Q3 2024 Financial Results
Reykjavík, Nov. 14, 2024 (GLOBE NEWSWIRE) --
(“Amaroq” or the “Corporation” or the
“Company”)
Q3 2024
Financial Results
TORONTO, ONTARIO – 14 November
2024 - Amaroq Minerals Ltd. (AIM, TSXV, NASDAQ Iceland: AMRQ), an
independent mine development company with a substantial land
package of gold and strategic mineral assets in Southern Greenland,
presents its Q3 2024 financials.All dollar amounts are expressed in
Canadian dollars unless otherwise noted.
A conference call for analysts and investors
will be held tomorrow, 15 November 2024, at 08:30 GMT, details of
which can be found further down in this announcement.
Eldur Olafsson, CEO of Amaroq,
commented:
"We are now on the cusp of
achieving first gold at Nalunaq, a major
milestone which will start initial cash
flow ahead of a ramp-up to commercial production.
Over the third
quarter we made significant headway
at Nalunaq. Many of the
major components of the processing plant
were installed successfully and the
development within the mine in the ‘Mountain
Block’ enabled the first ore to be
stockpiled for first gold
production due this quarter. Our exploration
programme at Nalunaq
has furthered our understanding of
the high-grade deposit with a drilling
campaign on the ‘Target
Block’ expansion and the
75 Vein. Results on this and the
first ore drives in Mountain Block are expected
soon. We believe these
results, also
incorporating the last two
years’ drill results,
will provide for an updated
Mineral Resource Estimate (MRE4) for Nalunaq
early next year.
The exploration
season was in full swing in
Q3 and I’m very proud of what our
exploration team has achieved this year.
In addition to our on-going work at Nalunaq,
we drilled the first two holes at
Nanoq in our Gold portfolio, and
across our strategic minerals portfolio we drilled [two] holes
in Target North at Sava, undertook
a three-drill rig campaign at Stendalen
and drilled two
scout holes at the historical
Josva copper mine. We expect results
from all of these campaigns
over the next few months. This has
laid a solid foundation for further
Gold, Copper and Nickel
exploration activities next year as we continue to unlock
the full value of our portfolio in Greenland.”
Q3
2024 Corporate Highlights
- Amaroq group liquidity of $26.0
million consisting of cash balances, undrawn revolving credit
overrun facility less trade payables ($62.2 million as of June 30,
2024).
- Gold business working capital
before convertible note liability and loan payable of $37.9 million
that includes prepaid contractors on the Nalunaq project of $17.8
million as of September 30, 2024 ($50.5 million that includes
prepaid contractors on the Nalunaq project of $19.6 million as of
June 30, 2024)
- The Gardaq Joint Venture that
comprises the Strategic Minerals business has available liquidity
of $8.3 million as of September 30, 2024 ($13.5 million as of June
30, 2024).
- In July 2024, the Company agreed
heads of terms, subject to final documentation, with Landsbankinn
for US$35 million in three Revolving Credit Facilities, securing a
substantial increase and extension to its current debt facilities.
Final documentation is currently in progress.
- Post period on 4 October, Amaroq
entered into an agreement with the holders of its US$22.4 million
convertible notes to convert the notes’ outstanding balance into
new common shares. That measure serves to simplify Amaroq’s capital
structure, reduces cash interest costs and increases future
financial flexibility.
- Amaroq continues to develop
opportunities in Servicing and Hydro to enhance local procurement
options and support the transition towards cleaner energy
sources.
Q3
2024 Operational Highlights
- Permitting: The
Company is working with stakeholders on the Impact Benefit
Agreement (IBA), which it aims to have in place by the end of the
year.
- Contracting and
Procurement: Procurement of all key contract packages is
100% complete and all of the critical path items have been procured
and have arrived on site already.
- Engineering:
Process plant detail design and engineering is 98% complete with
all packages issued to the market and manufactured.
- Construction:
Plant pad earthworks and civil construction at Nalunaq is 100%
complete. The plant building structural steel is complete and
cladding is 98% complete. Mechanical installation of the crushing
circuit is 68% complete and installation of the civil foundations
for the retaining walls, stockpile reclaimer and stacker conveyor
were completed in August 2024. The installation of the grinding and
gold room section started in July 2024 and was completed
post-period. The trackless mining machines and light vehicle
workshop construction is complete and in operation. The grinding
circuit structural and mechanical installations are complete and
electrical installation is in progress. The reclaim feeder has been
cleared for use. The thickener tank structure, mechanical and
pipework is complete, and electrical installation is also complete.
Cable tray installation is complete, and installation of power and
control cabling has commenced and is 92% complete. A new wing was
installed at the camp to accommodate up to 120 people on site.
- Mining: Amaroq
continues to focus on optimising mine development in the Mountain
Block. The ramp has been completed to 742 level and ore development
continued on 732 level. Both MineArc refuge stations have been
commissioned, and the leaky feeder communication system was
installed from 300 to the 720 level. Construction of the
underground main heating system is progressing at the 300 level
portal, and preparations have been made for heating of the ramp.
The exhaust raise fan for Target Block was commissioned in
preparation for the development of an exploration drift for diamond
drilling and resource expansion, and another portal is planned on
742 level to support further development in Mountain Block. The
Company is looking to improve its development rates and increase
availability of mining fleet with its contractor Thyssen. Amaroq is
also reviewing adding further mining equipment to optimise
operations going forward. Finally, the Company has started
employing its own mining team personnel.
- Gold and Strategic
Minerals Exploration: Post period, Amaroq
announced the completion of the 2024 exploration programme,
including over 8,600 metres of core drilling across the gold and
strategic metals portfolio. Results for the programme are expected
over the coming months.
Nalunaq
Project KPIs
|
Metric
|
Q2
2024
|
Q3
2024
|
Change
|
|
Total hours worked
|
103,680
hours
|
129,516
hours
|
+25%
|
|
Daily average of people working on site
|
96
people
|
107
people
|
+12%
|
|
Ratio of Greenlandic personnel
|
51%
|
43%
|
-8%
|
Outlook
- Activities at Nalunaq remain on
track to deliver first gold in Q4 2024.
- Exploration results from gold,
copper and nickel exploration expected at various intervals in Q4
2024 and Q1 2025.
- Updated measured resource
statement for Nalunaq Gold mine expected to be published in Q1
2025.
Exploration activities
overview
Gold projects:
- Nalunaq
- All additional 75 Vein sampling
from historical core housed at Nalunaq has been completed. A total
of 2,895 meters of core drilling has been completed across the
Target Block Extension zone to the west of the historical mining
areas.
- In parallel to this, a
programme of surface samples along the outcropping Main Vein and 75
Vein to the west was completed with mountaineering
specialists.
- A Mineral Resource Estimate
update for Nalunaq has been initiated with a Qualified Person’s
site visit conducted by Mining Plus.
- The Company is now awaiting the
assay results before conducting a detailed review of the Target
Block Extension zone and conducting further planning to address its
2025 exploration priorities.
- Nanoq
- A 130-meter scout drilling
programme was completed at Nanoq across previous channel sampling
results with core geologically assessed and sampled at Nalunaq.
These cores will be geologically logged and sampled results will
then be used to guide objectives for the 2025 season.
- Nalunaq Satellite
Targets
- Following the discovery of an
outcropping vein above historical high grade float results, a small
surface sampling programme was completed at Eagle’s Nest with
mountaineering specialists. The Company is now awaiting the results
of the surface sampling, which will be used to help direct further
work programmes.
- Amaroq continues to assess the
viability of other surrounding projects to become potential
satellite feeds to Nalunaq.
Strategic Minerals:
- Stendalen
- A new surface geophysical programme
was completed ahead of commencing the 2024 drilling programme.
- A total of 4,733 meters of
exploration drilling was completed at Stendalen with the aim of
providing greater geological understanding to the mineralisation
style and geometry. Demobilisation of equipment from Stendalen is
underway to ensure operational readiness for 2025.
- Assay and downhole geophysical
results, once received, will be used in conjunction with the
University of Leicester to assess the mineral system present and
produce targeting models. Environmental samples will also be
analysed to commence the environmental baseline data for the
project.
- Copper Belt (Sava/North
Sava, Kobberminebugt)
- The geological field team has
completed a programme of mapping and sampling across the copper
belt area, assessing both potential porphyry and magmatic Cu-Ni
targets.
- The team has been supplemented by
external support from copper subject matter expert.
- Following this work, a 212-meter
scout drilling programme was completed at Josva copper skarn target
within the Kobberminebugt licence as well as 501 meters of scout
drilling within the epithermal copper/gold target at Target North
within the Sava licence.
- Nunarsuit
- The Company is reviewing the
geological maps and results received from prospecting across the
Nunarsuit licence.
Details of conference
call
A conference call for analysts and investors
will be held tomorrow, 15 November, at 08:30am GMT BST, including a
management presentation and Q&A session.
To join the meeting, please register at the
below link:
https://us06web.zoom.us/webinar/register/WN_dhWLE36tQGabAf9MI_zcCA
Amaroq Financial
Results
The following selected financial data is extracted from the
Financial Statements for the six months ended June 30, 2024.
