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Note 15 - Income Taxes
 12 Months Ended
Nov. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 15 – INCOME TAXES

 

The Company’s statutory tax rate is 27% and is expected to remain at this amount until 2024.

 

The Company’s Income tax expense (recovery) consisted of:

 

   

Years ended November 30,

  
   

2023

    

2022

    

2021

  

Current:

                        

Canada

   $ —     $ —     $ 110  

Foreign

     39       (33 )     27  
      39       (33 )   $ 137  

Deferred:

                        

Canada

     —       —       —  

Foreign

     —       —       —  
      —       —       —  

Income tax (recovery) expense

   $ 39     $ (33 )   $ 137  

 

The Company’s Loss before income taxes consisted of:

 

   

Years ended November 30,

  
   

2023

    

2022

    

2021

  

Canada

   $ (18,213 )   $ (17,062 )   $ (17,723 )

Foreign

     (28,551 )     (36,314 )     (22,676 )
    $ (46,764 )   $ (53,376 )   $ (40,399 )

 

The Company’s Income tax (recovery) expense differed from the amounts computed by applying the Canadian statutory corporate income tax rates for the following reasons:

 

           

Years ended November 30,

  
           

2023

            

2022

            

2021

  

Loss before income taxes

           $ (46,764 )           $ (53,376 )           $ (40,399 )
                                                 

Combined federal and provincial statutory tax rate

     27.0 %     (12,626 )     27.0 %     (14,412 )     27.0 %     (10,908 )

Reconciling items:

                                                

Non-deductible expenditures

     -5.9 %     2,767       -4.5 %     2,411       -6.1 %     2,483  

Foreign accrual property income

     -3.6 %     1,682       -1.2 %     666       -1.9 %     771  

Effect of different statutory tax rates on earnings or losses of subsidiaries

     0.9 %     (407 )     1.0 %     (518 )     0.8 %     (323 )

Change in valuation allowance on deferred tax assets

     -18.5 %     8,623       -22.3 %     11,852       -20.1 %     8,115  

Other

     —       —       0.1 %     (32 )     —       (1 )

Income tax (recovery) expense

     -0.1 %   $ 39       0.1 %   $ (33 )     -0.3 %   $ 137  

 

 

Components of the Company’s deferred income tax assets (liabilities) are as follows:

 

   

As of November 30,

  
   

2023

    

2022

  

Deferred tax income assets:

                

Net operating loss carry forwards

   $ 193,508     $ 188,783  

Capital loss carry forwards

     47,995       48,264  

Mineral properties

     624       628  

Intangible assets

     462       465  

Property and equipment

     184       198  

Investment in affiliates

     47,522       44,713  

Unpaid interest expense

     2,105       2,105  

Unrealized loss on investments

     196       233  

Asset retirement obligation

     131       386  

Other

     1,129       1,068  
      293,856       286,843  

Valuation allowances

     (293,536 )     (285,611 )
      320       1,232  

Deferred income tax liabilities:

                

Notes receivable

     —       (942 )

Capitalized assets and other

     (320 )     (290 )
      (320 )     (1,232 )

Net deferred income tax assets (liabilities)

   $ —     $ —  

 

Net operating losses available to offset future taxable income are as follows:

 

Year of Expiry

  

U.S.

    

Canada

  

2024

   $ 1,032     $ —  

2025

     1,246       —  

2026

     13,382       17,795  

2027

     18,493       1,777  

2028

     85       —  

2029

     11,223       11,515  

2030

     10,916       15,322  

2031

     16,580       15,249  

2032

     309,772       18,610  

2033

     14,529       14,044  

2034

     15,607       10,104  

2035

     16,383       9,227  

2036

     14,764       9,080  

2037

     14,111       6,037  

2038

     —       6,153  

2039

     —       5,578  

2040

     —       6,642  

2041

     —       —  

2042

     —       6,854  

2043

     —       4,153  

Indefinite

     72,413       —  
    $ 530,536     $ 158,140  

 

 

U.S. net operating losses arising in tax years ending after December 31, 2017 can be carried over to each taxable year following the tax year of loss (indefinitely). The Company has capital loss carry-forwards of approximately $355,516 as of November 30, 2023 (November 30, 2022: $357,511) for Canadian tax purposes. These tax losses are carried forward indefinitely.

 

Future use of U.S. loss carry-forwards is subject to certain limitations under provisions of the Internal Revenue Code including limitations subject to Section 382, which relates to a 50% change in control over a three-year period and are further dependent upon the Company attaining profitable operations. Ownership changes occurred on January 22, 2009 and on December 31, 2012 and the U.S. tax losses related to NOVAGOLD Resources Alaska Inc. and its investment in Donlin Gold for the prior three-year periods prior to the change in control may be subject to limitation under Section 382. Accordingly, the Company’s ability to use these losses may be limited or they may expire un-utilized. Losses incurred to date may be further limited if a subsequent change in control occurs.

 

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax asset. Significant pieces of objective negative evidence evaluated included the cumulative loss incurred as of November 30, 2023. Such objective evidence limits the ability to consider other subjective evidence such as management’s projections for future growth. On the basis of this evaluation, as of November 30, 2023, a valuation allowance of $293,536 (November 30, 2022: $285,611), has been recorded in order to measure only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable; however, could be adjusted if estimates of future taxable income during the carry forward period are reduced or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as management’s projections for growth.

 

Uncertain tax position

 

There were no uncertain tax positions as of November 30, 2023, 2022 and 2021. The Company recognizes any interest and penalties related to uncertain tax positions, if any, as income tax expense. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet. As of November 30, 2023, 2022 and 2021, there were no accrued interest and penalties related to uncertain tax positions. The Company is subject to income taxes in Canada and the United States. With few exceptions, the tax years that remain subject to examination as of November 30, 2023, are 2018 to 2023 in Canada and 2019 to 2023 in the United States.