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Provision for Site Reclamation and Closure

12 Months Ended

Dec. 31, 2021

Provision for Site Reclamation and Closure

Provision for Site Reclamation and Closure

Note 13: Provision for site reclamation and closure

The Company recognizes a provision for site reclamation and closure, which reflects the present value of the estimated amount of cash flows required to satisfy the asset retirement obligation in respect of the Committee Bay and Eau Claire properties. The components of this obligation are the removal of equipment currently being used at the site as well as costs associated with the reclamation of the camp housing and work sites on the property. The estimate of future asset retirement obligations is subject to change based on amendments to applicable laws, management’s intentions, and mining lease renewals.

The key assumptions used to calculate the present value of the future estimated cash flows of the Company’s projects are as follows:

	·	Undiscounted cash flow obligation for site reclamation of $4,938 (December 31, 2020 – $5,060);

	·	Expected timing of future cash flows is based on mining leases expiration, which is between the years 2026 and 2041;

	·	Annual inflation rate of 2.5% (December 31, 2020 – 2%); and

	·	Risk-free interest rate of 1.68% (December 31, 2020 – 1.21%).

The present value of the liability for the site reclamation and closure provision for the Company’s projects was as follows:

	Quebec		Nunavut			Total
Balance at December 31, 2019	$	-	$	2,134		$	2,134
Provision, assumed on acquisition of Eastmain (note 6)		1,849		-			1,849
Accretion		5		29			34
Change in estimate		-		273			273
Balance at December 31, 2020	$	1,854	$	2,436		$	4,290
Accretion		30		39			69
Change in estimate		50		(219	)		(169	)
Balance at December 31, 2021	$	1,934	$	2,256		$	4,190