NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States 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 January 29, 2016, the Company completed an initial public offering in Canada and began trading on the Canadian Securities Exchange (“CSE”) under trading symbol “RISE.CN” on February 1, 2016.
On September 18, 2020, the Company increased its authorized capital from 40,000,000 shares to 400,000,000 shares.
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 $657,552 for the six-month period ended January 31, 2021 and has accumulated a deficit of $18,598,151. The ability of the Company to continue as a going concern is dependent on the Company’s ability to maintain continued support from its shareholders and creditors and to raise additional capital and implement its business plan. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. However, management believes that the Company has sufficient working capital to meet its projected minimum financial obligations for the next fiscal year. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Furthermore, the novel coronavirus outbreak (“COVID-19”) was declared a pandemic by the World Health Organization in 2020. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the Company’s business are not known at this time. These impacts could include an impact on the Company’s ability to obtain debt and equity financing to fund ongoing exploration activities as well as its ability to explore and conduct business. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.
At January 31, 2021, the Company had working capital of $2,215,282 (July 31, 2020 - $3,267,744).
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 Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis, for the year ended July 31, 2020. 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. The operating results for the six months ended January 31, 2021 are not necessarily indicative of the results that may be expected for the year ended July 31, 2021.
F-5
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
2.BASIS OF PREPARATION (continued)
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.
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. Intercompany transactions, balances and unrealized gains or losses on transactions are eliminated upon consolidation.
Functional and reporting currency
The Company changed its functional currency from Canadian dollars to United States dollars as at August 1, 2019. The change in functional currency from Canadian dollars to United States dollars is accounted for prospectively from August 1, 2019. Management determined that the Company’s functional currency had changed based on the assessment related to significant changes of the Company’s economic facts and circumstances. These significant changes included the fact that the Company’s equity and debt financings as well as the majority of the Company’s expenses are now primarily denominated in US dollars. Moreover, the Company’s place of business and management are now located in the United States.
In addition, beginning August 1, 2019, the Company also changed its reporting currency from Canadian dollars to United States dollars to provide greater clarity to users of the financial statements. The change in reporting currency was applied retrospectively effective beginning August 1, 2019. Financial statements for all periods presented have been recast into United States dollars.
All monetary assets and liabilities denominated in foreign currencies are translated into United States dollars using exchange rates in effect as of the date of the balance sheet date. The United States dollar translated amounts of nonmonetary assets and liabilities as of August 1, 2019 became the historical accounting basis for those assets and liabilities as of August 1, 2019. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. All resulting exchange differences were recognized within currency translation adjustment, a separate component of shareholders’ equity.
In applying the change in reporting currency, the Company applied the current rate method for presenting the comparative period presented. Under this method, all assets and liabilities of the Company’s operations were translated from their Canadian dollar functional currency into United States dollars using the exchange rates in effect on the balance sheet date, and shareholders’ equity were translated at the historical rates. Opening shareholders’ equity at August 1, 2017 has been translated at the historic rate on that date and any other movements in shareholders’ equity during the period from August 1, 2017 to July 31 2019 were translated using the appropriate historical rates at the date of the respective transaction. All other revenues, expenses and cash flows were translated at the average rates during the reporting periods presented. The resulting translation adjustments are reported under comprehensive income as a separate component of shareholders’ equity.
F-6
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
2.BASIS OF PREPARATION (continued)
Derivatives
Derivatives are initially recognized at the fair value on the date the derivative contract is entered into and transaction costs are expensed. The Company’s derivatives are subsequently re-measured at their fair value at each balance sheet date with changes in fair value recognized in profit or loss. As the exercise price of the Company’s warrants are in Canadian Dollars, and the functional currency of the Company is the United States Dollar, these warrants are considered a derivative as a variable amount of cash in the Company’s functional currency will be received upon exercise.
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.
