NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
1.
NATURE AND CONTINUANCE OF OPERATIONS
Rise Gold Corp. (the Company) was originally incorporated as Atlantic Resources Inc. in the State of Nevada on February 9, 2007 and is in the exploration stage. On April 11, 2012, the Company merged its wholly-owned subsidiary, Patriot Minefinders Inc., a Nevada corporation, in and to the Company to effect a name change to Patriot Minefinders Inc. On January 14, 2015, the Company completed a name change to Rise Resources Inc. in the same manner. On April 7, 2017, the Company changed its name to Rise Gold Corp. These mergers were carried out solely for the purpose of effecting these changes of names.
On February 16, 2015, the Company increased its authorized capital from 21,000,000 shares to 400,000,000 shares.
On January 29, 2016, the Company completed an initial public offering in Canada and began trading on the Canadian Securities Exchange (CSE) on February 1, 2016. On November 28, 2017, the Company ceased trading on the OTC Pink Market and began trading on the OTCQB Venture Market.
The Company is in the early stages of exploration and as is common with any exploration company, it raises financing for its acquisition activities. The accompanying condensed consolidated interim financial statements have been prepared on the going concern basis, which presumes that the Company will continue operations for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of business. The Company has incurred a loss of $594,306 for the period ended October 31, 2017 and has accumulated a deficit of $6,622,230. This raises substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Companys ability to maintain continued support from its shareholders and creditors and to raise additional capital and implement its business plan. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
At October 31, 2017, the Company had working capital of $358,319.
2.
BASIS OF PREPARATION
Generally Accepted Accounting Principles
The accompanying unaudited condensed consolidated interim financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America (US GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) for financial information with the instructions to Form 10-Q and Regulation S-K. Results are not necessarily indicative of results which may be achieved in the future. The unaudited condensed consolidated interim financial statements should be read in conjunction with the Companys Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with Managements Discussion and Analysis, for the year ended July 31, 2017. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations.
Basis of Consolidation
These condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiary Rise Grass Valley Inc. All significant intercompany accounts and transactions have been eliminated on consolidation.
F-5
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
2.
BASIS OF PREPARATION
(contd
)
Basis of Consolidation
(contd
)
Subsidiaries
Subsidiaries are all entities over which the Company has exposure to variable returns from its involvement and has the ability to use power over the investee to affect its returns. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company until the date on which control ceases.
The accounts of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Inter-company transactions, balances and unrealized gains or losses on transactions are eliminated upon consolidation.
Recently Adopted and Recently Issued Accounting Standards
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This ASU eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent amounts in a classified balance sheet and replaces it with a noncurrent classification of deferred tax assets and liabilities. The ASU applies to all entities and is effective for annual periods beginning after December 15, 2017, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities. This ASU amendment addresses aspects of recognition, measurement, presentation and disclosure of financial instruments. It affects investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value, and simplifies the impairment assessment of equity investments without a readily determinable fair value by requiring a qualitative assessment. The ASU applies to all entities and is effective for annual periods beginning after December 15, 2017, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard.
Other than the above, the Company has determined that other significant newly issued accounting pronouncements are either not applicable to the Companys business or that no material effect is expected on the financial statements as a result of future adoption.
Use of Estimates
The preparation of these financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas requiring the use of estimates include the carrying value and recoverability of mineral properties and the recognition of deferred tax assets based on the change in unrecognized deductible temporary tax differences. Actual results could differ from those estimates, and would impact future results of operations and cash flows.
F-6
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
3.
MINERAL PROPERTY INTERESTS
The Companys mineral properties balance consists of:
|
|
|
|
|
|
Indata, British Columbia
|
Klondike, British Columbia
|
Idaho-Maryland, California
|
Total
|
|
|
|
|
|
Balance, July 31, 2016
|
$ 50,000
|
$ 513,031
|
$ -
|
$ 563,031
|
Cash paid
|
-
|
-
|
3,605,854
|
3,605,854
|
Shares issued
|
-
|
-
|
184,000
|
184,000
|
Write-off
|
(50,000)
|
(513,031)
|
-
|
(563,031)
|
|
|
|
|
|
Balance, July 31, 2017
|
-
|
-
|
3,789,854
|
3,789,854
|
Cash paid
|
-
|
-
|
372,078
|
372,078
|
|
|
|
|
|
Balance, October 31, 2017
|
$ -
|
$ -
|
$ 4,161,932
|
$ 4,161,932
|
Title to mineral properties
Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain mineral titles as well as the potential for problems arising from the frequently ambiguous conveying history characteristic of many mineral properties. As at October 31, 2017, the Company holds title to the Idaho-Maryland Gold Mine Property.
