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FireFox Gold Corp. — Interim / Quarterly Report 2021
Aug 31, 2021
47468_rns_2021-08-30_37348669-2581-4fad-b821-2e1095c2a9dd.pdf
Interim / Quarterly Report
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FireFox Gold Corp. Condensed Interim Consolidated Financial Statements For the six months ended June 30, 2021 and 2020 (Expressed in Canadian dollars)
Notice of No Auditor Review
These unaudited condensed interim financial statements have not been reviewed by the auditors of the Corporation. This notice is being provided in accordance with Section 4.3 (3) (a) of National Instrument 51-102 - Continuous Disclosure Obligations.
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The accompanying unaudited condensed interim financial statements of FireFox Gold Corp. are the responsibility of the Company’s management and are prepared in accordance with International Financial Reporting Standards and reflect management’s best estimates and judgment based on information currently available.
Management has developed and maintains a system of internal controls to ensure that the Company’s assets are safeguarded, transactions are authorized and properly recorded, and financial information is reliable.
The Board of Directors is responsible for ensuring management fulfills its responsibilities for financial reporting and internal controls through an audit committee, which is comprised primarily of non-management directors. The Audit Committee reviews the financial statements prior to their submission to the Board of Directors for approval.
“Carl Löfberg”
“Janice E. Craig”
Carl Löfberg Chief Executive Officer
Janice E. Craig Chief Financial Officer
Vancouver, British Columbia August 27, 2021
2
FireFox Gold Corp.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - Expressed in Canadian Dollars)
| Note | June 30 | December 31 | |||
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| ASSETS | |||||
| Current assets | |||||
| Cash | $ | 3,206,103 |
$ | 2,042,510 |
|
| Amounts receivable | 37,326 | 40,324 | |||
| Prepaid expenses | 233,038 | 89,242 | |||
| 3,476,467 | 2,172,076 | ||||
| Mineralproperties | 4 | 1,092,297 | 992,297 | ||
| $ | 4,568,764 | $ | 3,164,373 | ||
| LIABILITIES | |||||
| Current liabilities | |||||
| Accounts payable | $ | 75,713 |
$ | 75,260 |
|
| Due to related parties | 6 | 52,897 | 25,013 | ||
| Accrued liabilities | 76,745 | 62,175 | |||
| 205,355 | 162,448 | ||||
| SHAREHOLDERS' EQUITY | |||||
| Capital stock | 5 | 12,234,443 | 9,182,791 | ||
| Contributed Surplus | 5 | 1,897,324 | 1,840,984 | ||
| Subscriptions Receivable | 5 | 238,200 | - | ||
| Deficit | (10,006,558) | (8,021,850) | |||
| 4,363,409 | 3,001,925 | ||||
| $ | 4,568,764 | $ | 3,164,373 |
Nature of operations and going concern (Note 1)
Subsequent events (Note 7)
These unaudited condensed interim financial statements were approved for issue by the Board of Directors on August 27, 2021 and are signed on its behalf by:
“Carl Löfberg” , Director “Patrick Highsmith” , Director
3
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Unaudited - expressed in Canadian Dollars)
| Note 2021 2020 2021 2020 For the three months ended June 30 For the six months ended June 30 |
Note 2021 2020 2021 2020 For the three months ended June 30 For the six months ended June 30 |
Note 2021 2020 2021 2020 For the three months ended June 30 For the six months ended June 30 |
Note 2021 2020 2021 2020 For the three months ended June 30 For the six months ended June 30 |
Note 2021 2020 2021 2020 For the three months ended June 30 For the six months ended June 30 |
Note 2021 2020 2021 2020 For the three months ended June 30 For the six months ended June 30 |
|---|---|---|---|---|---|
