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INCOME TAXES | 12 Months Ended
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Jun. 30, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES |
| 15. | INCOME TAXES
Domestic and foreign components of loss before income taxes for the years ended June 30, 2023, 2022, and 2021 are as follows:
|  | For the year ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Canada |  | $ | 34,606 |  |  | $ | 6,918 |  |  | $ | 3,362 |
United States |  |  | 6,006 |  |  |  | 3,969 |  |  |  | 1,462 |
Total |  | $ | 40,612 |  |  | $ | 10,887 |  |  | $ | 4,824 |
The following table is a reconciliation of income taxes at statutory rates:
|  | For the year ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Loss before income taxes |  | $ | 40,612 |  |  | $ | 10,887 |  |  | $ | 4,824 |
Combined federal and provincial statutory income tax rate |  |  | 27 | % |  |  | 27 | % |  |  | 27 | %
Income tax benefit at statutory tax rates |  |  | 10,965 |  |  |  | 2,940 |  |  |  | 1,303 |
Foreign rate differential |  |  | (131 | ) |  |  | (72 | ) |  |  | (31 | )
Earnout shares liability |  |  | (2,841 | ) |  |  | - |  |  |  | - |
Warrant liability |  |  | (1,518 | ) |  |  | - |  |  |  | - |
GXII transaction costs |  |  | (925 | ) |  |  | - |  |  |  | - |
Share based compensation |  |  | (412 | ) |  |  | (462 | ) |  |  | (212 | )
Accretion expense |  |  | (496 | ) |  |  | (407 | ) |  |  | (158 | )
Loss on debt extinguishment |  |  | (54 | ) |  |  | - |  |  |  | - |
Capital loss rate differential |  |  | (2 | ) |  |  | (38 | ) |  |  | 182 |
Change in estimates related to prior years |  |  | 14 |  |  |  | (274 | ) |  |  | 739 |
Other |  |  | 45 |  |  |  | 26 |  |  |  | 18 |
Change in valuation allowance |  |  | (4,341 | ) |  |  | (1,713 | ) |  |  | (1,841 | )
Income tax benefit |  | $ | 304 |  |  | $ | - |  |  | $ | - |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred taxes are as follows:
|  | As of June 30, |
|  | 2023 |  |  | 2022 |
Deferred tax assets |  |  |  |  |  |  |  |
Net operating losses available for future periods |  | $ | 11,893 |  |  | $ | 8,977 |
Mineral interests |  |  | 9,477 |  |  |  | 9,477 |
Startup and organizational costs |  |  | 2,132 |  |  |  | - |
Research and development costs |  |  | 1,060 |  |  |  | - |
Share issuance costs |  |  | 446 |  |  |  | - |
Capital losses available for future periods |  |  | 419 |  |  |  | 420 |
Other |  |  | 36 |  |  |  | 74 |
Total deferred tax assets |  |  | 25,463 |  |  |  | 18,948 |
Valuation allowance |  |  | (25,463 | ) |  |  | (18,948 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
During the year ended June 30, 2022, we identified errors in the recognition of capital losses related to realized mineral property write downs and foreign exchange gains and losses in Canada which resulted in changes to capital losses available for future periods and other of $(221) and $(3), respectively. These changes primarily related to adjustments to deferred tax assets recorded during fiscal year 2021. In addition, during the year ended June 30, 2022, we identified an error in the recognition of net operating losses related to disallowed interest expense for the prior year which resulted in a decrease to net operating loss carryforwards of $19. After evaluation and consideration of the full valuation allowance historically applied against total deferred tax assets, we determined that the impact of the adjustments was not material to the previously issued consolidated financial statements, nor are the out of period adjustments material to the estimated results for the year ended June 30, 2022. Changes in the valuation allowance are as follows:
|  | For the year ended June 30, |
|  | 2023 |  |  | 2022 |
Valuation allowance, beginning of year |  | $ | (18,948 | ) |  | $ | (17,235 | )
Current year additions |  |  | (4,341 | ) |  |  | (1,713 | )
Startup and organizational costs acquired |  |  | (2,174 | ) |  |  | - |
Valuation allowance, end of year |  | $ | (25,463 | ) |  | $ | (18,948 | )
The Company acquired a federal income tax payable of $406 in connection with the GXII Transaction. As a result of a post-transaction loss at ECRC, a partial release of the valuation allowance attributed to the reduction of the acquired federal income tax payable of $304 has been recorded as an income tax benefit in the consolidated statement of operations and comprehensive loss for the year ended June 30, 2023. The Company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowance of $25,463 at June 30, 2023, relates mainly to net operating loss carryforwards in Canada and mineral interests due to deferred exploration expenditures in the United States, where the utilization of such attributes is not more likely than not. The Company has the following cumulative net operating losses for Canadian and U.S. income tax purposes and these carryforwards will generally expire between 2026 and 2043. As a result of the Tax Cuts and Jobs Act of 2017, U.S. tax losses incurred for tax years ending on and after June 30, 2019, totaling $2,510, have no expiration.. Schedule of cumulative net operating losses
|  | As of June 30, |
Jurisdiction |  | 2023 |  |  | 2022 |
Canada |  | $ | 40,267 |  |  | $ | 31,551 |
United States |  |  | 3,491 |  |  |  | 2,460 |
Total |  | $ | 43,758 |  |  | $ | 34,011 |
In addition, the Company has a Canadian capital loss carryforward of $3,375 as of June 30, 2023, which has no expiration date and can be used to offset future capital gains, and U.S. state net operating loss carryforwards of $4,943 as of June 30, 2023 which generally expire between 2031 and 2043. The Company had no unrecognized tax benefits as of June 30, 2023 or 2022. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in its income tax provision. The Company has not recognized any interest or penalties in the fiscal years presented in these consolidated financial statements. The Company is subject to income tax in the U.S. federal jurisdiction and Canada. Certain years remain subject to examination but there are currently no ongoing exams in any taxing jurisdictions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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