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Labrador Gold Corp. — Management Reports 2021
Jan 29, 2021
43641_rns_2021-01-28_9bc1a2d6-536b-4e48-8e54-711bda4e5a9c.PDF
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LABRADOR GOLD CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS YEARS ENDED SEPTEMBER 30, 2020 AND 2019
Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
Introduction
The following discussion and analysis of the results of operations and of the financial position of Labrador Gold Corp. (“Labrador Gold” or the “Company”) is prepared as of January 28, 2021, and should be read in conjunction with the Company’s condensed interim financial statements for the year ended September 30, 2020 and the Company’s audited consolidated financial statements and the notes thereto for the year ended September 30, 2019.
The financial information presented herein is expressed in Canadian dollars, except where noted.
The Company’s financial statements are reported under International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”).
Company Information
Labrador Gold is a company involved in the acquisition and exploration of prospective gold projects in the Americas and is publicly traded on the TSX Venture Exchange (“TSX-V”). To date, the Company has not earned significant revenues and is in the exploration stage.
On September 5, 2017, and as amended December 7, 2020, the Company entered into a Letter of Intent (“LOI”) that grants the Company the option to earn a 100% interest in the Ashuanipi, Nain and Hopedale properties, located in Labrador (the “Labrador Properties”). The Company is meeting the terms of the LOI in respect of Ashuanipi and Hopedale but has dropped the Nain property. Additional claims adjacent to Ashuanipi and Hopedale were staked in fiscal 2018 and are being earned under the terms of the LOI.
In December 2017, the Company changed its name to Labrador Gold to reflect its corporate focus on gold exploration in Labrador and its commitment to the systematic exploration of the Labrador Properties for gold. The Company retained the services of Roger Moss, CEO of the Company, on a full-time basis to further this corporate objective.
The Company also holds a 100% interest in the Borden Lake Extension Property (the “Borden Lake Property”) located near Chapleau, Ontario, Canada.
At September 30, 2020, the Company had cash of $6,298,629 (September 30, 2019 - $403,466) and working capital of $6,216,155 (September 30, 2019 - $270,648).
The Company does not anticipate generating significant revenues in the near future. As a result, the Company will be required to continue raising funds in order to finance its ongoing property evaluation program and general and administrative expenses. This will most likely be accomplished through the sale of equity.
Highlights
On November 6, 2019, the Company extended the expiry date of 8,785,000 warrants exercisable at $0.30 to November 22, 2020.
On March 3, 2020, the Company acquired an option to earn a 100% interest in the Gander Property, subsequently renamed the Kingsway Property, (“Kingsway”) near Gander, Newfoundland. The licenses consist of 264 claims covering an area of 6,600 hectares.
On June 18, 2020, the Company closed a non-brokered private placement with the sale of 4,000,000 flow-through units ("FT Units") of the company at $0.25 per FT Unit for gross proceeds of $1,000,000. Each FT Unit comprises one common share of the Company and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of $0.30 until June 18, 2022.
On June 25, 2020, the Company closed a non-brokered private placement with the sale of 24,571,429 units at $0.175 per unit for proceeds of $4,300,000. Each unit comprises one common share of the Company and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of $0.30 until June 25, 2022. The Company paid $211,610 in cash finders' fees and issued 1,179,043 broker warrants. Each broker warrant is exercisable at $0.175 until June 25, 2022 to acquire one common share.
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
On July 6, 2020, the Company announced that it has entered into an option agreement to acquire 100% of License 023940M (the “Property”) which is strategically positioned between the Kingsway North and South claim blocks in the emerging Gander gold belt. The acquisition of the Property increases the Company’s landholdings in the district to 308 claims or approximately 77 square kilometres.
On July 24, 2020, the Company announced that it had raised $2,039,233 from the exercise of share purchase warrants with an exercise price of $0.35 and $0.40 respectively.
On July 27, 2020, the Company granted 3,150,000 stock options to directors, officers and consultants of the Company. The stock options are exercisable at $0.45 per share for a period of five years.
On July 30, 2020, the Company announced that its common shares have been accepted for trading on the OTCQB, a U.S. stock market that is based in New York City and operated by OTC Markets Group. The shares began trading on the OTCQB under the ticker symbol "NKOSF".
On August 6, 2020, the Company announced that its field crew had arrived in Gander and started the 2020 exploration program on the Kingsway Property.