| EXPENSES Mineral property exploration 4 $ 929,459 $ 107,502 $ 1,370,596 $ 115,412 Audit and tax compliance 5,000 4,207 10,000 8,707 Filing and listing fees 33,099 5,846 60,821 9,949 Legal 2,948 197 5,217 301 Marketing 18,348 54,456 - Office costs 31,520 942 75,011 10,370 Personnel 6 117,809 134,902 294,205 206,356 Regulatory fees 1,510 4,373 1,510 4,373 Travel and meals - 23,310 10,731 24,534 Share based payments - - 18,780 - Shareholder communications 30,524 23,615 78,676 52,728 Foreign exchange loss (gain) (38) 4,369 6,245 5,130 |
|||||
| Other income | (1,059) | (1,540) | |||
| 1,169,120 $ 309,263 $ 1,984,708 $ 437,860 $ Net and comprehensive loss for theperiod |
|||||
| Basic and diluted lossper share (0.01) $ (0.01) $ (0.02) $ (0.01) $ |
|||||
| 93,790,178 48,129,407 87,752,960 45,672,319 Weighted average number of shares outstanding |
4
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited – expressed in Canadian Dollars)
| Number of Shares Share Capital |
Contributed Surplus Subscriptions Receivable |
Deficit Total Shareholders' Deficiency |
|
|---|---|---|---|
| Balance at December 31, 2019 | 43,215,231 5,348,641 |
855,724 $ $ |
5,228,900 - 975,465 |
| Private placements Share issuance costs Warrants exercised Share-based compensation Net loss and comprehensive loss for theperiod |
37,538,300 4,079,578 333,428 - 750,000 88,000 - - - - |
345,416 142,637 - 497,207 |
- 4,424,994 - 190,791 - - 88,000 - 497,207 2,792,950 - 2,792,950 - |
| Balance at December 31, 2020 | 81,503,531 9,182,791 |
1,840,984 $ $ |
8,021,850 - 3,001,925 |
| Private placements Share issuance costs Warrants exercised Share-based compensation Net loss and comprehensive loss for theperiod |
15,343,332 2,761,800 78,048 - 2,936,000 367,900 - - - - |
238,200 - 56,341 - |
3,000,000 78,048 - - 367,900 - 56,341 1,984,708 - 1,984,708 - |
| Balance at June 30, 2021 | 99,782,863 12,234,443 |
1,897,325 $ 238,200 - $ |
10,006,558 - 4,363,409 |
5
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited - expressed in Canadian Dollars)
| For the six months ended | For the six months ended | For the six months ended | |||
|---|---|---|---|---|---|
| June 30 | |||||
| Note | 2021 | 2020 | |||
| Operating activities | |||||
| Loss for the period | $ | (1,984,708) |
$ | (437,860) |
|
| Non-cash items | |||||
| Share-based payments | 4,5 | 56,340 | - | ||
| Change in non-cash working capital: | |||||
| Amounts receivable | 2,998 | (8,846) | |||
| Prepaid expenses | (143,796) | (158,949) | |||
| Accounts payable | 453 | 188,239 | |||
| Due to related parties | 6 | 27,884 | 22,303 | ||
| Accrued liabilities | 14,570 | (11,293) | |||
| Net cash used in operatingactivities | (2,026,259) | (406,406) | |||
| Investing activities | |||||
| Mineralpropertyacquisition | 4 | (100,000) | - | ||
| Net cashprovided by (used in)investingactivities | (100,000) | - | |||
| Financing activities | |||||
| Private placement, net of share issuance costs | 2,683,752 | 1,310,752 | |||
| Subscriptions received in advance | 238,200 | 407,500 | |||
| Warrants exercised | 5 | 367,900 | - | ||
| Net cashprovided byfinancingactivities | 3,289,852 | 1,718,252 | |||
| Change in cash during the period | 1,163,593 | 1,311,846 | |||
| Cash, beginning of theperiod | 2,042,510 | 240,020 | |||
| Cash, end of theperiod | $ | 3,206,103 | $ | 1,551,866 | |
| SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | |||||
| Non-cash transactions and other supplemental disclosures: | |||||
| Interest paid | $ | - |
$ | - |
|
| Finder Warrants | $ | - |
$ | 3,213 |
|
| Unit warrants | $ | - |
$ | 107,250 |
|
| Income taxespaid | $ | - | $ | - |
6
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020 (Unaudited - Expressed in Canadian dollars)
1 . Nature of operations and going concern
FireFox Gold Corp. (the “Company” or “FireFox”) was incorporated under the Business Corporations Act (British Columbia) on June 16, 2017. The Company’s registered place of business is located at 650 - 1021 West Hastings Street, Vancouver, British Columbia, V6E 0C3, Canada. The Company is in the exploration stage with respect to its mineral property interests, and its primary activity is exploring for economic gold mineralization in Finland.