3.PREPAID EXPENSES
F-7
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
4.MINERAL PROPERTY INTERESTS
The Company’s mineral properties balance consists of:
|
|
|
Idaho-Maryland, California
|
|
|
|
|
July 31, 2020 and January 31, 2021
|
|
|
$ 4,149,053
|
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 January 31, 2021, the Company holds title to the Idaho-Maryland Gold Mine Property.
As of January 31, 2021, based on management’s review of the carrying value of mineral rights, management determined that there is no evidence that the cost of these acquired mineral rights will not be fully recovered and accordingly, the Company determined that no adjustment to the carrying value of mineral rights was required. As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition and exploration costs.
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 required to pay $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 $25,000, which was credited against the purchase price of $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 $25,000, which was also credited against the purchase price of $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 the net amount owing of $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 $140,000 equal to 7 per cent of the purchase price of $2,000,000; the commission was settled on January 25, 2017 through the issuance of 92,000 units valued at C$2.00 per unit. 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 C$4.00 for a period of two years from the date of issuance. On January 24, 2019, these warrants expired unexercised. The Company also incurred additional transaction costs of $109,053, which have been included in the carrying value of the Idaho-Maryland Gold Mine.
F-8
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
4.MINERAL PROPERTY INTERESTS (continued)
Idaho-Maryland Gold Mine Property, California (continued)
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 required to pay $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 $100,000, which was credited against the purchase price of $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 $200,000, at which time a payment of $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 $300,000, at which time a payment of $1,300,000 was due in order to exercise the option.
On May 14, 2018, the Company completed the purchase of the surface rights totalling approximately 82 acres by making the final payment of $1,300,000.
As at January 31, 2021, the Company has incurred cumulative exploration expenditures of $6,767,736 on the Idaho-Maryland Gold Mine property as follows:
|
Six months ended
January 31, 2021
|
Year ended
July 31, 2020
|
|
|
|
Idaho-Maryland Gold Mine expenditures:
|
|
|
Opening balance
|
$ 6,387,402
|
$ 4,750,611
|
|
|
|
Consulting
|
247,021
|
1,472,374
|
Depreciation
|
12,612
|
22,986
|
Engineering
|
7,355
|
32,543
|
Exploration
|
61,398
|
(117,792)
|
Logistics
|
4,264
|
32,157
|
Rent
|
47,502
|
71,363
|
Supplies
|
-
|
11,007
|
Sampling
|
182
|
112,153
|
Total expenditures for the period
|
380,334
|
1,636,791
|
|
|
|
Closing balance
|
$ 6,767,736
|
$ 6,387,402
|
F-9
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
5.EQUIPMENT
6.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.
7.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 $67,500 (2020 - $67,500) to the CEO of the Company.
b)Directors fees of $40,000 (2020 - $44,500) to directors of the Company.
c)During the period ended January 31, 2021, the Company paid $68,992 (2020 - $68,187) in professional and consulting fees to a company controlled by a director of the Company.
d)Share-based compensation of $560,792 (2020 - $326,393) for options granted during the six-month period ended January 31, 2021.
e)As at January 31, 2021 and July 31, 2020, $20,000 and $79,479 were owed to related parties, respectively.
F-10
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
8.LOAN PAYABLE
On September 3, 2019, the Company completed a debt financing with Eridanus Capital LLC (the “Lender”) for $1,000,000 (the “Loan”). The Loan has a term of 4 years and an annual interest rate of 10% for the first two years increasing to 20% in year 3 and to 25% in year 4. Interest will accrue and be paid along with the principal upon the maturity date. The Lender received 1,150,000 bonus share purchase warrants as additional consideration for advancing the Loan. The fair value of these warrants was calculated to be $444,942 which was netted against the loan payable balance along with $15,000 paid to the lender for a total of $459,942 in issuance costs. Each warrant entitles the holder to acquire one share of common stock at an exercise price of $0.80 (C$1.00) for a period of three years from the date of issuance. The Loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. In addition, if total interest payments are less than $200,000, the difference will be paid to the Lender as prepayment compensation. The Loan is secured against the assets of the Company and its subsidiary and will be used for permitting, engineering and working capital at the Company’s Idaho Maryland Gold Project.