Financial Results
|
|
Nine months ended Sep 30
|
|
|
2024
$
|
2023
$
|
|
Exploration and evaluation expenses
|
(5,172,947)
|
(5,737,257)
|
|
Site development costs
|
-
|
-
|
|
General and administrative
|
(11,831,157)
|
(8,015,379)
|
|
Gain on loss of control of subsidiary
|
-
|
31,340,880
|
|
Share of 9-months loss of an equity-accounted joint
arrangement
|
(6,698,550)
|
(5,021,231)
|
|
Unrealized gain on derivative liability
|
1,636,567
|
273,780
|
|
Net (loss) income and comprehensive (loss) income
|
(18,001,712)
|
13,425,594
|
|
Basic and diluted (loss) income per common share
|
(0.057)
|
0.05
|
Financial Position
|
|
As at Sep 30
|
As at June 30
|
|
|
2024
$
|
2024
$
|
|
Cash on hand
|
25,937,983
|
31,663,204
|
|
Total assets
|
199,102,439
|
177,950,773
|
|
Total current liabilities (before convertible notes liability
and loan payable)
|
13,596,239
|
8,490,107
|
|
Total current liabilities (including convertible notes liability
and loan payable)
|
76,516,905
|
41,932,965
|
|
Shareholders’ equity
|
121,963,411
|
135,365,745
|
|
Working capital - gold business (before convertible notes
liability and loan payable)
|
37,937,316
|
50,734,743
|
|
Working capital - gold business (after convertible notes
liability and loan payable)
|
(24,983,350)
|
17,291,885
|
|
Gold business liquidity (excluding $8.3 and $13.5M ring-fenced
for strategic mineral exploration as of September 30, 2024 and June
30, 2024, respectively)
|
25,958,581
|
61,787,888
|
Enquiries:
Amaroq Minerals Ltd.
Eldur Olafsson, Executive Director and CEO
eo@amaroqminerals.com
Eddie Wyvill, Corporate Development
+44 (0)7713 126727
ew@amaroqminerals.com
Panmure Liberum (UK) Limited (Nominated
Adviser and Corporate
Broker)
Scott Mathieson
Kieron Hodgson
+44 (0) 20 7886 2500
Canaccord Genuity Limited (Corporate
Broker)
James Asensio
Harry Rees
Tel: +44 (0) 20 7523 8000
Camarco (Financial PR)
Billy Clegg
Elfie Kent
Fergus Young
+44 (0) 20 3757 4980
For Company updates:
Follow @Amaroq_minerals on X (Formerly known as Twitter)
Follow Amaroq Minerals Ltd on LinkedIn
Further Information:
About Amaroq Minerals
Amaroq Minerals' principal business
objectives are the identification, acquisition, exploration, and
development of gold and strategic metal properties in South
Greenland. The Company's principal asset is a 100% interest in the
past producing Nalunaq Gold mine which is due to go into production
towards the end of 2024. The Company has a portfolio of gold and
strategic metal assets in Southern Greenland covering the two known
gold belts in the region as well as advanced exploration projects
at Stendalen and the Sava Copper Belt exploring for Strategic
metals such as Copper, Nickel, Rare Earths and other minerals.
Amaroq Minerals is continued under the Business Corporations Act
(Ontario) and wholly owns Nalunaq A/S, incorporated under the
Greenland Public Companies Act.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Glossary
|
Ag
|
silver
|
|
Au
|
gold
|
|
Bt
|
Billion tonnes
|
|
Cu
|
copper
|
|
g
|
grams
|
|
g/t
|
grams per tonne
|
|
km
|
kilometers
|
|
Koz
|
thousand ounces
|
|
m
|
meters
|
|
Mo
|
molybdenum
|
|
MRE
|
Mineral Resource Estimate
|
|
MT
|
Magnetotelluric data
|
|
Nb
|
niobium
|
|
Ni
|
nickel
|
|
oz
|
ounces
|
|
REE
|
Rare Earth Elements
|
|
t
|
tonnes
|
|
Ti
|
Titanium
|
|
t/m3
|
tonne per cubic meter
|
|
U
|
uranium
|
|
USD/ozAu
|
US Dollar per ounce of gold
|
|
V
|
Vanadium
|
|
Zn
|
zinc
|
Inside Information
This announcement contains inside information
for the purposes of Article 7 of the UK version of
Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as it
forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018, and Regulation
(EU) No. 596/2014 on Market Abuse ("EU MAR").
Qualified Person Statement
The technical information presented in this
press release has been approved by James Gilbertson CGeol, VP
Exploration for Amaroq Minerals and a Chartered Geologist with the
Geological Society of London, and as such a Qualified Person as
defined by NI 43-101.
Amaroq Minerals
Ltd.
UNAUDITED
CONDENSED INTERIM
CONSOLIDATED FINANCIAL
STATEMENTS
For the three and nine months ended September 30, 2024
The attached financial
statements have been prepared
by Management of Amaroq Minerals Ltd. and
have not been reviewed by the auditor
|
|
|
|
|
|
|
|
As at
September 30,
|
As at
December 31,
|
|
|
Notes
|
2024
|
2023
|
|
|
|
$
|
$
|
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash
|
|
25,937,983
|
21,014,633
|
|
Sales tax receivable
|
|
72,087
|
69,756
|
|
Prepaid expenses and others
|
|
17,812,986
|
18,681,568
|
|
Interest receivable
|
|
876,478
|
-
|
|
Inventory
|
|
6,834,021
|
680,358
|
|
Total current
assets
|
|
51,533,555
|
40,446,315
|
|
Non-current assets
|
|
|
|
|
Deposit
|
|
177,944
|
27,944
|
|
Escrow account for environmental rehabilitation
|
|
6,872,073
|
598,939
|
|
Financial Asset - Related Party
|
3,13
|
5,762,187
|
3,521,938
|
|
Investment in equity accounted joint arrangement
|
3
|
16,794,261
|
23,492,811
|
|
Mineral properties
|
4
|
48,683
|
48,821
|
|
Right of use asset
|
7
|
652,190
|
574,856
|
|
Capital assets
|
5
|
117,261,546
|
38,241,559
|
|
Total non-current
assets
|
|
147,568,884
|
66,506,868
|
|
TOTAL ASSETS
|
|
199,102,439
|
106,953,183
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
13,479,402
|
6,273,979
|
|
Convertible notes
|
6
|
38,395,349
|
35,743,127
|
|
Loan payable
|
6.1
|
24,525,317
|
-
|
|
Lease liabilities – current portion
|
7
|
116,837
|
80,206
|
|
Total current
liabilities
|
|
76,516,905
|
42,097,312
|
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
7
|
622,123
|
577,234
|
|
Total non-current
liabilities
|
|
622,123
|
577,234
|
|
Total liabilities
|
|
77,139,028
|
42,674,546
|
|
Equity
|
|
|
|
|
Capital stock
|
8
|
207,202,359
|
132,117,971
|
|
Contributed surplus
|
|
7,327,666
|
6,725,568
|
|
Accumulated other comprehensive loss
|
|
(36,772)
|
(36,772)
|
|
Deficit
|
|
(92,529,842)
|
(74,528,130)
|
|
Total equity
|
|
121,963,411
|
64,278,637
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
199,102,439
|
106,953,183
|
|
|
|
|
|
|
Subsequent events
|
16
|
|
|
The accompanying notes are
an integral part of
these unaudited condensed
interim consolidated financial
statements.
|
|
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|
|
Notes
|
2024
|
2023
|
2024
|
2023
|
|
|
|
$
|
$
|
$
|
$
|
| |
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Exploration and evaluation expenses
|
10
|
(4,424,907)
|
(2,277,540)
|
(5,172,947)
|
(5,737,257)
|
|
Site development costs
|
|
-
|
1,825,564
|
-
|
-
|
|
General and administrative
|
11
|
(3,536,240)
|
(2,632,041)
|
(11,831,157)
|
(8,015,379)
|
|
Loss on disposal of capital assets
|
5
|
(149,917)
|
-
|
(149,917)
|
(37,791)
|
|
Foreign exchange gain (loss)
|
|
1,040,420
|
(83,882)
|
1,475,432
|
(58,707)
|
|
Operating loss
|
|
(7,070,644)
|
(3,167,899)
|
(15,678,589)
|
(13,849,134)
|
|
Other income (expenses)
|
|
|
|
|
|
|
Interest income
|
|
901,831
|
141,443
|
943,023
|
613,031
|
|
Gardaq management income and allocated cost
|
|
608,392
|
601,461
|
1,823,286
|
1,108,101
|
|
Gain on loss of control of subsidiary
|
3
|
-
|
-
|
-
|
31,340,880
|
|
Share of net loss of joint arrangement
|
3
|
(4,788,733)
|
(3,381,749)
|
(6,698,550)
|
(5,021,231)
|
|
Unrealized gain (loss) on derivative liability
|
6
|
(3,655,048)
|
273,780
|
1,636,567
|
273,780
|
|
Finance costs
|
12
|
(9,317)
|
(1,022,258)
|
(27,449)
|
(1,039,833)
|
|
|
|
|
|
|
|
|
Net income (loss) and comprehensive income
(loss)
|
|
(14,013,519)
|
(6,555,222)
|
(18,001,712)
|
13,425,594
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
327,418,727
|
263,579,331
|
314,985,260
|
263,356,034
|
|
Weighted average number of common shares outstanding –
diluted
|
|
327,418,727
|
306,335,274
|
314,985,260
|
306,111,977
|
|
Basic earnings (loss) per share
|
14
|
(0.043)
|
(0.02)
|
(0.057)
|
0.05
|
|
Diluted earnings (loss) per common share
|
14
|
(0.043)
|
(0.02)
|
(0.057)
|
0.04
|
|
Effect of dilution
|
|
-
|
-
|
-
|
0.01
|
|
Share options
|
|
7,261,353
|
9,126,875
|
7,261,353
|
9,126,875
|
|
Restricted shares
|
|
6,659,409
|
-
|
6,659,409
|
-
|
The accompanying notes are
an integral part of
these unaudited condensed
interim consolidated financial
statements.
Amaroq Minerals
Ltd.
