Yukon
Territory, Canada
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Not
Applicable
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer Identification No.)
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Large
Accelerated Filer £
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Accelerated
Filer £
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Non-Accelerated
Filer £ (do not
check if a smaller
reporting
company)
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Smaller
Reporting Company R
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Page
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PART I FINANCIAL INFORMATION |
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38
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46
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PART II OTHER INFORMATION |
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Certification
of CEO Pursuant to Section 302
|
Exhibit 31.1
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Certification
of CFO Pursuant to Section 302
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Exhibit 31.2
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Certification
of CEO and CFO Pursuant to Section 906
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Exhibit 32.1
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·
|
plans
for the development of and production at the Black Fox project including,
without limitation, the timing of the development of the underground mine
at Black Fox;
|
|
·
|
estimates
of future production at Black Fox;
|
|
·
|
our
ability to reschedule quarterly principal payments under the Black Fox
project finance facility;
|
|
·
|
our
ability to meet our repayment obligations under the Black Fox project
finance facility;
|
|
·
|
plans
for and our ability to finance exploration at our Huizopa and Grey Fox
properties;
|
|
·
|
our
ability to repay the convertible debentures issued to RAB Special
Situations (Master) Fund Limited (“RAB”) due February 23,
2010;
|
|
·
|
the
future effect of recent issuances and registration for immediate resale of
a significant number of common share purchase warrants on our share
price;
|
|
·
|
future
financing of projects, without limitation, including the financing
required for the M Pit expansion at Montana
Tunnels;
|
|
·
|
costs
associated with placing the Montana Tunnels mine and mill on care and
maintenance and the decision to undertake the M Pit
expansion;
|
|
·
|
liquidity
to support operations and debt
repayment;
|
|
·
|
the
establishment and estimates of mineral reserves and
resources;
|
|
·
|
daily
production, mineral recovery rates and mill throughput
rates;
|
|
·
|
total
production costs;
|
|
·
|
cash
operating costs;
|
|
·
|
total
cash costs;
|
|
·
|
grade
of ore mined and milled from Black Fox and cash flows derived
therefrom;
|
|
·
|
anticipated
expenditures for development, exploration, and corporate
overhead;
|
|
·
|
timing
and issue of permits, including permits necessary to conduct phase II of
open pit mining at Black Fox;
|
|
·
|
expansion
plans for existing properties;
|
|
·
|
estimates
of closure costs and reclamation
liabilities;
|
|
·
|
our
ability to obtain financing to fund our estimated expenditure and capital
requirements;
|
|
·
|
factors
impacting our results of operations;
and
|
|
·
|
the
impact of adoption of new accounting
standards.
|
FINANCIAL
STATEMENTS
|
June 30,
2009
|
December 31,
2008
|
|||||||
ASSETS
|
||||||||
CURRENT
|
||||||||
Cash
and cash equivalents
|
$ | 1,834 | $ | 3,097 | ||||
Restricted
cash
|
4,499 | 10,000 | ||||||
Accounts
receivable and other
|
3,062 | 3,134 | ||||||
Derivative
instruments (Note 5)
|
469 | 552 | ||||||
Prepaids
|
697 | 546 | ||||||
Inventories
(Note 6)
|
7,733 | 4,154 | ||||||
Total
current assets
|
18,294 | 21,483 | ||||||
Derivative
instruments (Note 5)
|
1,773 | – | ||||||
Long-term
investments (Note 7)
|
1,094 | 1,081 | ||||||
Property,
plant and equipment
|
137,533 | 95,881 | ||||||
Deferred
stripping costs
|
– | 1,052 | ||||||
Restricted
certificates of deposit
|
21,590 | 12,030 | ||||||
Other
long-term assets
|
107 | 103 | ||||||
TOTAL
ASSETS
|
$ | 180,391 | $ | 131,630 | ||||
LIABILITIES
|
||||||||
CURRENT
|
||||||||
Accounts
payable
|
$ | 11,482 | $ | 13,827 | ||||
Accrued
liabilities
|
1,861 | 1,449 | ||||||
Property
and mining taxes payable
|
883 | 1,146 | ||||||
Derivative
instruments (Note 5 and Note 8(b))
|
3,708 | – | ||||||
Current
portion of debt (Note 8(a))
|
22,798 | 20,636 | ||||||
Convertible
debentures
|
4,138 | 3,356 | ||||||
Total
current liabilities
|
44,870 | 40,414 | ||||||
Accrued
long-term liabilities
|
330 | 316 | ||||||
Derivative
instruments (Note 5 and Note 8(b))
|
13,024 | – | ||||||
Debt
(Note 8(a))
|
44,411 | 1,012 | ||||||
Convertible
debentures
|
– | 4,571 | ||||||
Accrued
site closure costs
|
14,079 | 10,563 | ||||||
Future
income tax liability
|
393 | 447 | ||||||
Deferred
gain (Note 4)
|
– | 552 | ||||||
TOTAL
LIABILITIES
|
117,107 | 57,875 | ||||||
Continuing
operations (Note 1)
|
||||||||
Commitments
and contingencies (Note 11)
|
||||||||
SHAREHOLDERS’
EQUITY
|
||||||||
Share
capital (Note 10)
|
191,914 | 188,927 | ||||||
Equity
component of convertible debentures
|
584 | 1,987 | ||||||
Debenture
note warrants
|
– | 2,234 | ||||||
Contributed
surplus
|
35,349 | 21,683 | ||||||
Deficit
|
(164,563 | ) | (141,076 | ) | ||||
TOTAL
SHAREHOLDERS’ EQUITY
|
63,284 | 73,755 | ||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 180,391 | $ | 131,630 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue
from sale of minerals
|
$ | 7,558 | $ | 10,019 | $ | 14,928 | $ | 25,921 | ||||||||
Operating
expenses
|
||||||||||||||||
Direct
operating costs
|
5,044 | 9,469 | 13,447 | 18,530 | ||||||||||||
Depreciation
and amortization
|
1,417 | 355 | 1,728 | 759 | ||||||||||||
General
and administrative expenses
|
1,096 | 1,159 | 2,028 | 2,088 | ||||||||||||
Accretion
expense – accrued site closure costs
|
250 | 178 | 431 | 355 | ||||||||||||
Amortization
of deferred gain
|
(97 | ) | (369 | ) | (552 | ) | (924 | ) | ||||||||
Exploration
and business development
|
302 | 1,001 | 529 | 1,757 | ||||||||||||
8,012 | 11,793 | 17,611 | 22,565 | |||||||||||||
Operating
(loss) income
|
(454 | ) | (1,774 | ) | (2,683 | ) | 3,356 | |||||||||
Other
income (expenses)
|
||||||||||||||||
Interest
income
|
38 | 83 | 85 | 209 | ||||||||||||
Interest
expense (Note 8)
|
(1,434 | ) | (1,021 | ) | (2,461 | ) | (2,169 | ) | ||||||||
Debt
