GOLDCORP INC. Certain statements in this Management's Discussion and Analysis ("MD&A"), other
than purely historical information, including estimates, projections, statements
relating to our business plans, objectives and expected operating results, and
the assumptions upon which those statements are based, are "forward-looking
statements". Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "would," "expect," "intend,"
"could," "estimate," "should," "anticipate," or "believe," and similar
expressions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. We undertake
no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events, or otherwise, except as
may be required under applicable law. Readers should carefully review the risk
factors and related notes included under Item 1A of our Annual Report on Form
10-K for the year ended
The following MD&A is intended to help readers understand the results of our operation and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Interim Unaudited Financial Statements and the accompanying Notes to Interim Unaudited Financial Statements under Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Unless otherwise indicated or unless the context otherwise requires, all
references in this document to "we," "us," "our," the "Company," and similar
expressions refer to
Company History and Recent Events
General Corporate Overview
Augusta Gold is an exploration stage gold company focused on building a
long-term business that delivers stakeholder value through developing the
The Company is led by a management team and board of directors with a proven track record of success in financing and developing mining assets and delivering shareholder value.
On
Pursuant to the MIPA, the Company agreed to purchase from the Barrick Parties,
and the Barrick Parties agreed to sell to the Company, all of the equity
interests (the "Equity Interests") in
The Acquisition Transaction closed on
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Following closing of the Acquisition Transaction, the Company's board and
management was reconstituted to include
On
On
Results of Operations
Three Months Ended
Three Months Ended
3/31/22 3/31/21
Operating expenses
General and administrative $ 1,067,879 $ 1,338,457
Exploration, evaluation and project expense 338,639 2,584,323
Accretion expense 7,099 4,940
Depreciation expense 11,014 8,066
Total operating expenses 1,424,631 3,935,786
Net operating loss (1,424,631 ) (3,935,786 )
Revaluation of warrant liability (206,193 ) (7,007,886 )
Foreign currency exchange gain 209,611 195,326
Net loss $ (1,421,213 ) $ (10,748,346 ) For the three months ending
Three months ending 3/31/2022 3/31/2021 Variance Accounting fees$ 89,000 $ 95,000 $ (6,000 ) Legal and other professional fees 276,000 215,000 61,000 Marketing expense 14,000 77,000 (63,000 ) Payroll 62,000 478,000 (416,000 ) Corporate expenses & rent 19,000 143,000 (124,000 ) Share based compensation 439,000 234,000 205,000 Insurance 42,000 26,000 16,000 Stock exchange fees 39,000 43,000 (4,000 ) Other general expenses 88,000 27,000 61,000 Total$ 1,068,000 $ 1,338,000 $ (270,000 )
? Accounting fees decrease resulted from fewer costs for additional consulting
fees needed for required regulatory filings and tax compliance in 2021.
? Legal fees were needed for additional stock exchange listing compliance
requirements in 2021 and there was a decrease of
2022. This decrease was offset by professional consulting fees of
an increase in franchise tax fees of
? Marketing expense was lower as 2021 had additional amounts that were used for
Company and shareholder awareness projects.
? The payroll and corporate expenses was from the Company entering into an
agreement to share office space, equipment, personnel, consultants and various
administrative services for the Company's head office located in
periods due to decreased personnel and consultants used in the quarter.
? The Company granted 5,825,000 options to officers, directors and employees of
the Company in the first quarter 2021, pursuant to the terms of the Company's
Stock Option Plan. The Company recognized share-based compensation expense
related to the stock options of
ending
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For the three months ending
Three months ending 3/31/2022 3/31/2021 Variance Drilling$ 1,000 $ 1,446,000 $ (1,445,000 ) Consultants/Contractors 120,000 556,000 (436,000 ) Supplies and equipment 57,000 179,000 (122,000 ) Assay 0 134,000 (134,000 ) Water haulage 0 136,000 (136,000 ) Overhead 14,000 115,000 (101,000 ) Permits and fees 7,000 16,000 (9,000 ) Other 140,000 2,000 138,000 Total$ 339,000 $ 2,584,000 $ (2,245,000 )
In the first quarter of 2022, The Company continued test work on the metallurgical drill samples collected in 2021. Hydrogeologic modelling and geochemical characterization of the Bullfrog deposit was initiated and remains in-progress.
Additionally, Augusta and the BLM held a Baseline Kickoff Meeting, which included various federal, state, and local agencies, and the BLM assigned a Project Manager and Interdisciplinary Team to provide guidance, approve work plans, review, and approve baseline studies necessary to progress the permitting effort.
The revaluation of the warrant liability is based on the following warrants issued:
Issue Date Expiration Date Warrants Issued Exercise Price October 2020 October 202418,333,333 C$ 1.80 March 2021 March 20243,777,784 C$ 2.80
Liquidity and Capital Resources
The Company has no revenue generating operations from which it can internally generate funds. To date, the Company's ongoing operations have been financed by the sale of its equity securities by way of public offerings, private placements and the exercise of incentive stock options and share purchase warrants. The Company believes that it will be able to secure additional private placements and public financings in the future, although it cannot predict the size or pricing of any such financings. This situation is unlikely to change until such time as the Company can develop a bankable feasibility study on one of its projects.
On
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Liquidity
As of
As of
The Company expects that it will operate at a loss for the foreseeable future and believes that it will be required to raise additional funds through debt financing, public or private equity financing, or by other means in the coming months in order to continue in business. Should such financing not be available in that time-frame, the Company will be required to reduce its activities and will not be able to carry out all of its presently planned exploration and, if warranted, development activities on its currently anticipated scheduling.
Capital Management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development and exploration of its mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital to an acceptable risk.
As of
Contractual obligations and commitments
The Company's contractual obligations and commitments as of
<1 year 1 - 3 years 4 - 5 years >5 years Total Leases$ 152,466 $ 166,521 $ 46,000 $ 675,000 $ 1,039,987 Capital Expenditure 30,000 30,000 - - 60,000$ 182,466 $ 196,521 $ 46,000 $ 675,000 $ 1,099,987
Off Balance Sheet Arrangements
We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.
Critical Accounting Policies and Use of Estimates
Stock based compensation is measured at grant date, based on the fair value of
the award, and is recognized as an expense over the employee's requisite service
period. We estimate the fair value of each stock option as of the date of grant
using the Black-Scholes pricing model. The Company determines the expected life
based on historical experience with similar awards, giving consideration to the
contractual terms, vesting schedules and post-vesting forfeitures. The Company
uses the risk-free interest rate on the implied yield currently available on
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Mineral property exploration costs are expensed as incurred until such time as
economic reserves are quantified. To date, the Company has not established any
proven or probable reserves on its mineral properties. Costs of lease,
exploration, carrying and retaining unproven mineral lease properties are
expensed as incurred. The Company has chosen to expense all mineral exploration
costs as incurred given that it is still in the exploration stage. Once the
Company has identified proven and probable reserves in its investigation of its
properties and upon development of a plan for operating a mine, it would enter
the development stage and capitalize future costs until production is
established. When a property reaches the production stage, the related
capitalized costs will be amortized over the estimated life of the
probable-proven reserves. When the Company has capitalized mineral properties,
these properties will be periodically assessed for impairment of value and any
diminution in value. To date, the Company has not established the commercial
feasibility of any exploration prospects; therefore, all exploration costs are
being expensed. Costs of property acquisitions are being capitalized, and a
required payment of
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