What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-08 compared with 2022-03-09 · 32 added, 38 removed, 83 unchanged (46% of the section changed)

2 unchanged sentences

Livengood Gold Project Developments

During the year ended December 31, 2021, the Company progressed on a decision to embark on a new phase for the Livengood Gold Project as a result of the strengthening macro-economic backdrop for gold.

On January 12, 2021, the Company announced that the Board had approved a 2021 budget of $5.6 million and endorsed the associated 2021 work program to advance the Livengood Gold Project (the “Project”).

The key element of the 2021 work program was the completion of the Pre-Feasibility Study (the “PFS”) for the Livengood Gold Project.

The work program also advanced the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization needed to support future permitting, as well as advance community engagement.

Livengood Gold Project Pre-Feasibility Study

On November 4, 2021, the Company announced the results of the PFS for the Project.

The PFS detailed a project that would process 65,000 tons per day and produce 6.4 million ounces of gold over 21 years from a gold resource estimated at 13.6 million ounces at 0.60 g/tonne.

The PFS utilized a third-party review by Whittle Consulting and BBA Inc.

During February 2022, the Company completed the Technical Report Summary (the “TRS”) and subsequently announced on March 9, 2022, that the Board had approved a 2022 budget of $3.2 million.

The 2022 work program advanced the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization needed to support future permitting, as well as advanced community engagement.

Livengood Gold Project Technical Report Summary

The TRS detailed a project that would process 65,000 tons per day and produce 6.4 million ounces of gold over 21 years from a gold resource estimated at 13.6 million ounces at 0.60 g/tonne.

The TRS utilized a third-party review by Whittle Consulting and BBA Inc.

to integrate new interpretations based on an expanded geological database, improved geological modelling, new resource estimation methodology, an optimized mine plan and production schedule, additional detailed metallurgical work at various gold grades and grind sizes, changes in the target grind for the mill, new engineering estimates, and updated cost inputs, all of which significantly de-risk the Project.

The PFS has estimated the capital costs of the Project at US$1.93 billion, the total cost per ton milled at US$13.12, the all-in sustaining costs at US$1,171 per ounce, and the net present value (5%) at US$1,800/oz of US$400 million.

The Project configuration evaluated in the PFS is a conventional, owner-operated surface mine that will utilize large-scale mining equipment in a blast/load/haul operation.

The TRS has estimated the capital costs of the Project at $1.93 billion, the total cost per ton milled at $13.12, the all-in sustaining costs at $1,171 per ounce, and the net present value (5%) at $1,800/oz of $400 million.

The Project configuration evaluated in the TRS is a conventional, owner-operated surface mine that will utilize large-scale mining equipment in a blast/load/haul operation.

Mill feed would be processed in a 65,000 tons per day comminution circuit consisting of primary and secondary crushing, wet grinding in a single semi-autogenous (“SAG”) mill and single ball mill followed by a gravity gold circuit and a conventional carbon in leach (“CIL”) circuit.

Whittle Enterprise Optimization

Prior to beginning the PFS, the Company retained Whittle Engineering and BBA Inc.

Prior to beginning the Pre-Feasibility Study (the “PFS”), the Company retained Whittle Engineering and BBA Inc.

to collaborate on an enterprise optimization study (the “Whittle and BBA Study”) to review various technologies and project configurations and to recommend the optimum configuration for the PFS.

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The PFS is based on an updated Project mineral resource estimate effective as of August 20, 2021 using a different mineral resource model than used in the April 2017 Report.

COVID-19 Pandemic

In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic.

This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn.

While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak, including as a result of the emergence of variant strains of the virus and ongoing vaccination efforts, and its ultimate effects on the Company’s business, results of operations or ability to raise funds at this time, as of the date of this Annual Report on Form 10-K, the COVID-19 pandemic has not had any material adverse effects on the Company.

On March 9, 2022, the Company announced that the Board had approved a 2022 budget of $3.2 million and endorsed the associated 2022 work program to advance the Livengood Gold Project.

The 2022 work will advance the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization needed to support future permitting, as well as advance community engagement.

