which the Company has not hedged the payable gold ounces. (Notes 6 and 10).Company’s marketable securities. Based upon the net exposure as at December 31, 20152023 and assuming all other variables remain constant, a 20% depreciationnet increase or appreciationdecrease of 10% in the market prices of the gold spot prices could result in a decrease/underlying securities would increase of approximately $35,000 (2014or decrease respectively net (loss) income by $153,000 (2022 - $Nil) in the Company’s net losses.$85,000).
CANARC RESOURCE CORP.6. Marketable Securities
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
|
| December 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Balance, begin of year |
| $ | 855 |
|
| $ | 1,300 |
|
|
|
|
|
|
|
|
|
|
Fair value of marketable securities received from options on mineral property interests |
|
| 1,192 |
|
|
| 356 |
|
Proceeds from sale of marketable securities |
|
| (159 | ) |
|
| (325 | ) |
Change in fair value of marketable securities |
|
| (364 | ) |
|
| (425 | ) |
Foreign currency translation adjustment |
|
| 10 |
|
|
| (51 | ) |
Balance, end of year |
| $ | 1,534 |
|
| $ | 855 |
|
Canagold Resources Ltd. |
On October 8, 2015, the Company entered into the Agreement for the Purchase of all the Shares of Oro Silver Resources Ltd. with Marlin Gold Mining Ltd. (“Marlin Gold”) which closed on October 30, 2015 (the “Share Purchase Agreement”). As consideration the Company issued 19 million common shares to Marlin Gold to acquire a 100% interest in Marlin Gold’s wholly-owned subsidiary, Oro Silver, which owns the El Compas project through its wholly owned Mexican subsidiary, Minera Oro Silver. The terms of the Share Purchase Agreement include the following:
Page 23 |
The Share Purchase Agreement is considered to be outside the scope of IFRS 3 Business Combinations since Oro Silver does not meet the definition of a business, and as such, the transaction was accounted for as an asset acquisition.
The following table sets forth an allocation of the purchase price to assets acquired and liabilities assumed, based on their fair values:
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
7. Mineral Property Interest
|
| Canada |
|
| USA |
|
|
| ||||||||||||
|
| British Columbia |
|
| Nevada |
|
|
|
| |||||||||||
|
| New Polaris |
|
| Windfall Hills |
|
| Fondaway Canyon |
|
| Corral Canyon |
|
|
|
| |||||
|
| (Note 7(a)(i)) |
|
| (Note 7(a)(ii)) |
|
| (Notes 7(b)(i)) |
|
| (Note 7(b)(ii)) |
|
| Total |
| |||||
Acquisition Costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance, December 31, 2022 |
| $ | 3,910 |
|
| $ | 348 |
|
| $ | 655 |
|
| $ | 23 |
|
| $ | 4,936 |
|
Acquisition |
|
| 12 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 12 |
|
Recoveries |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Sale of investment |
|
| - |
|
|
| - |
|
|
| (655 | ) |
|
| - |
|
|
| (655 | ) |
Foreign currency translation adjustment |
|
| 5 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 5 |
|
Write off |
|
| - |
|
|
| (348 | ) |
|
| - |
|
|
| (23 | ) |
|
| (371 | ) |
Balance, December 31, 2023 |
|
| 3,927 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Exploration Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022 |
|
| 18,453 |
|
|
| 997 |
|
|
| 1,361 |
|
|
| 530 |
|
|
| 21,341 |
|
Additions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assays and sampling |
|
| 22 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 22 |
|
Community and social |
|
| 233 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 233 |
|
Drilling |
|
| 9 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 9 |
|
Environmental |
|
| 586 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 586 |
|
Feasibility |
|
| 2,470 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,470 |
|
Field, camp, supplies |
|
| 57 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 57 |
|
General, administrative, sundry |
|
| 37 |
|
|
| - |
|
|
| 4 |
|
|
| - |
|
|
| 41 |
|
Legal |
|
| 38 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 38 |
|
Local labour |
|
| 16 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 16 |
|
Machinery and equipment |
|
| 7 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 7 |
|
Metallurgy |
|
| 318 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 318 |
|
Reclamation |
|
| 1 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1 |
|
Rental and storage |
|
| 22 |
|
|
| - |
|
|
| 23 |
|
|
| 1 |
|
|
| 46 |
|
Royalties |
|
| 11 |
|
|
| - |
|
|
| 35 |
|
|
| - |
|
|
| 46 |
|
Salaries |
|
| 428 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 428 |
|
Surface taxes |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 17 |
|
|
| 17 |
|
Sustainability |
|
| 16 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 16 |
|
Transportation |
|
| 254 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 254 |
|
Utilities |
|
| 5 |
|
|
| - |
|
|
| 3 |
|
|
| - |
|
|
| 8 |
|
Recoveries |
|
| - |
|
|
| - |
|
|
| (65 | ) |
|
| (18 | ) |
|
| (83 | ) |
Sale of investment |
|
| - |
|
|
| - |
|
|
| (1,361 | ) |
|
| - |
|
|
| (1,361 | ) |
Impairment |
|
| - |
|
|
| (997 | ) |
|
| - |
|
|
| (530 | ) |
|
| (1,527 | ) |
Foreign currency translation adjustment |
|
| 598 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 598 |
|
Balance December 31, 2023 |
|
| 23,581 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 23,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023 |
| $ | 27,508 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | 27,508 |
|
Canagold Resources Ltd. | Page 24 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
7. Mineral Property Interests (continued)
|
| Canada |
|
| USA |
|
|
| ||||||||||||
|
| British Columbia |
|
| Nevada |
|
|
|
| |||||||||||
|
| New Polaris |
|
| Windfall Hills |
|
| Fondaway Canyon |
|
| Corral Canyon |
|
|
|
| |||||
|
| (Note 7(a)(i)) |
|
| (Note 7(a)(ii)) |
|
| (Notes 7(b)(i)) |
|
| (Note 7(b)(ii)) |
|
| Total |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Acquisition Costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance, December 31, 2021 |
| $ | 3,941 |
|
| $ | 370 |
|
| $ | 1,289 |
|
| $ | 25 |
|
| $ | 5,625 |
|
Additions |
|
| 12 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 12 |
|
Recoveries |
|
| - |
|
|
| - |
|
|
| (476 | ) |
|
| - |
|
|
| (476 | ) |
Foreign currency translation adjustment |
|
| (43 | ) |
|
| (22 | ) |
|
| (158 | ) |
|
| (2 | ) |
|
| (225 | ) |
Balance, December 31, 2022 |
|
| 3,910 |
|
|
| 348 |
|
|
| 655 |
|
|
| 23 |
|
|
| 4,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Exploration Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021 |
|
| 14,968 |
|
|
| 1,062 |
|
|
| 1,547 |
|
|
| 579 |
|
|
| 18,156 |
|
Additions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assays and sampling |
|
| 145 |
|
|
| 4 |
|
|
| - |
|
|
| - |
|
|
| 149 |
|
Community and social |
|
| 20 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 20 |
|
Drilling |
|
| 2,023 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,023 |
|
Environmental |
|
| 557 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 557 |
|
Feasibility |
|
| 215 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 215 |
|
Field, camp, supplies |
|
| 234 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 234 |
|
Fuel, gas, propane |
|
| 177 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 177 |
|
General, administrative, sundry |
|
| 15 |
|
|
| - |
|
|
| 19 |
|
|
| - |
|
|
| 34 |
|
Geology |
|
| 301 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 301 |
|
Local labour |
|
| 503 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 503 |
|
Machinery and equipment |
|
| 52 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 52 |
|
Metallurgy |
|
| 171 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 171 |
|
Reclamation |
|
| 20 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 20 |
|
Recovery of taxes |
|
| (774 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (774 | ) |
Rental and storage |
|
| 103 |
|
|
| - |
|
|
| - |
|
|
| 2 |
|
|
| 105 |
|
Royalt ies |
|
| 53 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 53 |