Indata, British Columbia
On May 18, 2015, the Company entered into an option agreement with Eastfield Resources Ltd., (Eastfield), pursuant to which Eastfield granted the Company the exclusive and irrevocable right to acquire up to a 75% interest in and to certain claims in the Indata property located in the Omineca Mining Division in British Columbia, Canada, for total consideration of $450,000 in cash and minimum aggregate exploration expenditures of $2,500,000. As at July 31, 2017, the Company had paid $50,000 towards the 75% interest earn-in and incurred cumulative exploration expenditures of $4,035 on the Indata property. During the year ended July 31, 2017, the Company terminated its option agreement with Eastfield; accordingly, the Company has written off $50,000 in acquisition costs in relation to the Indata property as at July 31, 2017.
Klondike, British Columbia
On May 26, 2016, the Company entered into an agreement with Klondike Gold Corp. (Klondike) regarding the purchase of a portfolio of seven gold and base metal properties in southeast British Columbia for total consideration of $200,000 cash, the issuance of 3,500,000 common shares, and the issuance of 2,500,000 warrants. As at July 31, 2017, the Company had paid Klondike $50,000 in cash, issued 1,500,000 shares of the Companys common stock valued at $240,000, and issued 1,500,000 warrants valued at $223,031 (discount rate 0.49%, volatility 200.64%, expected life 2 years, dividend yield 0%), exercisable at $0.227 per share until July 13, 2018, and incurred cumulative exploration expenditures of $10,408 on the Klondike properties. During the year ended July 31, 2017, the Company terminated the purchase agreement with Klondike and paid a settlement of $100,000 to Klondike; accordingly the Company has written off $513,031 in acquisition costs in relation to the Klondike properties as at July 31, 2017.
F-7
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
3.
MINERAL PROPERTY INTERESTS
(contd
)
Idaho-Maryland Gold Mine Property, California
On August 30, 2016, the Company entered into an option agreement with three parties to purchase a 100% interest in and to the Idaho-Maryland Gold Mine property located near Grass Valley, California, United States; pursuant to the option agreement, in order to exercise the option, the Company was to have paid US$2,000,000 by November 30, 2016. Upon execution of the option agreement, the Company paid the vendors a non-refundable cash deposit in the amount of $32,758 (US$25,000), which was credited against the purchase price of US$2,000,000 upon exercise of the option. On November 30, 2016, the Company negotiated an extension of the closing date of the option agreement to December 26, 2016, in return for a cash payment of $32,758 (US$25,000), which was credited against the purchase price of US$2,000,000 upon exercise of the option. On December 28, 2016, the Company negotiated a further no-cost extension of the closing date of the option agreement to April 30, 2017. On January 25, 2017, the Company exercised the option by paying $2,588,625 (US$1,950,000), and acquired a 100% interest in the Idaho-Maryland Gold Mine property. In connection with the option agreement, the Company agreed to pay a cash commission of $184,000 (US$140,000) equal to 7 per cent of the purchase price of US$2,000,000; the commission was settled on January 25, 2017 through the issuance of 920,000 units valued at $0.20 per unit (Note 7). The Company also incurred additional transaction costs of $144,391, which have been included in the carrying value of the Idaho-Maryland Gold Mine.
On January 6, 2017, the Company entered into an option agreement with Sierra Pacific Industries Inc. (Sierra) to purchase a 100% interest in and to certain surface rights totalling approximately 82 acres located near Grass Valley, California, United States, contiguous to the Idaho-Maryland Gold Mine property acquired by the Company on January 25, 2017. Pursuant to the option agreement, in order to exercise the option, the Company was to have paid US$1,900,000 by March 31, 2017. Upon execution of the option agreement, the Company paid the vendors a non-refundable cash deposit in the amount of $132,732 (US$100,000), which will be credited against the purchase price of US$1,900,000 upon exercise of the option. On April 3, 2017, the Company negotiated an extension of the closing date of the option agreement to June 30, 2017, in return for a cash payment of $268,000 (US$200,000), at which time a payment of US$1,600,000 was due in order to exercise the option. On June 7, 2017, the Company negotiated an extension of the closing date of the option agreement to September 30, 2017, in return for a cash payment of $406,590 (US$300,000), at which time a payment of US$1,300,000 was due in order to exercise the option. On September 1, 2017, the Company negotiated a third extension of the closing date of the option agreement to June 30, 2018 in return for cash payments as follows: US$300,000 by September 30, 2017 (paid $372,078), US$300,000 by December 30, 2017, US$300,000 by March 30, 2018, and a final payment of US$400,000 by June 30, 2018, which will be credited against the remaining purchase price of US$1,300,000. At October 31, 2017 a total of US$1,000,000 remained payable.