On March 7, 2023, the Company announced that the Board had approved a 2023 budget of $3.3 million to advance the Livengood Gold Project.

The 2023 work program will advance the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization needed to support future permitting, as well as advance community engagement.

The Company remains open to a strategic alliance to help support the future development of the Project while considering all other appropriate financing options.

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September 30,

Net income (loss)

Basic and diluted net income (loss) per common share

Significant fluctuations in the Company’s quarterly net income (loss) have mainly been the result of operating cost changes.

Basic and diluted net loss per common share

Significant fluctuations in the Company’s quarterly net losses have mainly been the result of operating cost changes.

Year ended December 31, 2022 compared to Year ended December 31, 2021

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Mineral property exploration expenditures were $1,138,134 for the year ended December 31, 2022 compared to $3,517,540 for the year ended December 31, 2021.

The increase of $1,152,641 is due to expenditures for metallurgical studies and engineering to complete the PFS on the Livengood Gold Project, partially offset by the Company limiting field activities to the continuation of critical environmental baseline work while moving forward with a multi-phase metallurgical test work program.

The decrease of $2,379,406 is primarily due to work completed in the year ended December 31, 2021 toward the updated Pre-Feasibility Study for the Livengood Gold Project of $2,072,121, reduced baseline environmental costs $239,826, reduced land maintenance costs of $62,510 and timing variances of legal costs of $4,949.

Share-based payment charges were $448,474 during the year ended December 31, 2022 compared to $535,117 during the year ended December 31, 2021.

The $149,586 increase in share-based payment charges during the period was mainly the result of equity compensation issued or granted to certain officers and employees of the Company at a higher issue price during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

The $86,643 decrease in share-based payment charges during the period was mainly the result of equity compensation issued or granted to certain officers and employees of the Company at a lower issue price during the year ended December 31, 2022 as compared to the year ended December 31, 2021.

The Company granted 451,085 deferred share units (“DSUs”) of C$0.92 per DSU and 240,000 incentive stock options at an issue price of C$0.92 per option during the year ended December 31, 2022 compared to 316,795 DSUs of C$1.31 per DSU and 240,000 incentive stock options at an issue price of C$1.31 per option during the year ended December 31, 2021.

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Wages and benefits

Excluding share-based payment charges of $380,878 and $304,205, respectively, consulting fees increased to $231,509 for the year ended December 31, 2021 from $168,208 for the year ended December 31, 2020.

The increase of $63,300 is primarily due to increased investor relations services.

Excluding share-based payment charges of $143,957 and $74,870, respectively, wages and benefits increased to $791,116 for the year ended December 31, 2021 from $733,967 for the year ended December 31, 2020.

The increase of $57,149 is primarily due to increased healthcare expenses of $12,782 and increased payroll and payroll-related benefit accruals of $44,367 as at December 31, 2021.

Excluding share-based payment charges of $322,052 and $380,878, respectively, consulting fees decreased to $229,111 for the year ended December 31, 2022 from $231,509 for the year ended December 31, 2021.

The decrease of $2,398 is primarily due to a timing variance for general IT services.

Regulatory expenses were $137,947 for the year ended December 31, 2022 compared to $178,264 for the year ended December 31, 2021.

The increase of $40,073 is primarily due to costs for TSX listing fees and increased filing fees due to the Company’s increased market valuation.

The decrease of $40,317 is primarily due to reduced SEDAR filings fees of $20,789, reduced TSX listing fees of $20,054, and reduced NYSE listing fees of $3,407, partially offset by increased EDGAR filings fees of $2,050 and increased transfer agent fees of $1,883.

Excluding share-based payment charges of $117,994 and $143,957, respectively, wages and benefits increased to $796,084 for the year ended December 31, 2022 from $791,116 for the year ended December 31, 2021.

The increase of $4,968 is primarily due to payroll-related benefit accruals as at December 31, 2022.

Professional fees were $226,439 for the year ended December 31, 2022 compared to $210,594 for the year ended December 31, 2021.

The increase of $15,845 is primarily due to the timing of audit services of $36,350 and increased XBRL costs of $1,211 partially offset by reduced legal fees of $17,777 and reduced tax services of $3,939.