|
Salaries |
|
| 157 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 157 |
|
Surface taxes |
|
| 1 |
|
|
| - |
|
|
| - |
|
|
| 17 |
|
|
| 18 |
|
Surveying |
|
| 6 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6 |
|
Transportation |
|
| 541 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 541 |
|
Utilit ies |
|
| 39 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 39 |
|
Recoveries |
|
| - |
|
|
| - |
|
|
| (62 | ) |
|
| - |
|
|
| (62 | ) |
Foreign currency translation adjustment |
|
| (1,074 | ) |
|
| (69 | ) |
|
| (143 | ) |
|
| (68 | ) |
|
| (1,354 | ) |
Balance, December 31, 2022 |
|
| 18,453 |
|
|
| 997 |
|
|
| 1,361 |
|
|
| 530 |
|
|
| 21,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral property interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022 |
| $ | 22,363 |
|
| $ | 1,345 |
|
| $ | 2,016 |
|
| $ | 553 |
|
| $ | 26,277 |
|
Canagold Resources Ltd. | Page 25 |
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of |
Consideration given:7. Mineral Property Interests (continued)
(a) Canada:
The closing of the Share Purchase Agreement resulted in Marlin Gold becoming an Insider of the Company by virtue of having a 10.79% interest in the Company as at the closing date of October 30, 2015.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
British Columbia (Canada) | Mexico | ||||||
New Polaris | Windfall Hills | El Compas | Total | ||||
(Note 7(a)(i)) | (Note 7(a)(ii)) | (Notes 6 and 7(b)) | |||||
Acquisition Costs: | |||||||
Balance, December 31, 2013 | $ 3,892 | $ 408 | $ - | $ 4,300 | |||
Additions | - | 27 | - | 27 | |||
Foreign currency translation adjustment | (16) | (34) | - | (50) | |||
Balance, December 31, 2014 | 3,876 | 401 | - | 4,277 | |||
Acquisition of subsidiary | - | - | 1,120 | 1,120 | |||
Additions | - | 3 | - | 3 | |||
Foreign currency translation adjustment | (25) | (65) | 6 | (84) | |||
Balance, December 31, 2015 | $ 3,851 | $ 339 | $ 1,126 | $ 5,316 | |||
Deferred Exploration Expenditures: | |||||||
Balance, December 31, 2013 | $ 7,938 | $ 92 | $ - | $ 8,030 | |||
Additions | 23 | 352 | - | 375 | |||
Foreign currency translation adjustment | (871) | (7) | - | (878) | |||
Balance, December 31, 2014 | 7,090 | 437 | - | 7,527 | |||
Acquisition of subsidiary | - | - | - | - | |||
Additions (recoveries), net of recoveries | 23 | (11) | 183 | 195 | |||
Foreign currency translation adjustment | (1,557) | (70) | - | (1,627) | |||
Balance, December 31, 2015 | $ 5,556 | $ 356 | $ 183 | $ 6,095 | |||
Mineral property interests: | |||||||
Balance, December 31, 2014 | $ 10,966 | $ 838 | $ - | $ 11,804 | |||
Balance, December 31, 2015 | 9,407 | 695 | 1,309 | 11,411 | |||
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(i) New Polaris:Polaris (British Columbia):
The New Polaris property, which is located in the Atlin Mining Division, British Columbia, is 100% owned by the Company subject to a 15% net profit interest which may be reduced to a 10% net profit interest within one year of commercial production by issuing 150,000 common shares to Rembrandt Gold Mines Ltd.shares. Acquisition costs at December 31, 20152023 include a reclamation bond for $182,000 (2014$227,000 (2022 - $217,000)$224,000).
On February 24, 2015, the Company entered into a Pre-Development and Earn-In Binding Agreement with PanTerra Gold(ii) Windfall Hills (British Columbia) Limited, a wholly-owned subsidiary of PanTerra Gold Limited, (“PanTerra”). PanTerra has a 30-month option to earn a 50% interest in the New Polaris project by spending a total of CAD$10 million in three stages of predevelopment activities including metallurgical test work, drilling, detailed mine planning, tailings dam design, environmental permitting, and completion of a definitive feasibility study. In Stage One, PanTerra shall spend CAD$500,000 for laboratory production of flotation concentrate followed by test work through the Glencore Technology Albion pilot plant, and for comprehensive technical and economic review and commencement of environmental baseline data collection required for permitting. In Stage Two, PanTerra can earn a 20% interest in the New Polaris project by spending CAD$3.5 million in predevelopment expenditures which would include 10,000 metres drilling program and engineering and completion of field data required for environmental permitting. In Stage Three, PanTerra can earn an additional 30% interest in the project for a total interest of 50% by spending CAD$6 million in predevelopment expenditures which would primarily focus on the completion of a definitive feasibility study and would include further 10,000 metres of infill drilling, additional metallurgical test work, and preliminary engineering. PanTerra can increase its interest in the New Polaris project to 51% by purchasing 1% from the Company within six months of completion of the definitive feasibility study at a cost of 1% of the net present value established by the definitive feasibility study using a 10% discount rate.:
The Company had received the CAD$500,000 for Stage One. As at December 31, 2015, funds of US$69,000 remain for Stage One expenditures as specified pursuant to the agreement between the Company and PanTerra.
In August 2015, PanTerra had informed the Company that it will not be able to commit to further expenditures to commence Stage Two exploration and permitting work on the Company’s New Polaris project until PanTerra receives the approval from the Dominican Republic government for importing New Polaris gold concentrate into the country for processing. The Company does not agree with their position. The Company and PanTerra continue to be in communication regarding this matter, and an extension or a resolution has not yet been negotiated.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
(ii) Windfall Hills:
In April 2013, the Company entered into a property purchase agreement with Atna Resources Ltd. (“Atna”) whereby the Company acquired aowns 100% undivided interestinterests in thetwo adjacent gold properties (Uduk Lake and Dunn properties) located in British Columbia. The Uduk Lake properties by the issuance of 1,500,000 common shares atare subject to a fair value of CAD$0.10 per share, honouring a pre-existing 1.5% NSR production royalty that can be purchased for CAD$1 million and granting Atna aanother 3% NSR production royalty.
In April 2013, the Company entered into a property purchase agreement whereby the Company acquired a 100% undivided interest in the The Dunn properties by the issuance of 500,000 common shares at a fair value of CAD$0.10 per share and granting the vendorare subject to a 2% NSR royalty which can be reduced to 1% NSR royalty for $500,000. During the year ended December 31, 2023, the Company impaired the property to $Nil as the Company currently does not have any planned or budgeted expenditures for the property.
(iii) Tay-LP:Princeton (British Columbia):
On August 24, 2009,In December 2018 and then as amended in June 2019, the Company entered into a property option agreement jointly with Ross River Minerals Inc.Universal Copper Ltd. (formerly, Tasca Resources Ltd.) (“Universal”) and Ross River Gold Ltd. to acquire up to 100%an individual. In October 2020, the Company assigned its interest in the Tay-LP goldproperty option agreement for the Princeton property to Damara Gold Corp. (“Damara”). Pursuant to the assignment, Damara issued 9.9% of its outstanding common shares to the Company on closing of the assignment at a fair value of $228,500. After reducing the carrying value of the property to $nil by recording a $228,000 recovery to the mineral property, the Company recorded mineral property option income of $500 for the year ended December 31, 2020. Subject to the exercise of the option by December 31, 2021, the Company’s aggregate ownership in the capital of Damara shall increase to 19.9% which Damara did exercise by the issuance of 9.8 million Damara shares to the Company at a fair value of $588,800 which was recorded as mineral property option income for the year ended December 31, 2021.