transaction costs (Note 8(a) and (c))
|
(10 | ) | – | (1,821 | ) | – | ||||||||||
Loss
on modification of debentures (Note 9)
|
– | – | (1,969 | ) | – | |||||||||||
Realized
(losses) gains on derivative contracts
|
(492 | ) | 1,432 | (124 | ) | 1,950 | ||||||||||
Unrealized
(losses) gains on derivative contracts
|
3,376 | 122 | (15,042 | ) | (733 | ) | ||||||||||
Foreign
exchange gain (loss) and other
|
242 | (108 | ) | 339 | (225 | ) | ||||||||||
Income
(loss) before income taxes
|
1,266 | (1,266 | ) | (23,676 | ) | 2,388 | ||||||||||
Income
taxes (Note 12)
|
– | (63 | ) | 189 | (63 | ) | ||||||||||
Net
income (loss) and comprehensive income (loss) income for the
period
|
$ | 1,266 | $ | (1,329 | ) | $ | (23,487 | ) | $ | 2,325 | ||||||
Basic
net income (loss) per share (Note 10)
|
$ | 0.01 | $ | (0.01 | ) | $ | (0.10 | ) | $ | 0.01 | ||||||
Diluted
net income (loss) per share (Note 10)
|
$ | 0.00 | $ | (0.01 | ) | $ | (0.10 | ) | $ | 0.01 | ||||||
Basic
weighted-average number of shares outstanding
|
234,162 | 161,169 | 230,453 | 160,252 | ||||||||||||
Diluted
weighted-average number of shares
|
289,454 | 161,169 | 230,453 | 165,885 |
Number of
Shares
|
Share
Capital
|
Equity
Component
of
Convertible
Debentures
|
Debenture
Note
Warrants
|
Contributed
Surplus
|
Deficit
|
Total
|
||||||||||||||||||||||
(U.S. dollars and shares in thousands)
|
||||||||||||||||||||||||||||
Balance,
December 31, 2007
|
156,248 | $ | 166,424 | $ | 2,238 | $ | 2,292 | $ | 14,591 | $ | (142,672 | ) | $ | 42,873 | ||||||||||||||
Shares
issued for services
|
650 | 351 | – | – | – | – | 351 | |||||||||||||||||||||
Units
issued for cash and related compensation warrants
|
40,806 | 14,885 | – | – | 3,247 | – | 18,132 | |||||||||||||||||||||
Flow-through
shares issued for cash and related compensation warrants
|
20,000 | 8,028 | – | – | 104 | – | 8,132 | |||||||||||||||||||||
Warrants
issued for services
|
– | – | – | – | 2,907 | – | 2,907 | |||||||||||||||||||||
Warrants
exercised
|
3,272 | 1,463 | – | (58 | ) | (1 | ) | – | 1,404 | |||||||||||||||||||
Conversion
of debentures
|
1,884 | 834 | (251 | ) | – | – | – | 583 | ||||||||||||||||||||
Income
tax benefits renounced in connection with issuance of flow-through
shares
|
– | (3,058 | ) | – | – | – | – | (3,058 | ) | |||||||||||||||||||
Stock-based
compensation
|
– | – | – | – | 835 | – | 835 | |||||||||||||||||||||
Net
income and comprehensive income
|
– | – | – | – | – | 1,596 | 1,596 | |||||||||||||||||||||
Balance,
December 31, 2008
|
222,860 | 188,927 | 1,987 | 2,234 | 21,683 | (141,076 | ) | 73,755 | ||||||||||||||||||||
Shares
issued for services (Note 10(a)(ii and iii))
|
5,173 | 1,553 | – | – | – | – | 1,553 | |||||||||||||||||||||
Shares
issued in settlement of interest (Note 9)
|
2,445 | 772 | – | – | – | – | 772 | |||||||||||||||||||||
Warrants
issued for services (Notes 8(a) and 10(a)(ii and iii))
|
– | – | – | – | 9,089 | – | 9,089 | |||||||||||||||||||||
Warrants
exercised (Note 10(a)(i))
|
4,833 | 851 | – | – | – | – | 851 | |||||||||||||||||||||
Expiration
of note warrants
|
– | – | – | (2,234 | ) | 2,234 | – | – | ||||||||||||||||||||
Redemption
of debentures
|
– | – | (1,987 | ) | – | 1,987 | – | – | ||||||||||||||||||||
Equity
component of convertible debentures (Note 9)
|
– | – | 584 | – | – | – | 584 | |||||||||||||||||||||
Income
tax benefits renounced in connection with issuance of flow-through
shares
|
– | (189 | ) | – | – | – | – | (189 | ) | |||||||||||||||||||
Stock-based
compensation
|
– | – | – | – | 356 | – | 356 | |||||||||||||||||||||
Net
loss and comprehensive loss
|
– | – | – | – | – | (23,487 | ) | (23,487 | ) | |||||||||||||||||||
Balance,
June 30, 2009
|
235,311 | $ | 191,914 | $ | 584 | $ | – | $ | 35,349 | $ | (164,563 | ) | $ | 63,284 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Operating
activities
|
||||||||||||||||
Net
income (loss) for the period
|
$ | 1,266 | $ | (1,329 | ) | $ | (23,487 | ) | $ | 2,325 | ||||||
Items
not affecting cash:
|
||||||||||||||||
Depreciation
and amortization
|
1,417 | 355 | 1,728 | 759 | ||||||||||||
Amortization
of deferred stripping costs
|
184 | 704 | 1,052 | 1,762 | ||||||||||||
Stock-based
compensation
|
174 | 240 | 356 | 382 | ||||||||||||
Shares
and warrants issued for services and payment of interest
|
– | – | 4,020 | – | ||||||||||||
Accretion
expense – accrued site closure costs
|
250 | 178 | 431 | 355 | ||||||||||||
Interest
expense – amortization of debt discount
|
469 | – | 469 | – | ||||||||||||
Interest
expense – accretion of convertible debentures
|
312 | 877 | 1,282 | 1,770 | ||||||||||||
Interest
paid on convertible debentures
|
– | – | (567 | ) | (1,016 | ) | ||||||||||
Amortization
of deferred gain
|
(97 | ) | (369 | ) | (552 | ) | (924 | ) | ||||||||
Unrealized
(gains) losses on derivative instruments
|
(3,376 | ) | (122 | ) | 15,042 | 733 | ||||||||||
Foreign
exchange (gain) loss and other
|
(328 | ) | 160 | (290 | ) | 215 | ||||||||||
Income
taxes
|
– | – | (189 | ) | – | |||||||||||
Net
change in non-cash operating working capital items (Note
12)
|
(3,009 | ) | 3,468 | (477 | ) | (779 | ) | |||||||||
Net
cash (used in) provided by operating activities
|
(2,738 | ) | 4,162 | (1,182 | ) | 5,582 | ||||||||||
Investing
activities
|
||||||||||||||||
Property,
plant and equipment expenditures
|
(18,589 | ) | (2,388 | ) | (40,455 | ) | (3,644 | ) | ||||||||
Restricted
certificate of deposit and other assets
|
(9,144 | ) | (2,183 | ) | (4,064 | ) | (2,759 | ) | ||||||||
Net
cash used in investing activities
|
(27,733 | ) | (4,571 | ) | (44,519 | ) | (6,403 | ) | ||||||||
Financing
activities
|
||||||||||||||||
Proceeds
from exercise of warrants
|
352 | – | 851 | 1,404 | ||||||||||||
Proceeds
from debt
|
28,500 | 955 | 66,534 | 955 | ||||||||||||
Payments
of debt
|
(1,834 | ) | (2,782 | ) | (23,038 | ) | (5,744 | ) | ||||||||
Net
cash provided by (used in) financing activities
|
27,018 | (1,827 | ) | 44,347 | (3,385 | ) | ||||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
95 | (30 | ) | 91 | (44 | ) | ||||||||||
Net
decrease in cash and cash equivalents
|
(3,358 | ) | (2,266 | ) | (1,263 | ) | (4,250 | ) | ||||||||
Cash
and cash equivalents, beginning of period
|
5,192 | 2,868 | 3,097 | 4,852 | ||||||||||||
Cash
and cash equivalents, end of period (Note 12)
|
$ | 1,834 | $ | 602 | $ | 1,834 | $ | 602 | ||||||||
SUPPLEMENTAL
CASH FLOW INFORMATION
|
||||||||||||||||
Interest
paid
|
$ | 1,550 | $ | 114 | $ | 2,475 | $ | 1,502 | ||||||||
Income
taxes paid
|
$ | – | $ | – | $ | 25 | $ | – |
1.