Consolidated Statements
of Changes in
Equity
(Unaudited, in Canadian Dollars)
|
|
Notes
|
Number of common shares outstanding
|
Capital Stock
|
Contributed surplus
|
Accumulated other comprehensive
loss
|
Deficit
|
Total Equity
|
|
|
|
|
$
|
$
|
$
|
$
|
$
|
|
Balance at
January 1,
2023
|
|
263,073,022
|
131,708,387
|
5,250,865
|
(36,772)
|
(73,694,581)
|
63,227,899
|
|
Net income and comprehensive income
|
|
-
|
-
|
-
|
-
|
13,425,594
|
13,425,594
|
|
Options exercised, net
|
|
597,029
|
409,584
|
(433,600)
|
-
|
-
|
(24,016)
|
|
Stock-based compensation
|
9
|
-
|
-
|
1,353,042
|
-
|
-
|
1,353,042
|
|
Balance at
September 30,
2023
|
|
263,670,051
|
132,117,971
|
6,170,307
|
(36,772)
|
(60,268,987)
|
77,982,519
|
|
|
|
|
|
|
|
|
|
|
Balance at
January 1,
2024
|
|
263,670,051
|
132,117,971
|
6,725,568
|
(36,772)
|
(74,528,130)
|
64,278,637
|
|
Net loss and comprehensive loss
|
|
-
|
-
|
-
|
-
|
(18,001,712)
|
(18,001,712)
|
|
Shares issued under a fundraising
|
8
|
62,724,758
|
75,574,600
|
-
|
-
|
-
|
75,574,600
|
|
Shares issuance costs
|
8
|
-
|
(1,218,285)
|
-
|
-
|
-
|
(1,218,285)
|
|
Options exercised – net
|
9.1
|
1,023,918
|
728,073
|
(745,500)
|
-
|
-
|
(17,427)
|
|
Stock-based compensation
|
9
|
-
|
-
|
1,347,598
|
-
|
-
|
1,347,598
|
|
Balance at
September 30,
2024
|
|
327,418,727
|
207,202,359
|
7,327,666
|
(36,772)
|
(92,529,842)
|
121,963,411
|
The accompanying notes are
an integral part of
these unaudited condensed
interim consolidated financial
statements.
|
|
|
|
|
|
Notes
|
Nine months ended September
30,
|
|
|
|
2024
|
2023
|
|
|
|
$
|
$
|
|
Operating activities
|
|
|
|
|
Net (loss) income for the period
|
|
(18,001,712)
|
13,425,594
|
|
Adjustments for:
|
|
|
|
|
Depreciation
|
5
|
603,135
|
525,518
|
|
Amortisation of ROU asset
|
7
|
83,704
|
59,991
|
|
Stock-based compensation
|
9
|
1,347,598
|
1,353,042
|
|
Gain on loss of control of subsidiary
|
3
|
-
|
(31,340,880)
|
|
Unrealized gain on derivative liability
|
6
|
(1,636,567)
|
(273,780)
|
|
Embedded derivate related transaction costs
|
|
-
|
641,526
|
|
Loss on disposal of capital assets
|
|
149,916
|
37,791
|
|
Share of net losses of joint arrangement
|
3
|
6,698,550
|
5,021,231
|
|
Gardaq management income and allocated cost
|
3,13
|
(1,823,286)
|
(1,108,101)
|
|
Interest income
|
|
(943,023)
|
(613,031)
|
|
Other expenses
|
|
(17,427)
|
-
|
|
Foreign exchange
|
|
(1,624,654)
|
(1,114,277)
|
|
Finance costs
|
|
27,449
|
-
|
|
|
|
(15,136,317)
|
(13,385,376)
|
|
Changes in non-cash working capital items:
|
|
|
|
|
Sales tax receivable
|
|
(2,331)
|
30,178
|
|
Due from related party
|
3,13
|
(388,400)
|
(52,304)
|
|
Prepaid expenses and others
|
|
(5,154,320)
|
(5,808,291)
|
|
Accounts payable and accrued liabilities
|
|
7,203,774
|
1,179,419
|
|
|
|
1,658,723
|
(4,650,998)
|
|
Cash flow
used in
operating activities
|
|
(13,477,594)
|
(18,036,374)
|
|
Investing activities
|
|
|
|
|
Transfer to escrow account for environmental rehabilitation
|
|
(6,044,556)
|
(165,946)
|
|
Construction in progress and acquisition of capital assets
|
5
|
(75,508,967)
|
(9,409,183)
|
|
Prepayment for acquisition of ROU asset
|
|
(5,825)
|
-
|
|
Deposit
|
|
(150,000)
|
-
|
|
Cash flow
used in
investing activities
|
|
(81,709,348)
|
(9,575,129)
|
|
Financing activities
|
|
|
|
|
Proceeds from issuance of shares
|
8
|
75,574,600
|
-
|
|
Proceeds from convertible notes, net of issue costs
|
6
|
-
|
29,427,152
|
|
Proceeds from loan, net of transaction cost
|
6
|
24,394,364
|
-
|
|
Shares issuance costs
|
8
|
(1,218,285)
|
-
|
|
Lease payments
|
7
|
(101,143)
|
(53,583)
|
|
Interest received
|
|
66,545
|
613,031
|
|
Cash flow
from financing
activities
|
|
98,716,081
|
29,986,600
|
|
Net change in cash before effects of exchange rate changes on
cash during the period
|
|
3,529,139
|
2,375,097
|
|
Effects of exchange rate changes on cash
|
|
1,394,211
|
1,143,288
|
|
Net change in cash during the period
|
|
4,923,350
|
3,518,385
|
|
Cash, beginning of period
|
|
21,014,633
|
50,137,569
|
|
Cash, end of
period
|
|
25,937,983
|
53,655,954
|
|
Supplemental cash
flow information
|
|
|
|
|
Borrowing costs capitalised to capital assets
|
5
|
4,263,933
|
-
|
|
ROU assets acquired through lease
|
7
|
155,214
|
-
|
|
Shares issued as a result of options exercised - net
|
9.1
|
728,073
|
-
|
The accompanying notes are
an integral part of
these unaudited condensed
interim consolidated financial
statements.
1. NATURE
OF OPERATIONS,
BASIS OF
PRESENTATION
Amaroq Minerals Ltd. (the “Corporation”) was
incorporated on February 22, 2017, under the Canada Business
Corporations Act. As of June 19, 2024, the Corporation completed
its continuance from the Canada Business Corporations Act
into the Province of Ontario under the Business Corporations
Act (Ontario). The Corporation’s head office is situated at
100 King Street West, Suite 3400, First Canadian Place, Toronto,
Ontario, M5X 1A4, Canada. The Corporation operates in one industry
segment, being the acquisition, exploration and development of
mineral properties. It owns interests in properties located in
Greenland. The Corporation’s financial year ends on December 31.
Since July 2017, the Corporation’s shares are listed on the TSX
Venture Exchange (the “TSX-V”). Since July 2020, the Corporation’s
shares are also listed on the AIM market of the London Stock
Exchange (“AIM”) and from November 1, 2022, on Nasdaq First North
Growth Market Iceland which were transferred on
September 21, 2023 on Nasdaq Main Market Iceland
(“Nasdaq”) under the AMRQ ticker.
These unaudited condensed interim consolidated
financial statements for the nine months ended
September 30, 2024 (“Financial Statements”) were approved
by the Board of Directors on November 14, 2024.
1.1 Basis
of presentation
and consolidation
The Financial Statements include the accounts of
the Corporation and those of its 100% owned subsidiary
Nalunaq A/S, company incorporated under the Greenland Public
Companies Act. The Financial Statements also include the
Corporation’s 51% equity share of Gardaq A/S, a joint venture with
GCAM LP (Note 3).
The Financial Statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board
(“IASB”) including International Accounting Standard (“IAS”) 34,
Interim Financial Reporting. The Financial Statements have been
prepared under the historical cost convention.
The Financial Statements should be read in
conjunction with the audited annual financial statements for the
year ended December 31, 2023, which have been prepared in
accordance with IFRS as issued by the IASB. The accounting
policies, methods of computation and presentation applied in these
Financial Statements are consistent with those of the previous
financial year ended December 31, 2023.
2. CRITICAL
ACCOUNTING JUDGMENTS
AND ASSUMPTIONS
The preparation of the Financial Statements
requires Management to make judgments and form assumptions that
affect the reported amounts of assets and liabilities at the date
of the Financial Statements and reported amounts of expenses during
the reporting period. On an ongoing basis, Management evaluates its
judgments in relation to assets, liabilities and expenses.
Management uses past experience and various other factors it
believes to be reasonable under the given circumstances as the
basis for its judgments. Actual outcomes may differ from these
estimates under different assumptions and conditions.
In preparing the Financial Statements, the
significant judgements made by Management in applying the
Corporation accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the
Corporation’s audited annual financial statements for the year
ended December 31, 2023.