The unaudited condensed interim financial statements were prepared on a going concern basis with the assumption that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has working capital surplus of $ $3,271,112 (December 31, 2020 – surplus of $2,009,628). Management believes that the Company has adequate resources to maintain core operations and planned exploration programs over the next twelve months, however, the Company recognizes that operations and exploration expenditures may change, and additional financing may be required. While the Company has been successful in obtaining funding in the past through the issuance of additional equity, there is no assurance that such funding will be available in the future.
The Company is dependent upon its ability to finance its operations and exploration programs through financing activities that may include issuances of additional debt or equity securities. The recoverability of the carrying value of exploration projects and, ultimately, the Company’s ability to continue as a going concern, is dependent upon the existence and economic recovery of reserves, the ability to raise financing to complete the exploration and development of the properties, and upon future profitable production or, alternatively, upon the Company’s ability to dispose of its interest on an advantageous basis, all of which are uncertain. The financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations.
On March 11, 2020, the World Health Organization declared CoVID-19 a pandemic. In mid-March 2020, federal, regional, and local authorities in Canada, the United States, and other nations began to significantly restrict the ability of people to leave their homes and carry out normal day-to-day activities. These measures will have a significant, negative effect on the economy of all nations for an uncertain period of time. The duration and impact of CoVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods.
2 . Summary of Significant accounting policies
Basis of compliance
These unaudited condensed interim financial statements have been prepared in accordance International Accounting Standard (“IAS”) 34 Interim Financial Reporting, are in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and they are consistent with interpretations of the IFRS Interpretations Committee (“IFRIC”). The accounting policies adopted in these unaudited condensed interim financial statements are based on IFRS’s in effect at June 30, 2021. The disclosures which follow do not include all disclosures required for the annual financial statements. These unaudited condensed interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereon for the period ended December 31, 2020 and the unaudited condensed financial statements for the quarter ended June 30, 2020.
7
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
2. Summary of significant accounting policies (continued)
Basis of measurement
These unaudited condensed interim financial statements have been prepared on the historical cost basis. In addition, these unaudited condensed interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
Details of the group
In addition to the Company, the unaudited condensed interim financial statements include a subsidiary. Subsidiaries are corporations over which the Company is able, directly or indirectly, to control financial and operating policies, which is authority usually connected with holding majority voting rights. Subsidiaries are fully consolidated from the date on which control is acquired by the Company and are de-consolidated from the date that control by the Company ceases. Inter-company transactions and balances are eliminated upon consolidation.
As at June 30, 2021, the Company has one subsidiary, FireFox Gold Oy.
Significant accounting estimates and judgments
The preparation of these unaudited condensed interim financial statements require management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the unaudited condensed interim financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates and judgments, which, by their nature, are uncertain. The impact of estimates and judgments is pervasive throughout the unaudited condensed interim financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates, or changes to judgments, are recognized in the period in which the estimate is revised and may affect both the period of revision and future periods.
3. Risk management and financial Instruments
Financial instruments are agreements between two parties that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Categories of financial assets and financial liabilities
The carrying values of the Company’s financial instruments are classified into the following categories:
| Financial | June 30 | December 31 | |||
|---|---|---|---|---|---|
| instrument | Category | 2021 | 2020 | ||
| Cash | FVTPL | $ | 3,206,103 | $ | 2,042,510 |
| Accounts receivable | Amortized cost | $ | 9,554 | $ | - |
| Accounts payable and accrued liabilities | Amortized cost | $ | 152,458 | $ | 137,435 |
| Due to relatedparties | Amortized cost | $ | 52,897 | $ | 25,013 |
The carrying values of these instruments approximate their fair values due to their short term to maturity.