F-11
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
9.DERIVATIVE LIABILITY
The exercise price of the Company’s share purchase warrants is fixed in Canadian dollars and the functional currency of the Company is the USD. These warrants are considered to be a derivative as a variable amount of cash in the Company’s functional currency will be received on exercise of the warrants. Accordingly, the share purchase warrants issued as part of past financings, are classified and accounted for as a derivative liability.
The following table shows a continuity of the Company’s derivative liability:
For the six-month period ended January 31, 2021, the Company recorded a total gain on fair value of derivative liability of $1,333,140 during the period (January 31, 2020 – loss of $2,076,663).
The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants as at January 31, 2021 and July 31, 2020:
|
January 31, 2021
|
July 31, 2020
|
|
|
|
Risk-free interest rate
|
1.52%
|
1.52%
|
Expected life of warrants
|
0.08 to 1.64 years
|
0.46 to 2.05 years
|
Expected annualized volatility
|
84.6% to 116.0%
|
92.6% to 117.0%
|
Dividend
|
Nil
|
Nil
|
Forfeiture rate
|
0%
|
0%
|
F-12
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
10.CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
Private Placements
On July 3, 2019, the Company completed the first tranche of a non-brokered private placement. The Company raised a total of $552,000 (C$725,769) through the sale of 1,036,813 units at a price of $0.50 (C$0.70) per unit where each unit consists of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one additional share at an exercise price of $0.80 (C$1.00) until July 3, 2022.
On August 19, 2019, the Company completed the second tranche of a non-brokered private placement for a total of $2,412,281 (C$3,207,850) through the sale of 4,582,644 units at a price of $0.53 (C$0.70) per unit where each unit consists of one share of common stock and one-half of one share purchase warrant. Each whole warrant is exercisable into one share of common stock at a price of $0.80 (C$1.00) until August 19, 2022. The Company has paid finders’ fees and associated legal fees of $8,710, and issued a total of 11,196 finder’s warrants valued at $4,990 (Note 11), entitling the holder to acquire one share at a price of $0.80 (C$1.00) until August 19, 2022.
On July 31, 2020, the Company completed a non-brokered private placement for a total of $3,272,875 through the issuance of 4,363,833 units at a price of $0.75 per Unit (C$1.02 per Unit), with each Unit comprising of one share of common stock (a “Share”) and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one Share at an exercise price of $1.00 until July 31, 2022. The Company paid a total of $40,414 in finders fees and issued a total of 43,435 finders warrants with a fair value of $15,500, where each finder’s warrant entitles the holder to acquire one Share at a price of $1.00 until July 31, 2022. The following weighted average assumptions were used for the Black-Scholes pricing model valuation of these warrants: Risk-free interest rate – 1.52%; expected volatility – 115.42%; share price of C$0.86 and strike price – C$1.02; expected life of warrants – 2 years.
To accommodate the lack of authorized capital to facilitate the closing of the private placement, the Company’s President and CEO surrendered 1,097,298 stock options priced between C$0.70 and C$2.40 per share.
On September 23, 2020, the Company completed a non-brokered private placement for a total of $250,000 through the issuance of 333,333 units at a price of $0.75 per Unit (C$1.02 per Unit), with each Unit comprising one share of common stock and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one Share at an exercise price of $1.00 (C$1.36) until September 21, 2022. The Company has paid associated legal fees of $1,802 in connection with this financing.
F-13
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
10.CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (continued)
Stock Options
During the year ended July 31, 2020, the Company granted a total of 826,284 stock options with a fair value of $357,271 to employees, officers, directors, and consultants of the Company, exercisable at a weighted average price of C$0.68 per share for a period of five years.
On September 22, 2020, the Company granted a total of 1,338,500 stock options to the Company’s President and CEO, Benjamin Mossman. The stock options are exercisable at a price of $0.90 (C$1.20) per share until September 22, 2025. The company recorded share-based compensation of $560,792 in connection with this grant.