Selected Annual Information
| Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |
|---|---|---|---|---|---|---|
| September 30, | September 30, | September 30, | ||||
| 2020 | 2019 | 2018 | ||||
| Total revenues | $ | - |
$ | - |
$ | - |
| Net Loss | (2,048,908) | (569,597) | (621,110) | |||
| Loss per share | (0.03) | (0.01) | (0.02) | |||
| Diluted lossper share | **(0.03) ** | (0.01) | (0.02) | |||
| At | September 30, | September 30, | September 30, | |||
| 2020 | 2019 | 2018 | ||||
| Total assets | 13,810,244 | 6,820,615 | 6,390,472 | |||
| Total long-term liabilities | - | - | - | |||
| cash dividends declared | - | - | - |
Results of Operations
Year ended September 30, 2020
The year ended September 30, 2020 reported a net loss of $2,048,908 compared to $569,597 for the year ended September 30, 2019. The increase in net loss was mainly due to the decrease in share-based compensation during the current year.
During the year ended September 30, 2020, the Company incurred $465,800 in acquisition costs and $535,785 in deferred exploration expenses, capitalized as unproven mineral right interests.
From time to time, the Company may acquire or dispose of mineral right interests pursuant to the terms of option agreements. Since options are exercisable entirely at the discretion of the optionee, the amounts payable or receivable are not recorded as assets but as resource property costs or recoveries when the payments are made or received.
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
Liquidity and Capital Resources
Labrador Gold is a development-stage company that currently does not generate significant revenues and does not anticipate doing so in the near future.
Labrador Gold held cash of $6,298,629 at September 30, 2020, compared to $403,466 at September 30, 2019.
At September 30, 2020, the Company had working capital of $6,216,155 (September 30, 2019 - $270,648).
The Company is not subject to debt covenants.
Off-Balance Sheet Arrangements
As of the date of this filing, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company including, without limitation, such considerations as liquidity and capital resources that have not previously been discussed.
Unproven Mineral Right Interests
Ownership in mineral right interests involves certain inherent risks due to the difficulties of determining and obtaining clear title to claims as well as the potential for problems arising from the ambiguous conveyance history of many mineral right interests. The Company has investigated ownership of its mineral right interests and, to the best of its knowledge, ownership of its interests are in good standing.
| September 30, 2020($) September 30, 2019($) |
|
|---|---|
| Labrador Properties Acquisition 1,174,952 1,174,952 Deferred exploration 4,311,730 4,260,378 |
|
| 5,486,682 5,435,330 |
|
| Borden Lake Property Acquisition 314,185 314,185 Deferred exploration 612,209 602,176 |
|
| 926,394 916,361 |
|
| Kingsway Property Acquisition 465,800 - Deferred exploration 474,400 - |
|
| 940,200 - |
|
| 7,353,276 6,351,691 |
|
Labrador Properties
On September 5, 2017, the Company entered into a Letter of Intent (“LOI”) that grants the Company the option to earn a 100% interest in the Ashuanipi, Nain and Hopedale properties, located in Labrador (the “Labrador Properties”). The terms of the LOI are the following:
-
On receipt of TSX-V approval: payment of $75,000 and issuance of 450,000 shares in respect of each of the three Labrador Properties (completed);
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On or before September 5, 2018: payment of $100,000 and issuance of 300,000 shares in respect of each property (completed with the payment of $200,000 and issuance of 600,000 shares on the Ashuanipi and Hopedale properties, as the Company dropped its option on the Nain property);
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
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On or before September 5, 2019: payment of $75,000 and issuance of 175,000 shares in respect of the Ashuanipi property and payment of $150,000 and issuance of 350,000 shares in respect of the Hopedale property (paid and issued);
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On or before September 5, 2020: payment of $50,000 and issuance of 400,000 shares in respect of each of the Ashuanipi and Hopedale properties (completed with the payment of $100,000 and issuance of 800,000 shares on the Ashuanipi and Hopedale properties subsequent to September 30, 2020);
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On or before September 5, 2021: payment of $100,000 and issuance of 675,000 shares in respect of the Ashuanipi property and payment of $100,000 and issuance of 500,000 shares in respect of the Hopedale property;
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On or before September 5, 2022: payment of $150,000 each in respect of each of the Ashuanipi and Hopedale properties; and
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On or before September 5, 2023: payment of $200,000 in respect of the Ashuanipi property and $125,000 in respect of the Hopedale property.