8
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
3. Risk management and financial Instruments (continued)
The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below:
Credit risk
Credit losses are measured using a present value and probability-weighted model that considers all reasonable and supportable information available without undue cost or effort along with the information available concerning past defaults, current conditions and forecasts at the reporting date. IFRS 9 requires the recognition of 12 month expected credit losses (the portion of lifetime expected credit losses from default events that are expected within 12 months of the reporting date) if credit risk has not significantly increased since initial recognition (stage 1), and lifetime expected credit losses for financial instruments for which the credit risk has increased significantly since initial recognition (stage 2) or which are credit impaired (stage 3). There are no expected credit losses with respect to the Company’s financial instruments held at amortized cost.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk consists of interest rate risk, foreign currency risk and other price risk. As at June 30, 2021, the Company is not exposed to significant market risk.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company’s approach to managing liquidity risk is to attempt to ensure that it will have sufficient cash or credit available to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities, and by maintaining its lending arrangement with a related party. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments.
All of the liabilities presented as accounts payable and accrued liabilities are due within 90 days of June 30, 2021.
4. Mineral properties
Riikonkoski (East and West), Jeesiö (including Jeesiö West) and Ylöjӓrvi (including Oks)
On August 1, 2017, the Company entered an option agreement with Magnus Minerals Ltd. (“Magnus”), a company incorporated under the laws of Finland, whereby Magnus granted FireFox an exclusive right and option to earn and acquire a 100% interest in each of the Riikonkoski (East and West), Jeesiö (including Jeesiö West) and Ylöjӓrvi (including Oks) projects (the “RJY Properties”), which are located in Finland and were, at the time, owned by Magnus (the “RJY Option Agreement”). Since originally entering into the option agreement, certain extensions have been formally granted by Magnus to commitment dates under the RJY Option Agreement.
-
Pursuant to the RJY Option Agreement, FireFox has completed the following commitments:
-
(i) issued 6,000,000 common shares to Magnus
-
(ii) incurred $2,959,987 in exploration expenditures on the RJY Properties, and
-
(iii) made cash payments to Magnus totaling $250,000
9
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020 (Unaudited - Expressed in Canadian dollars)
4. Mineral properties (continued)
On January 26, 2021 FireFox Gold Corp. completed its earn-in requirements with prepayment of the final $100,000 outstanding and exercised the option for a 100% interest in the Jeesiö Gold Project in Lapland, Finland. There are no further commitments to be satisfied under the RJY Option Agreement.
The RJY Option Agreement also provides that upon FireFox exercising the Option, FireFox will be obligated to pay Magnus an additional payment, equal to the value of 1,000 troy ounces of gold, within 12 months of the commencement of commercial production. In addition, under the RJY Option Agreement, FireFox granted Magnus a 1.5% net smelter return royalty (“NSR”), which may be reduced to 1% by the payment to Magnus of the value of 1,000 troy ounces of gold within 90 days of publishing a positive feasibility study. Pursuant to the RJY Option Agreement, Magnus has agreed to provide mineral exploration services to FireFox. Magnus is a related party (Note 6).
(a) Mustajärvi Project
On December 14, 2017, the Company entered into an agreement whereby it paid a total of €30,000 and issued 400,000 common shares (Note 7(b)) to a Finnish junior exploration company, Aurora Exploration Oy (“Aurora”), to acquire a 100% interest in the Mustajärvi Project. Aurora retains a 1% Net Smelter Royalty (“NSR”) on all metals sold from the Mustajärvi Project, 50% of which can be repurchased by FireFox for USD $500,000. The repurchase right is exercisable at any point within 180 days of the Company’s receipt of a positive feasibility study for the Mustajärvi Project.