3. INVESTMENT
IN AN ASSOCIATE OR JOINT VENTURE CORPORATION
|
|
As at
September 30,
2024
|
As at
December
31,
2023
|
|
|
$
|
$
|
|
Balance at beginning of period
|
23,492,811
|
-
|
|
Original
investment in Gardaq ApS
|
-
|
7,422
|
|
Transfer of
non-gold strategic minerals licences at cost
|
-
|
36,896
|
|
Investment at
conversion of Gardaq ApS to Gardaq A/S
|
-
|
55,344
|
|
Gain on FV
recognition of equity accounted investment in joint venture
|
-
|
31,285,536
|
|
Share of joint
venture’s net losses
|
(6,698,550)
|
(7,892,387)
|
|
Balance at end of period
|
16,794,261
|
23,492,811
|
|
Original
investment in Gardaq ApS
|
7,422
|
7,422
|
|
Transfer of
non-gold strategic minerals licences at cost
|
36,896
|
36,896
|
|
Investment at
conversion of Gardaq ApS to Gardaq A/S
|
55,344
|
55,344
|
|
Gain on FV
recognition of equity accounted investment in joint venture
|
31,285,536
|
31,285,536
|
|
Investment
retained at fair value- 51% share
|
31,385,198
|
31,385,198
|
|
Share of joint venture’s cumulative net losses
|
(14,590,937)
|
(7,892,387)
|
|
Balance at end of period
|
16,794,261
|
23,492,811
|
The following tables summarize the unaudited
financial information of Gardaq A/S.
|
|
As at
September 30,
2024
|
As at
December
31,
2023
|
|
|
$
|
$
|
|
Cash and cash equivalent
|
8,325,045
|
18,377,850
|
|
Prepaid expenses and other
|
560,579
|
351,752
|
|
Total current assets
|
8,885,624
|
18,729,602
|
|
Mineral property
|
117,576
|
92,239
|
|
Total assets
|
9,003,200
|
18,821,841
|
|
Accounts payable and accrued liabilities
|
1,603,757
|
528,235
|
|
Financial liability - related party
|
5,762,187
|
3,521,938
|
|
Total liabilities
|
7,365,944
|
4,050,173
|
|
Capital stock
|
30,246,937
|
30,246,937
|
|
Deficit
|
(28,609,681)
|
(15,475,269)
|
|
Total equity
|
1,637,256
|
14,771,668
|
|
Total liabilities and equity
|
9,003,200
|
18,821,841
|
3. INVESTMENT
IN AN ASSOCIATE OR JOINT VENTURE CORPORATION (CONT’d)
|
|
As at
September 30,
2024
|
As at
September 30,
2023
|
|
|
$
|
$
|
|
Exploration and Evaluation expenses
|
12,144,276
|
8,565,658
|
|
Interest expense (income)
|
(5,985)
|
-
|
|
Foreign exchange loss (gain)
|
(858,925)
|
171,792
|
|
Operating loss
|
11,279,366
|
8,737,450
|
|
Other expenses
|
1,855,047
|
1,108,101
|
|
Net loss and comprehensive loss
|
13,134,413
|
9,845,551
|
3.1 Financial Asset – Related
Party
Subject to a Subscription and Shareholder
Agreement dated 13 April 2023, the Corporation undertakes to
subscribe to two ordinary shares in Gardaq (the “Amaroq shares”) at
a subscription price of GBP 5,000,000 no later than 10 business
days after the third anniversary of the completion of the
subscription agreement.
Amaroq’s subscription will be completed by the
conversion of Gardaq’s related party balance into equity shares.
Gardaq’s related party payable balance consists of overhead,
management, general and administrative expenses payable to the
Corporation. In the event that the related party payable balance is
less than GBP 5,000,000, the Corporation shall, no later than 10
business days after the third anniversary of Completion:
(a) subscribe to one Amaroq
share by conversion of the amount payable to the Corporation,
(b) subscribe to one Amaroq share at a
subscription price equal to GBP 5,000,000 less the amount payable
to the Corporation
In the event that the amount payable to the
Corporation exceeds GBP 5,000,000, the Corporation shall subscribe
to the Amaroq shares at a subscription price equal to GBP 5,000,000
by conversion of GBP 5,000,000 of the amount due from Gardaq.
Gardaq shall not be liable to repay any of the balance payable to
the Corporation that exceeds GBP 5,000,000 (equivalent to CAD
9,048,791 as at 30 September 2024). See note 13.1.
During the nine-month period ended 30 September
2024, the Corporation determined that the financial asset should be
reclassified to the non-current asset category since the amount
will be settled during April 2026. As a result, an amount of
$5,762,187 has been reclassified to non-current assets as at 30
September 2024 ($3,521,938 reclassified as at 31 December
2023).
4. MINERAL
PROPERTIES
|
|
As at
December 31,
2023
|
Transfer
|
As at
September 30,
2024
|
|
|
$
|
$
|
$
|
|
Nalunaq – Au
|
1
|
-
|
1
|
|
Tartoq – Au
|
18,431
|
-
|
18,431
|
|
Vagar – Au
|
11,103
|
-
|
11,103
|
|
Nuna Nutaaq – Au
|
6,076
|
-
|
6,076
|
|
Anoritooq – Au
|
6,389
|
-
|
6,389
|
|
Siku – Au
|
6,821
|
(138)
|
6,683
|
|
Total mineral
properties
|
48,821
|
(138)
|
48,683
|
4. MINERAL
PROPERTIES (CONT’d)
|
|
As at
December 31,
2022
|
Transfers
|
As at
September 30,
2023
|
|
|
$
|
$
|
$
|
|
Nalunaq - Au
|
1
|
-
|
1
|
|
Tartoq - Au
|
18,431
|
-
|
18,431
|
|
Vagar - Au
|
11,103
|
-
|
11,103
|
|
Nuna Nutaaq - Au
|
6,076
|
-
|
6,076
|
|
Anoritooq - Au
|
6,389
|
-
|
6,389
|
|
Siku - Au
|
6,821
|
-
|
6,821
|
|
Naalagaaffiup Portornga - Strategic Minerals
|
6,334
|
(6,334)
|
-
|
|
Saarloq - Strategic Minerals
|
7,348
|
(7,348)
|
-
|
|
Sava - Strategic Minerals
|
6,562
|
(6,562)
|
-
|
|
Kobberminebugt - Strategic Minerals
|
6,840
|
(6,840)
|
-
|
|
Stendalen - Strategic Minerals
|
4,837
|
(4,837)
|
-
|
|
North Sava - Strategic Minerals
|
4,837
|
(4,837)
|
-
|
|
Total mineral
properties
|
85,579
|
(36,758)
|
48,821
|
5. CAPITAL
ASSETS
|
|
Field equipment and
infrastructure
|
Vehicles and
rolling stock
|
Equipment (including software)
|
Construction in
progress
|
Total
|
|
|
$
|
$
|
$
|
$
|
$
|
|
Nine months ended September 30,
2024
|
|
|
|
|
|
|
Opening net book value
|
1,537,379
|
3,312,118
|
108,822
|
33,283,240
|
38,241,559
|
|
Additions
|
-
|
1,941,750
|
138
|
77,831,150
|
79,773,038
|
|
Disposals
|
-
|
(149,916)
|
-
|
-
|
(149,916)
|
|
Depreciation
|
(148,780)
|
(407,563)
|
(46,792)
|
-
|
(603,135)
|
|
Closing net
book value
|
1,388,599
|
4,696,389
|
62,168
|
111,114,390
|
117,261,546
|
|
|
Field equipment and
infrastructure
|
Vehicles and
rolling stock
|
Equipment (including software)
|
Construction in
progress
|
Total
|
|
|
$
|
$
|
$
|
$
|
$
|
|
As at
September 30,
2024
|
|
|
|
|
|
|
Cost
|
2,351,042
|
6,197,074
|
232,231
|
111,114,390
|
119,894,737
|
|
Accumulated depreciation
|
(962,443)
|
(1,500,685)
|
(170,063)
|
-
|
(2,633,191)
|
|
Closing net
book value
|
1,388,599
|
4,696,389
|
62,168
|
111,114,390
|
117,261,546
|
5. CAPITAL ASSETS
(CONT’d)
|
|
Field equipment and
infrastructure
|
Vehicles and
rolling stock
|
Equipment (including software)
|
Construction In
progress
|
Total
|
|
|
$
|
$
|
$
|
$
|
$
|
|
December 31, 2023
|
|
|
|
|
|
|
Opening net book value
|
1,735,752
|
3,742,384
|
216,385
|
7,522,085
|
13,216,606
|
|
Additions
|
-
|
-
|
-
|
25,761,155
|
25,761,155
|
|
Disposals
|
-
|
-
|
(80,983)
|
-
|
(80,983)
|
|
Adjustment
|
-
|
-
|
43,054
|
-
|
43,054
|
|
Depreciation
|
(198,373)
|
(430,266)
|
(69,634)
|
-
|
(698,273)
|
|
Closing net
book value
|
1,537,379
|
3,312,118
|
108,822
|
33,283,240
|
38,241,559
|
|
|
Field equipment and
infrastructure
|
Vehicles and
rolling stock
|
Equipment (including software)
|
Construction In
progress
|
Total
|
|
|
$
|
$
|
$
|
$
|
$
|
|
As at December 31,
2023
|
|
|
|
|
|
|
Cost
|
2,351,041
|
4,466,971
|
232,231
|
33,283,240
|
40,333,483
|
|
Accumulated depreciation
|
(813,662)
|
(1,154,853)
|
(123,409)
|
-
|
(2,091,924)
|
|
Closing net book value
|
1,537,379
|
3,312,118
|
108,822
|
33,283,240
|
38,241,559
|
Depreciation of capital assets related to
exploration and evaluation properties is being recorded in
exploration and evaluation expenses in the consolidated statement
of comprehensive loss, under depreciation. Depreciation of $556,632
($478,519 for the nine months ended September 30, 2023) was
expensed as exploration and evaluation expenses during the nine
months ended September 30, 2024.
As at September 30, 2024, the Corporation had
capital commitments, of $25,532,115. These commitments relate to
the development of Nalunaq Project, rehabilitation of the Nalunaq
mine, construction of processing plant, purchases of mobile
equipment and establishment of surface infrastructure.
During the first nine months of 2024 the
Corporation capitalised borrowing costs of $4,263,933 to
construction in progress, which are included in additions.
