XML 56 R20.htm IDEA: XBRL DOCUMENT

Fair Value of Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2022

Disclosure of Fair Value of Financial Assets and Liabilities Explanatory [Abstract]

Fair Value of Financial Assets and Liabilities

15.

Fair value of financial assets and liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts, volatility measurements used to value option contracts and observable credit default swap spreads to adjust for credit risk where appropriate), or inputs that are derived principally from or corroborated by observable market data or other means.

Level 3: Inputs are unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

The Company’s fair values of financial assets and liabilities were as follows:

	December 31, 2022
($000s)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents		46,150		46,150		-		-		46,150
Short-term deposits		81,690		81,690		-		-		81,690
Amounts receivable		6,260		6,260		-		-		6,260
Investment in marketable securities		3,696		3,696		-		-		3,696
Convertible notes receivable		631		-		-		631		631
Long-term receivables		51,703		51,703		-		-		51,703
		190,130		189,499		-		631		190,130
Liabilities
Accounts payable and accrued liabilities		42,956		42,956		-		-		42,956
Secured note		263,541		-		-		263,541		263,541
		306,497		42,956		-		263,541		306,497

	December 31, 2021
($000s)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents		11,523		11,523		-		-		11,523
Short-term deposits		29,243		29,243		-		-		29,243
Amounts receivable and prepaid expenses		5,229		5,229		-		-		5,229
Investment in marketable securities		3,367		3,367		-		-		3,367
Convertible notes receivable		606		-		-		606		606
Long-term receivables		13,038		13,038		-		-		13,038
		63,006		62,400		-		606		63,006
Liabilities
Accounts payable and accrued liabilities		12,165		12,165		-		-		12,165
		12,165		12,165		-		-		12,165

The carrying value of cash and cash equivalents, short-term deposits, amounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial assets and liabilities.

The Company’s financial risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit Risk

The Company’s credit risk is primarily attributable to short-term deposits, convertible notes receivable, and receivables included in amounts receivable and prepaid expenses. The Company has no significant concentration of credit risk arising from operations. The short-term deposits consist of Canadian Schedule I bank guaranteed notes, with terms up to one year but are cashable in whole or in part with interest at any time to maturity, for which management believes the risk of loss to be remote. Management believes that the risk of loss with respect to financial instruments included in amounts receivable and prepaid expenses to be remote.

Liquidity Risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2022, the Company had cash and cash equivalents of $46.2 million and short-term deposits of $81.7 million (December 31, 2021 - $11.5 million and $29.2 million, respectively) for settlement of current financial liabilities of $47.3 million (December 31, 2021 - $12.2 million). Except for the secured note liability and the reclamation obligations, the Company’s financial liabilities primarily have contractual maturities of 30 days and are subject to normal trade terms. The Company’s ability to fund its operations and capital expenditures and other obligations as they become due is dependent upon market conditions.

The following tables detail the Company’s expected remaining contractual cash flow requirements for its financial liabilities on repayment or maturity periods. The amounts presented are based on the contractual undiscounted cash flows and may not agree with the carrying amounts in the Consolidated Statements of Financial Position.

($000s)	Less than 1 year		1-3 years		3-5 years		Greater than 5 years		Total
Secured note including interest		19,808		39,616		39,616		164,501		263,541
Flow-through share expenditures		15,023		-		-		-		15,023
Lease obligation		669		834		106		92		1,701
		35,500		40,450		39,722		164,593		280,265

As the Company does not generate cash inflows from operations, the Company is dependent upon external sources of financing to fund its exploration projects and on-going activities. If required, the Company will seek additional sources of cash to cover its proposed exploration and development programs at its key projects, in the form of equity financing and from the sale of non-core assets. Refer to Note 13 for details on equity financing.

Market Risk

(a)

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument or its fair value will fluctuate because of changes in market interest rates. The secured note liability (Note 12) bears interest at a fixed rate of 6.5% per annum. The Company’s current policy is to invest excess cash in Canadian bank guaranteed notes (short-term deposits). The short-term deposits can be cashed in at any time and can be reinvested if interest rates rise.

(b)

Foreign Currency Risk

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian and US dollars. The secure note liability and the related interest payments are denominated in US dollars. The Company has the option to pay the interest either in cash or in shares. The Company also funds certain operations, exploration and administrative expenses in the United States on a cash call basis using US dollar cash on hand or converted from its Canadian dollar cash. Management believes the foreign exchange risk derived from currency conversions is not significant to its operations and has not entered into any foreign exchange hedges. As at December 31, 2022, the Company had cash and cash equivalents, investment in associate, convertible notes receivable, loan receivable, reclamation deposits, accounts payable, accrued liabilities and secured note that are in US dollars.

(c)

Investment Risk

The Company has investments in other publicly listed exploration companies which are included in investments. These shares were received as option payments on certain exploration properties the Company owns or has sold. In addition, the Company holds $3.6 million in a gold exchange traded receipt that is recorded on the consolidated statements of financial position in investments. The risk on these investments is significant due to the nature of the investment but the amounts are not significant to the Company.