In addition, the Company has staked additional ground consisting of four exploration reservations, partially adjoining the optioned Mustajärvi property.
(b) Seuru Properties
On August 21, 2019, the Company entered an option agreement with Magnus (the “Seuru Option Agreement”) to acquire a 100% interest in approximately 46,039 hectares of mineral exploration reservations in the Central Lapland Greenstone Belt of northern Finland. The new properties were comprised of four separate reservations, collectively referred to as the Seuru Properties. Since originally entering into the option agreement, certain extensions have been formally granted by Magnus to commitment dates under the Seuru Option Agreement. Magnus will retain a 1.5% NSR royalty on production from the Seuru Properties, 0.5% of which can be purchased for 1,000 troy ounces of gold. Magnus is a related party (Note 5).
-
Pursuant to the Seuru Option Agreement, FireFox has completed the following commitments: (i) issued 1,500,000 shares,
-
(ii) made cash payments to Magnus totalling $150,000, and
-
(iii) incurred $380,887 in mineral exploration on the Seuru Properties
The following commitments remain to be satisfied under the Seuru Option Agreement:
-
(i) making a cash payment to Magnus of $50,000 by October 5, 2022
-
(ii) incurring a further $1,119,113 in mineral exploration on the Seuru Properties, as follows: a. $119,113 by December 31, 2021
-
b. $1,000,000 by April 30, 2022
10
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
4. Mineral properties (continued)
Mineral Properties (Assets)
| RJY Mustajärvi Seuru |
Total |
|---|---|
| Total at December 31,2020 $150,773$ 166,524 $675,000$ |
992,297 |
| Optionpayments 100,000 - |
100,000 |
| Total at June 30,2021 $250,773$ 166,524 $675,000$ |
1,092,297 |
Mineral property exploration (expenses)
The Company incurred the following mineral property exploration expenses for the six-month periods ended June 30, 2020, and June 30, 2021:
Q2 2021
| June 30, 2020 | RJY | Mustajärvi | Seuru | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Assays | $ | 1,242 |
$ | 3,281 |
$ | - |
$ | 4,523 |
| Equipment rental | 4,640 | 4,639 | 2,320 | $ | 11,599 |
|||
| Geology | 38,450 | 45,333 | - | $ | 83,783 |
|||
| Rent | 1,611 | 5,976 | - | $ | 7,587 |
|||
| Permits | - | 6,106 | - | $ | 6,106 |
|||
| Travel | 1,172 | 642 | $ | 1,814 | ||||
| Total June 30,2020 | $ | 47,115 | $ | 65,977 | $ | 2,320 | $ | 115,412 |
| June 30, 2021 | RJY | Mustajärvi | Seuru | Total | ||||
| Assays | $ | 18,736 |
$ | 86,117 |
$ | - |
$ | 104,853 |
| Drilling | 269,055 | 436,228 | - | $ | 705,283 |
|||
| Equipment rental | 3,231 | 11,006 | 4,970 | $ | 19,208 |
|||
| Geology | 96,074 | 260,959 | 28,287 | $ | 385,320 |
|||
| Other | 3,263 | 12,885 | 1,183 | $ | 17,330 |
|||
| Rent | 31,951 | 14,081 | 1,134 | $ | 47,166 |
|||
| Stock Based Compensation | 11,535 | 22,843 | 3,181 | $ | 37,560 |
|||
| Travel | 24,749 | 20,700 | 8,427 | $ | 53,876 | |||
| Total June 30,2021 | $ | 458,594 | $ | 864,820 | $ | 47,182 | $ | 1,370,596 |
11
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
5. Share capital
(a) Authorized
The Company’s authorized share capital consists of an unlimited number of common shares without par value.