6. CONVERTIBLE NOTES AND LOAN
PAYABLE
|
CONVERTIBLE NOTES
|
Convertible notes loan
|
Embedded Derivatives at FVTPL
|
Total
|
|
|
$
|
$
|
$
|
|
Balance as at December 31, 2023
|
11,763,053
|
23,980,074
|
35,743,127
|
|
Accretion of discount
|
2,910,769
|
-
|
2,910,769
|
|
Accrued interest
|
1,142,212
|
-
|
1,142,212
|
|
Fair value change
|
-
|
(1,636,567)
|
(1,636,567)
|
|
Foreign exchange loss
|
235,808
|
-
|
235,808
|
|
Balance as at
September 30, 2024
|
16,051,842
|
22,343,507
|
38,395,349
|
|
Non-current portion
|
-
|
-
|
-
|
|
Current portion
|
16,051,842
|
22,343,507
|
38,395,349
|
6. CONVERTIBLE NOTES AND LOAN
PAYABLE (CONT’d)
|
CONVERTIBLE NOTES
|
Convertible notes loan
|
Embedded Derivatives at FVTPL
|
Total
|
|
|
$
|
$
|
$
|
|
Balance as at December 31, 2022
|
-
|
-
|
-
|
|
Gross proceeds from issue
|
30,431,180
|
-
|
30,431,180
|
|
Embedded derivative component
|
(19,443,663)
|
19,443,663
|
-
|
|
Transaction costs
|
(362,502)
|
-
|
(362,502)
|
|
Accretion of discount
|
949,062
|
-
|
949,062
|
|
Accrued interest
|
508,576
|
-
|
508,576
|
|
Fair value change
|
-
|
4,536,411
|
4,536,411
|
|
Foreign exchange gain
|
(319,600)
|
-
|
(319,600)
|
|
Balance as at December
31, 2023
|
11,763,053
|
23,980,074
|
35,743,127
|
|
Non-current portion
|
-
|
-
|
-
|
|
Current portion
|
11,763,053
|
23,980,074
|
35,743,127
|
|
LOAN PAYABLE
|
As at
September 30,
2024
|
As at
December 31,
2023
|
|
|
$
|
$
|
|
Balance as at December 31, 2023
|
-
|
-
|
|
Gross proceeds from issue
|
25,087,636
|
-
|
|
Transaction costs
|
(693,272)
|
-
|
|
Accretion of discount
|
32,973
|
-
|
|
Accrued interest
|
177,979
|
-
|
|
Foreign exchange gain
|
(79,999)
|
-
|
|
Balance as at
September 30, 2023
|
24,525,317
|
-
|
|
Non-current portion
|
-
|
-
|
|
Current portion
|
24,525,317
|
-
|
6.1 Revolving Credit
Facility
A $25 million (US$18.5 million) Revolving Credit
Facility (“RCF”) was entered into with Landsbankinn hf. and Fossar
Investment Bank on September 1, 2023, with a two-year term expiring
on September 1, 2025 and priced at the Secured Overnight Financing
Rate (“SOFR”) plus 950bps. Interest is capitalized and payable at
the end of the term.
The RCF is denominated in US Dollars and the
SOFR interest rate is determined with reference to the CME Term
SOFR Rates published by CME Group Inc. The RCF carries (i) a
commitment fee of 0.40% per annum calculated on the undrawn
facility amount and (ii) an arrangement fee of 2.00% on the
facility amount where 1.5% has been paid on the closing date of the
facility and 0.50% was paid at the first draw down. The facility is
not convertible into any securities of the Corporation.
The facility is secured by (i) a bank account
pledge from the Corporation and Nalunaq A/S, (ii) share pledges
over all current and future acquired shares in Nalunaq A/S and
Gardaq A/S held by the Corporation pursuant to the terms of share
pledge agreements, (iii) a proceeds loan assignment agreement, (iv)
a pledge agreement in respect of owner’s mortgage deeds and (v) a
licence transfer agreement. During September 2024, the Corporation
has drawn on this facility and the loan payable amount as of
September 30, 2024, is $25,069,002.
This facility will be replaced by the new
revolving credit facilities that are expected to be finalized
subsequent to the interim financial reporting date (see note
6.4).
6. CONVERTIBLE
NOTES AND LOAN PAYABLE (CONT’d)
6.2 Convertible notes
Convertible notes represent $30.4 million
(US$22.4 million) notes issued to ECAM LP (US$16 million), JLE
Property Ltd. (US$4 million) and Livermore Partners LLC
(US$2.4 million) on September 1, 2023 with a four-year term and a
fixed interest rate of 5%. The conversion price of $0.90 per common
share is the closing Canadian market price of the Amaroq shares on
the day, prior to the closing day of the Debt Financing.
The convertible notes are denominated in US
Dollars and will mature on September 30, 2027, being the date that
is four years from the convertible note offering closing date. The
principal amount of the convertible notes will be convertible, in
whole or in part, at any time from one month after issuance into
common shares of the Corporation ("Common Shares") at a conversion
price of $0.90 (£0.525) per Common Share for a total of up to
33,629,068 Common Shares. The Corporation may repay the convertible
notes and accrued interest at any time, in cash, subject to
providing 30 days’ notice to the relevant noteholders, with such
noteholders having the option to convert such convertible notes
into Common Shares at the conversion price up to 5 days prior to
the redemption date. If the Corporation chooses to redeem some but
not all of the outstanding convertible notes, the Corporation shall
redeem a pro rata share of each noteholder's holding of convertible
notes. The Corporation shall pay a commitment fee to the holders of
the convertible notes of, in aggregate, $5,511,293 (US$4,484,032),
which shall be paid pro rata to each noteholder's holding of
convertible notes. The commitment fee is payable on the earlier of
(a) the date falling 20 business days after all amounts outstanding
under the Bank Revolving Credit Facility have been repaid in full,
but no earlier than the date that is 24 months after the date of
issuance of the notes; and (b) the date falling 30 (thirty) months
after the date of the subscription agreement in respect of the
notes, irrespective of whether or not notes have converted at that
date or been repaid.
The convertible notes will be secured by (i)
bank account pledge agreements from the Corporation and
Nalunaq A/S, (ii) share pledges over all current and future
acquired shares in Nalunaq A/S and Gardaq A/S held by the
Corporation pursuant to the terms of share pledge agreements, (iii)
a proceeds loan assignment agreement, (iv) a pledge agreement in
respect of owner’s mortgage deeds and (v) a licence transfer
agreement.
The convertible notes represent hybrid financial
instruments with embedded derivatives requiring separation. The
debt host portion (the “Host”) of the instrument is initially
recognised at fair value and subsequently measured at amortized
cost, whereas the aggregate conversion and repayment options (the
“Embedded Derivatives”) are classified at fair value through profit
and loss (FVTPL).
The fair value of the convertible notes at
inception was recognized at $30.4 million (US$22.4 million) and
$19.4 million (US$14.3 million) embedded derivative component was
isolated and determined using a Black Scholes valuation model which
required the use of significant unobservable inputs. As of
September 30, 2024, the Corporation identified the fair value of
embedded derivative associated with the early conversion option to
be $22.3 million ($24.0 million as of December 31, 2023). The
change in fair value of embedded derivative in the period from
January 1, 2024 to September 30, 2024 has been recognized in the
consolidated statement of comprehensive loss. The Host liability
component at inception, before deducting transaction costs, was
recognized to be the residual amount of $10.9 million (US$8.1
million) which is subsequently measured at amortized cost.
Transaction costs incurred on the issuance of the convertible note
amounted to $1,004,030, of which $362,502 was allocated to, and
deducted from, the host liability component, and $641,528 was
allocated to the embedded derivative component and charged to
profit and loss.
Amendments and conversion of these convertible
notes were concluded subsequently to the interim financial
reporting date (see note 6.4).
6. CONVERTIBLE
NOTES AND LOAN PAYABLE (CONT’D)
6.3 Cost Overrun Facility
$13.5 million (US$10 million) Revolving Cost
Overrun Facility was entered into with JLE Property Ltd. on
September 1, 2023, on the same terms as the Bank Revolving Credit
Facility.
The Overrun Facility is denominated in US
Dollars with a two-year term, expiring on September 1, 2025, and
will bear interest at the CME Term SOFR Rates by CME Group Inc. and
have a margin of 9.5% per annum. The Overrun Facility carries a
stand-by fee of 2.5% on the amount of committed funds. The Overrun
Facility is not convertible into any securities of the
Corporation.
The Overrun Facility will be secured by (i) bank
account pledge agreements from the Corporation and
Nalunaq A/S, (ii) share pledges over all current and future
acquired shares in Nalunaq A/S and Gardaq A/S held by the
Corporation pursuant to the terms of share pledge agreements, (iii)
a proceeds loan assignment agreement, (iv) a pledge agreement in
respect of owner’s mortgage deeds and (v) a licence transfer
agreement. The Corporation has not yet drawn on this facility.
This facility will be replaced by the new
revolving credit facilities that are expected to be finalized
subsequent to the interim financial reporting date (see note
6.4).
6.4 US$35 million
Revolving Credit Facility Heads of Terms
On July 2, 2024, the Corporation announced that
it agreed a Head of Terms, subject to final approval and
documentation, with Landsbankinn for US$35 million in three
Revolving Credit Facilities, securing a substantial increase and
extension to its existing debt facilities.
- The financing package will replace
the existing credit and cost overrun facilities, simplifying the
structure of the debt package and increasing financial flexibility
and liquidity for the Corporation.