Insurance costs were $202,893 for the year ended December 31, 2022 compared to $179,659 for the year ended December 31, 2021.

The increase of $23,234 is primarily due to premium increases to maintain coverage.

Excluding share-based payment charges of $10,282 and $6,456, respectively, investor relations costs were $66,974 for the year ended December 31, 2021 compared to $50,750 for the year ended December 31, 2020.

The increase of $16,224 was primarily due to contracted investor relations services of $10,072 and conference expenses of $6,152.

Travel costs were $29,935 for the year ended December 31, 2022 compared to $18,464 for the year ended December 31, 2021.

The increase of $11,471 is primarily due to travel related to investor relations conferences.

Excluding share-based payments, all other operating expense categories reflected only moderate changes period over period.

Other items amounted to an expense of $64,839 during the year ended December 31, 2021 compared to an expense of $103,889 in the year ended December 31, 2020.

The Company had a foreign exchange loss of $101,818 during the year ended December 31, 2021 compared to a foreign exchange loss of $191,071 during the year ended December 31, 2020 as a result of the impact of exchange rates on certain of the Company’s U.S.

Other items amounted to other income of $404,346 during the year ended December 31, 2022 compared to an expense of $64,839 during the year ended December 31, 2021.

The Company had a foreign exchange gain of $348,207 during the year ended December 31, 2022 compared to a foreign exchange loss of $101,818 during the year ended December 31, 2021 as a result of the impact of exchange rates on certain of the Company’s U.S.

dollar cash balances.

The average exchange rate during the year ended December 31, 2021 was C$1 to US$0.7994 compared to C$1 to US$0.7461 for the year ended December 31, 2020.

The average exchange rate during the year ended December 31, 2022 was C$1 to $0.7692 compared to C$1 to $0.7994 for the year ended December 31, 2021.

Liquidity and Capital Resources

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As at December 31, 2022, the Company reported cash and cash equivalents of $4,847,429 compared to $7,780,671 at December 31, 2021.

The decrease of approximately $5.3 million resulted mainly from operating expenditures on the Livengood Gold Project of approximately $5.3 million.

The decrease of approximately $2.9 million resulted mainly from operating expenditures on the Livengood Gold Project of approximately $2.9 million and a negative foreign currency transaction impact of $0.3 million, partially offset by financing activities of $0.3 million.

Our anticipated expenditures for year 2023 are approximately $3.3 million, including $535,578 for mineral property leases and $206,215 for mining claim government fees.

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As at March 7, 2023, management believes that the Company has sufficient financial resources to maintain its operations for the next twelve months.

Financing activities during the year ended December 31, 2022 included the exercise of stock options.

Proceeds of $290,290 were received on the issuance of 405,000 common shares.

The Company had no cash flows from financing activities during the year ended December 31, 2021.

Financing activities during the year ended December 31, 2020 included an “at-the-market” offering pursuant to which the Company issued a total of 7,334,513 common shares at an average price of $1.40 for gross proceeds of $10.3 million.

Share issuance costs included $0.5 million related to the Offering.

The Company had no cash flows from investing activities during the years ended December 31, 2022 and December 31, 2021.

As at December 31, 2022, the Company had working capital of $4,711,616 compared to working capital of $7,342,470 at December 31, 2021.

The Company expects that it will operate at a loss for the foreseeable future, but believes the current cash and cash equivalents will be sufficient for it to complete its anticipated 2022 work plan at the Livengood Gold Project and satisfy its currently anticipated general and administrative costs through the 2023 fiscal year.

The Company expects that it will operate at a loss for the foreseeable future, but believes its current cash and cash equivalents

will be sufficient for it to complete its anticipated 2023 work plan at the Livengood Gold Project and satisfy its currently anticipated general and administrative costs through the 2024 fiscal year.

The Company will require significant additional financing to continue its operations (including general and administrative expenses) in connection with advancing activities at the Livengood Gold Project and the development of any mine that may be determined to be built at the Livengood Gold Project, and there is no assurance that the Company will be able to obtain the additional financing required on acceptable terms, if at all.

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a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition;

a significant adverse change in legal factors or in the business climate

that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator;

a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator;

an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis