DAKOTA TERRITORY RESOURCE CORP. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q may also contain statistical data and estimates we obtained from industry publications and reports generated by third parties. Although we believe that the publications and reports are reliable, we have not independently verified their data.
Forward-Looking Statements
This Quarterly Report on Form 10-Q and the exhibits attached hereto contain "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments of our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "estimates" or "intends", the negatives thereof, variations thereon and similar expressions or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q, include, but are not limited to:
º the progress, potential and uncertainties of our exploration program at our
properties located in the Homestake District of South Dakota (the
"Project");
º the success of getting the necessary permits for future drill programs and
future project exploration;
º expectations regarding the ability to raise capital and to continue our
exploration plans on our properties; and
º plans regarding anticipated expenditures at the Project.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:
º risks associated with the Merger;
º risks associated with lack of defined resources that are not SEC Guide 7
Compliant Reserves, and may never be;
º risks associated with our history of losses and need for additional
financing;
º risks associated with our limited operating history;
º risks associated with our properties all being in the exploration stage;
º risks associated with our lack of history in producing metals from our
properties;
º risks associated with our need for additional financing to develop a
producing mine, if warranted;
º risks associated with our exploration activities not being commercially
successful;
º risks associated with ownership of surface rights at our Project;
º risks associated with increased costs affecting our financial condition;
º risks associated with a shortage of equipment and supplies adversely
affecting our ability to operate;
º risks associated with mining and mineral exploration being inherently
dangerous;
º risks associated with mineralization estimates;
º risks associated with changes in mineralization estimates affecting the
economic viability of our properties;
º risks associated with uninsured risks;
º risks associated with mineral operations being subject to market forces
beyond our control;
º risks associated with fluctuations in commodity prices;
º risks associated with permitting, licenses and approval processes;
º risks associated with the governmental and environmental regulations;
º risks associated with future legislation regarding the mining industry and
climate change;
º risks associated with potential environmental lawsuits;
º risks associated with our land reclamation requirements;
º risks associated with gold mining presenting potential health risks;
º risks associated with the COVID-19 pandemic;
º risks associated with cybersecurity and cyber-attacks;
º risks related to title in our properties;
º risks related to competition in the gold and silver mining industries;
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º risks related to economic conditions;
º risks related to our ability to manage growth;
º risks related to the potential difficulty of attracting and retaining
qualified personnel;
º risks related to our dependence on key personnel;
º risks related to our SEC filing history; and
º risks related to our securities.
This list is not exhaustive of the factors that may affect our forward-looking statements. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as required by law, we disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the foregoing cautionary statements.
This management's discussion and analysis should be read in conjunction with our financial statements and notes thereto as set forth herein. Readers are also urged to carefully review and consider the various disclosures made by us, which attempt to advise interested parties of the factors which affect our business, including without limitation, the disclosures made under "Risk Factors" of our most recent Form 10-K.
Our unaudited financial statements are stated in
Since we are an exploration stage company and have not generated revenues to date, our business is subject to numerous contingencies and risk factors beyond our control, including exploration and development risks, competition from well-funded competitors, and our ability to manage growth.
Overview
Our goal is to create shareholder value through the acquisition, responsible
exploration and future development of high caliber gold properties in the
Since 2012, we have consistently pursued a strategy of expanding our portfolio
of brownfields exploration properties located exclusively within the
Planned Activities
Our planned activities during fiscal 2022 are focussed on advancing our
Maitland, Blind Gold,
We continue to model data acquired by our broad high-definition airborne
geophysical survey - as well as a recent and extensive ground geophysics survey
covering a large area in the
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Table: Fiscal Year 2022 Proposed
Exploration Expenditures (millions)
General & administrative $ 3.4 Drilling, Field programs/Met Testing/Data Compilation
$ 3.8 TOTAL$13.4
Since we are an exploration stage company and have not generated revenues to date, our cash flow projections are subject to numerous contingencies and risk factors beyond our control, including exploration and development risks, competition from well-funded competitors, and our ability to manage growth. We can offer no assurance that our expenses will not exceed our projections.
As at the date of this management's discussion and analysis, the company has
commitments to purchase three exploration properties, totaling approximately
Merger Agreement
Pursuant to an Amended and Restated Merger Agreement (the "Merger Agreement"),
In addition, at the closing of the Merger, (i) each outstanding option to purchase the Company's common stock, whether vested or unvested, will be assumed and converted into an option with respect to a number of shares of JR common stock in the manner set forth in the Merger Agreement and (ii) any outstanding awards of restricted stock units with respect to shares of the Company's common stock will be assumed and converted into the right to receive an award of restricted stock units representing a right to receive a number of shares of JR common stock in the manner set forth in the Merger Agreement. On or prior to the closing of the Merger, JR will have completed a reverse stock split such that the total number of JR shares will be proportionately reduced to 35,641,667.
On or before completion of the Mergers: (i) JR will have changed its name to
The completion of the Merger is subject to customary closing conditions for a transaction of this nature, including securities law compliance and the approval of the Company's shareholders.
Liquidity and Capital Resources
We are an exploration-stage company and do not generate revenues. As such, we finance our operations and the acquisition and exploration of our mineral properties through the issuance of share capital, and we could be materially adversely affected if we were unable to raise capital because of market or other factors.
As of
During the six months ended
During our fiscal year ending
Results of Operations
Three months ended
Revenue
We had no operating revenues for the three months ended
Exploration Costs
During the three months ended
General and Administrative
Our general and administrative expenses for the three months ended
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Six months ended
Revenue
We had no operating revenues for the six months ended
Exploration Costs
During the six months ended
General and Administrative
Our general and administrative expenses for the six months ended
We had losses from operations for the six months ended
Off-Balance Sheet Arrangements
As at
Critical Accounting Estimates
Management's discussion and analysis of financial condition and results of
operations is based on our financial statements, which have been prepared in
accordance with US GAAP. Preparation of financial statements requires management
to make assumptions, estimates and judgments that affect the reported amounts of
assets, liabilities, revenues, costs and expenses, and the related disclosures
of contingencies. Management bases its estimates on various assumptions and
historical experience, which are believed to be reasonable; however, due to the
inherent nature of estimates, actual results may differ significantly due to
changed conditions or assumptions. On a regular basis, management reviews the
accounting policies, assumptions, estimates and judgments to ensure that our
financial statements are fairly presented in accordance with US GAAP. However,
because future events and their effects cannot be determined with certainty,
actual results could differ from our assumptions and estimates, and such
differences could be material. Management believes that the following critical
accounting estimates and judgments have a significant impact on our financial
statements: valuation of options granted to directors and officers using the
Black-Scholes model and fair value of mineral properties. The accounting
policies are described in greater detail in Note 2 to our audited annual
financial statements in our Annual Report on Form 10-K for the fiscal year ended
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