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 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
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Following closing of the Acquisition Transaction, the Company's board and
management was reconstituted to include Maryse Bélanger as President, CEO and
director, and Messrs.
On
On
Results of Operations
Three Months Ended
Three Months Ended
6/30/21 6/30/20
Operating expenses
General and administrative $1,300,318 $197,853
Lease expense 16,000 16,000
Exploration, evaluation and project expense 3,909,175 323,274
Accretion expense 7,503 -
Depreciation expense 8,066 -
Total operating expenses 5,241,062 537,127
Net operating loss (5,241,062) (537,127)
Interest expense - (19,235)
Revaluation of warrant liability 16,897,823 (498,974)
Foreign currency translation adjustment 461,181 -
Net income (loss) $12,117,942 ($1,055,336 )
Six Months Ended
Six Months Ended
6/30/21 6/30/20
Operating expenses
General and administrative $2,638,549 $381,661
Lease expense 16,000 16,000
Exploration, evaluation and project expense 6,493,723 366,963
Accretion expense 12,443 -
Depreciation expense 16,133 -
Total operating expenses 9,176,848 764,624
Net operating loss (9,176,848) (764,624)
Interest expense - (38,299)
Revaluation of warrant liability 9,889,937 (327,483)
Foreign currency translation adjustment 656,507 -
Net income (loss) $1,369,596 ($1,130,406 )
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For the three months ending
Three months ending 6/30/2021 6/30/2021 6/30/2020 Variance Accounting fees$62,000 $20,000 $42,000 Legal fees 85,000 6,000 79,000 Marketing expense 9,000 124,000 (115,000) Payroll 362,000 27,000 335,000 Corporate expenses & rent 78,000 - 78,000 Share based compensation 487,000 - 487,000 Insurance 34,000 - 34,000 Stock exchange fees 177,000 2,000 175,000 Other general expenses 6,000 19,000 (13,000)
For the six months ending
Six months ending
$156,000 $53,000 $103,000 Legal fees 265,000 8,000 257,000 Marketing expense 73,000 159,000 (86,000) Payroll 816,000 54,000 762,000 Corporate expenses & rent 220,000 37,000 183,000 Share based compensation 721,000 37,000 684,000 Insurance 61,000 - 61,000 Stock exchange fees 219,000 17,000 202,000 Other general expenses 108,000 17,000 91,000
·Accounting fees increase resulted from higher costs for review procedures along with additional consulting fees needed for required regulatory filings and tax compliance. Management believes these increased costs will continue in future fiscal periods.
·Legal fees were needed for additional stock exchange listing compliance
requirements. While these fees represent a onetime cost, management does believe
that legal costs will be higher than prior periods moving forward due to the
Company's increased compliance costs and the implementation of regulatory
changes in relation to property disclosure requirements in our filings with the
·Marketing expense was lower as 2020 had additional amounts that were used for company and shareholder awareness projects.
·The increase in payroll and corporate expenses was from the Company entering
into an agreement to share office space, equipment, personnel, consultants and
various administrative services for the Company's new head office located in
·The Company granted 5,825,000 options to officers, directors and employees of
the Company in the first quarter 2021, pursuant to the terms of the Company's
Stock Option Plan. The Company recognized share-based compensation expense
related to the stock options of
·Stock exchange fee variance is a result of the initial listing fee paid to the
TSX in
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For the three- and six-month period ending
Three months Six months
ending 6/30/2021 ending 6/30/2021
Drilling $2,131,000 $3,567,000
Consultants/Contractors 694,000 1,251,000
Supplies and equipment 481,000 659,000
Assay 254,000 389,000
Water haulage 171,000 307,000
Overhead 107,000 208,000
Permits and fees 68,000 84,000
Other 3,000 29,000
In the second quarter of 2021, exploration drilling targeted four exploration
targets. A total of 26 holes totaling 10,204 meters were drilled at
Montgomery-
In addition to exploration drilling in the second quarter, the Company continued to advance the development of the project by conducting comprehensive geologic mapping and geochemical sampling on the property and completing a geophysical survey at the Gap Target.
The revaluation of the warrant liability is based on the following warrants issued:
Issue Date Expiration Date Warrants Issued Exercise Price
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
On
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purchase one share of common stock purchased at an exercise price of
On
Pursuant to the closing of the Offering, the Company issued 7,555,556 Unit
Shares and 3,777,784 Warrants to investors upon payment of the Offering Price in
cash. The Unit Shares and Warrants were issued to investors inside
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, again 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 time-frame, 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
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<1 year 1 - 3 years 4 - 5 years >5 years Total Leases$144,143 $602,491 $107,240 $700,000 $1,553,874 Capital Expenditure 25,000 60,000 - - 85,000$169,143 $662,491 $107,240 $700,000 $1,638,874
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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