Yes
£
|
No
T
|
Yes
£
|
No
T
|
Yes
T
|
No
£
|
Large accelerated filer
£
|
Accelerated filer
T
|
Non-accelerated filer
£
|
U.S. GAAP
£
|
International Financial Reporting Standards as issued by the International Accounting Standards Board
£
|
Other
T
|
Item 17
T
|
Item 18
£
|
Yes
£
|
No
T
|
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
A.
|
Directors and senior management
|
B.
|
Advisers
|
C.
|
Auditors
|
OFFER STATISTICS AND EXPECTED TIMETABLE
|
A.
|
Offer statistics.
|
B.
|
Method and expected timetable
|
KEY INFORMATION
|
Year ended December 31,
|
||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||
Amounts in accordance with Canadian GAAP:
|
||||||||||||||||
Net (loss)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (9,483 | ) | $ | (7,723 | ) | $ | (3,504 | ) | |
Basic and diluted (loss) per share
|
(0.005 | ) | (0.04 | ) | (0.08 | ) | (0.08 | ) | (0.05 | ) | ||||||
Total assets
|
29,152 | 29,521 | 34,391 | 35,272 | 21,204 | |||||||||||
Net assets
|
27,513 | 27,848 | 31,909 | 33,428 | 19,854 | |||||||||||
Net working capital
|
22,476 | 22,557 | 27,432 | 29,143 | 16,040 | |||||||||||
Capital stock
|
65,583 | 65,621 | 65,964 | 59,365 | 43,067 | |||||||||||
Contributed surplus
|
8,668 | 8,354 | 7,844 | 6,479 | 1,479 | |||||||||||
Dividends declared (per share)
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||
Weighted average number of common shares outstanding – basic and diluted
|
118,915,812 | 120,440,062 | 113,429,078 | 94,734,979 | 71,378,444 | |||||||||||
Number of common shares outstanding
|
118,900,563 | 118,969,063 | 120,213,962 | 107,590,212 | 79,747,212 | |||||||||||
Amounts in accordance with U.S. GAAP:
|
||||||||||||||||
Net (loss)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (10,439 | ) | $ | (9,486 | ) | $ | (3,504 | ) | |
Basic and diluted (loss) per share
|
(0.005 | ) | (0.04 | ) | (0.09 | ) | (0.10 | ) | (0.05 | ) | ||||||
Total assets
|
29,152 | 29,521 | 34,391 | 35,272 | 21,204 | |||||||||||
Net assets
|
27,513 | 27,848 | 31,909 | 31,897 | 19,854 | |||||||||||
Net working capital
|
22,476 | 22,557 | 27,432 | 29,143 | 16,040 | |||||||||||
Capital stock
|
68,302 | 68,340 | 68,683 | 57,834 | 43,067 | |||||||||||
Contributed surplus
|
8,668 | 8,354 | 7,844 | 6,479 | 1,479 | |||||||||||
Dividends declared (per share)
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||
Weighted average number of common shares outstanding – basic and diluted
|
118,915,812 | 120,440,062 | 113,429,078 | 94,734,979 | 71,378,444 | |||||||||||
Number of common shares outstanding
|
118,900,563 | 118,969,063 | 120,213,962 | 107,590,212 | 79,747,212 |
U.S. DOLLARS PER $1.00 (CDN.)
|
||||||
Monthly
|
||||||
November ‘09
|
December ‘09
|
January
‘10
|
February
‘10
|
March
‘10
|
April
‘10
|
|
High
|
0.9565
|
0.9580
|
0.9771
|
0.9611
|
0.9898
|
1.0012
|
Low
|
0.9278
|
0.9343
|
0.9352
|
0.9307
|
0.9601
|
0.9827
|
|
• The relative strength of the U.S. dollar against other currencies;
|
|
• Government monetary and fiscal policies;
|
|
• Expectations of the future rate of global monetary inflation and interest rates;
|
|
• General economic conditions and the perception of risk in capital markets;
|
|
• Political conditions including the threat of terrorism or war;
|
|
• Speculative trading;
|
|
• Investment and industrial demand; and
|
|
• Global production and inventory stocks.
|
|
• Mineralization or formations could be different from those predicted by drilling, sampling and similar examinations;
|
|
• Declines in the market price of metals may render the mining of some or all of Canadian Zinc’s mineral resources uneconomic;
|
|
• Increases in operating mining costs and processing costs could adversely affect mineral reserves or resources; and
|
|
• The grade of mineral reserves or resources may vary significantly from time to time and there can be no assurance that any particular level of metal may be recovered from the mineral reserves or resources.
|
|
·
|
the global credit/liquidity crisis could impact the cost and availability of financing and the Company’s overall liquidity;
|
|
·
|
the volatility of metal prices may impact the Company’s revenues, profits and cash flow;
|
|
·
|
volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and
|
|
·
|
the devaluation and volatility of global stock markets impacts the valuation of the Company’s equity securities
|
INFORMATION ON THE COMPANY
|
|
·
|
A combined Proven and Probable Reserve estimate of 1.9 million tonnes of ore grading 10.9 grams of gold per tonne for contained gold of 680,000 ounces;
|
|
·
|
An underground combined Measured and Indicated Mineral Resource of 8.3 million tonnes grading 10.5 grams of gold per tonne for contained gold of 2.8 million ounces; and
|
|
·
|
An Inferred Mineral Resource of 4.7 million tonnes grading 8.6 grams of gold per tonne for contained gold of 1.3 million ounces.
|
|
1.
|
Land Tenure
|
|
·
|
Mining Leases
Numbers 2854, 2931, 2932, 2933, 3313, 3314, 3315, and 3338; (8,749.4 acres), expiring from July 13, 2010 to August 5, 2020.
|
|
·
|
Surface Leases
Numbers 95 F/10-5-5 and 95 F/10-7-4; (325.81 acres). The Surface Leases are held from the Department of Indian Affairs and Northern Development and expire March 31, 2012.
|
|
·
|
Mineral Claims:
Four additional mineral claims, referred to as the Gate Claims, were staked in 1999 in the vicinity of the Prairie Creek Property. These claims consist of the Gate 1-4 Claims covering an area of 9,245.35 acres. During 2009, the Company submitted an application to convert the Gate 1-4 Claims to leases which requires legal survey work to be performed. The Company has until September 15, 2010 to submit the required legal survey and documentation to convert the Claims to leases. Six additional mineral claims Way 1–6 covering an area of 10,196.18 acres were staked in 2006 adjacent to existing mining leases or mineral claims to enlarge the size of the Prairie Creek property and were in good standing until November 11, 2008. The Company determined in November 2008 that it would not renew the Way 1 – 4 claims, which were allowed to lapse. The Way 5 claim (1,807.75 acres) is in good standing until November 1, 2013 and the Way 6 claim (2,479.20 acres) until November 1, 2010.
|
|
• is generally fine-grained, banded to semi-massive and comprises massive fine-grained sphalerite, coarse-grained galena and disseminated to massive pyrite (silver is contained in solid solution within galena);
|
|
·
|
One metre composites were created from the assay data honoring the geological zone codes provided in the dataset. Classical statistics were gathered for silver, copper, lead and zinc, as well as for each of the three mineralized zones considered in analysis (Main Quartz Vein, stockwork and stratabound).
|
|
·
|
A three-dimensional block model was developed; a block size of ten metres (easting) by 30 metres (northing) by 30 metres (elevation) was used. Inverse distance weighting with a power of three was used for all three mineralized zones; grades were interpolated for silver, copper, lead and zinc.
|
|
·
|
A primary search distance of 300 metres was used to enable filling of all the blocks in the down-plunge extension of the Main Quartz Vein. The search direction was orientated along a major axis of 357 degrees and a dip of 65 degrees east (i.e. to conform to the average strike and dip of the vein). The search was horizontal between sections 1,055N and 1,825N and plunging at 15 degrees north from sections 1,825N to 3,155N.
|
|
·
|
Coded composites from the same zone as the block being estimated were selected for block estimation. The minimum length composite selected for grade interpolation was 0.3 metres. The minimum number of composites used for the interpolation was one and the maximum was ten. The maximum number of composites per hole was limited to three, to thereby provide a more uniform grade interpolation. The resource grades include all intercepts in a specific area and had no blocks removed by cut-off grade, which is appropriate for the type of massive sulphide, selective mineralization considered in analysis.
|
|
·
|
the available resource grades (even when diluted in the normal process of stoping, high-grade, run-of-mine mill feed can reasonably be expected);
|
|
·
|
the fairly straightforward metallurgical process of co-mingled Main Quartz Vein and stratabound material (that yields a lead concentrate [sulphide and oxide] with a lead grade of approximately 69 percent at a recovery of nearly 89 percent and a silver grade of about 820 g/t at a recovery rate of approximately 73 percent, and a zinc concentrate [sulphide and oxide] with a zinc grade of nearly 54 percent at a recovery of approximately 86 percent); and
|
|
·
|
the likely limited amount of start-up capital required for mining and processing Main Zinc mineralized material, especially compared to a new mine operation.”