The vendors of the Labrador Properties retain a 2% net smelter return “(NSR”) royalty, half of which may be bought back by the Company at any time for $2 million plus $1 per ounce of gold in measured and indicated resources. An advance royalty of $25,000 per annum for each property will be payable starting in 2024.
In January 2018, additional claims contiguous to the Ashuanipi property were staked and are being earned by the Company under the terms of the LOI.
In May 2018, additional claims at the Hopedale property were staked and are being earned by the Company under the terms of the LOI.
Kingsway Property
On March 3, 2020, the Company announced it had acquired an option to earn a 100% interest in the Gander Property, subsequently renamed the Kingsway Property, (“Kingsway”) near Gander, Newfoundland. To exercise the option, the Company must complete the following:
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As consideration for the option: payment of $250,000 and issuance of 400,000 common shares (paid and issued);
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On or before March 3, 2021: payment of $150,000 cash and issuance of 250,000 common shares;
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On or before March 3, 2022: payment of $150,000 cash and issuance of 300,000 common shares;
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On or before March 3, 2023: payment of $200,000 cash and issuance of 350,000 common shares;
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On or before March 3, 2024: payment of $250,000 cash and issuance of 400,000 common shares;
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On or before March 3, 2025: payment of $250,000 cash and issuance of 300,000 common shares;
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Incur $750,000 in expenditures on each of two licenses ($1.5 million total) over the first four years of the option; and
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Complete additional payments totaling $2.25 million based on exploration expenditures incurred, as follows: $750,000 upon incurring an aggregate of $10 million in expenditures on one of the licenses;
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$750,000 upon incurring an aggregate of $20 million in expenditures on one of the licenses; and
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$750,000 upon incurring an aggregate of $30 million in expenditures on one of the licenses.
The Company will also grant a 1% NSR to the Vendor plus $1 per ounce of gold in a measured and indicated resource. An advance royalty of $50,000 per annum for each property will be payable starting in 2026.
Borden Lake Property
The Company has a 100% undivided interest in the Borden Lake Property (the “Borden Lake Property”) located near Chapleau Ontario. The 1,598-hectare property lies immediately east of, and adjacent to, Newmont-Goldcorp’s Borden Lake gold project. The original vendors of the Borden Lake Property retain a 2% NSR royalty, half of which may be bought back by the Company for $1 million at any time.
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
Exploration Activity –2020
Roger Moss, Ph.D, P.Geo, a Qualified Person under National Instrument 43101 has approved the scientific and technical disclosure in this Management’s Discussion and Analysis, and has verified the data disclosed.
During the 2020 fiscal year, Labrador Gold completed exploration on the Labrador properties, acquired the Kingsway Gold Project near Gander Newfoundland and carried out a first stage exploration program on the Kingsway property.
Hopedale
On November 22, 2019 Labrador Gold Corp announced the results of rock sampling at its Hopedale project in Labrador. The samples were taken over stratigraphy prospective for gold in the Florence Lake Greenstone Belt (FLGB). Sampling of eight prospective areas resulted in 201 rock samples with gold values ranging from below the detection limit of 5 parts per billion (ppb) to 8.26 grams per tonne (g/t) in selected grab samples. The highest gold values were from three samples taken at the site of a new mineralized showing discovered shortly after the start of field work. The showing is located approximately 500 metres north, and along strike of, the Thurber Dog gold occurrence where previous Labrador Gold rock sampling returned values up to 11.4 g/t Au. Mineralization is comprised of disseminated to semimassive pyrite and arsenopyrite hosted by felsic metavolcanic rocks with pervasive iron oxide alteration.
The Thurber Dog area stands out as the most consistently mineralized gold trend in the belt. Gold mineralization was found that fills in gaps along the three kilometre stretch of anomalous gold in both rock and soil. The discovery of the new gold showing during 2019 is the latest addition to what is turning into a prolific trend.