(b) United States:
(i) Fondaway Canyon (Nevada):
On March 20, 2017, the Company closed the Membership Interest Purchase Agreement with AIM (the “Membership Agreement”) whereby the Company acquired 100% legal and beneficial interests in mineral properties located in Nevada, Idaho and Utah (USA) for a total cash purchase price of $2 million in cash and honouring pre-existing NSRs. Certain of the mineral properties are subject to royalties. For the Fondaway Canyon project, it bears both a 3% NSR and a 2% NSR. The 3% NSR has a buyout provision for an original amount of $600,000 which is subject to advance royalty payments of $35,000 per year by July 15th of each year until a gross total of $600,000 has been paid at which time the NSR is bought out a balance of $425,000 with a fair value of $183,000 was outstanding upon the closing of the Membership Agreement; a balance of $Nil remains payable as at December 31, 2023 (2022 - $215,000). The 2% NSR has a buyout provision of either $2 million in cash or 19.99% interest of a public entity which owns AIM if AIM were to close an initial public offering of at least $5 million.
Canagold Resources Ltd. | Page 26 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
7. Mineral Property Interests (continued)
(b) United States: (continued)
(i) Fondaway Canyon (Nevada): (continued)
On October 16, 2019, the Company signed a binding Letter Agreement with Getchell Gold Corp. (“Getchell”) which was later superseded by the Option Agreement for the Acquisition of Fondaway Canyon and Dixie Comstock Properties on January 3, 2020, whereby Getchell has an option for four years to acquire 100% of the Fondaway Canyon and Dixie Comstock properties located in Churchill County, Nevada (both subject to a 2% NSR) for $4 million in total compensation to the Company, comprised of $2 million in cash and $2 million in shares of Getchell. Payment terms by Getchell are as follows:
|
| Cash |
|
|
|
| US$ equivalent in Getchell Shares |
|
|
| |||
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| |||
At signing of agreement |
| $ | 100 |
|
| (received in 2020) |
| $ | 100 |
|
| (received in 2020 with fair value of $104,600) | |
1st anniversary |
|
| 100 |
|
| (received in 2020) |
|
| 200 |
|
| (received in 2020 with fair value of $208,400) | |
2nd anniversary |
|
| 100 |
|
| (received in 2021) |
|
| 300 |
|
| (received in 2021 with fair value of $259,000) | |
3rd anniversary |
|
| 100 |
|
| (received in 2022) |
|
| 400 |
|
| (received in 2022 with fair value of $376,000) | |
4th anniversary |
|
| 1,600 |
|
| (received in 2023) |
|
| 1,000 |
|
| (received in 2023 with fair value of $1,192,000) | |
|
| $ | 2,000 |
|
|
|
| $ | 2,000 |
|
|
|
The option includes minimum annual work commitments of $1.45 million on the properties. Getchell must also honor the pre-existing NSR and advance royalty commitments related to the properties, and grant the Company a 2% NSR on the Fondaway Canyon and Dixie Comstock properties of which half (1%) can be bought for $1 million per property.
On December 29, 2023, Getchell exercised the option to acquire the Fondaway Cannyon and Dixie Comstock. The Company recorded a gain of $738,000 in the 2023 Consolidated statement of comprehensive loss.
(ii) Corral Canyon (Nevada):
In 2018, the Company staked various mining claims in Nevada, USA. During the year ended December 31, 2023, the Company impaired the property to $Nil as the Company currently does not have any planned or budgeted expenditures for the property.
Canagold Resources Ltd. | Page 27 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
7. Mineral Property Interests (continued)
(b) United States: (continued)
(iii) Silver King (Nevada):
In October 2018, the Company entered into a property option agreement for its Silver King property with Brownstone Ventures (US) Inc. (“Brownstone”) whereby Brownstone has an option to earn a 100% undivided interest by paying $240,000 in cash over a 10 year period with early option exercise payment of $120,000. The Company will retain a 2% NSR of which a 1% NSR can be acquired by Brownstone for $1 million. The Company received $12,000 cash in 2023 (2022 - $12,000) which was recognized as mineral property option income.
(iv) Lightning Tree (Idaho):
On September 10, 2020, the Company entered into an option agreement in the form of a definitive mineral property purchase agreement for its Lightning Tree property located in Yukon, by paying CAD$1 millionLemhi County, Idaho, with Ophir Gold Corp. (“Ophir”), whereby Ophir shall acquire a 100% undivided interest in cash and/or shares and spending CAD$1.5 million on explorationthe property. In order to acquire the property, over a three-year period, which can occurOphir shall pay to the Company a total of CAD$137,500 in two stages.cash over a three-year period and issue 2.5 million common shares and 2.5 million warrants over a two-year period, and shall incur aggregate exploration expenditures of at least $4 million over a three-year period. The Company decided notwill retain a 2.5% NSR of which a 1% NSR can be acquired by Ophir for CAD$1 million. If Ophir fails to proceed with any further expenditurefile a NI 43-101 compliant resource on the Tay LPLightning Tree property within three years, the property will not be conveyed to Ophir. In August 2022, the Company received CAD$50,000 cash (2021 – CAD$25,000 cash). In 2021, the Company received 1.25 million shares with a fair value of $159,600 and 1.25 million warrants with a fair value of $5,000, all of which were recognized as mineral property option income. In Q3 2023, the Company and Ophir mutually agreed to terminate the September 10, 2020 agreement, and the property was written off in 2013.
CANARC RESOURCE CORP.
Notesreturned to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
El Compas:Company.
The(v) Hot Springs Point (Nevada):
In July 2022, the Company acquiredentered into a Real Estate Purchase and Sale Agreement for the El Compas projectHot Springs Point property located in Zacatecas, Mexico, pursuant toEureka County, Nevada, with a third party (the “Purchaser”), whereby the Share Purchase Agreement with Marlin Gold by way of the acquisition ofPurchaser acquired a 100% interest for $480,000 (received). The Purchaser also grants a 3% NSR to the Company. The entire amount received was recognized in Oro Silver (Note 6). On each of the first three anniversaries of the date of the Share Purchase Agreement, 55 troy ounces of gold (or the U.S. dollar equivalent) will be paid2022 in mineral property option income as a gain as Hot Springs book value on acquisition day by the Company was $nil; Hot Springs being incidental to Marlin Gold or to any of its subsidiaries. Certain mineral concessions named Altiplano include a 3% NSR royalty and a buy back option. Marlin Gold will retain the Altiplano royalty and buy back option, and will receive a 1.5% NSR on all non-Altiplano claims that currently have no royalties associated with them. (Notes 6 and 10)Fondaway Canyon property when they were acquired together.
Canagold Resources Ltd. | Page 28 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
7. Mineral Property Interests (continued)
In January 2016, the Company signed a definitive agreement with the Zacatecas state government to lease and operate the permitted 500 tonne per day La Plata ore processing plant located in the city of Zacatecas, Mexico. Highlights of the lease agreement include the following:(c) Expenditure options:
As at December 31, 2015,2023, to maintain the Company’s interest and/or to fully exercise the options under various property agreements covering its properties, the Company must make payments to the optionors as follows:
Number of | Number of | ||
Shares | Troy Ounces of Gold (1) | ||
New Polaris (Note 7(a)(i)): | |||
Net profit interest reduction or buydown | 150,000 | - | |
El Compas (Notes 6, 7(b) and 10): | |||
October 30, 2016 | - | 55 | |
October 30, 2017 | - | 55 | |
October 30, 2018 | - | 55 | |
150,000 | 165 |
(1) Payable in troy ounces of gold or the U.S. dollar equivalent.
|
| Cash |
|
| Cash |
|
| Annual |
|
| Number of |
| ||||
|
| Payments |
|
| Payments |
|
| Payments |
|
| Shares |
| ||||
|
| (CADS$000) |
|
| (US$000) |
|
| (US$000) |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
New Polaris (Note 7(a)(i)): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net profit interest reduction or buydown |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
| 150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Windfall Hills (Note 7(a)(ii)): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buyout provision for net smelter return of 1.5% |
|
| 1,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
Reduction of net smelter return of 2% to 1% |
|
| - |
|
|
| 500 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,000 |
|
| $ | 500 |
|
| $ | - |
|
|
| 150,000 |
|
These amounts may be reduced in the future as the Company determines which mineral property interests to continue to explore and which to abandon.