F-8
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
3.
MINERAL PROPERTY INTERESTS
(contd
)
Idaho-Maryland Gold Mine Property, California
(contd
)
As at October 31, 2017, the Company has incurred cumulative property investigation costs of $55,253 and cumulative exploration expenditures of $549,974 on the Idaho-Maryland Gold Mine property as follows:
|
|
|
|
Three month period ended October 31, 2017
|
Year ended July 31, 2017
|
|
|
|
Opening balance
|
$ 375,980
|
$ -
|
Idaho-Maryland Gold Mine expenditures:
|
|
|
Consulting
|
$ 71,883
|
$ 287,411
|
Exploration
|
2,022
|
54,753
|
Rent
|
8,234
|
10,968
|
Supplies
|
82,372
|
4,020
|
Sampling
|
4,070
|
8,623
|
Travel
|
5,413
|
10,205
|
Total expenditures
|
$ 173,994
|
$ 375,980
|
|
|
|
Closing balance
|
$ 549,974
|
$ 375,980
|
4.
CONTINGENCY
During the year ended July 31, 2014, the Company entered into a binding letter of intent (LOI) with Wundr Software Inc. (Wundr). Under the terms of the LOI, the Company would acquire 100% of the issued and outstanding common shares of Wundr. Due to unforeseen circumstances, the Company did not complete the transactions contemplated in the LOI, which the Company announced had expired on January 10, 2014.
On September 17, 2014, the Company learned that it was the subject, along with a number of additional defendants, of a notice of civil claim (the Claim) filed in the Supreme Court of British Columbia by Wundr, under which Wundr is seeking general damages from the Company as well as damages for conspiracy to cause economic harm. None of the allegations contained in the Claim have been proven in court. Management has determined that the probability of the Claim resulting in an unfavourable outcome and financial loss to the Company is unlikely.
5.
PROMISSORY NOTES PAYABLE
During the year ended July 31, 2017, the Company issued promissory notes totalling $220,000, accruing interest in advance at 10% every three months, maturing on June 29, 2017. Subsequently, the Company and one promissory note holder agreed to reduce the interest rate to 7.2% and make an early repayment of principal of $100,000 and accrued interest of $7,200. The remaining principal of $120,000 and accrued interest of $12,000 was also repaid during the year ended July 31, 2017.
6.
RELATED PARTY TRANSACTIONS
Key management personnel consist of the Chief Executive Officer, Chief Financial Officer, and the directors of the Company. The remuneration of the key management personnel is as follows:
a)
Salaries of $45,000 (2016 - $30,000) and nil (2016 400,000) shares of common stock valued at $nil (2016 - $60,000), recognized in consulting expense, to the CEO of the Company;
F-9
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
b)
Consulting fees of $nil (2016 - $19,500) to the former CEO of the Company.
6.
RELATED PARTY TRANSACTIONS
(contd
)
c)
Consulting fees of $12,000 (2016 - $9,000) to the CFO of the Company, and consulting fees of $3,000 (2016 - $1,821) to a company in which the CFO holds a 50% interest.
d)
Consulting fees of $3,000 (2016 - $1,821) to a company in which a former director of the Company holds a 50% interest.
e)
Share-based payments of $nil (2016 - $106,096) to the CEO and directors of the Company.
As at October 31, 2017, the Company has recorded loans from related parties of $39,324 (US$30,500) (July 31, 2017 - $38,079 (US$30,500)) representing advances made by a director and a former director and officer. The advances are due on demand without interest.
As at October 31, 2017, included in due to related parties is $20,334 (July 31, 2017 - $20,385) in accounts and advances payable and accrued liabilities to current and former officers and companies controlled by directors and officers of the Company.
7.
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
Issued Capital Stock
On August 1, 2016, the Company issued 400,000 shares of common stock at a price of $0.15 per share to the Companys CEO as compensation. The shares were valued at $60,000 on issuance and were recognized as consulting expense.