Highlights of 2019 rock sample assays – Hopedale Project.
| Sample | Easting | Northing | Sample | Rock type | Mineralization | Au (ppb) | Area |
|---|---|---|---|---|---|---|---|
| ID | Type* | ||||||
| 1702676 | 654781 | 6110696 | Grab | Quartz vein | Py, Apy | 8,263 | New Showing |
| 1710148 | 654778 | 6110691 | Grab | Felsic volcanic | Py, Apy | 1.672 | New Showing |
| 1710149 | 654781 | 6110696 | Grab | Felsic volcanic | Py, Apy | 2.831 | New Showing |
| 1710140 | 654745 | 6111249 | Grab | Chlorite schist | 602 | Thurber Trend | |
| 1695444 | 654628 | 6112280 | Grab | Ultramafic volcanic | Py | 114 | Thurber North |
| 1995433 | 654628 | 6112280 | Grab | Quartz vein | Py | 224 | Thurber North |
| 1705230 | 654996 | 6113663 | Grab | Mafic volcanic | Apy | 532 | Thurber |
| Boundary | |||||||
| 1691224 | 647639 | 6100795 | Grab | Ultramafic volcanic | Apy, Py | 107 | Jasmine North |
| 1702687 | 648021 | 6098550 | Grab | Iron formation | Py | 388 | Jasmine South |
| 1705738 | 647074 | 6095318 | Grab | Quartz vein | 134 | Misery North | |
| 1702678 | 644914 | 6091661 | Grab | Quartz vein | Py | 488 | Misery |
| 1785270 | 643338 | 6085835 | Grab | Mafic volcanic | Py | 336 | Schist Lakes |
*Note that grab samples are select samples and are not necessarily representative of gold mineralization found on the property. Abbreviations: Py pyrite; Apy Arsenopyrite.
Kingsway
Following a project review process undertaken during Q2-2020 the Company acquired three licenses comprising the Kingsway Gold Property in the Gander Area of Newfoundland. The licenses cover the northeastern extension of the Appleton fault zone which is associated with many of the gold showings in the district, including the late 2019 discovery of 92.86 g/t Au over 19 metres, on New Found Gold’s Queensway project to the south. (Note that mineralization hosted on adjacent and/or nearby properties is not necessarily indicative of mineralization hosted on the Company’s property).
Following the acquisition, the company undertook research into the geology and mineralization of the region and compiled the historical data from work on and around the area covered by the property. Most of this historical work was completed between 1989 and 2005 and results demonstrated significant gold anomalies in all media sampled including stream sediments, lake sediments, till, vegetation, soil and rock. Many of these anomalies occur along, or adjacent to
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
the Appleton Fault Zone.
Highlights of the historical sampling are as follows: Glacial till over the southern claim block showed gold values from below detection (<5ppb) to 89,000ppb (89g/t Au) in heavy mineral concentrates with 8 samples assaying over 10,000ppb (10g/t Au) anomalies extend over three kilometres along the Appleton fault zone.
Gold grains in till samples vary from 2 to 60 grains in fifteen samples. Analysis of the grains showed many of them to be subangular, suggesting that they are close to their source.
Subangular boulder of quartz vein containing visible gold which assayed 168 g/t Au was uncovered by trenching of the heavy mineral concentrate anomalies. Neither the source of the boulder nor of the gold grains has been found.
Exploration between 2017 and 2019 by Torq Resources and Shawn Ryan included over 1,758 till samples 3,724 vegetation (spruce tips) samples 2,381 till XRF samples and 2,958 soil samples taken over a 45km by 15km (675 square kilometre) area. This work resulted in the identification of an area of 66 square kilometres, covered by the Kingsway North and South licenses most prospective for gold. Till and vegetation sampling over the south claim block confirms the results of the historical work and identified new gold anomalies while the work on the northern claim block identified new gold anomalies associated with northnortheast trending magnetic lineaments. On both claim blocks there is a close association between the gold anomalies and the Appleton or Dog Bay structures.
Note that while the assays from the historical work presented here are considered accurate, they have not been verified by independent sampling.
Following receipt of permits for the proposed exploration, field work began on the Kingsway property in August 2020 and consisted of detailed soil geochemistry on 16 grids covering most of the licenses to follow up on results of the historical work as well as geological mapping and prospecting. A ground magnetic-VLF-EM survey and a controlled source audio magnetotelluric (CSAMT) survey were undertaken to target structures with the potential for localizing gold mineralization. In addition, a rotary air blast (RAB) drilling program began subsequent to the fiscal year end.
Results of exploration reported after year end include soil sampling, CSAMT (controlled source audio magnetotellurics) survey and rock sampling.