- Amaroq has signed term sheets for a
US$35 million debt financing package with Landsbankinn consisting
of:
- US$28.5 million facility with a
margin of 9.5% per annum, reducing to 7.5% once the full amount has
been drawn and the Corporation’s cumulative EBITDA over a
three-month period exceeds CAD 6 million. This facility will
replace the Corporation’s existing revolving credit and cost
overrun facilities entered into on September 1, 2023. US$18.5
million of the facility is to be used towards the completion of the
Nalunaq development with the balance available for general
corporate purposes.
- US$6.5 million facility with a
margin of 7.5% per annum, available for general corporate purposes
once all other facilities have been fully drawn.
- The new facilities will have a 1.5%
arrangement fee, a 0.4% commitment fee on unutilised amounts, and
an expected maturity date of October 1, 2026.
- The new facilities will be subject
to certain ongoing covenant tests, further detail of which will be
provided on closing of definitive documentation.
- Amaroq will finalise the new
facilities’ legally binding documentation and expects to be in a
position to sign binding documents before the end of the year. The
Corporation’s currently undrawn US$10.0 million debt facilities
will remain in place until this time.
7.
LEASE LIABILITIES
|
|
As at
September 30,
2024
|
As at
December 31,
2023
|
|
|
$
|
$
|
|
Balance beginning
|
657,440
|
729,237
|
|
Lease additions
|
155,214
|
-
|
|
Lease payment
|
(101,143)
|
(105,894)
|
|
Interest
|
27,449
|
34,097
|
|
Balance ending
|
738,960
|
657,440
|
|
Non-current portion – lease liabilities
|
(622,123)
|
(577,234)
|
|
Current portion – lease liabilities
|
116,837
|
80,206
|
The Corporation has two leases for its offices.
In October 2020, the Corporation started a lease for five years and
five months including five free rent months during this period. The
monthly rent is $8,825 until March 2024 and $9,070 for the balance
of the lease. The Corporation has the option to renew the lease for
an additional five-year period at $9,070 monthly rent indexed
annually to the increase of the consumer price index of the
previous year for the Montreal area. In March 2024, the Corporation
started a new lease for a two-year term with the option to extend
for two more years. The monthly rent is $5,825 until March 2025
after which the monthly rent may increase as per the lease
terms.
7.1
Right of use asset
|
|
As at
|
As at
|
|
|
September 30,
|
December 31,
|
|
|
2024
|
2023
|
|
|
$
|
$
|
|
Opening net book value
|
574,856
|
655,063
|
|
Additions
|
161,038
|
-
|
|
Amortisation
|
(83,704)
|
(80,207)
|
|
Closing net book value
|
652,190
|
574,856
|
| |
|
|
|
Cost
|
997,238
|
836,200
|
|
Accumulated amortisation
|
(345,048)
|
(261,344)
|
|
Closing net book value
|
652,190
|
574,856
|
8. SHARE
CAPITAL
On February 23, 2024, the Corporation
successfully completed its oversubscribed fundraising which
resulted in a total of 62,724,758 new common shares being placed
with new and existing institutional investors at a placing price of
74 pence (CAD $1.25 at the closing exchange rate on 9 February
2024). The placing price represents a 5.7% premium to the closing
share price on 9 February 2024 on the AIM exchange. The fundraising
consisted of:
- A placing of new common shares with
new and existing institutional investors at the placing price (the
“UK Placing”). Stifel Nicolaus Europe Limited acted as the sole
bookrunner and broker on the UK Placing.
- A placing of new depository
receipts representing new common shares with new and existing
investors at the placing price (the “Icelandic Placing”).
Landsbankinn hf. and Fossar fjarfestingarbanki hf. acted as joint
bookrunners on the Icelandic Placing and Landsbankinn hf. acted as
underwriter.
- A private placement of new common
shares by certain existing institutional investors and a director
of the Corporation at the placing price (the “Canadian
Subscription”). The Director subscribed to approximately CAD $3.4
million (equivalent to GBP 2.0 million) in the fundraising.
As a result of the subscription, net proceeds of
approximately GBP 44 million (CAD 75.6 million) have been raised,
exceeding the initial targeted amount of GBP 30 million. The shares
subscribed to were credited as fully paid and rank pari
passu in all respects with the existing common shares of
the Corporation.
9. STOCK-BASED
COMPENSATION
9.1 Stock
options
An incentive stock option plan (the “Plan”) was
approved initially in 2017 and renewed by shareholders on
June 14, 2024. The Plan is a “rolling” plan whereby a
maximum of 10% of the issued shares at the time of the grant are
reserved for issue under the Plan to executive officers, directors,
employees and consultants. The Board of directors attributes that
the stock options and the exercise price of the options shall not
be less than the closing price on the last trading day, preceding
the grant date. The options have a maximum term of ten years.
Options granted pursuant to the Plan shall vest and become
exercisable at such time or times as may be determined by the
Board, except options granted to consultants providing investor
relations activities shall vest in stages over a 12-month period
with a maximum of one-quarter of the options vesting in any
three-month period. The Corporation has no legal or constructive
obligation to repurchase or settle the options in cash.
On May 14, 2024, and June 3, 2024, the
Corporation granted its employees 22,988 stock options with an
exercise price ranging from $1.30 to $1.31 per share. The stock
options vested 100% at the grant date. The options were granted at
an exercise price equal to the closing market price of the shares
the day prior to the grant. Total stock-based compensation costs
amounted to $18,163 for an estimated fair value of $0.72 per
share.
On January 5, 2024, a former director of the
Corporation exercised his options. As a result, 150,000 options
were exercised which resulted in the former director receiving
60,637 shares net of applicable withholdings. On May 23, 2024, the
former Chief Financial Officer (“CFO”) of the Corporation exercised
his options. As a result, 1,800,000 options were exercised which
resulted in the former CFO receiving 963,281 shares net of
applicable withholdings.On October 9, 2024, an employee of the
Corporation exercised his options. As a result, 31,278 options were
exercised which resulted in the employee receiving 11,090 shares
net of applicable withholdings
9. STOCK-BASED COMPENSATION
(CONT’d)
Changes in stock options are as follows:
|
|
Nine months ended September 30,
2024
|
December 31, 2023
|
|
|
Number of
options
|
Weighted average exercise
price
|
Number of
options
|
Weighted average exercise
price
|
|
|
|
$
|
|
$
|
|
Balance, beginning
|
9,188,365
|
0.59
|
10,717,395
|
0.57
|
|
Granted
|
22,988
|
1.30
|
80,970
|
1.01
|
|
Exercised
|
(1,950,000)
|
0.60
|
(1,610,000)
|
0.46
|
|
Balance, end
|
7,261,353
|
0.59
|
9,188,365
|
0.59
|
|
Balance, end exercisable
|
7,261,353
|
0.59
|
9,188,365
|
0.59
|
Stock options outstanding and exercisable as at
September 30, 2024 are as follows:
|
Number of
options outstanding
|
Number of
options exercisable
|
Exercise price
|
Expiry date
|
|
|
|
$
|
|
|
1,670,000
|
1,670,000
|
0.38
|
December 31, 2025
|
|
100,000
|
100,000
|
0.50
|
September 13, 2026
|
|
1,245,000
|
1,245,000
|
0.70
|
December 31, 2026
|
|
2,700,000
|
2,700,000
|
0.60
|
January 17, 2027
|
|
73,333
|
73,333
|
0.75
|
April 20, 2027
|
|
39,062
|
39,062
|
0.64
|
July 14, 2027
|
|
1,330,000
|
1,330,000
|
0.70
|
December 30, 2027
|
|
19,480
|
19,480
|
0.77
|
July 24, 2028
|
|
61,490
|
61,490
|
1.09
|
December 20, 2028
|
|
11,538
|
11,538
|
1.30
|
May 14, 2029
|
|
11,450
|
11,450
|
1.31
|
June 3, 2029
|
|
7,261,353
|
7,261,353
|
|
|
9.2
Restricted Share Unit
9.2.1 Description
Conditional awards were made in 2022 that give
participants the opportunity to earn restricted share unit awards
under the Corporation’s Restricted Share Unit Plan (“RSU Plan”)
subject to the generation of shareholder value over a four-year
performance period.
The awards are designed to align the interests
of the Corporation’s employees and shareholders, by incentivising
the delivery of exceptional shareholder returns over the long-term.
Participants receive a 10% share of a pool which is defined by the
total shareholder value created above a 10% per annum compound
hurdle.
The awards comprise three tranches, based on
performance measured from January 1, 2022, to the following
three measurement dates:
- First Measurement Date:
December 31, 2023;
- Second Measurement Date:
December 31, 2024; and
- Third Measurement Date:
December 31, 2025.
9. STOCK-BASED COMPENSATION
(CONT’d)
Restricted share unit awards granted under the
RSU Plan as a result of achievement of the total shareholder return
performance conditions are subject to continued service, with
vesting as follows:
- Awards granted after the First
Measurement Date - 50% vest after one year, 50% vest after three
years.
- Awards granted after the Second
Measurement Date - 50% vest after one year, 50% vest after two
years.
- Awards granted after the Third
Measurement Date - 100% vest after one year.
The maximum term of the awards is therefore four
years from grant.
The Corporation’s starting market capitalization
is based on a fixed share price of $0.552. Value created by share
price growth and dividends paid at each measurement date will be
calculated with reference to the average closing share price over
the three months ending on that date.
- After December 31, 2023, 100%
of the pool value at the First Measurement Date is delivered as
restricted share units under the RSU Plan, subject to the maximum
number of shares that can be allotted not being exceeded.
- After December 31, 2024, the
pool value at the Second Measurement Date is reduced by the pool
value from the First Measurement Date (increased in line with share
price movements between the First and Second Measurement Dates).
