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Gold Hunter Resources Inc. — Interim / Quarterly Report 2021
May 7, 2021
47985_rns_2021-05-06_99f03172-60f0-4bb0-ad17-1748c1e946ce.pdf
Interim / Quarterly Report
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GOLD HUNTER RESOURCES INC.
CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2021
(Unaudited)
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the condensed interim financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsible of the Company's management. The unaudited condensed interim financial statements have been prepared using accounting polices in compliance with International Financial Reporting Standards for the preparation of unaudited condensed interim financial statements and are in accordance with International Accounting Standard 34 - Interim Financial Reporting.
The Company's independent auditor has not performed a review of these unaudited condensed interim financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.
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GOLD HUNTER RESOURCES INC. CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION As at February 28, 2021 and February 29, 2021
(Unaudited)
| February 28 August 31 2021 2020 |
|
|---|---|
| ASSETS CURRENT Cash and cash equivalents Taxes recoverable Prepaid expenses EXPLORATION AND EVALUATION ASSET (Note 4) DEFERRED COST LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT Trade and other payables SHAREHOLDERS' EQUITY Share capital(Note 5) Contributed surplus Deficit |
$ 1,859,194 $ 69,316 8,501 12,091 - 3,938 |
| 1,867,695 85,345 191,464 106,134 - 33,375 |
|
| $ 2,059,159 $ 224,854 |
|
| $ 8,000 $ 8,000 |
|
| 2,255,691 296,000 121,714 30,000 (326,246) (109,146) |
|
| 2,051,159 216,854 |
|
| $ 2,059,159 $ 224,854 |
ON BEHALF OF THE BOARD ____ s/ "Richard Macey" Director s/ "Michael Williams" ____ Director
The accompanying notes are an intergral part of these financial statements.
2
GOLD HUNTER RESOURCES INC. CONDENSED INTERIM STATEMENT OF LOSS AND COMPREHENSIVE LOSS Year Ended February 28, 2021
(Unaudited)
| 3 Months Ended February 28, 2021 3 Months Ended February 29, 2020 6 Months Ended February 28, 2021 Period Ended February 29, 2020 |
|
|---|---|
| EXPENSES Accounting fees Legal fees Office Management fees Share based compensation Listing fees Rental NET LOSS COMPREHENSIVE LOSS LOSS PER SHARE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |
$ 11,500 $ 1,350 $ 20,385 $ 1,350 93,256 2,440 105,222 6,377 3,990 3,095 5,702 3,119 9,000 15,000 18,000 20,000 - - 37,000 30,000 21,290 - 26,290 - 2,250 2,250 4,500 3,250 |
| 141,286 24,135 217,099 64,096 |
|
| $ (141,286) $ (24,135) $ (217,099) $ (64,096) |
|
| $ (0.01) $ (0.01) $ (0.03) $ (0.01) |
|
| 11,780,337 2,100,000 11,031,944 2,073,771 |
The accompanying notes are an intergral part of these financial statements.