Results of the CSAMT survey carried out over the Appleton Fault Zone show a zone of extremely conductive rocks that appear to be bounded by ENE trending structures, one of which likely represents the trace of the Appleton Fault Zone. In addition, several northwest trending features are apparent that may represent faults crosscutting the ENE trending structures. Several resistive areas are also apparent that may reflect zones of silicification and/or quartz veining. Highly anomalous soil samples occur in both high and low resistive areas and significant anomalous clusters occur in areas of high resistivity close to intersections of interpreted structures.
Prospecting and mapping resulted in the discovery of two occurrences of visible gold found in a quartz vein named Big Vein. The vein has now been traced along strike to the northeast and southwest of the occurrences for over 400 metres. This lies within a larger quartz vein corridor of intermittent quartz veining that has been traced over 7.1 km adjacent to the Appleton Fault Zone.
Gold values in soil samples taken over the property range from below detection (<0.5ppb) to 9,946ppb (9.9g/t Au). The gold in soil anomalies tend to be associated with interpreted structures, including the Appleton Fault zone, Dog Bay line and splays or cross faults to these major crustal structures. The highest gold assay together with three other samples assaying greater than 1,000ppb (1g/t Au) occur between 100 and 300 metres to the southwest of the visible gold locations and suggest the potential for additional gold mineralization in this area.
Assays from 70 grab samples of rock taken over a 175 metre strike length of Big Vein northeast and southwest of the visible gold samples range from below detection (<5ppb) to 1,065 g/t Au in sample 526089 containing visible gold. In addition, 16 samples assayed over 1g/t Au and 39 samples assayed over 0.1g/t Au. Highlights of the results are given below.
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
| Highlights of 2020 Big Vein sampling–Kingsway Project | |
|---|---|
| Sample ID Sample Medium Sample Type |
Au(g/t) |
| Highlights of 2020 Big Vein sampling–Kingsway Project | Highlights of 2020 Big Vein sampling–Kingsway Project | Highlights of 2020 Big Vein sampling–Kingsway Project | Highlights of 2020 Big Vein sampling–Kingsway Project |
|---|---|---|---|
| Sample ID | Sample Medium | Sample Type | Au(g/t) |
| 526089 | Subcrop | Grab* | 1,065.4 |
| 526073 | Outcrop | Grab | 16.1 |
| 526077 | Outcrop | Grab | 7.2 |
| 526090 | Angular Float | Grab | 5.4 |
| 526084 | Subcrop | Grab | 5.4 |
| 526111 | Subcrop | Grab | 5.3 |
| 526097 | Angular Float | Grab | 4.9 |
| 526113 | Subcrop | Grab | 3.8 |
| 1834193 | Outcrop | Grab | 3.2 |
| 526096 | Angular Float | Grab | 2.2 |
| 526075 | Subcrop | Grab | 2.1 |
| 526081 | Outcrop | Grab | 1.8 |
| 526076 | Outcrop | Grab | 1.7 |
| 1834191 | Outcrop | Grab | 1.6 |
| 526112 | Subcrop | Grab | 1.3 |
| 526114 | Subcrop | Grab | 1.3 |
*Note that grab samples are select samples and are not necessarily representative of gold mineralization found on the property.
Assays for the first nine of 28 holes (total of 588 metres) received from the rotary air blast (RAB) program indicated anomalous gold values (>0.1 g/t) in 5 holes, including a high of 0.84 g/t in hole KINRAB2006 drilled in the Midway area. Three of the remaining four holes did not intersect the target gabbro.
Due to restrictions related to the Coronavirus pandemic, no exploration was carried out at Hopedale or Ashuanipi during 2020.