100% of the remaining pool value, if any, is delivered as
restricted share units under the RSU Plan.
- After December 31, 2025, the
pool value at the Third Measurement Date is reduced by the pool
value from the Second Measurement Date (increased in line with
share price movements between the Second and Third Measurement
Dates), and then further reduced by the pool value from the First
Measurement Date (increased in line with share price movements
between the First Measurement Date and the Third Measurement Date).
100% of the remaining pool value, if any, is delivered as
restricted share units under the RSU Plan.
9.2.2 RSU Plan Amendment
The RSU Plan was amended by a shareholders
General Meeting on June 15, 2023. As a result of the amendment the
number of shares that could be issued under the RSU Plan to satisfy
the conditional awards and other share awards was increased from
10% of a fixed share capital amount of 177,098,740 shares to 10% of
share capital at the time of award, amounting to 10% of 263,073,022
shares, reduced by the number of outstanding options at each
calculation date. As a result, an additional expense based on the
difference between the fair value of the conditional awards before
and after the modification will be recognised over the service
period. The incremental fair value was determined and incorporated
info the valuation in 9.2.4.
9. STOCK-BASED COMPENSATION
(CONT’d)
9.2.3 New Conditional Award under RSU
Plan
On October 13, 2023, Amaroq made an award (the
“Award”) under the RSU Plan as detailed below. The Award consists
of a conditional right to receive value if the future performance
targets, applicable to the Award, are met. Any value to which the
participants are eligible in respect of the Award will be granted
as Restricted Share Units (each an “RSU”), with each RSU entitling
a participant to receive common shares in the Corporation. Each RSU
will be granted under, and governed in accordance with, the rules
of the Corporation's Restricted Share Unit Plan.
|
Award Date
|
October 13, 2023
|
|
Initial Price
|
CAD 0.552
|
|
Hurdle Rate
|
10% p.a. above the Initial Price
|
|
Total Pool
|
10% of the growth in value above the Hurdle rate, not exceeding
10% of the Corporation’s share capital.
The number of shares will be determined at the Measurement
Dates.
|
|
Participant proportion
|
Edward Wyvill, Corporate Development, 10%
|
|
Performance Period
|
January 1, 2022 to December 31, 2025 (inclusive)
|
|
Normal Measurement Dates
|
First Measurement Date: December 31, 2023, 50% vesting on
the first anniversary of grant, with the remaining 50% vesting on
the third anniversary of grant.
Second Measurement Date: December 31, 2024, 50% vesting on the
first anniversary of grant, with the remaining 50% vesting on the
second anniversary of grant.
Third Measurement Date: December 31, 2025, vesting on the
first anniversary of grant.
|
On August 14, 2024, Amaroq made an award (the
“Award”) under the RSU Plan as detailed below. The Award consists
of a conditional right to receive value if the future performance
targets, applicable to the Award, are met. Any value to which the
participants are eligible in respect of the Award will be granted
as Restricted Share Units (each an “RSU”), with each RSU entitling
a participant to receive common shares in the Corporation. Each RSU
will be granted under, and governed in accordance with, the rules
of the Corporation's Restricted Share Unit Plan.
|
Award Date
|
August 14, 2024
|
|
Initial Price
|
CAD 1.04
|
|
Hurdle Rate
|
10% p.a. above the Initial Price
|
|
Total Pool
|
10% of the growth in value above the Hurdle rate, not exceeding
10% of the Corporation’s share capital.
The number of shares will be determined at the Measurement
Date.
|
|
Participant proportion
|
Ellert Arnarson, Chief Financial Officer, 12%
|
|
Performance Period
|
August 6, 2024, to December 31, 2025 (inclusive)
|
|
Measurement Date
|
December 31, 2025, vesting on the first anniversary of
grant.
|
|
RSU Grant Date
|
First quarter of 2026
|
|
RSU Vesting Date
|
100% of the shares will vest on the first anniversary of grant
(first quarter of 2027)
|
9. STOCK-BASED COMPENSATION
(CONT’d)
9.2.4
Valuation
The fair value of the award granted in December
2022 and modified June 2023, in addition to the award granted
October 13, 2023, increased to $7,378,000 based on 90% of the
available pool being awarded.
During June 2024, some of the awards were
forfeited due to the departure of Jaco Crouse, CFO of the
Corporation, effective June 3, 2024 (see note 9.2.5). As a result
of the departure, previously recognised RSU award vesting charges
of $566,875 were reversed and the percentage of the pool that was
allocated was reduced to 70%.
During August 2024, new awards granted to the
CFO increased the percentage of the pool that was allocated to
82%.
A charge of $610,654 and $1,328,904 was recorded
during the three and nine months ended September 30, 2024
respectively, including the reduction of $566,875 of previously
recognized RSU vesting charges which were reversed during the
period as a result of the forfeiture of the RSU awards (a charge of
$449,000 and $1,347,000 was recorded during the three and nine
months ended September 30, 2023).
The fair value was obtained through the use of a
Monte Carlo simulation model which calculates a fair value based on
a large number of randomly generated projections of the
Corporation’s share price.
|
Assumption
|
Value
|
|
Grant date
|
December 30, 2022
|
|
Amendment date
|
June 15, 2023
|
|
Additional award date
|
October 13, 2023
|
|
Forfeiture of 20% of the awards date
|
June 3, 2024
|
|
Additional award date
|
August 14, 2024
|
|
Expected life (years)
|
1.38 – 3.00
|
|
Share price at grant date
|
$0.70 - $1.02
|
|
Exercise price
|
N/A
|
|
Dividend yield
|
0%
|
|
Risk-free rate
|
3.44% - 4.71%
|
|
Volatility
|
49.5% - 72%
|
|
Fair value of awards - First Measurement Date
|
$3,538,000
|
|
Fair value of awards - Second Measurement Date
|
$1,526,000
|
|
Fair value of awards - Third Measurement Date
|
$1,496,000
|
|
Total fair value of awards
(82% of pool)
|
$6,560,000
|
Expected volatility was determined from the
daily share price volatility over a historical period prior to the
date of grant with length commensurate with the expected life. A
zero-dividend yield has been used based on the dividend yield as at
the date of grant.
9. STOCK-BASED COMPENSATION
(CONT’d)
9.2.5
Awards under Restricted Share Unit Plan (the
“RSU”)
On February 23, 2024, in alignment with the
Company’s RSU plan dated 15 June 2023, the Company granted an
award (the “Award”) to directors and employees of the Company as
listed below.
|
Award Date
|
February 23, 2024
|
|
Initial Price
|
CAD 0.552
|
|
Hurdle Rate
|
10% p.a. above the Initial Price
|
|
Total Pool
|
10% of the growth in value above the Hurdle rate, not exceeding
10% of the Company’s share capital
The number of shares is determined at the Measurement Dates
|
|
Participant proportions and Number of shares
subject to RSU
|
Eldur Olafsson,
CEO
40% 3,805,377
shares
|
|
Jaco Crouse1,
CFO
20% 1,902,688
shares
|
|
Joan Plant, Executive
VP
10% 951,344
shares
|
|
James Gilbertson, VP
Exploration
10% 951,344
shares
|
|
Edward Wyvill, Corporate
Development 10% 951,344
shares
|
|
First Measurement Date:
|
31 December 2023
50% of the Shares will vest on the first anniversary of grant, with
the remaining 50% vesting on the third anniversary of grant.
|
1The shares awarded
under the RSU to Jaco Crouse, CFO, have been forfeited as a result
of his departure effective June 3, 2024.
10. EXPLORATION
AND EVALUATION EXPENSES
(RECOVERY)
|
|
Three months ended September
30,
|
Nine months ended September
30,
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
$
|
$
|
$
|
$
|
|
Geology
|
440,058
|
201,738
|
573,208
|
176,116
|
|
Drilling
|
2,028,481
|
173,776
|
2,088,481
|
1,210,428
|
|
Lodging and on-site support
|
284,812
|
151,495
|
284,812
|
203,208
|
|
Analysis
|
60,176
|
27,416
|
193,086
|
1,061
|
|
Geophysical survey
|
-
|
-
|
-
|
(416,177)
|
|
Transport
|
14,059
|
25,510
|
18,968
|
650,263
|
|
Helicopter charter
|
805,327
|
205,073
|
805,327
|
886,755
|
|
Logistic support
|
-
|
-
|
-
|
(51,509)
|
|
Insurance
|
-
|
-
|
-
|
-
|
|
Maintenance infrastructure
|
363,154
|
628,733
|
379,986
|
1,207,624
|
|
Supplies and equipment
|
180,338
|
706,545
|
230,849
|
1,309,562
|
|
Project Engineering
|
-
|
-
|
-
|
55,792
|
|
Government fees
|
8,750
|
-
|
41,599
|
25,615
|
|
Exploration and
evaluation expenses
before depreciation
|
4,185,155
|
2,120,286
|
4,616,316
|
5,258,738
|
|
Depreciation
|
239,752
|
157,254
|
556,631
|
478,519
|
|
Exploration and
evaluation expenses
|
4,424,907
|
2,277,540
|
5,172,947
|
5,737,257
|
11. GENERAL AND
ADMINISTRATION
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
$
|
$
|
$
|
$
|
|
Salaries and benefits
|
924,737
|
626,384
|
3,916,009
|
1,864,046
|
|
Director’s fees
|
159,000
|
158,667
|
477,000
|
472,667
|
|
Professional fees
|
793,524
|
296,024
|
2,645,492
|
1,818,781
|
|
Marketing and investor relations
|
169,781
|
173,572
|
482,952
|
480,258
|
|
Insurance
|
83,536
|
76,002
|
256,369
|
211,206
|
|
Travel and other expenses
|
534,375
|
471,992
|
1,778,834
|
993,167
|
|
Regulatory fees
|
214,236
|
342,668
|
796,695
|
715,222
|
|
General and
administration before
following elements
|
2,879,189
|
2,145,309
|
10,353,351
|
6,555,347
|
|
Stock-based compensation
|
611,185
|
451,014
|
1,347,598
|
1,353,042
|
|
Depreciation
|
45,866
|
35,718
|
130,208
|
106,990
|
|
General and
administration
|
3,536,240
|
2,632,041
|
11,831,157
|
8,015,379
|
12.