CANARC RESOURCE CORP.
Notes(d) Title to the Consolidated Financial Statementsmineral property interests:
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
The Company has diligently investigated rights of ownership of all of its mineral property interests/concessions and, to the best of its knowledge, all agreements relating to such ownership rights are in good standing. However, all properties and concessions may be subject to prior claims, agreements or transfers, and rights of ownership may be affected by undetected defects.
(e) Realization of assets:
The Company’s investment in and expenditures on its mineral property interests comprise a significant portion of the Company’s assets. Realization of the Company’s investment in these assets is dependent on establishing legal ownership of the mineral properties, on the attainment of successful commercial production or from the proceeds of their disposal. The recoverability of the amounts shown for mineral property interests is dependent upon the existence of reserves, the ability of the Company to obtain necessary financing to complete the development of the properties, and upon future profitable production or proceeds from the disposition thereof.
(f) Environmental:
Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation of the Company’s operation may cause additional expenses and restrictions.
Canagold Resources Ltd. | Page 29 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
7. Mineral Property Interests (continued)
(f) Environmental: (continued)
If the restrictions adversely affect the scope of exploration and development on the mineral properties, the potential for production on the property may be diminished or negated.
The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous materials and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its current properties and former properties in which it has previously had an interest. The Company is not aware of any existing environmental problems related to any of its current or former mineral property interests that may result in material liability to the Company.
8. Equipment
|
| Leasehold |
|
| Office Furnishings |
|
| Right of Use |
|
|
|
| ||||
|
| Improvements |
|
| and Equipment |
|
| Asset |
|
|
| Total |
| |||
Cost: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance, December 31, 2021 |
| $ | 89 |
|
| $ | 63 |
|
| $ | 121 |
|
| $ | 273 |
|
Acquisitions |
|
| 117 |
|
|
| 2 |
|
|
| 272 |
|
|
| 391 |
|
Dispositions |
|
| (84 | ) |
|
| - |
|
|
| (113 | ) |
|
| (197 | ) |
Foreign currency translation adjustment |
|
| (6 | ) |
|
| (4 | ) |
|
| (9 | ) |
|
| (19 | ) |
Balance, December 31, 2022 |
|
| 116 |
|
|
| 61 |
|
|
| 271 |
|
|
| 448 |
|
Acquisitions |
|
| - |
|
|
| 5 |
|
|
| - |
|
|
| 5 |
|
Foreign currency translation adjustment |
|
| 3 |
|
|
| 1 |
|
|
| 10 |
|
|
| 14 |
|
Balance, December 31, 2023 |
|
| 119 |
|
|
| 67 |
|
|
| 281 |
|
|
| 467 |
|
Accumulated amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021 |
|
| 78 |
|
|
| 41 |
|
|
| 110 |
|
|
| 229 |
|
Amortization |
|
| 18 |
|
|
| 9 |
|
|
| 33 |
|
|
| 60 |
|
Dispositions |
|
| (84 | ) |
|
| - |
|
|
| (113 | ) |
|
| (197 | ) |
Foreign currency translation adjustment |
|
| (4 | ) |
|
| (3 | ) |
|
| (11 | ) |
|
| (18 | ) |
Balance, December 31, 2022 |
|
| 8 |
|
|
| 47 |
|
|
| 19 |
|
|
| 74 |
|
Amortization |
|
| 23 |
|
|
| 11 |
|
|
| 55 |
|
|
| 89 |
|
Foreign currency translation adjustment |
|
| 1 |
|
|
| 3 |
|
|
| 3 |
|
|
| 7 |
|
Balance, December 31, 2023 |
|
| 32 |
|
|
| 61 |
|
|
| 77 |
|
|
| 170 |
|
Net book value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022 |
| $ | 108 |
|
| $ | 14 |
|
| $ | 252 |
|
| $ | 374 |
|
Balance, December 31, 2023 |
| $ | 87 |
|
| $ | 6 |
|
| $ | 204 |
|
| $ | 297 |
|
Canagold Resources Ltd. | Page 30 |
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Field | Office | ||||||
Building | Equipment | Equipment | Total | ||||
Cost: | |||||||
Balance, December 31, 2013 | $ - | $ - | $ 9 | $ 9 | |||
Adjustments | - | - | - | - | |||
Balance, December 31, 2014 | - | - | 9 | 9 | |||
Add: | |||||||
Acquisition of subsidiary (Note 6) | 7 | 17 | 1 | 25 | |||
Foreign currency translation adjustment | - | - | (1) | (1) | |||
Balance, December 31, 2015 | 7 | 17 | 9 | 33 | |||
Accumulated amortization: | |||||||
Balance, December 31, 2013 | - | - | 6 | 6 | |||
Add: Amortization | - | - | 1 | 1 | |||
Balance, December 31, 2014 | - | - | 7 | 7 | |||
Add: | |||||||
Amortization | - | - | 1 | 1 | |||
Balance, December 31, 2015 | - | - | 8 | 8 | |||
Net book value: | |||||||
Balance, December 31, 2014 | $ - | $ - | $ 2 | $ 2 | |||
Balance, December 31, 2015 | $ 7 | $ 17 | $ 1 | $ 25 | |||
8. Equipment(continued)
The Company has a lease agreement for its headquarter office space in Vancouver, British Columbia. Its office lease term ended in July 2022 and a new office lease term started in September 2022 for a different office. The lease was set up as a right-of-use asset under the IFRS rules and 6.60% discount rate was used.
9. Liabilities
(a) Flow Through Premium Liability
On October 28, 2021, the Company closed a private placement for 10.6 million flow through common shares at CAD$0.50 per share for gross proceeds of CAD$5.3 million. The fair value of the shares was CAD$0.46 per share, resulting in the recognition of a flow through premium liability of CAD$0.04 per share for a total of CAD$425,700.
On December 30, 2021, the Company closed a private placement for 560,000 flow through common shares at CAD$0.50 per share for gross proceeds of CAD$280,000. The fair value of the shares was CAD$0.37 per share, resulting in the recognition of a flow through premium liability of CAD$0.13 per share for a total of CAD$72,800.
On January 19, 2022, the Company closed a private placement for 4.05 million flow through common shares at CAD$0.50 per share for gross proceeds of CAD$2.03 million. The fair value of the shares was CAD$0.39 per share, resulting in the recognition of a flow through premium liability of CAD$0.11 per share for a total of CAD$445,500.
On October 19, 2022, the Company closed a private placement for 4.7 million flow through common shares at CAD$0.32 per share for gross proceeds of CAD$1.5 million. The fair value of the shares was CAD$0.26 per share, resulting in the recognition of a flow through premium liability of CAD$0.06 per share for a total of CAD$282,000.