Summary of Quarterly Results (IFRS)
| Quarter ended Quarter ended | Quarter ended Quarter ended | Quarter ended Quarter ended | Quarter ended Quarter ended | Quarter ended | Quarter ended | Quarter Ended | Quarter Ended | |
|---|---|---|---|---|---|---|---|---|
| September | 30, | June 30, | March 31, | December 31, | ||||
| 2020 | 2020 | 2020 | 2019 | |||||
| Total revenue | $ - |
$ | - |
$ | - | $ | - | |
| Net loss | (1,825,145) | (136,390) | (49,775) | (37,598) | ||||
| Lossper share | (0.02) | (0.00) | (0.00) | (0.00) | ||||
| Quarter ended Quarter ended | Quarter ended | Quarter Ended | ||||||
| September | 30, | June 30, | March 31, | December 31, | ||||
| 2019 | 2019 | 2019 | 2018 | |||||
| Total revenue | $ - |
$ | - |
$ | - | $ | - | |
| Net loss | (214,311) | (215,618) | (69,502) | (70,166) | ||||
| Lossper share | (0.00) | (0.01) | (0.00) | (0.00) |
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
Liquidity and Capital Resources
Labrador Gold is a development-stage company that currently does not generate significant revenues and does not anticipate doing so in the near future.
Labrador Gold held cash of $6,298,629 at September 30, 2020, compared to $403,466 at September 30, 2019.
The Company had working capital of $6,216,155 on September 30, 2020, compared of $270,648 on September 30, 2019.
The Company is not subject to debt covenants.
Related Party Transactions
Related parties include the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions.
As at September 30, 2020, the Company’s related parties consist of a proprietorship controlled by the Company’s Chief Executive Officer (“CEO”), a company controlled by the Company’s former Chief Financial Officer (“CFO”) and a company of which the Company's CFO is an employee.
| Entity | Nature of Transaction |
|---|---|
| Moss Explorations Services | Management |
| Delphis Financial Strategies Inc. | Management |
| Marrelli Support Services Inc. | Management |
The Company entered into the following transactions with related parties:
During the year ended September 30, 2020, the Company incurred management and consulting fees of $4,000 (year ended September 30, 2019 - $21,000) for accounting services provided by a company controlled by the Company's former CFO.
During the year ended September 30, 2020, the Company incurred management and consulting fees of $97,410 (year ended September 30, 2019 - $84,000) and geological consulting fees of $17,160 (year ended September 30, 2019 - $9,000) for services provided by a company controlled by the Company's CEO.
Management fees to the Company’s CEO are paid pursuant to a 2018 consulting agreement under which Moss Exploration Services received a monthly fee of $8,000, increased to $9,000 as of April 1, 2019 and to $12,000 as of September 1, 2020. The Company can terminate the agreement with three months’ notice, or payment of the fees during the termination period in lieu of notice.
For the year ended September 30, 2020, the Company paid or accrued $17,179, in professional fees (year ended September 30, 2019 - $nil) to Marrelli Support Services Inc. ("Marrelli") for Eric Myung, an employee of Marrelli, to act as the Company's CFO. As at September 30, 2020, Marrelli was owed $1,471 (September 30, 2019 - $nil).
Amounts due to related parties are unsecured, non-interest bearing and due on demand.
Subsequent Events
On October 29, 2020, the Company closed a non-brokered private placement of 7,500,000 flow-through units at a price of $0.54 per flow-through unit, for gross proceeds of $4,050,000. Each flow-through unit consists of one flow-through common share and one share purchase warrant, with each warrant exercisable to acquire a common share at $0.60 until October 29, 2022. Palisades Goldcorp Ltd. purchased all of the flow-through units through a donation arrangement. As a result of the flow-through offering, Palisades Goldcorp has become an insider of the Company
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
holding approximately 13.57% of the Company after giving effect to the offering. The Company paid a finder's fee of $180,000 in relation to the offering.
On December 7, 2020, the Company amended the terms of its option for the Labrador Properties. Subsequent to year end, the Company issued the vendors 400,000 common shares (800,000 total) and paid $50,000 cash ($100,000 total) in respect of each of the Ashuanipi and Hopedale properties.
On October 8, 2020, the Company granted 450,000 share purchase options exercisable at a price of $0.45 per share until October 8, 2025.
On December 21, 2020, the Company granted 500,000 share purchase options exercisable at a price of $0.45 per share until December 21, 2025.
Subsequent to September 30, 2020, the Company received proceeds of $2,656,173 from the exercise of 8,932,929 warrants.
Critical Accounting Estimates
The most significant estimates are related to the physical and economic lives of unproven mineral right interests and their recoverability.