On November 1, 2016 and November 7, 2016, the Company issued a total of
272,080 shares of common stock upon the exercise of finders warrants at a price of $0.10 per share.
On January 25, 2017, the Company issued 920,000 units valued at $0.20 per unit to an individual pursuant to a debt conversion by the individual in the amount of $184,000 (US$140,000), representing a cash commission equal to seven per cent of the US$2,000,000 purchase price of the Idaho-Maryland property (Note 3).
Each unit consists of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance.
On August 9, 2017, the Company issued 417,184 units valued at $0.23 per unit to a third party pursuant to a debt conversion by the third party in the amount of $95,952, representing finders fees payable on the private placement which closed May 5, 2017.
Each unit consists of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance.
Private Placements
On December 23, 2016, the Company completed a non-brokered private placement, issuing an aggregate of 21,044,500 units at a price of $0.20 per unit for gross proceeds of $4,208,900. Each unit consisted of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $218,410, other share issuance costs of $15,723, and issued a total of 1,104,300 finders warrants valued at $191,724 (discount rate 0.76%, volatility 179.53%, expected life 2 years, dividend yield 0%), exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance.
F-10
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
7.
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
(contd
)
Private Placements
(contd
)
On January 24, 2017, the Company completed a non-brokered private placement, issuing an aggregate of 1,340,000 units at a price of $0.20 per unit for gross proceeds of $268,000. Each unit consisted of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $5,220 and issued a total of 26,100 finders warrants valued at $5,919 (discount rate 0.76%, volatility 175.85%, expected life 2 years, dividend yield 0%), exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance.
On February 6, 2017, the Company completed a non-brokered private placement, issuing an aggregate of 455,000 units at a price of $0.25 per unit for gross proceeds of $113,750. Each unit consisted of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $2,625 and issued a total of 10,500 finders warrants valued at $2,657 (discount rate 0.70%, volatility 175.86%, expected life 2 years, dividend yield 0%), exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance.
On May 5, 2017, the Company completed a non-brokered private placement, issuing an aggregate of 9,009,814 units at a price of $0.23 per unit for gross proceeds of $2,072,257. Each unit consisted of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $100,392 and issued a total of 436,488 finders warrants valued at $92,991 (discount rate 0.67%, volatility 170.28%, expected life 2 years, dividend yield 0%), exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance.
On September 26, 2017, the Company completed the first tranche of a non-brokered private placement, issuing an aggregate of 7,077,140 units at a price of $0.15 per unit for gross proceeds of $1,061,571. Each unit consisted of one share of common stock and one non-transferable share purchase warrant exercisable into one share of common stock at a price of $0.25 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $540 and issued a total of 3,600 finders warrants valued at $388 (discount rate 1.59%, volatility 150.97%, expected life 2 years, dividend yield 0%), exercisable into one share of common stock at a price of $0.25 for a period of two years from the date of issuance.
Stock Options
During the three month period ended October 31, 2017, the Company did not grant any stock options.
During the year ended July 31, 2017, the Company granted:
a)
a total of 2,729,142 stock options to the Companys CEO, exercisable at a weighted average price of $0.23 per share for a period of five years;
b)
500,000 incentive stock options to an investor relations consultant, each option exercisable into one share of common stock at a price of $0.33 until February 7, 2020.
c)
500,000 stock options to a director of the Company, exercisable at a price of $0.27 per share until April 3, 2022.
d)
900,000 stock options to two directors of the Company, exercisable at a price of $0.28 per share until April 20, 2020.
F-11
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
7.