Balance, December 31, 2020 |
|
| - |
|
Add: |
|
|
|
|
Excess of subscription price over fair value of flow through common shares |
| $ | 402 |
|
Foreign currency translation adjustment |
|
| 2 |
|
Less: |
|
|
|
|
Income tax recovery |
|
| (206 | ) |
Balance, December 31, 2021 |
|
| 198 |
|
Add: |
|
|
|
|
Excess of subscription price over fair value of flow through common shares |
|
| 561 |
|
Foreign currency translation adjustment |
|
| (8 | ) |
Less: |
|
|
|
|
Income tax recovery |
|
| (719 | ) |
Balance, December 31, 2022 |
|
| 32 |
|
Less: |
|
|
|
|
Income tax recovery |
|
| (32 | ) |
Foreign currency translation adjustment |
|
| - |
|
Balance, December 31, 2023 |
| $ | - |
|
Canagold Resources Ltd. | Page 31 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
As at December 31, 2015, the Company had an interest of 7% in Aztec (2014 – 7%).9. Liabilities (continued)
(a) Flow Through Premium Liability (continued)
There is no separately quoted market valueremaining obligation to incur qualified expenditures as at December 31, 2023 (2022 – CAD$229,000).
(b) Deferred Royalty Liability
The 3% NSR for the Aztec shares andFondaway Canyon project (Note 7(b)(i)) has a buyout provision for an original amount of $600,000. The buyout amount is subject to advance royalty payments of $35,000 per year by July 15th of each year until the full gross total of $600,000 has been paid. The remaining balance was $425,000 at the closing of the Membership Agreement in March 2017. The $425,000 was discounted to a fair value cannot be reliably determined. Therefore they were recorded at cost, net of any write-downs.$183,000 in 2017 using a discount rate of 18%. The liability was accreted over time as follows:
Balance, December 31, 2021 |
| $ | 142 |
|
Add: |
|
|
|
|
Accretion |
|
| 24 |
|
Less: |
|
|
|
|
Advance royalty payment |
|
| (35 | ) |
|
|
|
|
|
Balance, December 31, 2022 |
|
| 131 |
|
Add: |
|
|
|
|
Accretion |
|
| 22 |
|
Less: |
|
|
|
|
Advance royalty payment |
|
| (35 | ) |
Sale of investment (1) |
|
| (118 | ) |
Balance, December 31, 2023 |
| $ | - |
|
|
|
|
|
|
Current portion |
| $ | - |
|
Long term portion |
|
| - |
|
Balance, December 31, 2023 |
| $ | - |
|
In 2013,
(1) Getchell exercised the option to acquire the Fondaway Canyon property on December 29, 2023. As such, the Company wrote-downderecognized the deferred royalty liability from its investment in Aztec to a nominal value of CAD$100. In October 2014, the Company received 358,000 shares from Aztec in settlement of debt owed to the Company which the Company had written off in 2013.books.
Canagold Resources Ltd. | Page 32 |
CANARC RESOURCE CORP.
CANAGOLD RESOURCES LTD.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2023, 2022 and 2021
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
9. Liabilities (continued)
(c) Lease Liability
The continuity of the lease liability for the years ended December 31, 2015, 20142023 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)2022 is as follows:
Balance, December 31, 2021 |
| $ | 21 |
|
Add: |
|
|
|
|
New offlice lease |
|
| 272 |
|
Interest |
|
| 7 |
|
Foreign currency translation |
|
| (1 | ) |
Less: |
|
|
|
|
Payments |
|
| (42 | ) |
|
|
|
|
|
Balance, December 31, 2022 |
|
| 257 |
|
Add: |
|
|
|
|
Interest |
|
| 16 |
|
Foreign currency translation |
|
| 4 |
|
Less: |
|
|
|
|
Payments |
|
| (62 | ) |
|
|
|
|
|
Balance, December 31, 2023 |
| $ | 215 |
|
|
|
|
|
|
|
|
|
|
|
Current portion |
| $ | 62 |
|
Long term portion |
|
| 153 |
|
Balance, December 31, 2023 |
| $ | 215 |
|
Derivative Liability | ||||
October 30, 2015 | December 31, 2015 | (Gain) Loss on | ||
Acquisition of | Derivative Liability | |||
Oro Silver | ||||
Number of payable troy ounces of gold | 165 | 165 | ||
Spot price per troy ounce of gold | $ 1.142 | $ 1.062 | ||
Balance | $ 188 | $ 175 | $ (13) | |
On each of the first three anniversaries of the date of the Share Purchase Agreement, 55 troy ounces of gold (or the U.S. dollar equivalent) will be paid by the Company to Marlin Gold or to any of its subsidiaries pursuant to the Share Purchase Agreement (Note 6). The estimated fair value is based on the spot market price of gold at the period end.(d) Loans Payable
On June 28, 2022, the Company arranged a loan for CAD$25,000 from a company controlled by a former director. The loan bore interest at a rate of 9% per annum, and the entire loan amount of CAD$25,000 was fully repaid on July 14, 2022 along with interest of CAD$99.
In fiscal 2013,On August 15, 2022, the Company received demand loans of $126,000 from two directorsentered into a Bridge Loan Agreement with Sun Valley Investments AG (“Sun Valley”), which is currently a 40.06% control person of the Company which were repayable on demand and borefor CAD$2.5 million bearing an interest rate of 12% compounded monthly with5.5% per annum. The bridge loan was applied as an advance payment for the standby guaranty for the rights offering (Note 10(b)(i)) and extinguished in December 2022 when Sun Valley purchased 20,352,577 common shares. The Company paid Sun Valley a total of CAD$46,336 in interest payable semi-annually. In January 2014,and a total of CAD$178,085 in fees (accounted as share issuance expense part of the Company repaid all principal and interest in full settlement of outstanding demand loans.Shareholder Equity) pursuant to the Standby Guaranty Agreement.
Canagold Resources Ltd. | Page 33 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
10. Share Capital
(a) Authorized:
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
In 2010, certain exploration expenditures incurred in 2007 were disallowed as Canadian exploration expenditures (“CEE”) for flow-through purposes in which the Company recognized a provision for flow through indemnification at that time. In 2013, the Company determined that it was improbable that any further cash outlays would be required, and therefore the Company derecognized the provision for flow through indemnification for these expenditures.
In 2013, the Company also derecognized a provision of $99,000 by writing off certain liabilities related to an exploration project which was written off in 2008.
In 2015, the Company incurred a shortfall of CAD$14,000 in CEE for flow through purposes, and recognized a provision of US$2,000 for flow through indemnification as at December 31, 2015 and included in accounts payable and accrued liabilities.
The authorized share capital of the Company is comprised of an unlimited number of common shares without par value.
(b) Issued:
(i) On July 28, 2023, the Company closed a financing consisting of 21,000,000 shares at CAD $0.21 per share for aggregate gross proceeds of CAD $4.4 million.
CANARC RESOURCE CORP.
Notes(ii) In November 2022, the Company proceeded with a rights offering whereby shareholders of the Company received one right for each common share held. Each two rights entitled holders to subscribe for one common share at a price of CAD$0.175. The Company closed the offering on December 16, 2022 and issued 25.3M common share for total gross proceeds of CAD$4.4 million. The Company also entered into a standby guaranty agreement with Sun Valley whereby Sun Valley shall purchase common shares issuable under the rights offering which remain unsubscribed under the basic subscription privilege and the additional subscription privilege. In August 2022, the Company obtained a bridge loan of CAD$2.5 million from Sun Valley as an advance payment for the standby guaranty (Note 9(d)). Pursuant to the Consolidated Financial Statements
Forstandby guaranty agreement, Canagold issued 20.4M common shares to Sun Valley. From the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
On September 24, 2015,CAD$3.6 million gross proceeds received from Sun Valley, the Company issued 2deducted a total of CAD$2.5 million shares atto pay back and terminate the $2.5M loan provided by Sun Valley in August 2022 plus accrued interest of CAD$46,336, and a valuetotal of CAD$0.07178,085 in settlement of partial salaries owedfees pursuant to certain officers and fees owed to certain directors in which the latter also forgave a certain portion of outstanding directors fees owed, resulting in a gain on debt settlement of $54,000.standby guaranty agreement.