|
|
·
|
The Mine has a robust Measured and Indicated, Main Zone resource base that reflects high-grade mineralization (especially zinc);
|
|
·
|
The results of the [current] Phase II underground drilling program can reasonably be expected to further enhance the amount (tonnes) of Measured and Indicated, Main Zone resources;
|
|
·
|
Much of the required surface infrastructure and equipment is already in place, or at least only a limited amount of capital is probably required for new equipment and for rehabilitating and/or upgrading the existing mine and mill facilities; and
|
|
·
|
Only a small amount of additional underground development would probably be required to start the production ramp-up to the target rate of 1,000 tonnes per day.”
|
|
·
|
Main Quartz Vein and stratabound material could be co-mingled in the milling process (i.e. vein and stratabound material did not have to be separately campaigned through the processing plant);
|
|
·
|
Main Quartz Vein and stratabound material could, either separately or as co-mingled material, be pre-concentrated in a heavy media circuit to remove the waste component (limestone, quartz, etc);
|
|
·
|
A reagent scheme, that would eliminate the need for cyanide compounds, could be developed; and
|
|
·
|
Separate sulpide and oxide, lead and zinc concentrates (i.e. four separate concentrates) could be produced with acceptable recoveries and at marketable grades.
|
|
·
|
Stratabound material can be successfully co-mingled with Main Quartz Vein material, without significant metal losses in final concentrates;
|
|
·
|
Co-mingled, run-of-mine mineralized material is very amenable to pre-concentration by HLS (which both reduces the quantity of tailings produced and reduces both the power requirements and work index for milling);
|
|
·
|
Excellent metal recoveries can be achieved in both sulphide and oxide material, with a reagent suite that does not include cyanide products; and
|
|
·
|
Marketable concentrates can be produced (albeit that penalty elements, including antimony, arsenic and mercury, would unavoidably report to the final concentrates).
|
|
·
|
preparing regional land use plans to guide the development and use of land, waters and other resources [Land Use Planning Board];
|
|
·
|
regulating all uses of land and water [Mackenzie Valley Land and Water Board (Water Board)]; and
|
|
·
|
carrying out the environmental assessment and review process [Mackenzie Valley Environmental Impact Review Board (Review Board)].
|
|
·
|
Conducts environmental assessments;
|
|
·
|
Conducts environmental impact reviews;
|
|
·
|
Maintains a public registry of all preliminary screenings conducted by Regulatory Authorities; and
|
|
·
|
Makes recommendations to the Minister of DIAND for rejection or approval of any proposal.
|
|
(c)
|
“
Grandfather” Provisions
|
|
(d)
|
Recent Permitting History at Prairie Creek
|
|
(e)
|
Land Use Permit – Phase 1 Exploration
|
|
(f)
|
Sundog (CAT) Camp – Clean Up Permit
|
|
(g)
|
Land Use Permit – Phase 2 Exploration
|
|
(h)
|
Water Licence and Land Use Permit – Underground Development
|
|
·
|
Government and regulatory authorities are to ensure that all drill waste is disposed of in a manner that does not allow any harmful substance to enter surface waters.
|
|
·
|
Canadian Zinc shall take every reasonable effort to employ a local person, selected in consultation with the Dehcho First Nations, as community environmental monitor, who will independently report back to the Dehcho First Nations.
|
|
·
|
DIAND shall ensure that a comprehensive program to monitor cumulative impacts on fish, wildlife, vegetation and water quality is implemented.
|
|
·
|
Parks Canada and Canadian Zinc agree to work collaboratively, within their respective areas of responsibility, authority and jurisdiction, to achieve their respective goals of an expanded NNPR and an operating Prairie Creek Mine.
|
|
·
|
Parks Canada recognizes and respects the right of Canadian Zinc to develop the Prairie Creek Mine and will manage the expansion of NNPR so that the expansion does not in its own right negatively affect development of, or reasonable access to and from, the Prairie Creek Mine.
|
|
·
|
Canadian Zinc accepts and supports the proposed expansion of the NNPR and will manage the development of the Prairie Creek Mine so the mine does not, in its own right, negatively affect the expansion of the Nahanni Park.
|
|
(a)
|
pay the Band annually 5% of the profits before tax, after recovery of the aggregate costs incurred in establishing access and bringing the project into production;
|
|
(b)
|
grant the Band an option to purchase 10% or 15% of the project for $6,000,000 or $9,000,000 respectively subject to adjustment for inflation and additional development costs, exercisable within three months following delivery of a Bankable Feasibility Study and receipt of all major permits for the project; and
|
|
(c)
|
give the Band preferential access on providing contract services; being competitive as to price, delivery, capability, performance and quality.
|
|
·
|
to provide a process through which Canadian Zinc, in pursuing its exploration and development activities at the Prairie Creek Mine, can consult with and accommodate the interests of LKFN with a view to amicably reconciling any issues that might arise;
|
|
·
|
to establish a relationship through which LKFN can identify opportunities for its businesses and members to participate in Canadian Zinc’s exploration and development activities; and
|
|
·
|
to set out the objectives, process and topics for the negotiation of an IBA between LKFN and Canadian Zinc, which is specifically intended to cover the future operations of the Prairie Creek Mine project.
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
SUMMARY - Presented in accordance with Canadian GAAP
|
|||||||||
(Thousands of dollars, except per share amounts)
|
2009
|
2008
|
2007
|
||||||
Statement of operations
|
|||||||||
Investment income
|
$ | 242 | $ | 899 | $ | 1,234 | |||
Net (loss)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (9,483 | ) |
Basic and diluted loss per share
|
$ | (0.005 | ) | $ | (0.04 | ) | $ | (0.08 | ) |
Balance sheet
|
|||||||||
Cash, cash equivalents and short-term investments
|
$ | 7,443 | $ | 20,948 | $ | 28,414 | |||
Marketable securities
|
$ | 15,382 | $ | 2,024 | $ | 100 | |||
Total assets
|
$ | 29,152 | $ | 29,521 | $ | 34,391 | |||
Total liabilities
|
$ | 1,639 | $ | 1,673 | $ | 2,482 | |||
Shareholders’ equity
|
$ | 27,513 | $ | 27,848 | $ | 31,909 | |||
|
Related Party Transactions
|
2009
|
2008
|
2007
|
||||
Statutory tax rate
|
30.70%
|
31.00%
|
34.12%
|
|||
Recovery of income taxes computed at statutory rates
|
$
|
187
|
$
|
1,311
|
$
|
4,084
|
Permanent differences
|
256
|
(64)
|
(93)
|
|||
Expired losses
|
(183)
|
(192)
|
(162)
|
|||
Other
|
7
|
(118)
|
281
|
|||
Income tax rate changes
|
75
|
(403)
|
(1,612)
|
|||
Change in valuation allowance
|
(342)
|
(534)
|
(11)
|
|||
$
|
-
|
$
|
-
|
$
|
2,487
|
Years ended December 31,
|
|||
2009
|
2008*
|
2007
|
|
Dividend yield
|
0%
|
N/a
|
0%
|
Risk free interest rate
|
1.90%
|
N/a
|
4.07%
|
Expected life
|
4 years
|
N/a
|
5 years
|
Expected volatility
|
83%
|
N/a
|
89%
|
|
(i)
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
|
(ii)
|
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
|
|
(iii)
|
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
Standards
|
Difference from Canadian GAAP
|
Potential Impact
|
Presentation and Disclosure
|
IFRS requires significantly
more disclosure than Canadian
GAAP for certain standards.
|
The increased disclosure requirements will cause the Company to change financial reporting processes to ensure the appropriate data is collected.
|
Stock-based Compensation
|
Under Canadian GAAP, vesting of employee stock options can be recognized on a straight-line basis whereas IFRS requires that each tranche of stock option vesting is treated as having a separate fair value.
|
The amount of the expense recognized under IFRS may be different to that under Canadian GAAP and is recognized more up-front.
|
Impairment of long-lived assets
|
IFRS requires the assessment of asset impairment to be based on discounted cash flows while Canadian GAAP only requires discounting if the carrying value of assets exceeds the undiscounted cash flows.
