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Mineral Interests, Property and Equipment

12 Months Ended

Dec. 31, 2022

Mineral Interests, Property and Equipment [Abstract]

Mineral Interests, Property and Equipment

Mineral Interests, Property and Equipment

($000s)	Mineral interests		Construction in progress		Property & equipment ¹		Right-of-use assets ¹		Total
Cost
As at January 1, 2021		591,446		-		-		307		591,753
Additions		40,559		27,061		3,080		100		70,800
As at December 31, 2021		632,005		27,061		3,080		407		662,553
Additions		55,069		120,287		43,177		2,030		220,563
As at December 31, 2022		687,074		147,348		46,257		2,437		883,116
Accumulated Depreciation
As at January 1, 2021		-		-		-		72		72
Depreciation expense		-		-		117		85		202
As at December 31, 2021		-		-		117		157		274
Depreciation expense ¹		-		-		953		392		1,345
As at December 31, 2022		-		-		1,070		549		1,619
Net Book Value
As at December 31, 2021		632,005		27,061		2,963		250		662,279
As at December 31, 2022		687,074		147,348		45,187		1,888		881,497

Depreciation expense related to camps, equipment, and right-of-use assets associated with the KSM construction is capitalized to construction in progress.

Mineral interests, property and equipment additions by project are as follows.

			Year ended December 31, 2022
($000s)	January 1, 2022		Mineral interests		Construction in progress		Property & equipment		Right-of-use assets		Total Additions		December 31, 2022
Additions
KSM ¹		502,015		39,985		120,287		43,177		1,726		205,175		707,190
Courageous Lake		77,176		823		-		-		-		823		77,999
Iskut		41,779		8,125		-		-		-		8,125		49,904
Snowstorm		31,471		3,091		-		-		-		3,091		34,562
3 Aces		9,034		3,045		-		-		-		3,045		12,079
Grassy Mountain		771		-		-		-		-		-		771
Corporate		307		-		-		-		304		304		611
		662,553		55,069		120,287		43,177		2,030		220,563		883,116

			Year ended December 31, 2021
($000s)	January 1, 2021		Mineral interests		Construction in progress		Property & equipment		Right-of-use assets		Total Additions		December 31, 2021
Additions
KSM ²		444,167		27,607		27,061		3,080		100		57,848		502,015
Courageous Lake		76,522		654		-		-		-		654		77,176
Iskut		37,949		3,830		-		-		-		3,830		41,779
Snowstorm		24,924		6,547		-		-		-		6,547		31,471
3 Aces		7,113		1,921		-		-		-		1,921		9,034
Grassy Mountain		771		-		-		-		-		-		771
Corporate		307		-		-		-		-		-		307
		591,753		40,559		27,061		3,080		100		70,800		662,553

Construction in progress additions at KSM includes $14.7 million of capitalized borrowing costs.

$3.9 million of costs related to the BCMETC audit (refer to Note 8) were reclassified from mineral interests to amounts receivable.

Continued exploration of the Company’s mineral properties is subject to certain lease payments, project holding costs, rental fees and filing fees.

KSM

In 2001, the Company purchased a 100% interest in contiguous claim blocks in the Skeena Mining Division, British Columbia. The vendor maintains a 1% net smelter royalty interest on the project, subject to maximum aggregate royalty payments of $4.5 million. The Company is obligated to purchase the net smelter royalty interest for the price of $4.5 million in the event that a positive feasibility study demonstrates a 10% or higher internal rate of return after tax and financing costs.

In 2011 and 2012, the Company completed agreements granting a third party an option to acquire a 2% net smelter royalty on all gold and silver production sales from KSM for a payment equal to the lesser of $160 million or US$200 million. The option is exercisable for a period of 60 days following the announcement of receipt of all material approvals and permits, full project financing and certain other conditions for the KSM Project.

In December 2020, the Company purchased the Snowfield (renamed East Mitchell) property from Pretium Resources Inc. The East Mitchell property, located in the same valley that hosts KSM’s Mitchell deposit, was purchased for US$100 million ($127.5 million) in cash, a 1.5% net smelter royalty on East Mitchell property production, and a conditional payment of US$20 million, payable following the earlier of (i) commencement of commercial production from East Mitchell property, and (ii) announcement by the Company of a bankable feasibility study which includes production of reserves from the East Mitchell property. US$15 million of the conditional payment can be credited against future royalty payments.

Additions to mineral interests of $40 million (2021 - $27.6 million) consisted of costs incurred to carry out the Company’s environmental, technical support, exploration and drilling programs at KSM.

Additions to construction in progress consisted of $104.6 million (2021- $27.0 million) of KSM assets under construction costs, $14.7 million (2021- nil) of capitalized borrowing costs related to the secured note interest expense, and $0.9 million (2021- $0.1 million) of capitalized depreciation expense.

Additions to property and equipment consisted of $37.8 million (2021- nil) of commissioned camp costs, $4.5 million (2021- $3.1 million) of equipment costs, and $0.7 million (2021- nil) of leasehold improvements

Courageous Lake

In 2002, the Company purchased a 100% interest in the Courageous Lake gold project from Newmont Canada Limited and Total Resources (Canada) Limited. The Courageous Lake gold project consists of mining leases located in Northwest Territories of Canada.

Iskut

On June 21, 2016, the Company purchased 100% of the common shares of SnipGold Corp. which owns the Iskut Project, located in northwestern British Columbia.

In 2022, total mineral interests additions at Iskut were $8.1 million, of which $6.1 million was related to exploration activities, $1.0 million was related to environmental costs, and $0.9 million was related to project payroll costs.

Additions to mineral interests in 2022 consisted of costs to carry out the Company’s exploration and drilling program at Iskut.

Snowstorm

In 2017, the Company purchased 100% of the common shares of Snowstorm Exploration LLC which owns the Snowstorm Project, located in northern Nevada. In connection with the acquisition, the Company has agreed to make a conditional cash payment of US$2.5 million if exploration activities at the Snowstorm Project result in defining a minimum of five million ounces of gold resources compliant with National Instrument 43-101 and a further cash payment of US$5.0 million on the delineation of an additional five million ounces of gold resources.

In 2022, total mineral interests additions at Snowstorm were $3.1 million, which consisted of costs incurred to carry out the Company’s exploration and drill program.

3 Aces

In 2020, the Company acquired a 100% interest in the 3 Aces gold project in the Yukon, Canada from Golden Predator Mining Corp. through the issuance of 300,000 common shares valued at $6.6 million. Should the project attain certain milestones, including the confirmation of a National Instrument 43-101 compliant mineral resource of 2.5 million ounces of gold, the Company will pay an additional $1 million, and upon confirmation of an aggregate mineral resource of 5 million ounces of gold, the Company will pay an additional $1.25 million.

In 2022, total mineral interests additions at 3 Aces were $3.0 million, which consisted of costs incurred to carry out the Company’s exploration and drill program.

Grassy Mountain

In 2013, the Company sold 100% of its interest in the Grassy Mountain Project with a net book value of $0.8 million retained within mineral properties, related to the option to either receive, at the discretion of the Company, a 10% net profits interest royalty or a $10 million cash payment. Settlement is due four months after the later of: the day that the Company receives a feasibility study on the project; and the day that the Company is notified that permitting and bonding for the mine is in place. The current owner of the Grassy Mountain Project is Paramount who completed a feasibility study in 2020 but they have not notified the Company that permitting and bonding for the mine is in place.