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
(contd
)
Stock Options
(contd
)
The following incentive stock options were outstanding at October 31, 2017:
|
|
|
|
|
|
|
Number
of Shares
|
|
Exercise
Price
|
|
Expiry Date
|
|
|
|
|
|
|
|
1,100,000
|
$
|
0.15
|
|
March 22, 2021
|
|
586,600
|
|
0.20
|
|
August 8, 2021
|
|
2,142,542
|
|
0.24
|
|
December 27, 2021
|
|
500,000
|
|
0.33
|
|
February 7, 2020
|
|
500,000
|
|
0.27
|
|
April 3, 2022
|
|
900,000
|
|
0.28
|
|
April 30, 2020
|
|
5,729,142
|
|
0.24
|
|
|
|
|
|
|
|
|
Stock option transactions are summarized as follows:
|
|
|
|
Number of Options
|
Weighted Average Exercise Price
|
|
|
|
Balance, July 31, 2016
|
2,700,000
|
$ 0.15
|
Options granted
|
4,629,142
|
0.26
|
Options exercised
|
(400,000)
|
(0.15)
|
Options expired/forfeited
|
(1,200,000)
|
(0.15)
|
|
|
|
Balance outstanding and exercisable, July 31 and October 31, 2017
|
5,729,142
|
$ 0.24
|
Warrants
The following warrants were outstanding at October 31, 2017:
|
|
|
|
|
|
|
Number
of Warrants
|
|
Exercise
Price
|
|
Expiry Date
|
|
|
|
|
|
|
|
192,670
|
$
|
0.10
|
|
January 29, 2018
|
|
1,500,000
|
|
0.227
|
|
July 13, 2018
|
|
22,148,800
|
|
0.40
|
|
December 23, 2018
|
|
2,286,100
|
|
0.40
|
|
January 24, 2019
|
|
465,500
|
|
0.40
|
|
February 6, 2019
|
|
9,863,486
|
|
0.40
|
|
May 5, 2019
|
|
7,080,740
|
|
0.25
|
|
September 25, 2019
|
|
43,537,296
|
$
|
0.37
|
|
|
|
|
|
|
|
|
F-12
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
7.
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
(contd
)
Warrants
(contd
)
Warrant transactions are summarized as follows:
|
|
|
|
Number of Options
|
Weighted Average Exercise Price
|
|
|
|
Balance, July 31, 2016
|
1,964,750
|
$ 0.20
|
Warrants issued
|
34,346,702
|
0.40
|
Warrants exercised
|
(272,080)
|
(0.10)
|
|
|
|
Balance, July 31, 2017
|
36,039,372
|
$ 0.39
|
Warrants issued
|
7,497,924
|
0.26
|
|
|
|
Balance, October 31, 2017
|
43,537,296
|
$ 0.37
|
During the three month period ended October 31, 2017, the Company issued a total of 3,600 (2016 nil) finders warrants with a weighted average fair value of $0.11 (2016 - $nil) per warrant.
The following weighted average assumptions were used for the Black-Scholes option-pricing model valuation of finders warrants issued during the period:
|
|
|
|
2017
|
2016
|
|
|
|
Risk-free interest rate
|
1.59%
|
N/A
|
Expected life of warrants
|
2.0 years
|
N/A
|
Expected annualized volatility
|
150.97%
|
N/A
|
Dividend
|
Nil
|
N/A
|
Forfeiture rate
|
0%
|
N/A
|
Share-Based Payments
The Company has a stock option plan under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan the exercise price of each option equals the market price of the Companys stock, less any applicable discount, as calculated on the date of grant. The options can be granted for a maximum term of 5 years with vesting determined by the board of directors.
During the three month period ended October 31, 2017, the Company granted nil (2016 - 586,600) stock options with a weighted average fair value of $nil (2016 - $0.18) per share, recognizing share-based payments expense of $nil (2016 - $106,096).
F-13
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED OCTOBER 31, 2017
(Expressed in Canadian Dollars)
(Unaudited)
7.
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
(contd
)
Share-Based Payments
(contd
)
The following weighted average assumptions were used for the Black-Scholes option-pricing model valuation of stock options granted during the period:
|
|
|
|
2017
|
2016
|
|
|
|
Risk-free interest rate
|
N/A
|
0.54%
|
Expected life of options
|
N/A
|
5.00 years
|
Expected annualized volatility
|
N/A
|
148.45%
|
Dividend
|
N/A
|
-
|
Forfeiture rate
|
N/A
|
-
|
8.
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
During the three month period ended October 31, 2017, the Company:
a)
Issued 3,600 finders warrants valued at $388 (Note 7);
b)
Issued 417,184 units, each unit comprised of one share of common stock and one share purchase warrant, valued at $95,952, pursuant to a debt conversion in relation to finders fees payable on the private placement which closed on May 5, 2017 (Note 7); and
c)
Accrued $1,600 in share issuance costs through accounts payable and accrued liabilities.
During the three month period ended October 31, 2016, the Company accrued $2,664 in share issuance costs through accounts payable and accrued liabilities.
9.
SEGMENTED INFORMATION
The Company has two reportable segments, being the acquisition of exploration and evaluation assets located in British Columbia, Canada, and California, United States.
10.
SUBSEQUENT EVENT
Subsequent to October 31, 2017, the Company received $97,500 in advance subscriptions for a potential financing.
F-14