IFRS also requires the reversal of any previous asset impairments, excluding goodwill, where circumstances have changed. GAAP prohibits the reversal of impairment losses.
|
The differences in methodology may result in asset impairments upon transition to IFRS. In addition, the potential for asset impairments will increase in the future.
|
Asset retirement obligations (ARO)
|
IFRS requires asset retirement obligations to be adjusted to the discount rate in affect at each balance sheet date while GAAP retains the historical discount rate. In addition, IFRS requires that ARO are accrued for constructive as well as legal obligations. Canadian GAAP only requires that legal obligations are included.
|
The ARO recorded under IFRS may be greater than that under Canadian GAAP and the accounting treatment in the future may see more fluctuations in the amount reported.
|
|
Balance Sheets
|
2009
|
2008
|
|||||
Share capital (Canadian GAAP)
|
$ | 65,583 | $ | 65,621 | ||
Increase due to future income tax recovery on renouncement of flow-through shares (b)
|
4,250 | 4,250 | ||||
Decrease due to flow-through share premium paid in excess of market value (b)
|
(1,531 | ) | (1,531 | ) | ||
Share capital (U.S. GAAP)
|
$ | 68,302 | $ | 68,340 | ||
Deficit (Canadian GAAP)
|
$ | (46,738 | ) | $ | (46,127 | ) |
Increase due to future income tax recovery on renouncement of flow-through shares (b)
|
(4,250 | ) | (4,250 | ) | ||
Decrease due to flow through share premium paid in excess of market value (b)
|
1,531 | 1,531 | ||||
Deficit (U.S. GAAP)
|
$ | (49,457 | ) | $ | (48,846 | ) |
|
Statements of Operations
|
2009
|
2008
|
2007
|
|||||||
Net loss and comprehensive loss (Canadian GAAP)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (9,483 | ) |
Flow through share premium reversal (b)
|
- | - | 1,531 | ||||||
Future income tax recovery elimination (b)
|
- | - | (2,487 | ) | |||||
Net loss and comprehensive loss (U.S. GAAP)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (10,439 | ) |
Loss per share
- basic and diluted (U.S. GAAP)
|
$ | (0.005 | ) | $ | (0.04 | ) | $ | (0.09 | ) |
Weighted average number of common shares outstanding
- basic and diluted (U.S. GAAP)
|
118,915,812 | 120,440,062 | 113,429,078 | ||||||
Quarter ended
|
Investment Income $
|
Net Income (Loss) $
|
Net (Loss) Income per Common Share – basic and diluted $
|
December 31, 2009
|
14
|
(2,487)
|
(0.021)
|
September 30, 2009
|
16
|
(1,092)
|
(0.009)
|
June 30, 2009
|
82
|
3,265
|
0.027
|
March 31, 2009
|
130
|
(297)
|
(0.002)
|
December 31, 2008
|
201
|
(1,075)
|
(0.01)
|
September 30, 2008
|
184
|
(1,671)
|
(0.015)
|
June 30, 2008
|
218
|
(1,131)
|
(0.01)
|
March 31, 2008
|
296
|
(351)
|
(0.005)
|
($’000s)
|
Payment due by period
|
||||
Contractual Obligations
|
Total (CDN$)
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
Operating Lease Obligation (1)
|
360
|
148
|
212
|
-
|
-
|
Asset Retirement Obligation (2)
|
2,383
|
-
|
-
|
-
|
2,383
|
Total
|
2,743
|
148
|
212
|
-
|
2,383
|
(1)
|
Represents rent obligations under operating leases for office space and equipment.
|
(2)
|
The asset retirement obligation represents the undiscounted value of total payments of $2.383 million which are anticipated to be predominantly incurred at the end of the life of the Prairie Creek Mine.
|
G.
|
Safe Harbor
|
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
|
A.
|
Directors and Senior Management
|
Name, Jurisdiction of Ordinary Residence and Position Held with the Company
|
Age
|
Principal Occupation During Preceding
Five Years
|
Date First Became Director of the Company
|
Common Shares beneficially owned controlled or directed, directly or indirectly
(1)
|
Brian A. Atkins
British Columbia, Canada
Director
|
64
|
Chartered Accountant; Partner at KPMG LLP, Chartered Accountants, from 1978 to 2005; Director of North Shore Credit Union; Member of Independent Review Committee of Inhance Investment Management Inc. until December 2009.
|
June 2008
|
Nil
|
John F. Kearney
Ontario, Canada
Chairman, President, Chief Executive Officer and Director
|
59
|
Chairman, President and Chief Executive Officer of Canadian Zinc Corporation since 2003; Chairman of Labrador Iron Mines Limited since May 2007; Chairman of Conquest Resources Limited since 2001; Chairman of Anglesey Mining plc since 1994; Director of Vatukoula Gold Mines Plc since July 2009.
|
November 2001
|
1,923,909 common shares (1.62%)
|
John A. MacPherson
British Columbia, Canada
Director
|
66
|
Director and Chairman of Tower Energy Ltd. until 2007; Private Businessman; Director of Vatukoula Gold Mines Plc since July 2009.
|
May 1999
|
Nil
|
Dave Nickerson
Northwest Territories, Canada
Director
|
66
|
Professional Engineer, Mining consultant, Director, Tyhee Development Corp.; previously Chairman of Northwest Territories Water Board; Member of Parliament, Member of NWT Legislative Assembly; Government Minister
|
March 2004
|
17,500 common shares (0.01%)
|
Alan B. Taylor
British Columbia, Canada
Vice President, Exploration, Chief Operating Officer and Director
|
53
|
Vice President, Exploration of Canadian Zinc Corporation since 1999 and Chief Operating Officer of Canadian Zinc Corporation since March 2004.
|
March 2004
|
Nil
|
Martin Rip
British Columbia, Canada
Chief Financial Officer, Vice President, Finance and Secretary
(2)
|
36
|
Chief Financial Officer and Vice President Finance of Canadian Zinc Corporation since October 2007; Chartered Accountant; former VP Finance and CFO of Pine Valley Mining Corporation (February 2005 – June 2007); Senior Manager – Grant Thornton LLP (March 2001 – February 2005).
|
N/A
|
Nil
|
|
B.
|
Compensation
|
Name
And
Principal
Position
|
Year
|
Salary
($)
|
Share-based awards
($)
|
Option-based awards
(1)
($)
|
Non-equity incentive plan compensation
($)
|
Pension value
($)
|
All other compensation
(3)
($)
|
Total Compensation
($)
|
|
Annual incentive plans
(2)
|
Long-term incentive plans
|
||||||||
John F. Kearney
Chairman, President and CEO
(4)
|
2009
2008
|
150,000
155,000
(5)
|
Nil
Nil
|
50,000
Nil
|
25,000
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
225,000
155,000
|
Alan B. Taylor
COO
(4)
|
2009
2008
|
174,720
(6)
168,000
|
Nil
Nil
|
50,000
Nil
|
25,000
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
249,720
168,000
|
Martin Rip
CFO
|
2009
2008
|
144,000
144,000
|
Nil
Nil
|
30,000
Nil
|
12,500
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
186,500
144,000
|
|
(1)
|
The value of option-based awards represents the grant date fair value of the stock options awarded. For fiscal 2009, the Company granted stock options on March 27, 2009 which were valued using the Black-Scholes valuation model with the following assumptions: (i) Dividend yield – 0%, (ii) Risk free interest rate – 1.9%, (iii) Expected option life – 4 years and (iv) Expected volatility – 83%. The grant date fair value and the fair value for accounting purposes reported in the Company’s financial statements for the year ended December 31, 2009 were the same.
|
|
(2)
|
The Company does not have a formal bonus plan tied to set targets. Any bonus payments are entirely discretionary and are reviewed by the Compensation Committee as part of an overall review of performance for the year. The amounts awarded were paid to the Named Executive Officers in 2009.
|
|
(3)
|
Perquisites have not been included, as the do not exceed 10% of total salary for the financial years presented.
|
|
(4)
|
John Kearney and Alan Taylor are directors of the Company but were not compensated for services in this capacity.
|
|
(5)
|
$30,000 of the total salary was paid to a private company controlled by John Kearney.
|
|
(6)
|
$6,720 of Alan Taylor’s salary in 2009 related to unused vacation pay that was paid out.
|
Option-based Awards
|
Share-based Awards
|
|||||
Name
|
Number of securities underlying unexercised options
(#)
|
Option exercise price
($)
|
Option expiration date
|
Value of unexercised in-the-money options
($)
|
Number of shares or units of shares that have not vested
(#)
|
Market or payout value of share-based awards that have not vested
($)
|
John F. Kearney
|
1,000,000
200,000
500,000
|
0.60
0.90
0.23
|
Jan 14, 2010
Dec 13, 2011
Mar 27, 2014
|
Nil
Nil
45,000
|
N/a
|
N/a
|
Alan B. Taylor
|
700,000
200,000
500,000
|
0.60
0.90
0.23
|
Jan 14, 2010
Dec 13, 2011
Mar 27, 2014
|
Nil
Nil
45,000
|
N/a
|
N/a
|
Martin Rip
|
300,000
300,000
|
0.94
0.23
|
Oct 15, 2012
Mar 27, 2014
|
Nil
27,000
|
N/a
|
N/a
|
Name
|
Option-based awards – Value vested during the year
(1)
($)
|
Share-based awards – Value vested during the year
($)
|
Non-equity incentive plan compensation – Value earned during the year
(2)
($)
|
John F. Kearney
|
21,250
|
N/a
|
25,000
|
Alan B. Taylor
|
21,250
|
N/a
|
25,000
|
Martin Rip
|
12,750
|
N/a
|
12,500
|
|
(1)
|
The value of vested options represents the aggregate dollar value that would have been realized if any of the options granted in 2009 had been exercised on the vesting date. The dollar value is the difference between the market price of the underlying securities at exercise and the exercise price of the options on the vesting date.