FINANCE COSTS
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
$
|
$
|
$
|
$
|
|
Transaction costs and service fees
|
-
|
1,013,771
|
-
|
1,013,771
|
|
Lease interest
|
9,317
|
8,487
|
27,449
|
26,062
|
|
|
9,317
|
1,022,258
|
27,449
|
1,039,833
|
13. RELATED
PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION
13.1 Gardaq Joint Venture
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
$
|
$
|
$
|
$
|
|
Gardaq management fees and allocated cost
|
608,392
|
601,461
|
1,823,286
|
1,108,101
|
|
Other allocated costs
|
212,489
|
803,567
|
388,152
|
2,516,430
|
|
Foreign exchange revaluation
|
(34,116)
|
17,480
|
28,811
|
16,581
|
|
|
786,765
|
1,422,508
|
2,240,249
|
3,641,112
|
As at September 30, 2024, the balance receivable
from Gardaq amounted to $5,762,187 ($3,521,938 as at
December 31, 2023). This receivable balance represents
allocated overhead and general administration costs to manage the
exploration work programmes and day-to-day activities of the joint
venture. This balance will be converted to shares in Gardaq within
10 business days after the third anniversary of the completion of
the Subscription and Shareholder Agreement dated April 13, 2023
(See note 3.1).
13. RELATED
PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION
(CONT’d)
13.2 Key Management Compensation
The Corporation’s key management are the members
of the board of directors, the President and Chief Executive
Officer, the Chief Financial Officer, the Vice President
Exploration, and the Executive Vice President. Key management
compensation is as follows:
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
$
|
$
|
$
|
$
|
|
Short-term benefits
|
|
|
|
|
|
Salaries and benefits
|
385,277
|
316,736
|
1,225,843
|
971,553
|
|
Director’s fees
|
159,000
|
158,667
|
477,000
|
472,667
|
|
Long-term benefits
|
|
|
|
|
|
Stock-based compensation
|
531
|
2,014
|
2,143
|
6,042
|
|
Stock-based compensation - RSU
|
610,654
|
449,000
|
1,328,904
|
1,347,000
|
|
Total compensation
|
1,155,462
|
926,417
|
3,033,890
|
2,797,262
|
14. NET EARNINGS (LOSS) PER COMMON SHARE
The calculation of net loss per share is shown
in the table below.
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
$
|
$
|
$
|
$
|
|
Net income (loss) and comprehensive income
(loss)
|
(14,013,519)
|
(6,555,222)
|
(18,001,712)
|
13,425,594
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
327,418,727
|
263,579,331
|
314,985,260
|
263,356,034
|
|
Weighted average number of common shares outstanding –
diluted
|
327,418,727
|
306,335,274
|
314,985,260
|
306,111,977
|
|
Basic earnings (loss) per share
|
(0.043)
|
(0.02)
|
(0.057)
|
0.05
|
|
Diluted earnings (loss) per common share
|
(0.043)
|
(0.02)
|
(0.057)
|
0.04
|
15. FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT
The Corporation is exposed to various risks
through its financial instruments. The following analysis provides
a summary of the Corporation's exposure to and concentrations of
risk at September 30, 2024:
15.1 Credit Risk
Credit risk is the risk that one party to a
financial instrument will cause financial loss for the other party
by failing to discharge an obligation. The Corporation’s main
credit risk relates to its prepaid amounts to suppliers for placing
orders, manufacturing and delivery of process plant equipment, as
well as an advance payment to a mining contractor. The Corporation
performed expected credit loss assessment and assessed the amounts
to be fully recoverable.
15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
(CONT’d)
15.2 Fair Value
Financial assets and liabilities recognized or
disclosed at fair value are classified in the fair value hierarchy
based upon the nature of the inputs used in the determination of
fair value. The levels of the fair value hierarchy are:
• Level 1 - Quoted
prices (unadjusted) in active markets for identical assets or
liabilities
• Level 2 - Inputs other than quoted prices included
within level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from
prices)
• Level 3 - Inputs
for the asset or liability that are not based on observable market
data (i.e., unobservable inputs)
The following table summarizes the carrying value of the
Corporation’s financial instruments:
|
|
September 30,
2024
|
December 31, 2023
|
|
|
$
|
$
|
|
Cash
|
25,937,983
|
21,014,633
|
|
Sales tax receivable
|
72,087
|
69,756
|
|
Prepaid expenses and others
|
17,812,986
|
18,681,568
|
|
Interest receivable
|
876,478
|
-
|
|
Deposit
|
177,944
|
27,944
|
|
Escrow account for environmental monitoring
|
6,872,073
|
598,939
|
|
Financial Asset – Related Party
|
5,762,187
|
3,521,938
|
|
Investment in equity-accounted joint arrangement
|
16,794,261
|
23,492,811
|
|
Accounts payable and accrued liabilities
|
(13,479,402)
|
(6,273,979)
|
|
Convertible notes
|
(38,395,349)
|
(35,743,127)
|
|
Loan payable
|
(24,525,317)
|
-
|
|
Lease liabilities
|
(738,960)
|
(657,440)
|
Due to the short-term maturities of cash,
prepaid expenses, and accounts payable and accrued liabilities, the
carrying amounts of these financial instruments approximate fair
value at the respective balance sheet date.
The carrying value of the convertible note
instrument approximates its fair value at maturity and includes the
embedded derivative associated with the early conversion option and
the host liability at amortized cost.
The carrying value of the loan payable
approximate its fair value.
The carrying value of lease liabilities
approximate its fair value based upon a discounted cash flows
method using a discount rate that reflects the Corporation’s
borrowing rate at the end of the period.
15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
(CONT’d)
15.3 Liquidity
Risk
Liquidity risk is the risk that the Corporation
will encounter difficulty in meeting obligations associated with
financial liabilities. The Corporation seeks to ensure that it has
sufficient capital to meet short-term financial obligations after
taking into account its exploration and operating obligations and
cash on hand. The Corporation is currently negotiating new Head of
Terms with Landsbankinn in order to fund general and administrative
costs, exploration and evaluation costs and Nalunaq project
development costs. The Corporation’s options to enhance liquidity
include the issuance of new equity instruments or debt.
The following table summarizes the carrying
amounts and contractual maturities of financial liabilities:
|
|
As at September 30,
2024
|
As at December 31,
2023
|
|
|
Trade and other payables
|
Convertible notes
|
Loan payable
|
Lease liabilities
|
Trade and other payables
|
Convertible Notes
|
Lease liabilities
|
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
Within 1 year
|
13,479,402
|
38,395,349
|
24,525,317
|
150,250
|
6,273,979
|
-
|
108,345
|
|
1 to 5 years
|
-
|
-
|
-
|
545,633
|
-
|
35,743,127
|
544,178
|
|
5 to 10 years
|
-
|
-
|
-
|
154,184
|
-
|
-
|
126,975
|
|
Total
|
13,479,402
|
38,395,349
|
24,525,317
|
850,067
|
6,273,979
|
35,743,127
|
779,498
|
The Corporation has assessed that it is not
exposed to significant liquidity risk due to its cash balance in
the amount of $25,937,983 at the period end and to the subsequent
conversion of the convertible note into shares of the Corporation
(see note 16).
16. SUBSEQUENT EVENTS
Amendments and
conversion of
convertible
notes
On October 4, 2024, the Corporation entered into
an agreement with the holders of its US $22.4M convertible notes,
due in 2027, to convert the notes into new common shares in order
to simplify the Corporation’s capital structure, reduce cash
interest costs and permit future financial flexibility.
The Corporation has amended the convertible
notes to permit the payment of the outstanding interest and
commitment fees in common shares of the Corporation at a conversion
price equal to the closing price of the common shares on the TSX-V
on the trading day immediately prior to such conversion. These
amendments were approved by the TSX-V on October 14, 2024.
The holders of the convertible notes have
elected to convert all of the outstanding principal of the
convertible notes into 33,629,068 Common Shares (the “Principal
Conversion Shares”) at a conversion price of CAD 0.90 (£0.525) per
Principal Conversion Share and all of the outstanding interest of
the convertible notes in 1,293,356 Common Shares (the “Interest
Conversion Shares”) at a conversion price of CAD $1.3 (£0.73) per
Interest Conversion Share. The Corporation and the holders of the
convertible notes also agreed to make 70% of the total amount of
the outstanding commitment fee immediately payable. The holders of
the convertible notes have elected to convert such commitment fee
payable into 3,307,502 Common Shares (the “Commitment Fee
Conversion Shares”) in aggregate, at a conversion price of CAD $1.3
(£0.73) per Commitment Fee Conversion Share.
Following the consent of the TSX-V, and their
approval of the amendments to the convertible notes, the 33,629,068
Principal Conversion Shares, 1,293,356 Interest Conversion Shares
and 3,307,502 Commitment Fee Conversion Shares were admitted to
trading on AIM, and TSX-V and Nasdaq Iceland’s main market.
Amaroq Minerals (LSE:AMRQ)
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Amaroq Minerals (LSE:AMRQ)
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