(b) Equity financings
On April 23, 2020, the Company completed a non-brokered private placement, raising total gross proceeds of $281,500 by issuing 5,360,000 units of the Company at a purchase price of $0.05 per Unit. Each Unit consists of one common share of the Company and one whole common share purchase warrant, with each warrant being exercisable to acquire one additional common share of the Company at an exercise price of $0.08 per share for a term of two years following the closing of the private placement. The company incurred $1,350 in finder’s fees payable to qualified finders in association with the financing.
On June 24, 2020, the Company completed the first tranche of a private placement by issuing 10,725,000 units of the Company at a price of $0.10 per Unit for gross proceeds of $1,072,500. Each Unit consists of one common share of the Company and one half of one common share purchase warrant, with each whole warrant being exercisable to acquire one additional common share of the Company at an exercise price of $0.12 per share for a term of two years from the date of issuance. In relation to this tranche of the private placement, the Company paid cash share issuance costs of $4,522, finders’ fees of $34,475, and issued 344,750 broker warrants as finder’s fees. The broker warrants are exercisable at $0.10 for two years from the date of issuance. Of the 344,750 broker warrants, 297,500 were issued on July 2, 2020. The broker warrants have a total fair value of $39,438, with $36,225 pertaining to the 297,500 warrants issued on July 2, 2020.
The second tranche of the private placement closed on July 2, 2020, by issuing 9,275,000 units of the Company at a price of $0.10 per Unit. Each Unit consists of one common share of the Company and one half of one common share purchase warrant, with each whole warrant being exercisable to acquire one additional common share of the Company at an exercise price of $0.12 per share for a term of two years from the date of issuance. In association with this tranche of the financing, the Company paid cash share issuance costs of $1,913, finders’ fees of $62,825, and issued 925,750 finder’s warrants exercisable at $0.10 for two years from the date of issuance, 297,500 of which pertained to the first tranche of the private placement. The finder’s warrants pertaining to the second tranche of the private placement have a fair value of $65,268.
On October 28, 2020, the Company completed a non-brokered private placement. The private placement was oversubscribed, raising total gross proceeds of approximately $2,143,494 by issuing 11,908,300 units at a purchase price of $0.18 per Unit. Each Unit consists of one common share of the Company and one half of one common share purchase warrant, with each whole warrant being exercisable to acquire one additional common share of the Company at an exercise price of $0.27 per share for a term of two years from the date of issuance. In relation to this placement the Company paid $80,875 in cash finder’s fees and issued 374,422 finders warrants exercisable at $0.18 for two years from the date of issuance. The finder’s warrants have a fair value of $43,250.
On April 28, 2021 the Company closed a Private Placement that raised total gross proceeds of $3,000,000 by issuing 16,666,664 units at a purchase price of $0.18 per unit. Each unit consists of one common share of the Company and one half of one common share purchase warrant, with each whole warrant being exercisable to acquire one additional common share of the Company at an exercise price of $0.27 per share for a term of two years from the date of issuance.
12
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020 (Unaudited - Expressed in Canadian dollars)
5. Share capital (continued)
(b) Equity financings
The Company intends to use the proceeds from this financing for general corporate purposes, working capital and exploration activities on the Company’s gold exploration properties in Finland. In association with this financing, the Company paid to qualified finders $67,533 in cash finder’s fees and issued 312,655 finders warrants exercisable at $0.18 for 2 years from the date of issuance. Out of the total 16,666,664 units sold, 1,323,332 units (valued at $238,200) were issued subsequent to the June 30, 2021 quarter end.
The Shares issued pursuant to the above Private Placements are subject to a statutory hold period of four months plus one day from the date of issuance, in accordance with applicable securities legislation.
During the six months ended June 30, 2021, 2,936,000 warrants were exercised and converted into common shares for total proceeds of $367,900.
(c) Stock options and warrants
The Company has a shareholder-approved incentive share option plan (the “plan”) in place. Under the plan, the Company may issue options to purchase common shares, at prices determined by the Board of Directors on the date of award, for periods of not more than five years. Options awarded will vest immediately upon issue unless vesting is modified by the Board of Directors at the time of grant. The total number of common shares that may be reserved for issue under the share option plan is limited to 10% of the number of issued common shares.