3
| (Unaudited) | Number of Share Contributed Deficit Shareholder's Shares Capital Surplus Equity |
As at October 30, 2019 - $ - $ - $ - $ - Net Loss for the period - - - (64,096) (64,096) Founders shares issued 2,000,000 10,000 30,000 - 40,000 Shares issued for cash 4,300,000 86,000 - - 86,000 As at February 29, 2020 6,300,000 96,000 30,000 (64,096) 61,904 Net loss for the period - - - (45,050) (45,050) Shares issued for cash 4,000,000 200,000 - - 200,000 As at August 31, 2020 10,300,000 $ 296,000 $ 30,000 $ (109,146) $ 216,854 As at September 1, 2020 10,300,000 $ 296,000 $ 30,000 $ (109,147) $ 216,853 Net Loss for the period - - - (217,099) (217,099) Shares issued for cash 10,750,000 2,112,501 - - 2,112,501 Options exercised 450 68 - - 68 Shares issued for property 500,000 50,000 - - 50,000 Share issuance costs - (202,878) 54,714 - (148,164) Share based compensation - - 37,000 - 37,000 As at February 28, 2021 21,550,450 $ 2,255,691 $ 121,714 $ (326,246) $ 2,051,159 |
|---|---|---|
GOLD HUNTER RESOURCES INC. CONDENSED INTERIM STATEMENT OF CASH FLOWS For the six months ended
(Unaudited)
| February 28 February 29 2021 2020 |
|
|---|---|
| OPERATING ACTIVITIES Net loss Items not affecting cash: Shares issued for mineral property Shares issued for compensation Changes in non-cash working capital: Accounts Receivable Prepaid expenses Cash flow used by operating activities INVESTING ACTIVITY Exploration and evaluation asset FINANCING ACTIVITY Proceeds from the issuance of common stock INCREASE IN CASH FLOW Cash - beginning of period CASH - END OF PERIOD |
$ (217,099) $ (64,096) (50,000) - (37,000) - |
| (304,099) (64,096) |
|
| 3,590 (2,273) 3,938 5,540 |
|
| 7,528 3,267 |
|
| (296,571) (60,829) |
|
| (35,330) - |
|
| 2,121,780 126,000 |
|
| 1,789,879 65,171 69,315 - |
|
| $ 1,859,194 $ 65,171 |
The accompanying notes are an intergral part of these financial statements.
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GOLD HUNTER RESOURCES INC. NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS Year Ended February 28, 2021
(Unaudited)
1. NATURE OF BUSINESS AND CONTINUING OPERATIONS
Gold Hunter Resources Inc. (“the Company”) was incorporated on October 30, 2019 under the laws of British Columbia. The address of the Company’s corporate office and its principal place of business is 9285 – 203B Street, Langley, British Columbia, Canada.
The Company’s principal business activities include the acquisition and exploration of mineral property assets. As at February 28, 2021, the Company has not yet determined whether the Company’s mineral property assets contain ore reserves that are economically recoverable. The recoverability of amounts shown for exploration and evaluation asset is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and the future profitable production from the property or realizing proceeds from its disposition. The outcome of these matters cannot be predicted at this time and the uncertainties cast significant doubt upon the Company’s ability to continue as a going concern.
The Company had a deficit of $326,246 as at February 28, 2021, which has been funded by the issuance of equity. The Company’s ability to continue its operations and to realize its assets at their carrying value is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs.
These condensed interim financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in these financial statements.
The outbreak of the Coronavirus Disease 2019, or COVID-19, has spread across the globe and is impacting worldwide economic activity. This global pandemic poses the risk that the Company or its clients, employees, contractors, suppliers, and other partners may be unable to conduct regular business activities for an indefinite period of time. At this point, the impact on the Company has been minimal. The Company continues to monitor the situation and is taking all necessary precautions in order to follow rules and best practices as set out by the federal and provincial governments.
2. BASIS OF PREPARATION
Statement of Compliance
These unaudited condensed interim financial statements of the Company have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” (“IAS 34”) and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the Financial Reporting Interpretations Committee (“IFRIC”).
Basis of Measurement
These unaudited condensed financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information. These unaudited condensed interim financial statements follow the same accounting policies and methods of application as the annual audited financial statements for the year ended August 31, 2020. The adoption of new accounting standards has had no material impact on the financial statements. The functional and presentation currency of the Company is the Canadian dollar.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's significant accounting policies and critical accounting estimates applied in the interim financial statements are the same as those applied on the Company's annual financial statements and for the period ended August 31, 2020.