|
|
(2)
|
The Company does not have a formal bonus plan tied to set targets. Any bonus payments are entirely discretionary and are reviewed by the Compensation Committee as part of an overall review of performance for the year. The amounts awarded were paid to the Named Executive Officers in 2009.
|
Name
|
Fees earned
($)
|
Share-based awards
($)
|
Option-based awards
(1)
($)
|
Non-equity incentive plan compensation
($)
|
Pension value
($)
|
All other compensation
($)
|
Total
($)
|
Brian A. Atkins
|
21,000
|
N/a
|
30,000
|
Nil
|
N/a
|
Nil
|
51,000
|
John MacPherson
|
25,500
|
N/a
|
30,000
|
Nil
|
N/a
|
Nil
|
55,500
|
Dave Nickerson
|
19,000
|
N/a
|
30,000
|
Nil
|
N/a
|
Nil
|
49,000
|
|
(1)
|
The value of option-based awards represents the grant date fair value of the stock options awarded. For fiscal 2009, the Company granted stock options on March 27, 2009 which were valued using the Black-Scholes valuation model with the following assumptions: (i) Dividend yield – 0%, (ii) Risk free interest rate – 1.9%, (iii) Expected option life – 4 years and (iv) Expected volatility – 83%. The grant date fair value and the fair value for accounting purposes reported in the Company’s financial statements for the year ended December 31, 2009 were the same.
|
Option-based Awards
|
Share-based Awards
|
|||||
Name
|
Number of securities underlying unexercised options
(#)
|
Option exercise price
($)
|
Option expiration date
|
Value of unexercised in-the-money options
($)
|
Number of shares or units of shares that have not vested
(#)
|
Market or payout value of share-based awards that have not vested
($)
|
Brian A. Atkins
|
300,000
|
0.23
|
Mar 27, 2014
|
27,000
|
N/a
|
N/a
|
John MacPherson
|
400,000
200,000
300,000
|
0.60
0.90
0.23
|
Jan 14, 2010
Dec 13, 2011
Mar 27, 2014
|
Nil
Nil
27,000
|
N/a
|
N/a
|
Dave Nickerson
|
300,000
200,000
300,000
|
0.60
0.90
0.23
|
Jan 14, 2010
Dec 13, 2011
Mar 27, 2014
|
Nil
Nil
27,000
|
N/a
|
N/a
|
Name
|
Option-based awards – Value vested during the year
(1)
($)
|
Share-based awards – Value vested during the year
($)
|
Non-equity incentive plan compensation – Value earned during the year
($)
|
Brian A. Atkins
|
12,750
|
N/a
|
Nil
|
John MacPherson
|
12,750
|
N/a
|
Nil
|
Dave Nickerson
|
12,750
|
N/a
|
Nil
|
|
·
|
Review and make recommendations to the Board regarding the Company’s compensation plans, including with respect to incentive-compensation plans and equity-based plans, policies and programs.
|
|
·
|
Review the level and form of Director’s compensation and recommend changes to the Board for consideration and approval.
|
|
·
|
Review and monitor the Company’s employee and management compensation and benefit plans and policies, provide oversight of any employee benefit plan, and review and approve the compensation of the Company’s executive officers.
|
|
·
|
Annually review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives and establish the individual elements of the CEO’s total compensation based on this evaluation.
|
|
·
|
Review and make recommendations to the Board with regard to grants and/or awards of restricted stock, stock options and other forms of equity-based compensation under the Company’s stock option, incentive-compensation and equity-based plans (as applicable).
|
|
·
|
Review and make recommendations for the Board, when and if appropriate, of employment agreements, severance agreements and change in control provisions / agreements for the CEO and other executive officers.
|
|
•
|
oversee and monitor the work and performance of the Corporation's external auditors, including meeting with the external auditors and reviewing and recommending all
|
renewals or replacements of the external auditors and their remuneration;
|
|
•
|
oversees the integrity of internal controls and financial reporting procedures of the Corporation and ensure implementation of such controls and procedures;
|
|
(1)
|
engage independent counsel and other advisors as it determines necessary to carry out its duties;
|
|
(2)
|
set and pay the compensation for advisors employed by the Audit Committee; and
|
|
(3)
|
communicate directly with the external auditors.
|
|
(1)
|
The Committee and its membership shall meet all applicable legal, regulatory and listing requirements, including those of all applicable securities regulatory authorities.
|
|
(2)
|
The Committee shall be composed of three directors as shall be designated by the Board from time to time. The members of the Committee shall appoint from among themselves a member who shall serve as Chair. A minimum of two members of the Committee present either in person or by telephone shall constitute a quorum.
|
|
(1)
|
Each member of the Committee shall be “independent” and shall be “financially literate” (as each such term is defined in Multilateral Instrument 52-110)
|
|
(2)
|
The Committee shall meet at least quarterly, as circumstances dictate or as may be required by applicable legal or listing requirements.
|
|
(3)
|
|
(1)
|
The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with applicable generally accepted accounting principles (“
GAAP
”) and report thereon to the Board and recommend to the Board whether or not same should be approved, prior to their being filed with the appropriate regulatory authorities. The Committee shall also review the interim financial statements.
|
|
(2)
|
The Committee shall review any internal control reports prepared by management and the evaluation of such report by the external auditors, together with management’s response.
|
|
(3)
|
The Committee shall be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, management’s discussion and analysis and annual and interim earnings press releases before the Corporation publicly discloses this information.
|
|
(4)
|
The Committee shall review management’s discussion and analysis relating to annual and interim financial statements and any other public disclosure documents, including interim earnings press releases, before the Corporation publicly discloses this information.
|
|
(5)
|
The Committee shall meet no less frequently than annually with the external auditors to review accounting practices, internal controls and such other matters as the Committee deems appropriate.
|
|
(6)
|
The Committee shall establish procedures for
|
|
(a)
|
the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and
|
|
(7)
|
The Committee shall provide oversight to any related party transactions entered into by the Corporation.
|
|
(8)
|
In the event that the Corporation wishes to retain the services of the Corporation’s external auditors for tax compliance or tax advice or any non-audit services the Chief Financial Officer of the Corporation shall consult with the Audit Committee, who shall have the authority to approve or disapprove such non-audit services. The Audit Committee shall maintain a record of non-audit services approved by the Audit Committee for each fiscal year and provide a report to the Board on an annual basis.
|
|
(9)
|
The Committee shall review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former auditors of the Corporation.
|
|
(10)
|
The Committee shall perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate.
|
TOTAL
|
|
December 31, 2009
|
13
|
December 31, 2008
|
19
|
December 31, 2007
|
18
|
Name
|
Number of securities underlying unexercised options
(#)
|
Option exercise price
($)
|
Option expiration date
|
Brian A. Atkins
|
300,000
300,000
|
0.23
0.45
|
Mar 27, 2014
May 11. 2015
|
John F. Kearney
|
200,000
500,000
1,300,000
|
0.90
0.23
0.45
|
Dec 13, 2011
Mar 27, 2014
May 11, 2015
|
John MacPherson
|
200,000
300,000
500,000
|
0.90
0.23
0.45
|
Dec 13, 2011
Mar 27, 2014
May 11, 2015
|
Dave Nickerson
|
200,000
300,000
400,000
|
0.90
0.23
0.45
|
Dec 13, 2011
Mar 27, 2014
May 11, 2015
|
Alan B. Taylor
|
200,000
500,000
1,000,000
|
0.90
0.23
0.45
|
Dec 13, 2011
Mar 27, 2014
May 11, 2015
|
Martin Rip
|
300,000
300,000
|
0.94
0.23
|
Sep 2, 2010
(1)
Sep 2, 2010
(1)
|
|
(1)
|
Mr. Rip’s stock options will expire 90 days following his resignation from the Company with effect from June 4, 2010.
|
|
(2)
|
The options expiring on May 11, 2015 were granted by the Company on May 12, 2010.
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
Name of Owner
|
Number of Common Shares
|
Percentage
|
Sprott Asset Management Inc.