The Company uses the Black-Scholes option pricing model in order to calculate a value for share options issued to employees. The Black-Scholes option pricing model was developed for use in estimating the fair value of share options that have no vesting provisions and are fully transferable. Also, option pricing models require the use of estimates and assumptions, including expected volatility rates. The Company uses expected volatility rates which are based upon historical experience and/or market comparables. Changes in the underlying assumptions used in the Black-Scholes option pricing model could materially affect the fair value estimates.
Stock options transactions during the periods ended June 30, 2021 and year ended December 31, 2020 are as follows:
| Weighted average | ||
|---|---|---|
| Number of options | exerciseprice | |
| OutstandingDecember 31,2019 | 3,485,000$ | 0.14 |
| Awarded during year ended December 31,2020 | 3,200,000 | 0.17 |
| Expired duringtheyear ended December 31,2020 | (400,000) | 0.24 |
| OutstandingDecember 31,2020 | 6,285,000 | 0.15 |
| Awarded duringthe six months ended June 30,2021 | 300,000 | 0.21 |
| OutstandingJune 30,2021 | 6,585,000$ | 0.16 |
13
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
5. Share capital (continued)
- (c) Stock options and warrants (continued)
The following is a summary of share options outstanding and exercisable at June 30, 2021:
| Expiry date | Number of options | Exerciseprice | |
|---|---|---|---|
| October 5, 2022 | 1,495,000 | $ | 0.10 |
| August 7, 2024 | 1,590,000 | $ | 0.15 |
| August 26, 2025 | 2,700,000 | $ | 0.15 |
| December 1, 2025 | 500,000 | $ | 0.25 |
| January25,2026 | 300,000 | $ | 0.21 |
The fair value of stock options awarded during 2021 and 2020 was estimated on the dates of award using the Black-Scholes option pricing model with the following assumptions:
| 2021 | 2020 | ||
|---|---|---|---|
| Risk-free interest rate | 34% | 0.38%-0.43% | |
| Expected volatility | 154.24% | 158%-186% | |
| Expected lives | 5 periods | 5 periods | |
| Estimated forfeiture rate | - | - |
The average fair value of stock options awarded during the period ended June 30, 2021 was $0.19 (2020 - $0.17).
On April 23, 2020, the Company issued 5,630,000 warrants attached to units issued in the private placement. Each warrant is exercisable into one common share of the Company at a price of $0.08 until April 23, 2022.
On June 24, 2020, the Company issued 5,362,500 warrants attached to units issued in the private placement, with a value of $107,250. Each warrant is exercisable into one common share of the Company at a price of $0.12 until June 24, 2022. In relation to the private placement, the Company issued 47,250 broker warrants with a fair value of $3,213 as finders’ fees. Each broker warrant is exercisable into one common share of the Company at an exercise price of $0.10 until June 24, 2022. An additional 297,500 broker warrants pertaining to this tranche with a fair value of $30,907 were issued on July 2, 2020.
On July 2, 2020, the Company issued 4,637,500 warrants attached to units issued in the private placement, with a $Nil value due to the stock trading higher than the issue price. Each warrant is exercisable into one common share of the Company at a price of $0.12 until July 2, 2022. In relation to the private placement, the Company issued 628,250 broker warrants with a fair value of $65,268 as finders’ fees. Each broker warrant is exercisable into one common share of the Company at an exercise price of $0.10 until June 24, 2022.
On October 28, 2020, the Company issued 5,954,147 warrants attached to units issued in the private placement, with a value of $ 238,166. Each warrant is exercisable into one common share of the Company at a price of $ 0.27 until October 27, 2022. In relation to the private placement, the Company issued 374,422 broker warrants with a fair value of $ $43,246 as finders’ fees. Each broker warrant is exercisable into one common share of the Company at an exercise price of $0.27 until October 27, 2022.
