GOLDCORP INC. Certain statements in this Management's Discussion and Analysis ("MD&A"), other
than purely historical information, including estimates, projections, statements
relating to our business plans, objectives and expected operating results, and
the assumptions upon which those statements are based, are "forward-looking
statements". Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "would," "expect," "intend,"
"could," "estimate," "should," "anticipate," or "believe," and similar
expressions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. We undertake
no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events, or otherwise, except as
may be required under applicable law. Readers should carefully review the risk
factors and related notes included under Item 1A of our Annual Report on Form
10-K for the year ended
The following MD&A is intended to help readers understand the results of our operation and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Interim Unaudited Financial Statements and the accompanying Notes to Interim Unaudited Financial Statements under Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Unless otherwise indicated or unless the context otherwise requires, all
references in this document to "we," "us," "our," the "Company," and similar
expressions refer to
Company History and Recent Events
General Corporate Overview
The Company is an exploration stage gold company focused on building a long-term
business that delivers stakeholder value through developing the
The Company is led by a management team and board of directors with a proven track record of success in financing and developing mining assets and delivering shareholder value.
On
Pursuant to the MIPA, the Company agreed to purchase from the Barrick Parties,
and the Barrick Parties agreed to sell to the Company, all of the equity
interests (the "Equity Interests") in
The Acquisition Transaction closed on
19
Following closing of the Acquisition Transaction, the Company's board and
management was reconstituted to include
On
On
On
The CR Interests were acquired for the following consideration:
?
? Issuance of 7,800,000 shares of common stock of the Company ("Common Shares")
on the closing date ("Initial Payment Shares") with an estimated fair value of
exchange rate of
? Cash of
equal to
exchange rate for the conversion of Canadian dollars to
(the "Currency Exchange Rate") on the business day immediately preceding the
closing date) of
paid
?
On
Results of Operations
Three Months Ended
Three Months Ended
9/30/22 9/30/21
Operating expenses
General and administrative $ 1,569,066 $ 1,152,843
Lease expense 0 0
Exploration, evaluation and project expense 3,003,730 1,267,366
Accretion expense 23,297 6,162
Depreciation expense 11,014 16,910
Total operating expenses 4,607,107 2,443,281
Net operating loss (4,607,107 ) (2,443,281 )
Revaluation of warrant liability 5,202,608 3,936,989
Interest expense (106,435 ) 0
Foreign currency exchange gain (loss) (179,405 ) (470,565 )
Net income $ 309,661 $ 1,023,143
20
Nine Months Ended
Nine Months Ended
9/30/22 9/30/21
Operating expenses
General and administrative $ 3,856,168 $ 3,807,392
Lease expense 21,000 16,000
Exploration, evaluation and project expense 4,824,158 7,745,089
Accretion expense 48,766 18,605
Depreciation expense 33,043 33,043
Total operating expenses 8,783,135 11,620,129
Net operating loss (8,783,135 ) (11,620,129 )
Revaluation of warrant liability 435,034 13,826,926
Interest expense (106,435 ) 0
Foreign currency exchange gain (loss) (206,609 ) 185,942
Net income (loss) $ 8,661,145 ) $ 2,392,739 For the three months ending
Three months ending 9/30/22 9/30/21 Variance Accounting fees$ 123,000 $ 62,000 $ 61,000 Legal and other professional fees 450,000 89,000 361,000 Marketing expense 15,000 1,000 14,000 Payroll 179,000 445,000 (266,000 ) Corporate expenses & rent 47,000 42,000 5,000 Share based compensation 673,000 442,000 231,000 Insurance 45,000 31,000 14,000 Stock exchange fees 31,000 13,000 18,000 Other general expenses 6,000 28,000 (22,000 ) Total$ 1,569,000 $ 1,153,000 $ 416,000
For the nine months ending
Nine months ending 9/30/22 9/30/21 Variance Accounting fees$ 248,000 $ 219,000 $ 29,000 Legal and other professional fees 1,084,000 354,000 730,000 Marketing expense 36,000 74,000 (38,000 ) Payroll 544,000 1,284,000 (740,000 ) Corporate expenses & rent 125,000 262,000 (137,000 ) Share based compensation 1,584,000 1,163,000 421,000 Insurance 122,000 92,000 30,000 Stock exchange fees 99,000 233,000 (134,000 ) Other general expenses 14,000 126,000 (112,000 ) Total$ 3,856,000 $ 3,807,000 $ 49,000
? Accounting fees decrease resulted from fewer costs for additional consulting
fees needed for required regulatory filings and tax compliance in 2021.
? Legal fees and professional fees increased due to a legal agreement that was
finalized in
in franchise tax fees and other expenses.
? Marketing expense was lower as 2021 had additional amounts that were used for
company and shareholder awareness projects.
21
? The payroll and corporate expenses result from the Company entering into an
agreement to share office space, equipment, personnel, consultants and various
administrative services for the Company's head office located in
periods due to decreased personnel and consultants used in the quarter.