(1)
|
17,652,033
(1)
|
14.8%
|
|
FINANCIAL INFORMATION
|
B.
|
Significant Changes
|
THE OFFER AND LISTING
|
Year Ended
|
High CDN$
|
Low CDN$
|
December 31, 2009
|
0.38
|
0.16
|
December 31, 2008
|
0.77
|
0.13
|
December 31, 2007
|
1.12
|
0.58
|
December 31, 2006
|
1.63
|
0.53
|
December 31, 2005
|
0.88
|
0.25
|
Quarter Ended
|
High CDN$
|
Low CDN$
|
March 31, 2010
|
0.56
|
0.31
|
December 31, 2009
|
0.38
|
0.275
|
September 30, 2009
|
0.34
|
0.21
|
June 30, 2009
|
0.36
|
0.165
|
March 31, 2009
|
0.24
|
0.165
|
December 31, 2008
|
0.37
|
0.13
|
September 30, 2008
|
0.65
|
0.30
|
June 30, 2008
|
0.66
|
0.35
|
March 31, 2008
|
0.77
|
0.49
|
Month Ended
|
High CDN$
|
Low CDN$
|
April 30, 2010
|
0.53
|
0.435
|
March 31, 2010
|
0.56
|
0.395
|
February 28, 2010
|
0.445
|
0.37
|
January 31, 2010
|
0.45
|
0.31
|
December 31, 2009
|
0.355
|
0.295
|
November 30, 2009
|
0.355
|
0.29
|
Year Ended
|
High U.S.$
|
Low U.S.$
|
December 31, 2009
|
0.3509
|
0.12
|
December 31, 2008
|
0.80
|
0.082
|
December 31, 2007
|
1.05
|
0.48
|
December 31, 2006
|
1.32
|
0.08
|
December 31, 2005
|
0.75
|
0.28
|
Month Ended
|
High U.S.$
|
Low U.S.$
|
April 30, 2010
|
0.495
|
0.43
|
March 31, 2010
|
0.53
|
0.345
|
February 28, 2010
|
0.415
|
0.345
|
January 31, 2010
|
0.42
|
0.281
|
December 31, 2009
|
0.349
|
0.24
|
November 30, 2009
|
0.35
|
0.29
|
ADDITIONAL INFORMATION
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
CONTROLS AND PROCEDURES
|
[RESERVED]
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Year Ended
December 31, 2009
|
Year Ended
December 31, 2008
|
|
Audit Fees
(1)
|
$136,600
|
$135,170
|
Audit-Related Fees
(2)
|
$Nil
|
$Nil
|
Tax Fees
(3)
|
$Nil
|
$Nil
|
All Other Fees
|
$Nil
|
$Nil
|
Totals
|
$136,600
|
$135,170
|
|
(1)
|
“Audit Fees” represent fees for the audit of the annual financial statements, and review in connection with the statutory and regulatory filings.
|
|
(2)
|
“Audit Related Fees” represent fees for assurance and related services that are related to the performance of the audit.
|
|
(3)
|
“Tax Fees” represent fees for tax compliance, tax advice and planning.
|
EXEMPTIONS FROM THE LISTINGS STANDARDS FOR AUDIT COMMITTEES
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
Period
|
Total number of shares purchased
(#)
|
Average Price Paid per Share
($)
|
Total number of shares purchased as part of publicly announced Bid
(#)
|
Maximum number of shares that may yet be purchased under the Bid
(#)
|
May 2008
|
Nil
|
N/a
|
Nil
|
5,000,000
|
June 2008
|
Nil
|
N/a
|
Nil
|
5,000,000
|
July 2008
|
Nil
|
N/a
|
Nil
|
5,000,000
|
August 2008
|
Nil
|
N/a
|
Nil
|
5,000,000
|
September 2008
|
342,500
|
0.34
|
342,500
|
4,657,500
|
October 2008
|
204,000
|
0.27
|
546,500
|
4,453,500
|
November 2008
|
303,500
|
0.19
|
850,000
|
4,150,000
|
December 2008
|
866,000
|
0.17
|
1,716,000
|
3,284,000
|
January 2009
|
Nil
|
N/a
|
1,716,000
|
3,284,000
|
February 2009
|
10,000
|
0.20
|
1,726,000
|
3,274,000
|
March 2009
|
28,500
|
0.19
|
1,754,500
|
3,245,500
|
April 2009
|
30,000
|
0.17
|
1,784,500
|
3,215,500
|
May 2009
|
Nil
|
N/a
|
1,784,500
|
3,215,500
|
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
|
CORPORATE GOVERNANCE
|
FINANCIAL STATEMENTS
|
FINANCIAL STATEMENTS
|
|
EXHIBITS
|
Exhibit Number
|
Description of Document
|
1.1*
|
Notice of Articles (of Incorporation)
|
1.2*
|
Articles (Bylaws)
|
4.2*
|
Purchase Agreement between Titan Logix Corp. and Canadian Zinc Corporation dated January 29, 2004.
|
4.3*
|
10% Rolling Stock Option Plan
|
4.4*
|
Employment Agreement between the Company and Martin Rip dated October 15, 2007.
|
4.5*
|
Form of Option Commitment (Senior Officers) dated October 15, 2007 to acquire common shares under the Company’s Stock Option Plan.
|
4.6*
|
Form of Option Commitment (Directors and Senior Officers) dated March 27, 2009 to acquire common shares under the Company’s Stock Option Plan.
|
|
(a)
|
on the Termination Date, the Executive will be paid an amount equal to the Executive’s Salary at that date, less lawful deductions; and
|
|
(b)
|
on the first anniversary of the Termination Date, the Executive will be paid an amount equal to 50% of the payment under clause (a).
|
|
(b)
|
a change in the principal executive office of the Company to a location more than 100 kilometres from the then-current location of the principal executive office of the Company;
|
|
(c)
|
the requirement by the Company that the Executive be based anywhere other than within a 100 kilometre radius of the Executive’s then current location;
|
|
(d)
|
the failure by the Company to continue in effect, or a material change in the terms of Executive’s participation in benefits under any Incentive Plan or Benefits plan (collectively, the “Existing Plans”), the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to the Executive of the Existing Plans;
|
|
(e)
|
any reduction by the Company of the number of paid vacation days to which the Executive is entitled; or
|
|
(f)
|
any other events or circumstances which would constitute a constructive dismissal at common law.
|
|
(a)
|
any act of fraud or material dishonesty;
|
|
(b)
|
wilful neglect of duties to a material degree; and
|
|
(c)
|
if the conduct of the Executive is determined by the Company, which determination shall be made in a bona fide and reasonable manner, to be detrimental to the business of the Company and if the Executive persists in such conduct after being informed of the Company’s determination.
|
|
(a)
|
temporarily disabled before termination of his employment hereunder, the Company will pay the Executive his Salary and Benefits to which he is otherwise entitled pursuant to his employment provided the Executive exercises reasonable efforts to return to employment as soon as practicable until such time as the Executive is eligible for Long Term Disability Benefits, or
|
|
(b)
|
permanently disabled (which shall refer to any disability resulting in the Executive being unable to perform substantially all his employment duties for more than 120 consecutive days or more than 120 days in any calendar year), the Company may forthwith terminate the Executive’s employment, and the Executive will thereafter be paid (by the Company or by a corporation entitled to issue annuity contracts engaged by the Company), for the one-year period commencing on such termination, on the last business day of each month following the date of termination of the employment, an amount equal to one-twelfth of the Executive’s Salary at the time of such termination. Such payments shall be in lieu of all amounts otherwise payable to the Executive, including under section 4.2 or any other section of this Agreement.
|
|
5.
|
SUCCESSORS OR ASSIGNS
|
The Corporate Seal of Canadian Zinc Corporation was hereunto affixed in the presence of:
Authorized Signatory
Authorized Signatory
|
)
)
)
)
) c/s
)
)
)
|
SIGNED, SEALED AND DELIVERED by Alan B. Taylor in the presence of:
Name
Address
Occupation
|
)
)
)
)
)
)
)
)
n
)
)
)
|
|
(a)
|
Oversee any operations program that may be taking place at the Company’s properties and ensure they are operated in the proper manner and report to the Board in a timely manner any update;
|
|
(b)
|
Assist the Company with any property evaluation or assessment and actively research for potential acquisitions;
|
|
(c)
|
Participate in actively promoting the Company including attending conferences, presentations, meetings to support the Company;
|
|
(d)
|
Oversee the management of all personnel associated with the Company;
|
|
(e)
|
Oversee and manage the Company’s main office and subsidiary offices;
|
|
(f)
|
Attend Board meetings and keep the Board informed and up to date on relevant matters;
|
|
(g)
|
Assist the Company, to the best of his ability, in completing all mandatory filings;
|
|
(h)
|
Assist the Company, to the best of his ability, with all corporate activity including financing, legal and administration and whatever other activities need to be addressed;
|
|
(i)
|
Assist in preparing annual budgets and monitor expenditures;
|
|
(j)
|
Report to the CEO and ensure that the CEO is informed of any significant corporate matter;
|
|
(k)
|
Any other reasonable duties that may be related to the Company that the Company may need assistance, on from time to time;
|
Date: May 13, 2010
|
By:
|
/s/ John Kearney
|
||
John Kearney
President and Chief Executive Officer
|
Date: May 13, 2010
|
By:
|
/s/ Martin Rip
|
||
Martin Rip
Vice President, Finance and Chief Financial Officer
|
|
·
|
A combined Proven and Probable Reserve estimate of 1.9 million tonnes of ore grading 10.9 grams of gold per tonne for contained gold of 680,000 ounces;
|
|
·
|
An underground combined Measured and Indicated Mineral Resource of 8.3 million tonnes grading 10.5 grams of gold per tonne for contained gold of 2.8 million ounces; and
|
|
·
|
An Inferred Mineral Resource of 4.7 million tonnes grading 8.6 grams of gold per tonne for contained gold of 1.3 million ounces.