|
CONTINUING
OPERATIONS
|
2.
|
NATURE
OF OPERATIONS
|
3.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
(a)
|
Changes
in accounting policies
|
4.
|
MONTANA
TUNNELS JOINT VENTURE
|
4.
|
MONTANA
TUNNELS JOINT VENTURE (continued)
|
June 30,
2009
|
December 31,
2008
|
|||||||
Cash
and cash equivalents
|
$ | 898 | $ | 12 | ||||
Other
non-cash current assets
|
1,422 | 5,323 | ||||||
2,320 | 5,335 | |||||||
Property,
plant and equipment
|
7,164 | 7,647 | ||||||
Deferred
stripping costs
|
– | 1,052 | ||||||
Restricted
certificates of deposit
|
7,587 | 7,587 | ||||||
Total
assets
|
$ | 17,071 | $ | 21,621 | ||||
Current
liabilities
|
$ | 1,642 | $ | 4,361 | ||||
Accrued
site closure costs
|
8,842 | 8,503 | ||||||
Total
liabilities
|
$ | 10,484 | $ | 12,864 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue
from sale of minerals
|
$ | 2,849 | $ | 10,019 | $ | 10,219 | $ | 25,921 | ||||||||
Direct
operating costs
|
3,007 | 9,467 | 11,409 | 18,526 | ||||||||||||
Depreciation
and amortization
|
169 | 326 | 469 | 705 | ||||||||||||
Accretion
expense – accrued site closure costs
|
169 | 164 | 339 | 329 | ||||||||||||
3,345 | 9,957 | 12,217 | 19,560 | |||||||||||||
Operating
(loss) income
|
(496 | ) | 62 | (1,998 | ) | 6,361 | ||||||||||
Interest
income
|
– | 38 | 7 | 90 | ||||||||||||
Interest
expense
|
(21 | ) | (102 | ) | (50 | ) | (214 | ) | ||||||||
(Loss)
income before income taxes
|
$ | (517 | ) | $ | (2 | ) | $ | (2,041 | ) | $ | 6,237 | |||||
Net
cash provided by operating activities
|
$ | 628 | $ | 3,987 | $ | 1,835 | $ | 8,811 | ||||||||
Net
cash used in investing activities
|
$ | (2 | ) | $ | (684 | ) | $ | (9 | ) | $ | (1,361 | ) | ||||
Net
cash used in by financing activities
|
$ | (273 | ) | $ | (3,164 | ) | $ | (940 | ) | $ | (7,303 | ) |
5.
|
DERIVATIVE
INSTRUMENTS
|
June 30, 2009
|
December 31, 2008
|
|||||||||||||||||||||||
Cost
Basis
|
Unrealized
Gain (Loss)
|
Fair
Value
|
Cost
Basis
|
Unrealized
Gain (Loss)
|
Fair
Value
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Canadian
dollar purchase contracts (Note 8(b))
|
$ | – | $ | 2,242 | $ | 2,242 | $ | – | $ | – | $ | – | ||||||||||||
Gold,
silver and lead contracts
|
– | – | – | – | 552 | 552 | ||||||||||||||||||
Less: Current
portion
|
– | (469 | ) | (469 | ) | – | (552 | ) | (552 | ) | ||||||||||||||
Long-term
portion
|
$ | – | $ | 1,773 | $ | 1,773 | $ | – | $ | – | $ | – | ||||||||||||
Liabilities
|
||||||||||||||||||||||||
Gold
forward sales contracts (Note 8(b))
|
$ | – | $ | (16,732 | ) | $ | (16,732 | ) | $ | – | $ | – | $ | – | ||||||||||
Less: Current
portion
|
– | 3,708 | 3,708 | – | – | – | ||||||||||||||||||
Long-term
portion
|
$ | – | $ | (13,024 | ) | $ | (13,024 | ) | $ | – | $ | – | $ | – |
6.
|
INVENTORIES
|
June 30,
2009
|
December 31,
2008
|
|||||||
Concentrate
inventory
|
$ | – | $ | 373 | ||||
Doré
inventory
|
2,137 | 21 | ||||||
In-circuit
gold inventory
|
1,260 | – | ||||||
Stockpiled
ore inventory
|
3,619 | 2,983 | ||||||
Materials
and supplies
|
717 | 777 | ||||||
$ | 7,733 | $ | 4,154 |
Three
months ended
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Inventories
recognized as an expense in direct operating costs
|
$ | 4,371 | $ | 6,973 | $ | 10,915 | $ | 13,339 | ||||||||
Expenses
related to the write down of the carrying value of inventories to net
realizable value
|
- | 15 | 1,029 | 15 |
7.
|
LONG-TERM
INVESTMENTS
|
8.
|
BLACK
FOX PROJECT FINANCING FACILITY
|
(a)
|
Financing
Agreement
|
8.
|
BLACK
FOX PROJECT FACILITY (continued)
|
2009
|
$ | 15,300 | ||
2010
|
13,800 | |||
2011
|
10,200 | |||
2012
|
24,500 | |||
2013
|
6,200 | |||
Principle
balance of Project Facility
|
70,000 | |||
Less
unamortized debt discount
|
(9,736 | ) | ||
Total
of project facility included within debt on the balance
sheet
|
60,264 | |||
Less
current portion
|
(19,794 | ) | ||
Long-term
portion
|
$ | 40,470 |
(b)
|
Derivative
Program in Connection with the Project
Facility
|
Gold Forward Sales Contracts
|
Canadian Dollar Foreign Exchange Contracts
|
|||||||||||||||||||
Year of Settlement
|
Gold Ounces
|
Average Contract
Price Per Ounce
|
Pay US Dollars
(Millions)
|
Exchange Rate
(Cdn$/USD)
|
Purchase
Canadian Dollars
(Millions)
|
|||||||||||||||
2009
|
44,357 | $ | 876 | $ | 5.6 | $ | 1.21 | $ | 6.8 | |||||||||||
2010
|
54,261 | $ | 876 | $ | 13.4 | $ | 1.21 | $ | 16.3 | |||||||||||
2011
|
54,704 | $ | 876 | $ | 16.1 | $ | 1.21 | $ | 19.5 | |||||||||||
2012
|
73,458 | $ | 876 | $ | 16.3 | $ | 1.21 | $ | 19.7 | |||||||||||
2013
|
14,523 | $ | 876 | $ | 4.1 | $ | 1.21 | $ | 4.9 | |||||||||||
241,303 | $ | 55.5 | $ | 67.2 |
8.
|
BLACK
FOX PROJECT FACILITY (continued)
|
(c)
|
Additional
Debt Transaction Costs Resulting from the Project
Facility
|
9.
|
CONVERTIBLE
DEBENTURES
|
9.
|
CONVERTIBLE
DEBENTURES (continued)
|
10.
|
SHARE
CAPITAL
|
(a)
|
Shares
issued in 2009
|
(b)
|
Warrants
|
Number of Warrants
and Shares Issuable
upon Exercise
|
||||
Balance,
December 31, 2008
|
91,277,374 | |||
Warrants
issued
|
37,404,012 | |||
Warrants
exercised
|
(4,833,333 | ) | ||
Warrants
expired
|
(9,725,927 | ) | ||
Balance,
June 30, 2009
|
114,122,126 |
10.