? The Company granted options to officers, directors and employees of the Company
pursuant to the terms of the Company's Stock Option Plan; 4,041,667 in the
first quarter 2021 (adjusted for 1,783,333 canceled options); 500,000 in the
third quarter 2021; 350,000 in the second quarter 2022; 100,000 in the third
quarter 2022.
? Stock exchange fee variance is a result of the initial listing fee paid to the
TSX in
does not expect initial listing fees to be incurred for the remainder of the
year.
For the three months ending
Three months ending 9/30/22 9/30/21 Variance Drilling$ 1,211,000 $ 425,000 $ 786,000 Consultants/Contractors 1,281,000 279,000 1,002,000 Supplies and equipment 134,000 105,000 29,000 Assay 26,000 154,000 (128,000 ) Water haulage 0 82,000 (82,000 ) Overhead and payroll 306,000 27,000 279,000 Permits and fees 12,000 183,000 (171,000 ) Other 34,000 12,000 22,000 Total$ 3,004,000 $ 1,267,000 $ 1,737,000
For the nine months ending
Nine months ending 9/30/22 9/30/21 Variance Drilling$ 1,566,000 $ 3,992,000 $ (2,426,000 ) Consultants/Contractors 2,243,000 1,529,000 714,000 Supplies and equipment 286,000 765,000 (479,000 ) Assay 36,000 543,000 (507,000 ) Water haulage 0 390,000 (390,000 ) Overhead and payroll 392,000 234,000 158,000 Permits and fees 288,000 253,000 35,000 Other 13,000 39,000 (26,000 ) Total$ 4,824,000 $ 7,745,000 $ (2,921,000 )
In the third quarter of 2022, the Company continued with test work on the metallurgical drill samples, hydrogeologic modelling and geochemical characterization of the Bullfrog deposit. Preparation of technical reports for the CR Reward and Bullfrog projects continued. In addition, core drilling continued, focused on completing necessary geotechnical and hydro holes in support of permitting efforts.
In September, the Company made the decision to focus resources on CR Reward and limit further resources on Bullfrog.
The revaluation of the warrant liability is based on the following outstanding warrants:
Outstanding
Issue Date Expiration Date Warrants Exercise Price
22
Liquidity and Capital Resources
The Company has no revenue generating operations from which it can internally generate funds. To date, the Company's ongoing operations have been financed by the sale of its equity securities by way of public offerings, private placements and the exercise of incentive stock options and share purchase warrants. The Company believes that it will be able to secure additional private placements and public financings in the future, although it cannot predict the size or pricing of any such financings. This situation is unlikely to change until such time as the Company can develop a bankable feasibility study on one of its projects.
On
Liquidity
As of
As of
The Company expects that it will operate at a loss for the foreseeable future and believes the current cash and cash equivalents and working capital will be sufficient for it to maintain its currently held properties, fund its planned exploration, and fund its currently anticipated general and administrative costs for at least the next 12 months from the date of this report. However, the Company does expect that it will be required to raise additional funds through public or private equity financings in the future in order to continue in business in the future past the immediate 12-month period. Should such financing not be available in that timeframe, the Company will be required to reduce its activities and will not be able to carry out all of its presently planned exploration and, if warranted, development activities on its currently anticipated scheduling.
Capital Management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development and exploration of its mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital to an acceptable risk.
As of
Contractual obligations and commitments
The Company's contractual obligations and commitments as of
<1 year 1 - 3 years 4 - 5 years >5 years Total Leases$ 152,466 $ 166,521 $ 46,000 $ 675,000 $ 1,039,987 Capital Expenditure 30,000 30,000 - - 60,000$ 182,466 $ 196,521 $ 46,000 $ 675,000 $ 1,099,987 23
Off Balance Sheet Arrangements
We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.
Critical Accounting Policies and Use of Estimates
Stock based compensation is measured at grant date, based on the fair value of
the award, and is recognized as an expense over the employee's requisite service
period. We estimate the fair value of each stock option as of the date of grant
using the Black-Scholes pricing model. The Company determines the expected life
based on historical experience with similar awards, giving consideration to the
contractual terms, vesting schedules and post-vesting forfeitures. The Company
uses the risk-free interest rate on the implied yield currently available on
Mineral property exploration costs are expensed as incurred until such time as
economic reserves are quantified. To date, the Company has not established any
proven or probable reserves on its mineral properties. Costs of lease,
exploration, carrying and retaining unproven mineral lease properties are
expensed as incurred. The Company has chosen to expense all mineral exploration
costs as incurred given that it is still in the exploration stage. Once the
Company has identified proven and probable reserves in its investigation of its
properties and upon development of a plan for operating a mine, it would enter
the development stage and capitalize future costs until production is
established. When a property reaches the production stage, the related
capitalized costs will be amortized over the estimated life of the
probable-proven reserves. When the Company has capitalized mineral properties,
these properties will be periodically assessed for impairment of value and any
diminution in value. To date, the Company has not established the commercial
feasibility of any exploration prospects; therefore, all exploration costs are
being expensed. Costs of property acquisitions are being capitalized, and a
required payment of
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