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GOLD HUNTER RESOURCES INC. NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS Year Ended February 28, 2021
(Unaudited)
4. EXPLORATION AND EVALUATION ASSET
| EXPLORATION AND EVALUATION ASSET | |
|---|---|
| Balance at October 30, 2019 Additions Cash Accommodation Administration Communication Equipment rental Geological supplies Labour Sample analysis Travel Balance as at August 31, 2020 Cash Shares Administration Consulting Labour Balance as at February 28, 2021 |
Acquisition Costs Exploration Costs Total |
| $ 20,000 $ - $ 20,000 - 10,620 10,620 - 4,131 4,131 - 920 920 - 1,525 1,525 - 2,983 2,983 - 51,880 51,880 - 8,129 8,129 - 5,946 5,946 |
|
| 20,000 86,134 106,134 23,560 - 23,560 50,000 - 50,000 - 906 906 - 6,039 6,039 - 4,825 4,825 - - - |
|
| $ 93,560 $ 97,904 $ 191,464 |
Cameron Lake East Property
On January 15, 2020, the Company (the "Optionee") entered into a Mineral Property Option Agreement (the "Agreement") with Northbound Capital Corp. (the "Optionor"). Pursuant to a Mineral Property Option Agreement dated September 20, 2019 (the "Head Option Agreement"), the Optionor has an option to acquire 100% interest in the mineral claims known as Cameron Lake East Property located in the Kenora Mining Division of Ontario (the "Claims") from the original claim holder (the “Claim Holder”). Under the Head Option Agreement, the Optionor will make a total cash payment of $48,000 by September 20, 2023 to the Claim Holder.
Upon exercise by the Optionor of its option under the Head Option Agreement, the Claim Holder will be entitled to a 1.5% net smelter returns royalty (the "Claim Holder's NSR"), subject to the Optionor's right to purchase a one-half interest in the Claim Holder's NSR in accordance with the Head Option Agreement.
Under the Agreement, the Optionor has granted the Optionee the option to acquire all rights, title and interest in the Claims. In addition, the Claims are subject to the reservation by the Optionor of a 1.5% net smelter returns royalty (the “Optionor’s NSR”) to be paid by the Optionee upon exercise of the option in full.
The terms of the Agreement, require the Optionee to make cash payments totaling $66,000 and issue 1,000,000 common shares to the Optionee as follows:
-
a) make a cash payment of $20,000 on signing of this Agreement - paid
-
b) make a further cash payment of $10,000 and issue 500,000 common shares on the earlier of (i) listing of the Optionee's common shares on the Canadian Securities Exchange, and (ii) March 15, 2021 - paid
-
c) make a further cash payment of $12,000 on January 15, 2022;
-
d) make a further cash payment of $12,000 and issue 500,000 Shares on January 15, 2023; and
-
e) make a final cash payment of $12,000 on January 15, 2024.
(continues)
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GOLD HUNTER RESOURCES INC. NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS Year Ended February 28, 2021
(Unaudited)
4. EXPLORATION AND EVALUATION ASSET (continued)
Following completion of the cash payments and common share issuances set forth above, the Company shall have exercised the option in full and shall be the beneficial owner of the Claims subject to the reservation by the Optionor’s NSR. At any time following January 31, 2021, the Company shall have the right to accelerate the exercise of the Option by completing all of the required cash payments and common share issuances as set forth above.
Following the exercise of the Option, the Optionee will have the right to purchase the Optionor's NSR at any time for $1,000,000. For greater certainty, in the event the Optionee purchases the Optionor’s NSR, the Claims would be subject only to the Claim Holder's NSR of which the Optionor will hold an option to purchase a one-half interest (0.75%) in accordance with the terms of the Head Option Agreement.
5. SHARE CAPITAL
-
(a) Authorized: Unlimited number of common shares without par value.
-
(b) Escrow shares:
As at February 28, 2021, there were 7,300,000 common shares held in escrow.
- (c) Issued and outstanding as at February 28, 2021: 21,550,450
During the period ended February 28, 2021, the Company had the following transactions:
On February 10, 2021, the Company issued 500,000 commons shares pursuant to the property option agreement. (Note 4b)
On February 11, 202,1 the Company completed a private placement for 5,750,000 common shares at a price $0.15 per share for gross proceeds of $862,500.
On February 19, 2021, the Company issued 450 common shares pursuant to broker options issued at an exercise price of $0.15 per share.