14
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
5. Share capital (continued)
- (c) Stock options and warrants (continued)
On April 28, 2021, the Company issued 8,333,332 warrants attached to units issued in the private placement, each whole warrant being exercisable to acquire one additional common share of the Company at an exercise price of $0.27 per share for a term of two years from the date of issuance. In relation to the private placement, the company also issued 312,655 finders warrants exercisable at $0.18 for 2 years from the date of issuance.
During the six months ended June 30, 2021, 2,936,000 warrants were exercised and converted into common shares for total proceeds of $367,900.
Warrant transactions during the period ended June 30, 2021 and year ended December 31, 2020 are as follows:
| Number of | Weighted average | ||
|---|---|---|---|
| warrants | exerciseprice | ||
| Outstanding,December 31,2019 | 15,620,857 | $ | 0.27 |
| Issued | 22,931,569 | 0.17 | |
| Exercised | (750,000) | 0.12 | |
| Expired | (4,292,324) | 0.54 | |
| Outstanding, December 31, 2020 | 33,510,102 | 0.16 | |
| Issued | 8,645,989 | 0.27 | |
| Exercised | (2,936,000) | 0.13 | |
| Outstanding,June 30,2021 | 39,220,091 | $ | 0.18 |
The following is a summary of warrants outstanding at June 30, 2021:
| Expirydate | Number of warrants | Exerciseprice | |
|---|---|---|---|
| September 9, 2021 | 1,774,533 | $ | 0.20 |
| September 16, 2021 | 1,420,000 | $ | 0.20 |
| April 23, 2022 | 3,920,000 | $ | 0.08 |
| June 24, 2022 | 5,109,750 | $ | 0.12 |
| June 28, 2022 | 4,050,000 | $ | 0.15 |
| July 2, 2022 | 5,563,250 | $ | 0.12 |
| July 16, 2022 | 2,408,000 | $ | 0.15 |
| October 27, 2022 | 6,328,569 | $ | 0.27 |
| April 28,2023 | 8,645,989 | $ | 0.27 |
15
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FireFox Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the Six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian dollars)
6. Related party disclosures
Key management compensation
Key management personnel at the Company are the directors and officers of the Company. The remuneration of key management personnel during the periods is as follows:
| Period ended | Period ended | |||
|---|---|---|---|---|
| June 30 | June 30 | |||
| 2021 | 2020 | |||
| Director remuneration1 | $ | 48,000 | $ | 21,000 |
| Officer remuneration1 | $ | 105,835 | $ | 83,183 |
| Share-basedpayments | $ | 18,780 | $ | - |
1Remuneration consists exclusively of salaries, bonuses, health benefits if applicable and consulting fees for key management personnel.
Other than the amounts disclosed above, there were no short-term employee benefits or share-based payments granted to key management personnel during the periods ended June 30, 2021 and June 30, 2020.
During the period ended June 30, 2021, mineral exploration services valued at $ 378,985 (period ended June 30, 2020 - $103,813), and CFO, accounting and corporate secretarial services valued at $Nil (period ended June 30, 2020 - $66,240) were provided by companies with an officer in common with FireFox. During the period ended June 30, 2021, the Company incurred fees to a director of $48,000 (period ended June 30, 2020 – $21,000), fees to an officer as President of $ 48,885 (period ended June 30, 2020 – 48,883) and fees to an officer for CFO, corporate secretarial and accounting services valued at $57,000 (period ended June 30, 2020 – $Nil).
At June 30, 2021 $Nil (December 31, 2020 - $15,462) remained owing to a former related party in relation to administrative services provided, $49,365 (December 31, 2020- $Nil) was owed to a related party for exploration services, $Nil (December 31, 2020 - $24,000) was owed to related parties for consulting fees, shown as personnel costs on the statement of comprehensive loss, and $3,532 (December 31, 2020 - $1,013) was owed to an officer for reimbursement of expenses, management and consulting fees.
FireFox has mineral property option agreements with Magnus, as further described in Note 4.
16
The accompanying notes are an integral part of these condensed interim consolidated financial statements.