|
|
·
|
Mining Leases
Numbers 2854, 2931, 2932, 2933, 3313, 3314, 3315, and 3338; (8,749.4 acres), expiring from July 13, 2010 to August 5, 2020.
|
|
·
|
Surface Leases
Numbers 95 F/10-5-5 and 95 F/10-7-4; (325.81 acres). The Surface Leases are held from the Department of Indian Affairs and Northern Development and expire March 31, 2012.
|
|
·
|
Mineral Claims:
Four additional mineral claims, referred to as the Gate Claims, were staked in 1999 in the vicinity of the Prairie Creek Property. These claims consist of the Gate 1-4 Claims covering an area of 9,245.35 acres. During 2009, the Company submitted an application to convert the Gate 1-4 Claims to leases which requires legal survey work to be performed. The Company has until September 15, 2010 to submit the required legal survey and documentation to convert the Claims to leases. Six additional mineral claims (Way 1 – 6) were staked in 2006 adjacent to existing mining leases or mineral claims to enlarge the size of the Prairie Creek property and were in good standing until November 2008. The Company determined in November 2008 that it would not renew the Way 1 – 4 claims, which were allowed to lapse. The Way 5 claim (1,807.75 hectares) is in good standing until November 1, 2013 and the Way 6 claim (2,479.20 hectares) until November 1, 2010.
|
|
3.1.2
|
Location, Access and Climate
|
|
3.1.3
|
Property Geological Summary
|
|
3.1.4
|
Gate Claims
|
|
3.1.5
|
2001 Scoping Study
|
|
3.1.6
|
Exploration Activities
|
|
·
|
Total Measured and Indicated Resource calculated at 5.8 million tonnes at >20% combined lead and zinc;
|
|
·
|
Measured Resources in Vein tonnage increased 73% at 25% combined lead and zinc with 212 grams per tonne silver;
|
|
·
|
Indicated Resources in Vein tonnage increased 105% at 24% combined lead and zinc with 212 grams per tonne silver;
|
|
·
|
Inferred Resource in Vein calculated at 5.5 million tonnes at 25% combined lead with silver with 216 grams per tonne silver;
|
|
·
|
Average increase of 10% in silver grades; and
|
|
·
|
Confirmation of grade and continuity in a NI 43-101 compliant resource report.
|
|
·
|
The Mine has a robust Measured and Indicated, Main Zone resource base that reflects high-grade mineralization (especially zinc);
|
|
·
|
The results of the [current] Phase II underground drilling program can reasonably be expected to further enhance the amount (tonnes) of Measured and Indicated, Main Zone resources;
|
|
·
|
Much of the required surface infrastructure and equipment is already in place, or at least only a limited amount of capital is probably required for new equipment and for rehabilitating and/or upgrading the existing mine and mill facilities; and
|
|
·
|
Only a small amount of additional underground development would probably be required to start the production ramp-up to the target rate of 1,000 tonnes per day.”
|
|
·
|
The available resource grades (even when diluted in the normal process of stoping, high-grade, run-of-mine mill feed can reasonably be expected);
|
|
·
|
The fairly straightforward metallurgical process for co-mingled Main Quartz Vein and stratabound material (that yields a lead concentrate [sulphide and oxide] with a lead grade of approximately 69 percent at a recovery of nearly 89 percent and a silver grade of about 820 g/t at a recovery rate of approximately 73 percent, and a zinc concentrate [sulphide and oxide] with a zinc grade of nearly 54 percent at a recovery of approximately 86 percent); and
|
|
·
|
The likely limited amount of start-up capital required for mining and processing Main Zone mineralized material, especially compared to a new mine operation.”
|
|
·
|
Main Quartz Vein and stratabound material could be co-mingled in the milling process (i.e. vein and stratabound material did not have to be separately campaigned through the processing plant);
|
|
·
|
Main Quartz Vein and stratabound material could, either separately or as co-mingled material, be pre-concentrated in a heavy media circuit to remove the waste component (limestone, quartz, etc);
|
|
·
|
A reagent scheme, that would eliminate the need for cyanide compounds, could be developed; and
|
|
·
|
Separate sulpide and oxide, lead and zinc concentrates (i.e. four separate concentrates) could be produced with acceptable recoveries and at marketable grades.
|
|
·
|
Stratabound material can be successfully co-mingled with Main Quartz Vein material, without significant metal losses in final concentrates;
|
|
·
|
Co-mingled, run-of-mine mineralized material is very amenable to pre-concentration by HLS (which both reduces the quantity of tailings produced and reduces both the power requirements and work index for milling);
|
|
·
|
Excellent metal recoveries can be achieved in both sulphide and oxide material, with a reagent suite that does not include cyanide products; and
|
|
·
|
Marketable concentrates can be produced (albeit that penalty elements, including antimony, arsenic and mercury, would unavoidably report to the final concentrates).
|
|
·
|
preparing regional land use plans to guide the development and use of land, waters and other resources [Land Use Planning Board];
|
|
·
|
regulating all uses of land and water [Mackenzie Valley Land and Water Board]; and
|
|
·
|
carrying out the environmental assessment and review process [Mackenzie Valley Environmental Impact Review Board].
|
|
·
|
Conducts environmental assessments;
|
|
·
|
Conducts environmental impact reviews;
|
|
·
|
Maintains a public registry of all preliminary screenings conducted by Regulatory Authorities; and
|
|
·
|
Makes recommendations to the Minister of DIAND for rejection or approval of any proposal.
|
|
(c)
|
“Grandfather” Provisions
|
|
(d)
|
Permitting History at Prairie Creek
|
|
(e)
|
Land Use Permit – Phase 1 Exploration
|
|
(f)
|
Sundog (CAT) Camp – Clean Up Permit
|
|
(g)
|
Land Use Permit – Phase 2 Exploration
|
|
(h)
|
Water Licence and Land Use Permit – Underground Development
|
|
·
|
Government and regulatory authorities are to ensure that all drill waste is disposed of in a manner that does not allow any harmful substance to enter surface waters.
|
|
·
|
Canadian Zinc shall take every reasonable effort to employ a local person, selected in consultation with the Dehcho First Nations, as community environmental monitor, who will independently report back to the Dehcho First Nations.
|
|
·
|
DIAND shall ensure that a comprehensive program to monitor cumulative impacts on fish, wildlife, vegetation and water quality is implemented.
|
|
·
|
Parks Canada and Canadian Zinc agreed to work collaboratively, within their respective areas of responsibility, authority and jurisdiction, to achieve their respective goals of an expanded Nahanni National Park Reserve and an operating Prairie Creek Mine.
|
|
·
|
Parks Canada recognized and respects the right of Canadian Zinc to develop the Prairie Creek Mine and was to manage the expansion of Nahanni National Park Reserve so that the expansion did not in its own right negatively affect development of, or reasonable access to and from, the Prairie Creek Mine.
|
|
(a)
|
pay the Band annually 5% of the profits before tax, after recovery of the aggregate costs incurred in establishing access and bringing the project into production;
|
|
(b)
|
grant the Band an option to purchase 10% or 15% of the project for $6,000,000 or $9,000,000 respectively subject to adjustment for inflation and additional development costs, exercisable within three months following delivery of a Bankable Feasibility Study and receipt of all major permits for the project; and
|
|
(c)
|
give the Band preferential access on providing contract services; being competitive as to price, delivery, capability, performance and quality.
|
|
3.1.14
|
Liidlii Kue First Nation (“LKFN”)
|
|
·
|
to provide a process through which Canadian Zinc, in pursuing its exploration and development activities at the Prairie Creek Mine, can consult with and accommodate the interests of LKFN with a view to amicably reconciling any issues that might arise;
|
|
·
|
to establish a relationship through which LKFN can identify opportunities for its businesses and members to participate in Canadian Zinc’s exploration and development activities; and
|
|
·
|
to set out the objectives, process and topics for the negotiation of an IBA between LKFN and Canadian Zinc, which is specifically intended to cover the future operations of the Prairie Creek Mine project.
|
|
• The relative strength of the U.S. dollar against other currencies;
|
|
• Government monetary and fiscal policies;
|
|
• Expectations of the future rate of global monetary inflation and interest rates;
|
|
• General economic conditions and the perception of risk in capital markets;
|
|
• Political conditions including the threat of terrorism or war;
|
|
• Speculative trading;
|
|
• Investment and industrial demand; and
|
|
• Global production and inventory stocks.
|
|
• Mineralization or formations could be different from those predicted by drilling, sampling and similar examinations;
|
|
• Declines in the market price of metals may render the mining of some or all of Canadian Zinc’s mineral resources uneconomic;
|
|
• Increases in operating mining costs and processing costs could adversely affect mineral reserves or resources; and
|
|
• The grade of mineral reserves or resources may vary significantly from time to time and there can be no assurance that any particular level of metal may be recovered from the mineral reserves or resources.