Risk factors
COVID-19 Risks
The worldwide emergency measures taken to combat the COVID-19 pandemic may continue, could be expanded, and could also be reintroduced in the future following relaxation. As governments implement monetary and fiscal policy changes aimed to help stabilize economies and capital markets, we cannot predict legal and regulatory responses to concerns about the COVID-19 pandemic and related public health issues and how these responses may impact our business. The COVID-19 pandemic, actions taken globally in response to it, and the ensuing economic downturn has caused significant disruption to business activities and economies. The depth, breadth and duration of these disruptions remain highly uncertain at this time. Furthermore, governments are developing frameworks for the staged resumption of business activities. As a result, it is difficult to predict how significant the impact of the COVID-19 pandemic, including any responses to it, will be on the global economy and our business. We have outlined these risks in more detail below.
Other MD&A Requirements
As of January 27, 2021, the Company has outstanding a total of 110,687,104 shares, 7,460,000 options with a weighted average price of $0.30 per share and 35,872,543 warrants with a weighted average exercise price of $0.30 per share. Additional information is available at the Company’s website at www.labradorgold.com. To view the public documents of the Corporation, please visit the Corporation’s profile on the SEDAR website at www.sedar.com.
Cautionary Statement on Forward Looking Information
This MD&A contains certain forward-looking information and statements as defined in applicable securities laws (collectively referred to as "forward-looking statements"). These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "should", "believe" and similar expressions is intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These statements speak only as of the date of this MD&A. These forward-looking statements include but are not limited to, statements concerning:
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our strategies and objectives;
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prices and price volatility for commodities and of materials we use in our operations;
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the demand for and supply of commodities and materials that we use and plan to produce and sell;
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
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our financial resources;
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interest and other expenses;
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domestic laws affecting our operations;
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our tax position and the tax rates applicable to us;
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decisions regarding the timing and costs of construction and production with respect to, and the issuance of, the necessary permits and other authorizations required for any proposed projects;
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our planned future production levels;
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potential impact of production and transportation disruptions;
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our planned capital expenditures and estimates of costs related to environmental protection;
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our future capital and production costs, including the costs and potential impact of complying with existing and proposed environmental laws and regulations in the operation and closure of our operations;
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our financial and operating objectives;
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our environmental, health and safety initiatives;
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the outcome of legal proceedings and other disputes in which we may be or become involved; and
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general business and economic conditions.
Inherent in forward-looking statements are risks and uncertainties beyond our ability to predict or control, including risks that may affect our operating or capital plans; risks generally encountered in the permitting and development of mineral projects such as unusual or unexpected geological formations, unanticipated metallurgical difficulties, delays associated with permit appeals, ground control problems, adverse weather conditions, process upsets and equipment malfunctions; risks associated with labour disturbances and availability of skilled labour and management; fluctuations in the market prices of our principal commodities, which are cyclical and subject to substantial price fluctuations; risks created through competition for mining projects and properties; risks associated with lack of access to markets; risks associated with mine plan estimates; risks posed by fluctuations in exchange rates and interest rates, as well as general economic conditions; risks associated with environmental compliance and changes in environmental legislation and regulation; risks associated with our dependence on third parties for the provision of critical services; risks associated with non-performance by contractual counterparties; title risks; social and political risks associated with our operations; risks of changes in laws affecting our operations or their interpretation; and risks associated with tax reassessments and legal proceedings.
Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:
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general business and economic conditions;
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interest rates;
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changes in commodity prices;
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acts of government and the outcome of legal proceedings;
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the supply and demand for, deliveries of, and the level and volatility of commodities and products used in our operations;
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the timing of the receipt of permits and other regulatory and governmental approvals;
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changes in credit market conditions and conditions in financial markets generally;
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the availability of funding on reasonable terms;
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our ability to procure equipment and operating supplies in sufficient quantities and on a timely basis;
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the availability of qualified employees and contractors for our operations;
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our ability to attract and retain skilled staff;
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engineering and construction timetables and capital costs for our projects;
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costs of closure of various operations;
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market competition;
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the accuracy of our mine plan estimates (including, with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based;
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tax benefits and tax rates;
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the resolution of environmental and other proceedings or disputes; and
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our ability to obtain, comply with and renew permits in a timely manner.
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Labrador Gold Corp. Management's Discussion and Analysis For the Year Ended September 30, 2020
We caution you that the foregoing list of important factors and assumptions is not exhaustive. Other events or circumstances could cause our actual results to differ materially from those estimated or projected and expressed in, or implied by, our forward-looking statements. Except as required by law, we undertake no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise.
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