The following incentive stock options were outstanding and exercisable as at January 31, 2021:
|
Number
of Options
|
|
Weighted Average Exercise
Price (C$)
|
|
Expiry Date
|
|
|
|
|
|
|
|
110,000
|
$
|
1.50
|
|
March 22, 2021
|
|
75,000
|
|
0.50
|
|
March 17, 2023
|
|
350,000
|
|
1.20
|
|
April 19, 2023
|
|
180,000
|
|
1.00
|
|
November 30, 2023
|
|
290,000
|
|
0.70
|
|
August 21, 2024
|
|
1,338,500
|
|
1.20
|
|
September 22, 2025
|
|
2,343,500
|
$
|
1.11
|
|
|
As at January 31, 2021, the aggregate intrinsic value of the Company’s stock options is $14,250 (July 31, 2020 – $73,400).
Stock option transactions are summarized as follows:
Share-Based Payments
The Company has a stock option plan under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan the exercise price of each option equals the market price of the Company’s stock, less any applicable discount, as calculated on the date of grant. The options can be granted for a maximum term of 5 years with vesting determined by the board of directors.
F-14
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
10.CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (continued)
The following weighted average assumptions were used for the Black-Scholes pricing model valuation of stock options issued during the period ended January 31, 2021 and year ended July 31, 2020:
|
January 31, 2021
|
July 31, 2020
|
|
|
|
Risk-free interest rate
|
1.52%
|
1.52%
|
Expected life of options
|
5 years
|
3-5 years
|
Expected annualized volatility
|
119.09%
|
117.21% - 123.27%
|
Dividend
|
Nil
|
Nil
|
Forfeiture rate
|
0%
|
0%
|
Warrants
The following warrants were outstanding at January 31, 2021:
|
Number
of Warrants
|
|
Exercise
Price (C$)
|
|
Expiry Date
|
|
|
|
|
|
|
|
3,516,100
|
|
$ 1.50
|
|
April 18, 2021
|
|
288,125
|
|
1.20
|
|
August 31, 2021
|
|
200,313
|
|
1.20
|
|
September 17, 2021
|
|
933,686
|
|
1.30
|
|
March 1, 2021
|
|
518,407
|
|
1.00
|
|
July 3, 2022
|
|
2,302,517
|
|
1.00
|
|
August 19, 2022
|
|
1,150,000
|
|
1.00
|
|
September 3, 2022
|
|
2,225,352
|
|
1.36
|
|
July 31, 2022
|
|
166,666
|
|
1.36
|
|
September 21, 2022
|
|
11,301,166
|
|
$ 1.27
|
|
|
|
|
|
|
|
|
During the period ended January 31, 2021, a total of 1,337,500 warrants with an exercise price of C$1.30 expired unexercised.
Warrant transactions are summarized as follows:
F-15
RISE GOLD CORP.
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2021
(Expressed in United States Dollars)
(Unaudited)
11.SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
During the six-month periods ended January 31, 2021 and 2020, the Company had the following non-cash financing and investing activities:
For the period ended January 31, 2021:
a)The Company accrued $58,702 of interest expense as part of the outstanding balance of loan payable.
For the period ended January 31, 2020:
b)Company accrued $42,441 of interest expense as part of the outstanding balance of loan payable.
c)The Company issued a total of 11,196 finder’s warrants entitling the holder to acquire one share at a price of
$1.00 until August 19, 2022 with a fair value of $4,990. The following weighted average assumptions were used for the Black-Scholes pricing model valuation of these warrants: Risk-free interest rate – 1.52%; expected volatility – 123.27%; share price and strike price - C$1.00; expected life of warrants – 3 years.
12.SEGMENTED INFORMATION
A reporting segment is defined as a component of the Company that:
-Engages in business activities from which it may earn revenues and incur expenses;
-Operating results are reviewed regularly by the entity’s chief operating decision maker; and
-Discrete financial information is available.
The Company has determined that it operates its business in one geographical segment located in California, United States, where all of its equipment and mineral property interests are located.
F-16