|
Stock Options
|
|||
Options December 31, 2009
|
Options March 26, 2010
|
Exercise/Conversion Price
|
Expiry Date
|
2,460,000
|
-
|
$0.60
|
January 14, 2010
|
70,000
|
70,000
|
$0.89
|
June 27, 2011
|
800,000
|
800,000
|
$0.90
|
December 13, 2011
|
455,000
|
425,000
|
$0.94
|
October 15, 2012
|
2,865,000
|
2,865,000
|
$0.23
|
March 27, 2014
|
6,650,000
|
4,160,000
|
Price Range 2009
|
|||
Month
|
High
Cdn. $
|
Low
Cdn $
|
Volume
|
January
|
0.24
|
0.17
|
3,886,608
|
February
|
0.22
|
0.18
|
1,795,700
|
March
|
0.21
|
0.16
|
2,207,650
|
April
|
0.23
|
0.16
|
2,063,481
|
May
|
0.25
|
0.18
|
1,909,988
|
June
|
0.36
|
0.22
|
4,410,386
|
July
|
0.28
|
0.21
|
2,771,823
|
August
|
0.31
|
0.23
|
1,990,817
|
September
|
0.34
|
0.23
|
1,637,204
|
October
|
0.38
|
0.27
|
3,465,964
|
November
|
0.35
|
0.29
|
2,080,588
|
December
|
0.35
|
0.29
|
2,592,694
|
Year 2009
|
0.38
|
0.16
|
30,812,903
|
|
7.1
|
Name, Occupation and Security Holding
|
Name, Province or State and Country of Ordinary Residence and Position Held with the Company
|
Principal Occupation During Preceding
Five Years
|
Date First Became Director of the Company
(5)
|
Common Shares beneficially owned, controlled or directed, directly or indirectly
(1) (6)
|
Brian Atkins
(2) (3)
British Columbia, Canada Director
|
Chartered Accountant; Partner at KPMG LLP, Chartered Accountants, from 1978 to 2005; Director of North Shore Credit Union; Member of Independent Review Committee of Inhance Investment Management Inc. until December 2009.
|
June 2008
|
Nil
|
John F. Kearney
Ontario, Canada
Chairman, President, Chief Executive Officer and Director
|
Chairman, President and Chief Executive Officer of Canadian Zinc Corporation since 2003; Chairman of Labrador Iron Mines Limited since May 2007; Chairman of Conquest Resources Limited since 2001; Chairman of Anglesey Mining plc since 1994; Director of Vatukoula Gold Mines Plc since July 2009.
|
November 2001
|
1,923,909 common shares
|
John MacPherson
(2) (3)
British Columbia, Canada
Director
|
Director and Chairman of Tower Energy Ltd. until 2007; Private Businessman; Director of Vatukoula Gold Mines Plc since July 2009.
|
May 1999
|
Nil
|
Dave Nickerson
(2) (3) (4)
Northwest Territories, Canada
Director
|
Professional Engineer, Mining consultant, Director, Tyhee Development Corp.; previously Chairman of Northwest Territories Water Board; Member of Parliament, Member of NWT Legislative Assembly; Government Minister.
|
March 2004
|
17,500 common shares
|
Alan Taylor
(4)
British Columbia, Canada
Vice President, Exploration, Chief Operating Officer and Director
|
Vice President, Exploration of Canadian Zinc Corporation since 1999 and Chief Operating Officer of Canadian Zinc Corporation since March 2004.
|
March 2004
|
Nil
|
Martin Rip
British Columbia, Canada
Chief Financial Officer, Vice President Finance and Corporate Secretary
|
Chief Financial Officer and Vice President Finance of Canadian Zinc Corporation since October 2007; Chartered Accountant; former VP Finance and CFO of Pine Valley Mining Corporation (February 2005 – June 2007); Senior Manager – Grant Thornton LLP (March 2001 – February 2005).
|
N/A
|
Nil
|
|
(1)
|
The information as to common shares beneficially owned, controlled or directed by the above-named directors as at the date hereof, not being within the knowledge of the Company, has been furnished by the respective directors individually.
|
|
(2)
|
Member of the Audit Committee.
|
|
(3)
|
Member of the Compensation Committee.
|
|
(4)
|
Member of Health and Safety Committee.
|
|
(5)
|
All Directors are elected annually to hold office until the next Annual Meeting of Shareholders.
|
|
(6)
|
All directors and executive officers as a group own, control or direct, directly or indirectly a total of 1,941,409 common shares.
|
8.
|
11.
|
|
(1)
|
engage independent counsel and other advisors as it determines necessary to carry out its duties;
|
|
(2)
|
set and pay the compensation for advisors employed by the Audit Committee; and
|
|
(3)
|
communicate directly with the external auditors.
|
|
(1)
|
The Committee and its membership shall meet all applicable legal, regulatory and listing requirements, including those of all applicable securities regulatory authorities.
|
|
(1)
|
Each member of the Committee shall be “independent” and shall be “financially literate” (as each such term is defined in Multilateral Instrument 52-110)
|
|
(2)
|
The Committee shall meet at least quarterly, as circumstances dictate or as may be required by applicable legal or listing requirements.
|
|
(3)
|
Any member of the Committee may participate in the meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting.
|
|
(1)
|
The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with applicable generally accepted accounting principles (“
GAAP
”) and report thereon to the Board and recommend to the Board whether or not same should be approved, prior to their being filed with the appropriate regulatory authorities. The Committee shall also review the interim financial statements.
|
|
(2)
|
The Committee shall review any internal control reports prepared by management and the evaluation of such report by the external auditors, together with management’s response.
|
|
(3)
|
The Committee shall be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, management’s discussion and analysis and annual and interim earnings press releases before the Corporation publicly discloses this information.
|
|
(4)
|
The Committee shall review management’s discussion and analysis relating to annual and interim financial statements and any other public disclosure documents, including interim earnings press releases, before the Corporation publicly discloses this information.
|
|
(5)
|
The Committee shall meet no less frequently than annually with the external auditors to review accounting practices, internal controls and such other matters as the Committee deems appropriate.
|
|
(6)
|
The Committee shall establish procedures for
|
|
(7)
|
The Committee shall provide oversight to any related party transactions entered into by the Corporation.
|
|
(8)
|
In the event that the Corporation wishes to retain the services of the Corporation’s external auditors for tax compliance or tax advice or any non-audit services the Chief Financial Officer of the Corporation shall consult with the Audit Committee, who shall have the authority to approve or disapprove such non-audit services. The Audit Committee shall maintain a record of non-audit services approved by the Audit Committee for each fiscal year and provide a report to the Board on an annual basis.
|
|
(9)
|
The Committee shall review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former auditors of the Corporation.
|
|
(10)
|
The Committee shall perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate.
|
Year Ended
December 31, 2009
(4)
|
Year Ended
December 31, 2008
|
|
Audit Fees
(1)
|
$136,600
|
$135,170
|
Audit-Related Fees
(2)
|
-
|
-
|
Tax Fees
(3)
|
-
|
-
|
All Other Fees
|
-
|
-
|
Total
|
$136,600
|
$135,170
|
|
·
|
the Company’s planned/proposed Prairie Creek mine operations which includes future mine grades and recoveries;
|
|
·
|
expectations around the process for obtaining operating permits;
|
|
·
|
references to ongoing work to convert the Project Description Report into a Pre-Feasibility Study and related future cost estimates for site infrastructure; and
|
|
·
|
the impact to the Company of future accounting standards and discussion of risks and uncertainties around the Company’s business.
|
·
|
the Company’s planned/proposed Prairie Creek Mine operations;
|
·
|
expectations around the process for obtaining operating permits;
|
·
|
the Company’s plans for further exploration at the Prairie Creek Mine;
|
·
|
future cost estimates pertaining to further development of the Prairie Creek Mine and items such as long-term environmental reclamation obligations;
|
·
|
the outlook for future prices of zinc and lead;
|
·
|
the future mining operations and production plans of Vatukoula Gold Mines Plc, as reported by management of Vatukoula Gold Mines Plc in its public filings;
|
·
|
the Company’s planned conversion to International Financial Reporting Standards; and
|
·
|
the impact to the Company of future accounting standards and discussion of risks and uncertainties around the Company’s business.
|
·
|
A combined Proven and Probable Reserve estimate of 1.9 million tonnes of ore grading 10.9 grams of gold per tonne for contained gold of 680,000 ounces of gold;
|
·
|
An underground combined Measured and Indicated Mineral Resource of 8.3 million tonnes grading 10.5 grams of gold per tonne for contained gold of 2.8 million ounces; and
|
·
|
An Inferred Mineral Resource of 4.7 million tonnes grading 8.6 grams of gold per tonne for contained gold of 1.3 million ounces.