|
SHARE
CAPITAL (continued)
|
Date Issued
|
Number of Warrants
and Shares Issuable
upon Exercise
|
Exercise Price
|
Expiry Date
|
||||||
Exercisable
in US$
|
|||||||||
November
8, 2006
|
2,666,666 | 0.176 |
November
8, 2009
|
||||||
November
8, 2006
|
1,178,944 | 0.50 |
November
8, 2009
|
||||||
February
23, 2007
|
8,580,000 | 0.25 |
March
4, 2010
|
||||||
12,425,610 | |||||||||
Exercisable
in Cdn$
|
|||||||||
August
21, 2008
|
1,020,000 | 0.50 |
February
21, 2010
|
||||||
December
31, 2008
|
255,000 | 0.30 |
December
31, 2010
|
||||||
February
20, 2009
|
2,567,901 | 0.256 |
February
20, 2011
|
||||||
July
24, 2008
|
20,403,250 | 0.65 |
July
24, 2011
|
||||||
December
10, 2008
|
42,614,254 | 0.221 |
December
10, 2012
|
||||||
February
20, 2009
|
34,836,111 | 0.252 |
February
20, 2013
|
||||||
101,696,516 | |||||||||
114,122,126 | |||||||||
(c)
|
Options
|
Number of
Common
Shares
|
Weighted
Average
Exercise
Price Per
Share
|
|||||||
Balance,
December 31, 2008
|
8,281,309 | $ | 0.77 | |||||
Options
granted
|
3,566,307 | 0.33 | ||||||
Options
forfeited
|
(78,600 | ) | 0.49 | |||||
Balance,
June 30, 2009
|
11,769,016 | $ | 0.64 |
10.
|
SHARE
CAPITAL (continued)
|
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||
Number
Outstanding
|
Expiry Date
|
Weighted
Average
Exercise
Price Per
Share
|
Weighted
Average
Remaining
Contractual Life
(in years)
|
Number
Exercisable
|
Weighted
Average
Exercise
Price Per
Share
|
|||||||||||||
100,000
|
September
1, 2011
|
$ | 0.46 | 2.2 | 100,000 | $ | 0.46 | |||||||||||
676,700
|
February
18, 2013
|
2.24 | 3.7 | 676,700 | 2.24 | |||||||||||||
260,000
|
March
10, 2014
|
2.05 | 4.7 | 260,000 | 2.05 | |||||||||||||
25,000
|
May
19, 2014
|
1.44 | 4.9 | 25,000 | 1.44 | |||||||||||||
20,200
|
August
10, 2014
|
0.95 | 5.1 | 20,200 | 0.95 | |||||||||||||
1,159,750
|
March
10, 2015
|
0.65 | 5.7 | 1,159,750 | 0.65 | |||||||||||||
100,000
|
August
4, 2015
|
0.27 | 6.1 | 100,000 | 0.27 | |||||||||||||
300,000
|
December
12, 2015
|
0.20 | 6.5 | 300,000 | 0.20 | |||||||||||||
125,000
|
March
28, 2016
|
0.65 | 6.7 | 125,000 | 0.65 | |||||||||||||
200,000
|
May
24, 2016
|
0.53 | 6.9 | 200,000 | 0.53 | |||||||||||||
108,000
|
August
10, 2016
|
0.48 | 7.1 | 108,000 | 0.48 | |||||||||||||
20,000
|
November
9, 2016
|
0.32 | 7.4 | 20,000 | 0.32 | |||||||||||||
2,922,746
|
February
6, 2017
|
0.57 | 7.6 | 2,922,746 | 0.57 | |||||||||||||
49,825
|
August
13, 2017
|
0.46 | 8.1 | 24,913 | 0.46 | |||||||||||||
2,077,738
|
March
27, 2018
|
0.66 | 8.7 | 1,038,869 | 0.66 | |||||||||||||
21,250
|
August
12, 2018
|
0.37 | 9.1 | – | – | |||||||||||||
55,000
|
November
11, 2018
|
0.15 | 9.4 | – | – | |||||||||||||
3,220,067
|
March
31, 2019
|
0.32 | 9.8 | – | – | |||||||||||||
327,740
|
May
6, 2019
|
0.45 | 9.9 | – | – | |||||||||||||
11,769,016
|
$ | 0.64 | 7.9 | 7,081,178 | $ | 0.79 |
(d)
|
Stock-based
compensation
|
Six months ended June
30,
|
||||||||
2009
|
2008
|
|||||||
Risk
free interest rate
|
1.9 | % | 2.9 | % | ||||
Dividend
yield
|
0 | % | 0 | % | ||||
Volatility
|
78 | % | 73 | % | ||||
Expected
life in years
|
6 | 6 | ||||||
Weighted
average grant-date fair value of stock options
|
$ | 0.22 | $ | 0.44 |
11.
|
INTEREST
EXPENSE
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Accretion
on convertible debentures
|
$ | 312 | $ | 877 | $ | 1,282 | $ | 1,770 | ||||||||
Amortization
of debt discount – Project Facility
|
469 | – | 469 | – | ||||||||||||
Capital
leases, Project Facility and other
|
653 | 144 | 710 | 399 | ||||||||||||
$ | 1,434 | $ | 1,021 | $ | 2,461 | $ | 2,169 |
12.
|
INCOME
TAXES
|
13.
|
EARNINGS
(LOSS) PER SHARE
|
Three
months ended
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
income (loss)
|
$ | 1,266 | $ | (1,329 | ) | $ | (23,487 | ) | $ | 2,325 | ||||||
Weighted
average number of shares, basic
|
234,161,561 | 161,168,592 | 230,452,859 | 160,252,248 | ||||||||||||
Dilutive
securities:
|
||||||||||||||||
Options
|
947,780 | – | – | 549,662 | ||||||||||||
Warrants
|
45,764,734 | – | – | 5,083,533 | ||||||||||||
Convertible
debentures
|
8,580,000 | – | – | – | ||||||||||||
Weighted
average number of shares, diluted
|
289,454,075 | 161,168,592 | 230,452,859 | 165,885,443 | ||||||||||||
Basic
net income (loss) per share
|
$ | 0.01 | $ | (0.01 | ) | $ | (0.10 | ) | $ | 0.01 | ||||||
Diluted
net income (loss) per share
|
$ | 0.00 | $ | (0.01 | ) | $ | (0.10 | ) | $ | 0.01 | ||||||
Options
and warrants outstanding but not included in computation of diluted
weighted average number of shares (“OWNI”) because the strike prices
exceeded the average price of the common shares
|
33,103,283
|
5,540,249 | 33,124,533 | 5,513,999 | ||||||||||||
Average
exercise price of OWNI
|
$ | 0.60 | $ | 1.02 | $ | 0.59 | $ | 1.02 | ||||||||
Shares
issuable for convertible debentures excluded from calculation of EPS
because their effect would have been anti-dilutive
|
– | 14,876,200 | 8,580,000 | 14,876,200 | ||||||||||||
Average
conversion price of anti-dilutive convertible securities
|
n/a | $ | 0.50 | $ | 0.50 | $ | 0.50 |
14.
|
COMMITMENTS
AND CONTINGENCIES
|
15.
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
(a)
|
Net
changes in non-cash operating working capital items
are:
|
Three
months ended
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Increase)
decrease in:
|
||||||||||||||||
Accounts
receivable and other
|
$ | 417 | $ | 1,579 | $ | 73 | $ | (439 | ) | |||||||
Prepaids
|
423 | 179 | 431 | 423 | ||||||||||||
Inventories
|
(6,004 | ) | 282 | (3,579 | ) | (1,636 | ) | |||||||||
Increase
(decrease) in:
|
||||||||||||||||
Accounts
payable
|
2,208 | 2,416 | 2,434 | 1,724 | ||||||||||||
Accrued
liabilities
|
152 | (1,146 | ) | 427 | (1,162 | ) | ||||||||||
Property
and mining taxes payable
|
(205 | ) | 158 | (263 | ) | 311 | ||||||||||
$ | (3,009 | ) | $ | 3,468 | $ | (477 | ) | $ | (779 | ) |
(b)
|
Components
of cash and cash equivalents are:
|
June
30,
2009
|
June
30,
2008
|
|||||||
Cash
|
$ | 1,834 | $ | 174 | ||||
Cash
equivalents
|
– | 428 | ||||||
Cash
and cash equivalents
|
$ | 1,834 | $ | 602 |
(c)
|
Non-cash
transactions
|
Three
months ended
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Increase
in property, plant and equipment due to assets acquired via issuance of
notes payable
|
$ | 3,406 | $ | 1,425 | $ | 4,039 | $ | 1,425 | ||||||||
Increase
in prepaid assets due to financing a portion of the Company’s insurance
program via the issuance of notes payable
|
– | – | 582 | – | ||||||||||||
Increase
in contributed surplus for the issuance of warrants to the Banks in
connection with the Project Facility (Note 8(a)) and a corresponding
decrease in debt for the debt discount
|
– | – | 7,395 | – | ||||||||||||
Increase
in share capital and reduction in convertible debentures due to the
conversion of Series 2007-A convertible debentures into common shares of
the Company
|
– | 140 | – | 621 | ||||||||||||
Increase
in share capital and a decrease in future income tax assets
upon renouncement of expenditures in connection with a flow-through share
offering completed in October 2007
|
– | – | – | 1,165 |
16.
|
FAIR
VALUE OF FINANCIAL INSTRUMENTS
|
(a)
|
Capital
Risk Management
|
(b)
|
Credit
Risk
|
(c)
|
Liquidity
Risk
|
(d)
|
Currency
Risk
|
(e)
|
Interest
Rate Risk
|
(f)
|
Commodity
Price Risk
|
(g)
|
Fair
Value Estimation
|
17.
|
SEGMENTED
INFORMATION
|
Montana
Tunnels
|
Black
Fox
|
Corporate
and
Other
|
Total
|
|||||||||||||
Cash
and cash equivalents
|
$ | 898 | $ | 27 | $ | 909 | $ | 1,834 | ||||||||
Other
non-cash current assets
|
1,383 | 8,900 | 6,177 | 16,460 | ||||||||||||
2,281 | 8,927 | 7,086 | 18,294 | |||||||||||||
Derivative
instruments
|
– | – | 1,773 | 1,773 | ||||||||||||
Long-term
investments
|
– | – | 1,094 | 1,094 | ||||||||||||
Property,
plant and equipment
|
7,172 | 127,339 | 3,022 | 137,533 | ||||||||||||
Restricted
certificates of deposit
|
8,209 | 13,373 | 8 | 21,590 | ||||||||||||
Other
long-term assets
|
– | 107 | – | 107 | ||||||||||||
Total
assets
|
$ | 17,662 | $ | 149,746 | $ | 12,983 | $ | 180,391 | ||||||||
Current
liabilities
|
$ | 1,973 | $ | 32,128 | $ | 10,769 | $ | 44,870 | ||||||||
Derivative
instruments
|
– | – | 13,024 | 13,024 | ||||||||||||
Debt
and other long-term liabilities
|
– | 44,411 | 330 | 44,741 | ||||||||||||
Accrued
site closure costs
|
9,527 | 4,552 | – | 14,079 | ||||||||||||
Future
income tax liability
|
– | 393 | – | 393 | ||||||||||||
Total
liabilities
|
$ | 11,500 | $ | 81,484 | $ | 24,123 | $ | 117,107 |
Montana
Tunnels
|
Black
Fox
|
Corporate
and
Other
|
Total
|
|||||||||||||
Cash
and cash equivalents
|
$ | 12 | $ | 214 | $ | 2,871 | $ | 3,097 | ||||||||
Other
non-cash current assets
|
5,425 | 9,805 | 3,156 | 18,386 | ||||||||||||
5,437 | 10,019 | 6,027 | 21,483 | |||||||||||||
Long-term
investments
|
– | – | 1,081 | 1,081 | ||||||||||||
Property,
plant and equipment
|
7,655 | 85,183 | 3,043 | 95,881 | ||||||||||||
Deferred
stripping costs
|
1,052 | – | – | 1,052 | ||||||||||||
Restricted
certificates of deposit
|
8,209 | 3,813 | 8 | 12,030 | ||||||||||||
Other
long-term assets
|
– | 103 | – | 103 | ||||||||||||
Total
assets
|
$ | 22,353 | $ | 99,118 | $ | 10,159 | $ | 131,630 | ||||||||
Current
liabilities
|
$ | 4,376 | $ | 26,925 | $ | 9,113 | $ | 40,414 | ||||||||
Debt
and other long-term liabilities
|
44 | 967 | 4,888 | 5,899 | ||||||||||||
Accrued
site closure costs
|
9,165 | 1,398 | – | 10,563 | ||||||||||||
Future
income tax liability
|
– | 447 | – | 447 | ||||||||||||
Deferred
gain
|
552 | – | – | 552 | ||||||||||||
Total
liabilities
|
$ | 14,137 | $ | 29,737 | $ | 14,001 | $ | 57,875 |
Three
months ended June 30, 2009
|
||||||||||||||||
Montana
Tunnels
|
Black
Fox
|
Corporate
and
Other
|
Total
|
|||||||||||||
Revenue
from sale of minerals
|
$ | 2,849 | $ | 4,709 | $ | – | $ | 7,558 | ||||||||
Direct
operating costs
|
3,010 | 2,034 | – | 5,044 | ||||||||||||
Depreciation
and amortization
|
168 | 1,238 | 11 | 1,417 | ||||||||||||
General
and administrative expenses
|
– | – | 1,096 | 1,096 | ||||||||||||
Accretion
expense – accrued site closure costs
|
181 | 69 | – | 250 | ||||||||||||
Amortization
of deferred gain
|
(97 | ) | – | – | (97 | ) | ||||||||||
Exploration
and business development
|
– | 48 | 254 | 302 | ||||||||||||
3,262 | 3,389 | 1,361 | 8,012 | |||||||||||||
Operating
(loss) income
|
(413 | ) | 1,320 | (1,361 | ) | (454 | ) | |||||||||
Interest
income
|
– | – | 38 | 38 | ||||||||||||
Interest
expense
|
(21 | ) | (1,098 | ) | (315 | ) | (1,434 | ) | ||||||||
Debt
transaction costs
|
– | (10 | ) | – | (10 | ) | ||||||||||
Realized
losses on derivative contracts
|
– | – | (492 | ) | (492 | ) | ||||||||||
Unrealized
gains on derivative contracts
|
– | – | 3,376 | 3,376 | ||||||||||||
Foreign
exchange gain and other
|
– | 1 | 241 | 242 | ||||||||||||
(Loss)
income before income taxes
|
$ | (434 | ) | $ | 213 | $ | 1,487 | $ | 1,266 | |||||||
Investing
activities
|
||||||||||||||||
Property,
plant and equipment expenditures and deferred stripping
expenditures
|
$ | 9 | $ | 18,580 | $ | – | $ | 18,589 |
Six
months ended June 30, 2009
|
||||||||||||||||
Montana
Tunnels
|
Black
Fox
|
Corporate
and
Other
|
Total
|
|||||||||||||
Revenue
from sale of minerals
|
$ | 10,219 | $ | 4,709 | $ | – | $ | 14,928 | ||||||||
Direct
operating costs
|
11,413 | 2,034 | – | 13,447 | ||||||||||||
Depreciation
and amortization
|
469 | 1,238 | 21 | 1,728 | ||||||||||||
General
and administrative expenses
|
– | – | 2,028 | 2,028 | ||||||||||||
Accretion
expense – accrued site closure costs
|
362 | 69 | – | 431 | ||||||||||||
Amortization
of deferred gain
|
(552 | ) | – | – | (552 | ) | ||||||||||
Exploration
and business development
|
– | 112 | 417 | 529 | ||||||||||||
11,692 | 3,453 | 2,466 | 17,611 | |||||||||||||
Operating
(loss) income
|
(1,473 | ) | 1,256 | (2,466 | ) | (2,683 | ) | |||||||||
Interest
income
|
7 | – | 78 | 85 | ||||||||||||
Interest
expense
|
(50 | ) | (1,098 | ) | (1,313 | ) | (2,461 | ) | ||||||||
Debt
transaction costs
|
– | (582 | ) | (1,239 | ) | (1,821 | ) | |||||||||
Loss
on modification of convertible debentures
|
– | – | (1,969 | ) | (1,969 | ) | ||||||||||
Realized
losses on derivative contracts
|
– | – | (124 | ) | (124 | ) | ||||||||||
Unrealized
losses on derivative contracts
|
– | – | (15,042 | ) | (15,042 | ) | ||||||||||
Foreign
exchange gain and other
|
– | 1 | 338 | 339 | ||||||||||||
Loss
before income taxes
|
$ | (1,516 | ) | $ | (423 | ) | $ | (21,737 | ) | $ | (23,676 | ) | ||||
Investing
activities
|
||||||||||||||||
Property,
plant and equipment expenditures and deferred stripping
expenditures
|
$ | 9 | $ | 40,446 | $ | – | $ | 40,455 |
Three
months ended June 30, 2008
|
||||||||||||||||
Montana
Tunnels
|
Black
Fox
|
Corporate
and
Other
|
Total
|
|||||||||||||
Revenue
from sale of minerals
|
$ | 10,019 | $ | – | $ | – | $ | 10,019 | ||||||||
Direct
operating costs
|
9,469 | – | – | 9,469 | ||||||||||||
Depreciation
and amortization
|
327 | – | 28 | 355 | ||||||||||||
General
and administrative expenses
|
– | – | 1,159 | 1,159 | ||||||||||||
Accretion
expense – accrued site closure costs
|
178 | – | – | 178 | ||||||||||||
Amortization
of deferred gain
|
(369 | ) | – | – | (369 | ) | ||||||||||
Exploration
and business development
|
– | 25 | 976 | 1,001 | ||||||||||||
9,605 | 25 | 2,163 | 11,793 | |||||||||||||
Operating
income (loss)
|
414 | (25 | ) | (2,163 | ) | (1,774 | ) | |||||||||
Interest
income
|
38 | – | 45 | 83 | ||||||||||||
Interest
expense
|
(102 | ) | – | (919 | ) | (1,021 | ) | |||||||||
Realized
gains on derivative contracts
|
– | – | 1,432 | 1,432 | ||||||||||||
Unrealized
gains on derivative contracts
|
– | – | 122 | 122 | ||||||||||||
Foreign
exchange loss and other
|
– | – | (108 | ) | (108 | ) | ||||||||||
Income
(loss) before income taxes
|
$ | 350 | $ | (25 | ) | $ | (1,591 | ) | $ | (1,266 | ) | |||||
Investing
activities
|
||||||||||||||||
Property,
plant and equipment expenditures and deferred stripping
expenditures
|
$ | 98 | $ | 3,673 | $ | 42 | $ | 3,813 |
Six
months ended June 30, 2008
|
||||||||||||||||
Montana
Tunnels
|
Black
Fox
|
Corporate
and
Other
|
Total
|
|||||||||||||
Revenue
from sale of minerals
|
$ | 25,921 | $ | – | $ | – | $ | 25,921 | ||||||||
Direct
operating costs
|
18,530 | – | – | 18,530 | ||||||||||||
Depreciation
and amortization
|
705 | – | 54 | 759 | ||||||||||||
General
and administrative expenses
|
– | – | 2,088 | 2,088 | ||||||||||||
Accretion
expense – accrued site closure costs
|
355 | – | – | 355 | ||||||||||||
Amortization
of deferred gain
|
(924 | ) | – | – | (924 | ) | ||||||||||
Exploration
and business development
|
– | 50 | 1,707 | 1,757 | ||||||||||||
18,666 | 50 | 3,849 | 22,565 | |||||||||||||
Operating
income (loss)
|
7,255 | (50 | ) | (3,849 | ) | 3,356 | ||||||||||
Interest
income
|
90 | – | 119 | 209 | ||||||||||||
Interest
expense
|
(214 | ) | – | (1,955 | ) | (2,169 | ) | |||||||||
Realized
gains on derivative contracts
|
– | – | 1,950 | 1,950 | ||||||||||||
Unrealized
gains on derivative contracts
|
– | – | (733 | ) | (733 | ) | ||||||||||
Foreign
exchange loss and other
|
– | – | (225 | ) | (225 | ) | ||||||||||
Income
(loss) before income taxes
|
$ | 7,131 | $ | (50 | ) | $ | (4,693 | ) | $ | 2,388 | ||||||
Investing
activities
|
||||||||||||||||
Property,
plant and equipment expenditures and deferred stripping
expenditures
|
$ | 178 | $ | 4,849 | $ | 42 | $ | 5,069 |
18.
|
DIFFERENCES
BETWEEN CANADIAN AND U.S. GAAP
|
June
30,
2009
|
Dec
31,
2008
|
|||||||
Total
assets in accordance with Canadian GAAP
|
$ | 180,391 | $ | 131,630 | ||||
Bank
indebtedness
|
– | (742 | ) | |||||
Equity
accounting for investment in Montana Tunnels joint venture
(b)(i)
|
(10,484 | ) | (12,864 | ) | ||||
Impairment
of property, plant and equipment, and change in depreciation and
amortization(b)(ii)
|
(1,558 | ) | (1,617 | ) | ||||
Deferred
stripping costs (b)(iii)
|
– | (1,052 | ) | |||||
Black
Fox Project (c)
|
(28,897 | ) | (29,159 | ) | ||||
Convertible
debentures (d)
|
– | 66 | ||||||
Total
assets in accordance with U.S. GAAP
|
$ | 139,452 | $ | 86,262 | ||||
Total
liabilities in accordance with Canadian GAAP
|
$ | 117,107 | $ | 57,875 | ||||
Bank
indebtedness
|
– | (742 | ) | |||||
Debt
transactions costs (a)
|
(521 | ) | – | |||||
Equity
accounting for investment in Montana Tunnels joint venture
(b)(i)
|
(10,484 | ) | (12,864 | ) | ||||
Deferred
gain (b)(i)
|
– | (552 | ) | |||||
Convertible
debentures (d)
|
359 | 118 | ||||||
Income
taxes related to flow-through share issuance (e)
|
– | 73 | ||||||
Warrants
treated as liabilities under EITF 07-5 (h)
|
29,887 | – | ||||||
Total
liabilities in accordance with U.S. GAAP
|
$ | 136,348 | $ | 43,908 | ||||
Total
shareholders’ equity in accordance with Canadian GAAP
|
$ | 63,284 | $ | 73,755 | ||||
Debt
transactions costs (a)
|
557 | – | ||||||
Deferred
gain (b)(i)
|
– | 552 | ||||||
Impairment
of property, plant and equipment, and change in depreciation and
amortization(b)(ii)
|
(1,558 | ) | (1,617 | ) | ||||
Deferred
stripping costs (b)(iii)
|
– | (1,052 | ) | |||||
Black
Fox Project (c)
|
(28,933 | ) | (29,159 | ) | ||||
Convertible
debentures (d)
|
(359 | ) | (52 | ) | ||||
Income
taxes related to flow-through share issuance (e)
|
– | (73 | ) | |||||
Warrants
treated as liabilities under EITF 07-5 (h)
|
(29,887 | ) | – | |||||
Total
shareholders’ equity in accordance with U.S. GAAP
|
$ | 3,104 | $ | 42,354 | ||||
Total
shareholders’ equity and liabilities in accordance with U.S.
GAAP
|
$ | 139,452 | $ | 86,262 |
June 30,
2009
|
Dec 31,
2008
|
|||||||
Share
capital
|
$ | 192,627 | $ | 189,451 | ||||
Note
warrants
|
– | 2,234 | ||||||
Contributed
surplus
|
45,146 | 48,241 | ||||||
Deficit
|
(234,669 | ) | (197,572 | ) | ||||
Total
shareholders’ equity in accordance with U.S. GAAP
|
$ | 3,104 | $ | 42,354 |
Three
months ended
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
income (loss) for the period, based on Canadian GAAP
|
$ | 1,266 | $ | (1,329 | ) | $ | (23,487 | ) | $ | 2,325 | ||||||
Debt
transaction costs (a)
|
(15 | ) | (54 | ) | 557 | (107 | ) | |||||||||
Amortization
of deferred gain (b)(i)
|
(97 | ) | (369 | ) | (552 | ) | (924 | ) | ||||||||
Change
in depreciation of property, plant and equipment (b)(ii)
|
15 | 39 | 59 | 92 | ||||||||||||
Capitalized
deferred stripping and amortization (b)(iii)
|
184 | 704 | 1,052 | 1,762 | ||||||||||||
Black
Fox Project (c)
|
226 | (1,137 | ) | 226 | (2,332 | ) | ||||||||||
Convertible
debentures (d)
|
109 | 233 | 277 | (1,097 | ) | |||||||||||
Warrants
treated as liabilities under EITF 07-5 (h)
|
(8,829 | ) | – | (13,582 | ) | – | ||||||||||
Income
taxes (f)
|
– | – | (116 | ) | 628 | |||||||||||
Net
(loss) income for the period based on U.S. GAAP
|
$ | (7,141 | ) | $ | (1,913 | ) | $ | (35,566 | ) | $ | 347 | |||||
Comprehensive
income (loss) based on U.S. GAAP
|
$ | (7,141 | ) | $ | (1,913 | ) | $ | (35,566 | ) | $ | 347 | |||||
Basic
and diluted net (loss) income per share in accordance with U.S.
GAAP
|
$ | (0.03 | ) | $ | (0.01 | ) | $ | (0.15 | ) | $ | 0.00 |
Three
months ended
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Cash
(used in) provided by operating activities based on Canadian
GAAP
|
$ | (2,738 | ) | $ | 4,162 | $ | (1,182 | ) | $ | 5,582 | ||||||
Debt
transaction costs (a)
|
– | – | 572 | – | ||||||||||||
Equity
accounting for investment in Montana Tunnels joint venture
(b)(i)
|
(628 | ) | (3,987 | ) | (1,835 | ) | (8,811 | ) | ||||||||
Black
Fox Project (c)
|
– | (1,137 | ) | – | (2,332 | ) | ||||||||||
Cash
used in operating activities based on U.S. GAAP
|
(3,366 | ) | (962 | ) | (2,445 | ) | (5,561 | ) | ||||||||
Cash
used in investing activities based on Canadian GAAP
|
(27,733 | ) | (4,571 | ) | (44,519 | ) | (6,403 | ) | ||||||||
Equity
accounting for investment in Montana Tunnels joint venture
(b)(i)
|
2 | 684 | 9 | 1,361 | ||||||||||||
Black
Fox Project (c)
|
– | 1,137 | – | 2,332 | ||||||||||||
Restricted
cash for Canadian flow-through expenditures (e)
|
– | 1,864 | 3,825 | 2,609 | ||||||||||||
Cash
used in investing activities based on U.S. GAAP
|
(27,731 | ) | (886 | ) | (40,685 | ) | (101 | ) | ||||||||
Cash
provided by financing activities based on Canadian GAAP
|
27,018 | (1,827 | ) | 44,347 | (3,385 | ) | ||||||||||
Debt
transaction costs (a)
|
– | – | (572 | ) | – | |||||||||||
Equity
accounting for investment in Montana Tunnels joint venture
(b)(i)
|
273 | 3,164 | 940 | 7,303 | ||||||||||||
Cash
provided by financing activities based on U.S. GAAP
|
27,291 | 1,337 | 44,715 | 3,918 | ||||||||||||
Effect
of exchange rate changes on cash
|
95 | (30 | ) | 91 | (44 | ) | ||||||||||
Net
cash (outflow) inflow in accordance with U.S. GAAP
|
(3,711 | ) | (541 | ) | 1,676 | (1,788 | ) | |||||||||
Cash
(bank indebtedness), beginning of period under U.S. GAAP
|
4,645 | 87 | (742 | ) | 1,334 | |||||||||||
Cash
(bank indebtedness), end of period under U.S. GAAP
|
$ | 934 | $ | (454 | ) | $ | 934 | $ | (454 | ) |
(a)
|
Debt
transaction costs
|
(b)
|
Montana
Tunnels
|
(c)
|
Black
Fox Project
|
(d)
|
Convertible
debentures
|
(e)
|
Flow-through
common shares
|
(f)
|
Income
taxes
|
(g)
|
Derivative
instruments
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||||||||||||||
June 30, 2009
|
December 31, 2008
|
June 30, 2009
|
December 31, 2008
|
|||||||||||||||||||||||||||||
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
|||||||||||||||||||||||||
Derivatives
not designated as hedging instruments under SFAS 133
|
||||||||||||||||||||||||||||||||
Gold
forward contracts
|
n/a
|
$ | – |
Derivative
instruments
|
$ | 54 |
Derivative
instruments
|
$ | 16,732 |
n/a
|
$ | – | ||||||||||||||||||||
Silver
forward contracts
|
n/a
|
– |
Derivative
instruments
|
139 |
n/a
|
– |
n/a
|
– | ||||||||||||||||||||||||
Lead
forward contracts
|
n/a
|
– |
Derivative
instruments
|
359 |
n/a
|
– |
n/a
|
– | ||||||||||||||||||||||||
Canadian
currency forward contracts
|
Derivative
instruments
|
2,242 |
n/a
|
– |
n/a
|
– |
n/a
|
– | ||||||||||||||||||||||||
Total
derivatives
|
$ | 2,242 | $ | 552 | $ | 16,732 | $ | – |
(h)
|
Adoption
of recently issued accounting
pronouncements
|
|
Level 1
|
Unadjusted
quoted prices in active markets that are accessible at the measurement
date for identical, unrestricted assets or
liabilities;
|
|
Level 2
|
Quoted
prices in markets that are not active, or inputs that are observable,
either directly or indirectly, for substantially the full term of the
asset or liability;
|
|
Level 3
|
Prices
or valuation techniques that require inputs that are both significant to
the fair value measurement and unobservable (supported by little or no
market activity).
|
18.
|
DIFFERENCES
BETWEEN CANADIAN AND U.S. GAAP
(continued)
|
(i)
|
Recently
issued accounting pronouncements
|
19.
|
SUBSEQUENT
EVENT
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
One
month
ended
June 30, 2009
|
||||
Metal
sales:
|
||||
Gold
(ounces)
|
5,043 | |||
Total
revenue ($millions)
|
$ | 4.7 | ||
Total
cash and production costs:
|
||||
Total
cash costs per ounce of gold
|
$ | 403 | ||
Total
production costs per ounce of gold
|
$ | 649 |
Three
months ended June 30,
|
Six
months ended June 30,
|
|||||||||||||||
2009
(1)
|
2008
|
2009
(1)
|
2008
|
|||||||||||||
Metal
sales:
|
||||||||||||||||
Gold
(ounces)
|
1,260 | 4,612 | 5,125 | 11,545 | ||||||||||||
Silver
(ounces)
|
30,626 | 48,012 | 80,275 | 109,595 | ||||||||||||
Lead
(pounds)
|
544,134 | 1,243,867 | 1,740,127 | 3,368,561 | ||||||||||||
Zinc
(pounds)
|
1,152,566 | 4,648,902 | 5,245,296 | 9,080,699 | ||||||||||||
Total
revenue ($millions)
|
$ | 2.8 | $ | 10.0 | $ | 10.2 | $ | 25.9 | ||||||||
Total
cash and production costs on a by-product basis:
|
||||||||||||||||
Total
cash costs per ounce of gold
|
$ | 1,057 | $ | 758 | $ | 1,178 | $ | 301 | ||||||||
Total
production costs per ounce of gold
|
$ | 1,191 | $ | 829 | $ | 1,269 | $ | 362 | ||||||||
Total
cash costs on a co-product basis:
|
||||||||||||||||
Total
cash costs per ounce of gold
|
$ | 970 | $ | 829 | $ | 1,055 | $ | 673 | ||||||||
Total
cash costs per ounce of silver
|
$ | 15.75 | $ | 15.76 | $ | 16.45 | $ | 13.21 | ||||||||
Total
cash costs per pound of lead
|
$ | 0.79 | $ | 0.79 | $ | 0.71 | $ | 0.86 | ||||||||
Total
cash costs per pound of zinc
|
$ | 0.76 | $ | 0.84 | $ | 0.66 | $ | 0.71 |
Three
months ended June 30,
|
Six
months ended June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Average
metal prices:
|
||||||||||||||||
Gold
- London bullion mkt. ($/ounce)
|
$ | 922 | $ | 896 | $ | 916 | $ | 911 | ||||||||
Silver
- London bullion mkt. ($/ounce)
|
$ | 13.76 | $ | 17.17 | $ | 13.19 | $ | 17.43 | ||||||||
Lead
- London Metal Exchange ($/pound)
|
$ | 0.68 | $ | 1.05 | $ | 0.60 | $ | 1.18 | ||||||||
Zinc
- London Metal Exchange ($/pound)
|
$ | 0.67 | $ | 0.96 | $ | 0.60 | $ | 1.03 |
($
in thousands, except per ounce of gold data)
|
One
month
ended
June 30, 2009
|
|||
Gold
ounces sold
|
5,043 | |||
Direct
operating costs
|
$ | 2,034 | ||
Less: Mining
taxes, royalty expenses
|
– | |||
By-product credits
|
– | |||
Cash
operating cost
|
2,034 | |||
Cash operating cost per ounce of gold
|
$ | 403 | ||
Cash
operating costs
|
2,034 | |||
Add: Mining
taxes, royalty expenses
|
– | |||
Total
cash costs
|
2,034 | |||
Total cash cost per ounce of gold
|
$ | 403 | ||
Total
cash costs
|
2,034 | |||
Add: Depreciation
& amortization
|
1,238 | |||
Total
production costs
|
3,272 | |||
Total production cost per ounce of gold
|
$ | 649 |
Three
months ended June 30,
|
Six
months ended June 30,
|
|||||||||||||||
($
in thousands, except per ounce of gold data)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Gold
ounces sold
|
1,260 | 4,612 | 5,125 | 11,545 | ||||||||||||
Direct
operating costs
|
$ | 3,010 | $ | 9,467 | $ | 11,413 | $ | 18,526 | ||||||||
Less: Mining
taxes, royalty expenses
|
71 | 297 | 234 | 788 | ||||||||||||
By-product credits
|
1,678 | 5,972 | 5,376 | 15,051 | ||||||||||||
Cash
operating cost
|
1,261 | 3,198 | 5,803 | 2,687 | ||||||||||||
Cash operating cost per ounce of gold
|
$ | 1,001 | $ | 693 | $ | 1,132 | $ | 233 | ||||||||
Cash
operating costs
|
1,261 | 3,198 | 5,803 | 2,687 | ||||||||||||
Add: Mining
taxes, royalty expenses
|
71 | 297 | 234 | 788 | ||||||||||||
Total
cash costs
|
1,332 | 3,495 | 6,037 | 3,475 | ||||||||||||
Total cash cost per ounce of gold
|
$ | 1,057 | $ | 758 | $ | 1,178 | $ | 301 | ||||||||
Total
cash costs
|
1,332 | 3,495 | 6,037 | 3,475 | ||||||||||||
Add: Depreciation
& amortization
|
168 | 327 | 469 | 705 | ||||||||||||
Total
production costs
|
1,500 | 3,822 | 6,506 | 4,180 | ||||||||||||
Total production cost per ounce of gold
|
$ | 1,191 | $ | 829 | $ | 1,269 | $ | 362 |
•
|
Changes
in note disclosures;
|
•
|
Information
technology and data system
requirements;
|
•
|
Disclosure
controls and procedures, including investor relations and external
communications plans related to the US GAAP
conversion;
|
•
|
Financial
reporting expertise requirements, including training of personnel;
and
|
•
|
Impacts
on other business activities that may be influenced by GAAP measures, such
as performance measures and debt
covenants.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
CONTROLS
AND PROCEDURES
|
LEGAL
PROCEEDINGS
|
Votes Against/
|
||||||||
Proposal
|
Votes for
|
Withheld (1)
|
||||||
(i) Election
of Management’s Slate of Directors:
|
||||||||
Charles
E. Stott
|
102,549,698 | 5,015,213 | ||||||
R.
David Russell
|
100,836,825 | 6,728,086 | ||||||
W.S.
(Steve) Vaughan
|
94,455,226 | 13,109,685 | ||||||
G.
Michael Hobart
|
101,022,098 | 6,562,813 | ||||||
Robert
W. Babensee
|
100,995,570 | 6,569,341 | ||||||
Marvin
K. Kaiser
|
101,748,835 | 5,816,076 | ||||||
David
W. Peat
|
101,068,488 | 6,496,423 | ||||||
(ii) Ratification
of Deloitte & Touche LLP
|
99,731,162 | 7,833,751 | ||||||
(iii) Resolution
for the Approval of the Apollo Gold Corporation Stock Option Plan
Incentive Plan
|
33,456,508 | 12,566,438 |
(1)
|
Based
on the records of the Company’s scrutineer for the meeting, this number
may include votes abstained and/or broker
non-votes.
|
Exhibit No.
|
Title of Exhibit
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
|
32.1
|
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley
Act
|
APOLLO
GOLD CORPORATION
|
||
Date:
August 14, 2009
|
/s/ R. David
Russell
|
|
R.
David Russell, President and
|
||
Chief
Executive Officer
|
||
Date:
August 14, 2009
|
/s/ Melvyn
Williams
|
|
Melvyn
Williams,
|
||
Chief
Financial Officer and Senior Vice President Finance and Corporate
Development
|
Exhibit No.
|
Title of Exhibit
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley
Act
|