(iii) On October 8, 2015,19, 2022, the Company entered into the Share Purchase Agreement with Marlin Gold which closed on October 30, 2015 whereby the Company issued 19a private placement for 4.7 million flow through common shares at a price of CAD$0.32 per share for gross proceeds of CAD$1.5 million. The fair value of the shares was CAD$0.070.26 per share, to Marlin Gold to acquireresulting in the recognition of a 100% interest in Marlin Gold’s wholly-owned subsidiary, Oro Silver, which owns the El Compas projectflow through its wholly-owned Mexican subsidiary, Minera Oro Silver (Note 6).premium liability of CAD$0.06 per share for a total of CAD$282,000.
(iv) In MarchDecember 2021 and April 2014,January 2022, the Company closed a private placement in two tranches totalling 19.64.61 million unitsflow through common shares at a price of CAD$0.100.50 per unitshare for gross proceeds of CAD$1.96 million with each unit comprised of one common share and one-half of one common share purchase warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.15 per share for a three year period.2.3 million. On March 18, 2014,December 30, 2021, the Company closed the first tranche for 10.6 million units560,000 flow through common shares for gross proceeds of CAD$1.06 million, and paid CAD$66,170 in cash and issued 661,718 in warrants as finders’ fees. In August 2015, 5.9 million warrants had their expiry date extended to September280,000. On January 18, 2018 (Note 13(d)). On April 3, 2014,2022, the Company closed the second tranche for 94.05 million unitsflow through common shares for gross proceeds of CAD$900,000, and paid CAD$6,070 in cash and issued 60,725 in warrants as finders’ fees. The finders’ fee warrants have the same terms as the underlying warrants in the unit private placement. In August 2015, 4.2 million warrants had their expiry date extended to October 3, 2018 (Note 13(d)).2.03 million.
(v) On July 9, 2014,October 28, 2021, the Company closed a brokered private placement with Red Cloud Securities Inc. (“Red Cloud”) for 510.6 million unitsflow through common shares at a price of CAD$0.080.50 per unitshare for gross proceeds of CAD$400,000. Each unit was5.3 million. Finders’ fees were comprised of one flow-through common shareCAD$253,555 in cash and one-half of one common share purchase warrant;638,510 broker warrants with each wholebroker warrant is exercisable to acquire one non-flownon flow through common share at an exercise price of CAD$0.15 per share0.75 until July 9, 2016. The Company expended funds of CAD$386,000 for flow through purposes (Note 12).October 28, 2023.
Canagold Resources Ltd. | Page 34 |
CANAGOLD RESOURCES LTD. Notes to the For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of |
10. Share Capital (continued)
(b) Issued (continued)
(vi) In 2013,2021, stock options for 769,000 common650,000 shares were exercised for proceeds of $204,100 and stock$179,700 was reallocated from reserve for share-based payments to share capital. Stock options for 700,000210,000 common shares were cancelled for the exercise of share appreciation rights for 207,024104,884 common shares.shares at a fair value of CAD$0.68 per share. Also warrants for 301,624 common shares were exercised for proceeds of $72,000, and $33,100 was reallocated from reserve for share-based payments to share capital.
CANARC RESOURCE CORP.(c) Omnibus incentive plan:
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
The Company has a stock optionan omnibus incentive compensation plan. Pursuant to the omnibus plan, that allows it to grant stock options to its directors, officers, employees, and consultants to acquire up to 18,888,434 common shares, of which stock options for 11,920,000 common shares are outstanding as at December 31, 2015. The exercise price of each2023, the Company currently has 5,788,939 shares listed and reserved under the plan for stock option cannot be lower than the last recorded sale of a board lot on the TSX during the trading day immediately preceding the date of granting or, if there was no such date, the high/low average priceactivities, 6,500,000 shares for the commonrestricted share units grants, 2,500,000 shares on the TSX based on the last five trading days before the datefor deferred share units grants and 1,000,000 Shares for performance share units grants. The Plan, together with all security-based compensation arrangements of the grant. Stock options have aCompany, has an aggregate maximum termnumber of ten years and terminate 30 days following the terminationshares that can be reserved for issuance equal to 10% of the optionee’s employment, except in the case of death, in which case they terminate one year after the event. Vesting of options is made at the discretion of the board at the time the options are granted.
At the discretion of the board, certain stock option grants provide the holder the right to receive the number of common shares valued at the quoted market price at theissued and outstanding, from time of exercise of the stock options, that represent the share appreciation since granting the stock options.to time.
i) Stock Options:
The continuity of outstanding stock options for the yearsyear ended December 31, 2015, 20142023 and 20132022 is as follows:
2015 | 2014 | 2013 | |||||||
Weighted | Weighted | Weighted | |||||||
average | average | average | |||||||
exercise | exercise | exercise | |||||||
Number | price | Number | price | Number | price | ||||
of Shares | (CAD$) | of Shares | (CAD$) | of Shares | (CAD$) | ||||
Outstanding balance, beginning of year | 10,130,000 | $0.10 | 8,325,000 | $0.11 | 9,999,000 | $0.15 | |||
Granted | 5,950,000 | $0.06 | 4,550,000 | $0.09 | 2,000,000 | $0.08 | |||
Exercised | - | - | - | - | (769,000) | $0.10 | |||
Cancelled for share appreciation rights | - | - | - | - | (700,000) | $0.10 | |||
Forfeited | (245,000) | $0.11 | (175,000) | $0.10 | (160,000) | $0.12 | |||
Expired | (3,915,000) | $0.12 | (2,570,000) | $0.11 | (2,045,000) | $0.25 | |||
Outstanding balance, end of year | 11,920,000 | $0.08 | 10,130,000 | $0.10 | 8,325,000 | $0.11 | |||
Exercise price range (CAD$) | $0.05 - $0.145 | $0.05 - $0.145 | $0.08 - $0.145 |
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
|
| 31-Dec-23 |
|
| 31-Dec-23 |
| ||||||||||
|
| Number of shares |
|
| Weighted average exercise prices (CAD$) |
|
| Number of shares |
|
| Weighted average exercise prices (CAD$) |
| ||||
Outstanding balance, beginning of year |
|
| 2,235,000 |
|
| $ | 0.49 |
|
|
| 6,665,000 |
|
| $ | 0.48 |
|
Forfeited |
|
| - |
|
| $ | 0.00 |
|
|
| (4,020,000 | ) |
| $ | 0.46 |
|
Cancelled and expired |
|
| (1,335,000 | ) |
| $ | 0.49 |
|
|
| (410,000 | ) |
| $ | 0.50 |
|
Outstanding balance, end of the year |
|
| 900,000 |
|
| $ | 0.50 |
|
|
| 2,235,000 |
|
| $ | 0.49 |
|
Exerxcise price range |
|
|
|
|
| $0.30-$0.52 |
|
|
|
|
|
| $0.30-$0.52 |
|
Canagold Resources Ltd. | Page 35 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
10. Share Capital (continued)
(c) Omnibus incentive plan: (continued)
i) Stock Options: (continued)
The following table summarizes information about stock options exercisable and outstanding at December 31, 2015:2023:
Options Outstanding | Options Exercisable | |||||||||||
Weighted | Weighted | Weighted | Weighted | |||||||||
Average | Average | Average | Average | |||||||||
Exercise | Number | Remaining | Exercise | Number | Remaining | Exercise | ||||||
Prices | Outstanding at | Contractual Life | Prices | Exercisable at | Contractual Life | Prices | ||||||
(CAD$) | Dec 31, 2015 | (Number of Years) | (CAD$) | Dec 31, 2015 | (Number of Years) | (CAD$) | ||||||
$0.135 | 160,000 | 0.51 | $0.135 | 160,000 | 0.51 | $0.135 | ||||||
$0.145 | 105,000 | 1.46 | $0.145 | 105,000 | 1.46 | $0.145 | ||||||
$0.08 | 1,525,000 | 2.49 | $0.08 | 1,525,000 | 2.49 | $0.08 | ||||||
$0.05 | 500,000 | 3.04 | $0.05 | 400,000 | 3.04 | $0.05 | ||||||
$0.10 | 3,680,000 | 3.54 | $0.10 | 2,220,000 | 3.54 | $0.10 | ||||||
$0.06 | 5,950,000 | 4.94 | $0.06 | 1,487,500 | 4.94 | $0.06 | ||||||
11,920,000 | 4.02 | $0.08 | 5,897,500 | 3.47 | $0.08 |
|
|
| Options Outstanding and Exercisable |
| ||||||||||
|
|
| Weighted |
|
| Weighted |
|
| ||||||
|
|
| Average |
|
| Average |
|
| ||||||
Exercise |
|
| Number |
|
| Remaining |
|
| Exercise |
| ||||
Prices |
|
| Outstanding at |
|
| Contractual Life |
|
| Prices |
| ||||
(CAD$) |
|
| 31-Dec-23 |
|
| (Number of Years) |
|
| (CAD$) |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
$ | 0.30 |
|
|
| 40,000 |
|
|
| 0.49 |
|
| $ | 0.30 |
|
$ | 0.50 |
|
|
| 60,000 |
|
|
| 1.50 |
|
| $ | 0.50 |
|
$ | 0.50 |
|
|
| 300,000 |
|
|
| 2.48 |
|
| $ | 0.50 |
|
$ | 0.52 |
|
|
| 500,000 |
|
|
| 2.53 |
|
| $ | 0.52 |
|
|
|
|
|
| 900,000 |
|
|
| 2.35 |
|
| $ | 0.50 |
|
During the year ended December 31, 2015,2023, the Company recognized share-based payments of $161,000 (2014$Nil (2022 - $209,000$154,000 and 20132021 - $72,000)$974,000), net of forfeitures, based on the fair value of stock options that were earned by the provision of services during the period. Share-based payments are segregated between directors and officers, employees and consultants, as applicable, as follows:year.
December 31, | |||||
2015 | 2014 | 2013 | |||
Directors and officers | $ 153 | $ 205 | $ 76 | ||
Employees | 8 | 4 | 5 | ||
Consultants | - | - | (9) | ||
$ 161 | $ 209 | $ 72 |
CANARC RESOURCE CORP.
Notes toNo stock options were granted during the Consolidated Financial Statements
For the Yearsyear ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
The weighted average fair value of stock options granted and the weighted average assumptions used to calculate share-based payments for stock option grants are estimated using the Black-Scholes option pricing model as follows:2023.
2015 | 2014 | 2013 | |||
Number of stock options granted | 5,950,000 | 4,550,000 | 2,000,000 | ||
Fair value of stock options granted (CAD$) | $0.05 | $0.08 | $0.06 | ||
Market price of shares on grant date (CAD$) | $0.06 | $0.09 | $0.08 | ||
Pre-vest forfeiture rate | 19.64% | 5.29% | 3.54% | ||
Risk-free interest rate | 0.75% | 1.38% | 1.71% | ||
Expected dividend yield | 0% | 0% | 0% | ||
Expected stock price volatility | 140% | 118% | 117% | ||
Expected option life in years | 4.24 | 4.48 | 4.52 |
ii) Performance share units
Expected stockNo performance share units (PSUs) were granted during the years ended December 31, 2023, 2022, and 2021. Total PSUs available for granting are 1,000,000.
iii) Restricted share units
From the available 6,500,000 restricted share units (“RSUs”) under the Omnibus plan, 1,600,000 RSUs were granted to the officers of the Company during the year ended December 31, 2023. These RSUs vest over a period of two years. For accounting purposes, the Company amortizes the share-based compensation expense over the vesting period. The Company recognized a share based compensation expense of $152,069 for the year ended December 31, 2023 (the share price volatility ison grant date was $CAD 0.230).
No RSUs were granted during the years ended December 31, 2022 and 2021.
iv) Deferred share units
From the available 2,500,000 deferred share units (“DSUs”) under the Omnibus plan, 1,537,255 DSUs were granted to the directors of the Company during the year ended December 31, 2023. These granted DSUs vested immediately, the Company accounted initially, based on the historicalshare price volatility(CAD$ 0.23) of the Company’s common shares.
In June 2012, the Company granted 1,460,000 stock options to directors, officers and employees with an exercise price of CAD$0.145 and an expiry date of June 18, 2017. These stock options will only vest when the Company consummates a major transaction or at the discretion of its Board of Directors, and any remaining outstanding stock options were vested as at December 8, 2015.
In June 2013, the Company granted 2,000,000 stock options to directors, officers and employees with an exercise price of CAD$0.08 and an expiry date of June 26, 2018, and which are subject to vesting provisions in which 20% of the options vest immediately on the grant date, for a share-based compensation expense of $263,000 and 20% vest every six months thereafter.
In 2013, stock options for 769,000 common sharesa corresponding share-based compensation liability. At period end December 31, 2023, the share-based compensation expense and share-based compensation liability were exercised, and stock options for 700,000 common shares were cancelled forrevalued to $244,000 based on the exercise of share appreciation rights for 207,024 common shares.
In January 2014, the Company granted 500,000 stock options to an officer with an exercise price of CAD$0.05 and an expiry date of January 14, 2019, and which are subject to vesting provisions in which 20%market value of the options vest immediately onCompany’s share (CAD$ 0.210). No DSUs were granted during the grant date and 20% vest every six months thereafter.
In July 2014, the Company granted 4,050,000 stock options to directors, officers and employees with an exercise price of CAD$0.10 and an expiry date of July 17, 2019, and which are subject to vesting provisions in which 20% of the options vest immediately on the grant date and 20% vest every six months thereafter.
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Yearsyears ended December 31, 2015, 20142022 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)2021.
Canagold Resources Ltd. | Page 36 |
CANAGOLD RESOURCES LTD. Notes to the Consolidated Financial Statements For the Years ended December 31, 2023, 2022 and 2021 (tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
In May 2015, certain directors and officers of the Company cancelled 3,360,000 stock options with exercise prices ranging from CAD$0.10 to CAD$0.145 and expiry dates ranging from September 2015 to June 2017.10. Share Capital (continued)
In December 2015, the Company granted 5,950,000 stock options to directors, officers and employees with an exercise price of CAD$0.06 and an expiry date of December 8, 2020, and which are subject to vesting provisions in which 25% of the options vest immediately on the grant date and 25% vest every six months thereafter.(d) Warrants:
On March 3, 2016, the Company issued 8.85 million warrants with an exercise price of CAD$0.12 and an expiry date of March 3, 2019 from the first tranche of the private placement. On March 14, 2016, the Company issued 2.65 million warrants with an exercise price of CAD$0.12 and an expiry date of March 14, 2019 from the second and final tranche of the private placement. (Note 13(b)(i)).
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
At December 31, 2015,2023, the Company had outstanding warrants as follows:
Exercise | ||||||
Prices | Outstanding at | Outstanding at | ||||
(CAD$) | Expiry Dates | December 31, 2014 | Issued | Exercised | Expired | December 31, 2015 |
$0.20 | September 28, 2015(1) | 11,300,000 | - | - | (11,300,000) | - |
$0.20 | September 28, 2015(1), (2) | 904,000 | - | - | (904,000) | - |
$0.20 | December 19, 2015 (1) | 4,500,000 | - | - | (4,500,000) | - |
$0.20 | January 11, 2016 (1), (7) | 600,000 | - | - | - | 600,000 |
$0.20 | January 18, 2016 (1), (7) | 1,000,000 | - | - | - | 1,000,000 |
$0.10 | January 31, 2016(7) | 550,000 | - | - | - | 550,000 |
$0.10 | July 31, 2017(3) | 8,450,000 | - | - | - | 8,450,000 |
$0.15 | March 18, 2017 | 55,000 | - | - | - | 55,000 |
$0.15 | September 18, 2018(3) | 5,254,055 | - | - | - | 5,254,055 |
$0.15 | September 18, 2018(3), (4) | 661,718 | - | - | - | 661,718 |
$0.15 | April 3, 2017 | 346,250 | - | - | - | 346,250 |
$0.15 | October 3, 2018 (3) | 4,153,750 | - | - | - | 4,153,750 |
$0.15 | October 3, 2018(3), (5) | 60,725 | - | - | - | 60,725 |
$0.15 | July 9, 2016 | 2,500,000 | - | - | - | 2,500,000 |
$0.08 | September 21, 2018 | - | 5,749,443 | - | - | 5,749,443 |
$0.08 | September 21, 2018(6) | - | 594,844 | - | - | 594,844 |
$0.08 | October 30, 2018 | - | 833,333 | - | - | 833,333 |
40,335,498 | 7,177,620 | - | (16,704,000) | 30,809,118 |
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
Exercise Prices (CAD$) |
|
| Expiry Dates |
| Outstanding at December 31, 2022 |
|
| Issued |
|
| Exercised |
|
| Expired |
|
| Outstanding at December 31, 2023 |
| ||||||
$ | 0.75 |
|
| October 28, 2023 |
|
| 638,510 |
|
|
| - |
|
|
| - |
|
|
| 638,510 |
|
|
| - |
|
At December 31, 2014,2022, the Company had outstanding warrants as follows:
Exercise | ||||||
Prices | Outstanding at | Outstanding at | ||||
(CAD$) | Expiry Dates | December 31, 2013 | Issued | Exercised | Expired | December 31, 2014 |
$0.20 | September 28, 2015(1) | 11,300,000 | - | - | - | 11,300,000 |
$0.20 | September 28, 2015(1), (2) | 904,000 | - | - | - | 904,000 |
$0.20 | December 19, 2015 (1) | 4,500,000 | - | - | - | 4,500,000 |
$0.15 / | until January 11, 2015 | 600,000 | - | - | - | 600,000 |
$0.20 | expiry January 11, 2016 (1) | |||||
$0.15 / | until January 18, 2015 | 1,000,000 | - | - | - | 1,000,000 |
$0.20 | expiry January 18, 2016 (1) | |||||
$0.10 | January 31, 2016 | - | 9,000,000 | - | - | 9,000,000 |
$0.15 | March 18, 2017 | - | 5,309,055 | - | - | 5,309,055 |
$0.15 | March 18, 2017(3) | - | 661,718 | - | - | 661,718 |
$0.15 | April 3, 2017 | - | 4,500,000 | - | - | 4,500,000 |
$0.15 | April 3, 2017(4) | - | 60,725 | - | - | 60,725 |
$0.15 | July 9, 2016 | - | 2,500,000 | - | - | 2,500,000 |
18,304,000 | 22,031,498 | - | - | 40,335,498 |
CANARC RESOURCE CORP.
Notes to the Consolidated Financial Statements
For the Years ended December 31, 2015, 2014 and 2013
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts)
Exercise |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Prices |
|
|
|
| Outstanding at |
|
|
|
|
|
|
|
|
|
|
| Outstanding at |
| ||||||
(CAD$) |
|
| Expiry Dates |
| December 31, 2021 |
|
| Issued |
|
| Exercised |
|
| Expired |
|
| December 31, 2022 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
$ | 0.65 |
|
| October 7, 2022 |
|
| 4,000,000 |
|
|
| - |
|
|
| - |
|
|
| (4,000,000 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.65 |
|
| November 12, 2022 |
|
| 6,500,000 |
|
|
| - |
|
|
| - |
|
|
| (6,500,000 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.65 |
|
| November 12, 2022 |
|
| 385,200 |
|
|
| - |
|
|
| - |
|
|
| (385,200 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.75 |
|
| October 28, 2023 |
|
| 638,510 |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| 638,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,523,710 |
|
|
| - |
|
|
| - |
|
|
| (10,885,200 | ) |
|
| 638,510 |
|
At December 31, 2013,2021, the Company had outstanding warrants as follows:
Exercise | ||||||
Prices | Outstanding at | Outstanding at | ||||
(CAD$) | Expiry Dates | December 31, 2012 | Issued | Exercised | Expired | December 31, 2013 |
$0.15 / | until September 28, 2014 | 11,300,000 | - | - | - | 11,300,000 |
$0.20 | expiry September 28, 2015 (1) | |||||
$0.15 / | until September 28, 2014 | 904,000 | - | - | - | 904,000 |
$0.20 | expiry September 28, 2015(1), (2) | |||||
$0.15 / | until December 19, 2014 | 4,500,000 | - | - | - | 4,500,000 |
$0.20 | expiry December 19, 2015 (1) | |||||
$0.15 / | until January 11, 2015 | - | 600,000 | - | - | 600,000 |
$0.20 | expiry January 11, 2016 (1) | |||||
$0.15 / | until January 18, 2015 | - | 1,000,000 | - | - | 1,000,000 |
$0.20 | expiry January 18, 2016 (1) | |||||
16,704,000 | 1,600,000 | - | - | 18,304,000 |
Exercise |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Prices |
|
|
|
| Outstanding at |
|
|
|
|
|
|
|
|
|
|
| Outstanding at |
| ||||||
(CAD$) |
|
| Expiry Dates |
| December 31, 2020 |
|
| Issued |
|
| Exercised |
|
| Expired |
|
| December 31, 2021 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
$ | 0.30 |
|
| July 23, 2021 |
|
| 301,624 |
|
|
| - |
|
|
| (301,624 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.65 |
|
| October 7, 2022 |
|
| 4,000,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.65 |
|
| November 12, 2022 |
|
| 6,500,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.65 |
|
| November 12, 2022 |
|
| 385,200 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 385,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 0.75 |
|
| October 28, 2023 |
|
| - |
|
|
| 638,510 |
|
|
| - |
|
|
| - |
|
|
| 638,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,186,824 |
|
|
| 638,510 |
|
|
| (301,624 | ) |
|
| - |
|
|
| 11,523,710 |
|
Canagold Resources Ltd. | Page 37 |
11. General and Administrative
amounts)
12.Related Party Transactions
Key management includes directors (executive and non-executive) and senior management. The compensation paid or payable to key management is disclosed in the table below.
Except as disclosed elsewhere in the consolidated financial statements, the Company had the following general and administrative costs with related parties during the years ended December 31,
(1) Includes key management compensation which is included in employee and director remuneration, mineral property interests, and corporate development.
(2)
The above transactions are incurred in the normal course of business.
Note 9(d) provides further details regarding a demand loan with a former director and bridge loan from Sun Valley.
13. Segment Disclosures
The Company has one operating segment, being mineral exploration, with assets located in Canada and
14. Commitment
In February 2017, the Company entered into an office lease arrangement for a term of five years with a commencement date of August 1, 2017 which ended on July 31, 2022.
CAD$89,900 for year 5. As at December 31,
15. Taxes
The Income taxes A reconciliation of income taxes at statutory rates with the reported taxes is as follows:
The significant components of the
15. Taxes (continued)
16. Subsequent events On March 28, 2024, subject to receiving the final approval from the TSX Exchange, the Company closed a private placement for 15, 700,000 flow through common shares at a price of CAD$0.2625 per share for gross proceeds of CAD$4.1 million.
|