On February 23, 2021 the Company completed an initial public offering for 5,000,000 common shares at a price $0.25 per share for gross proceeds of $1,250,000.
During the period ended August 31, 2020, the Company had the following transactions:
On October 30, 2019, the Company issued a common share for incorporation which was cancelled during the period ended August 31, 2020.
On October 30, 2019, the Company issued 2,000,000 common shares at a price of $0.005 per share for gross proceeds of $10,000 to the founders. The founder shares had a fair value of $40,000 and as a result, the Company recorded a share-based payment of $30,000 and a corresponding increase to contributed surplus.
On February 20, 2020, the Company completed a private placement for 1,000,000 flowthrough common shares at a price of $0.02 per share for gross proceeds of $20,000.
On June 22, 2020, the Company completed a private placement for 3,300,000 flow-through common shares at $0.02 per share for gross proceeds of $66,000.
On June 22, 2020, the Company completed a private placement for 4,000,000 non-flowthrough common shares at $0.05 per share for gross proceeds of $200,000.
- (d) Stock Option
(continues)
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GOLD HUNTER RESOURCES INC. NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS Year Ended February 28, 2021
(Unaudited)
5. SHARE CAPITAL (continued)
On October 1, 2020, the Company issued 517,500 finders options pursuant to the IPO. The stock options are exercisable for $0.15 per common share expiring on February 11, 2023. For the period ended February 28, 2021, the Company recorded a share issuance cost of $54,714.
The Company uses the Black-Scholes option pricing model to estimate the fair value for all sharebased compensation. The assumptions used in this pricing model, and the resulting fair values per option, for the options granted during the period ended February 28, 2021, are as follows:
| (i) Risk-free interest rate (ii) Expected life (iii) Expected volatility (iv) Expected dividend yield (iv) Expected forfeiture rate (vi) Fair value per option |
2020 |
|---|---|
| 0.25% 2 148% 0% 0% $0.11 |
On October 1, 2020, the Company adopted a Stock Option Plan (‘Plan’) for directors and officers of the Company. The Company may grant options to individuals, options are exercisable over periods of up to ten years, as determined by the Board of Directors of the Company, to buy shares of the Company at the fair market value on the date the option is granted. The maximum number of shares which may be issuable under the Plan cannot exceed 10% of the total number of issued and outstanding shares on a non-diluted basis.
On October 1, 2020, the Company issued 800,000 stock options to directors and officers of the Company. The stock options are exercisable for $0.15 per common share expiring on October 1, 2030. For the period ended November 30, 2020, the Company recorded a share-based compensation of $37,000.
The assumptions used in this pricing model, and the resulting fair values per option, for the options granted during the period ended November 30, 2020, are as follows:
| (i) Risk-free interest rate (ii) Expected life (iii) Expected volatility (iv) Expected dividend yield (iv) Expected forfeiture rate (vi) Fair value per option |
2020 |
|---|---|
| 1.58% 10 years 125% 0% 0% $0.05 |
6. RELATED PARTY BALANCES AND TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
(continues)
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GOLD HUNTER RESOURCES INC. NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS Year Ended February 28, 2021
(Unaudited)
6. RELATED PARTY BALANCES AND TRANSACTIONS (continued)
Key management includes directors and key officers of the Company, including the President, Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). During the period ended August 31, 2020, the Company issued 2,000,000 common shares with estimated fair value of $40,000 (see Note 5c) to directors and officers of the Company. Accordingly, the Company recorded an amount of $30,000 as share-based payments for the period ended August 30, 2020.
During the three months ended February 28, 2021, the Company paid $9,000 management fees to the CEO and President of the Company. During the same period, the Company incurred $NIL in accounting fees to a company controlled by the CFO and director of the Company and did not issue stock options to the directors and officers of the company. During the period ended February 29, 2020 the Company issued 800,000 stock options to directors and officers of the Company. Accordingly, the Company recorded an amount of $37,000 as share-based payments.
7. COMMITMENTS
The Company is committed to certain cash payments, common share issuances and exploration expenditures as described in Note 4.
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