|
·
|
The northernmost drill hole (PC-95-124) within the presently defined mineral resource at the Prairie Creek mine was drilled in 1995. This drill hole returned multiple significant mineralized vein intersections 750 metres down the hole such as an 8.3 metre core
|
·
|
intercept grading 18.7% zinc, 8.5% lead and 239 grams per tonne silver. Similar continuous surface geology, along with the presence of surface metal anomalies in soil and the existence of the high grade Rico Showing, all indicate excellent potential that mineralization may continue at depth north from the existing defined mineral resource.
|
·
|
Surface topography at Prairie Creek provides an opportunity to test for possible extension of mineralization 1.5 kilometres north of the last drill hole (PC-95-125). The initial vein target is projected to occur at a depth of approximately 900 metres below the 870 level (presently the lowest developed underground level) and 1,100 metres below surface. It is also proposed to drill off a number of wedges from the initial hole in order to further laterally explore at target depth. The Company holds a Land Use Permit, issued by the MVLWB, to permit exploration which is valid to September 2012.
|
(thousands of Canadian dollars
|
Year ended December 31,
|
||||||||||
except per share amounts)
|
2009
|
2008
|
2007
|
||||||||
Statement of operations
|
|||||||||||
Net (loss)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (9,483 | ) | ||
Basic and diluted (loss) per share
|
$ | (0.005 | ) | $ | (0.04 | ) | $ | (0.08 | ) | ||
Balance sheet
|
|||||||||||
Cash, cash equivalents and short-term investments
|
$ | 7,443 | $ | 20,948 | $ | 28,414 | |||||
Marketable securities
|
$ | 15,382 | $ | 2,024 | $ | 100 | |||||
Total assets
|
$ | 29,152 | $ | 29,521 | $ | 34,391 | |||||
Total liabilities
|
$ | 1,639 | $ | 1,673 | $ | 2,482 | |||||
Shareholders’ equity
|
$ | 27,513 | $ | 27,848 | $ | 31,909 | |||||
2009
|
2008
|
2007
|
|||||||
Statutory tax rate
|
30.70 | % | 31.00 | % | 34.12 | % | |||
Recovery of income taxes computed at statutory rates
|
$ | 187 | $ | 1,311 | $ | 4,084 | |||
Permanent differences
|
256 | (64 | ) | (93 | ) | ||||
Expired losses
|
(183 | ) | (192 | ) | (162 | ) | |||
Other
|
7 | (118 | ) | 281 | |||||
Income tax rate changes
|
75 | (403 | ) | (1,612 | ) | ||||
Change in valuation allowance
|
(342 | ) | (534 | ) | (11 | ) | |||
$ | - | $ | - | $ | 2,487 |
Quarter ended
|
Investment Income $
|
Net Income (Loss) $
|
Net (Loss) Income per Common Share – basic and diluted $
|
December 31, 2009
|
14
|
(2,487)
|
(0.021)
|
September 30, 2009
|
16
|
(1,092)
|
(0.009)
|
June 30, 2009
|
82
|
3,265
|
0.027
|
March 31, 2009
|
130
|
(297)
|
(0.002)
|
December 31, 2008
|
201
|
(1,075)
|
(0.010)
|
September 30, 2008
|
184
|
(1,671)
|
(0.015)
|
June 30, 2008
|
218
|
(1,131)
|
(0.010)
|
March 31, 2008
|
296
|
(351)
|
(0.005)
|
($’000s)
|
Payment due by period
|
||||
Contractual Obligations
|
Total (CDN$)
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
Operating Lease Obligation (1)
|
360
|
148
|
212
|
-
|
-
|
Asset Retirement Obligation (2)
|
2,383
|
-
|
-
|
-
|
2,383
|
Total
|
2,743
|
148
|
212
|
-
|
2,383
|
(1)
|
Represents rent obligations under operating leases for office space.
|
(2)
|
The asset retirement obligation represents the undiscounted value of total payments of $2.383 million which are anticipated to be predominantly incurred at the end of the life of the Prairie Creek Mine.
|
Years ended December 31,
|
|||
2009
|
2008*
|
2007
|
|
Dividend yield
|
0%
|
N/a
|
0%
|
Risk free interest rate
|
1.90%
|
N/a
|
4.07%
|
Expected life
|
4 years
|
N/a
|
5 years
|
Expected volatility
|
83%
|
N/a
|
89%
|
(i)
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
(ii)
|
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
|
(iii)
|
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
Key Activity
|
Key Milestones
|
Status
|
Financial Statement Preparation:
- Identify differences in Canadian GAAP / IFRS accounting policies.
- Select ongoing IFRS policies.
- Select IFRS 1 choices.
- Develop financial statement format.
- Quantify effects of changes in initial IFRS 1 disclosures and 2010 financial statements.
|
Senior management sign-off and audit committee review for all key accounting policy choices to be concluded by 3
rd
quarter of 2010.
Draft financial statements to be prepared under IFRS format, with IFRS accounting policies.
|
Analysis of accounting issues has commenced to further resolve and evaluate high-level areas identified at the “diagnostic” stage. Management continues to target the 3
rd
quarter of 2010 to conclude on this analysis.
Preliminary draft financial statements have been prepared to assist management in assessing possible accounting policies under IFRS and how these will impact the detailed analysis of accounting differences. These financial statements will require updating as the conversion process progresses and also as new IFRS standards are pronounced.
As an over-arching attempt to manage the conversion process, the Company has sought to implement, where possible, accounting policies under Canadian GAAP that are broadly consistent with permitted choices under IFRS, which will minimize the differences on conversion. For example, in 2008 the Company revised its accounting policy under Canadian GAAP to expense mineral exploration costs in order to minimize possible differences to IFRS.
|
Training:
Canadian Zinc is a relatively small company with limited operations and staff resource. Consideration is to be given to the level of expertise required for:
- Employees in general;
- Senior management and the Board, including the Audit Committee.
In order to manage and assess the IFRS conversion process the Company considers that the following personnel must possess sufficient understanding of IFRS as early as possible:
- CFO
- CEO
- Members of the Audit Committee.
|
Appropriate levels of expertise are required throughout the IFRS conversion project with ongoing training provided as needed.
|
The Company has provided time for the CFO and Audit Committee Chairman to attend externally provided IFRS training sessions.
The CEO, and certain other directors, currently sit on the Boards of companies that report under IFRS so possess knowledge of IFRS.
The needs of other members of the audit committee and the Company generally, are being reviewed in 2010 with the expectation that training at an appropriate level can be completed by the end of 2010.
|
Control Environment - Internal Control over Financial Reporting (ICFR):
For all accounting policy changes identified, the Company will assess ICFR design and effectiveness implications.
Appropriate changes to ICFR will be implemented as appropriate.
|
Assessment of ICFR will be performed throughout 2010 as the accounting policy changes are being documented and resolved. The Company plans to be able to test the new ICFR relating to IFRS conversion in the 4
th
quarter of 2010.
|
At the current time, the Company anticipates that many of its ICFR relating to IFRS will form part of its current financial reporting process controls with the key element being management and board understanding of IFRS. The exact nature of the changes has not yet been determined pending completion of the accounting policy documentation
|
Control Environment - Disclosure Controls and Procedures:
As the Company progresses through its IFRS conversion process and identifies accounting policy changes, these are to be reported to the public to ensure ongoing communication on the conversion.
|
Publish the likely impact of conversion on an ongoing basis and revised 2010 results and financial position in public filings during 2011 (i.e. comparative data previously presented under Canadian GAAP will be presented under IFRS).
|
Brief overview of high-level expected changes to accounting policies is presented in this MD&A (see below). The Company will continue to report updates in its MD&A during 2010.
|
Business Activities:
At the current time, Canadian Zinc has very limited business activities as it continues to seek operating permits for the Prairie Creek Mine site.
|
Should the business transition to active operations during 2010 or 2011, the Company will seek to adopt accounting policies that comply with IFRS, such as for inventory.
|
Canadian Zinc will continue to monitor its business activities to determine whether there are changes that will require review under the IFRS conversion process.
|
Infrastructure – Information Technology:
Canadian Zinc will be required to ensure that its accounting system can capture data that facilitates reporting under IFRS (i.e. information during 2010 that will be reported initially under Canadian GAAP and then under IFRS in 2011 comparatives).
|
The Company will have to ensure data collected in 2010 can be used in both Canadian GAAP and IFRS reporting.
|
Management is still evaluating the changes that may be required, and which are mostly expected to be capturing data in more detailed general ledger accounts. Given that the Company plans to complete its accounting policy review by the 3
rd
quarter of 2010, it is likely that there will be some revisiting of prior periods to ensure that the capture of data was sufficient for IFRS purposes.
|
Standards
|
Difference from Canadian GAAP
|
Potential Impact
|
Presentation and Disclosure
|
IFRS requires significantly
more disclosure than Canadian
GAAP for certain standards.
|
The increased disclosure requirements will cause the Company to change financial reporting processes to ensure the appropriate data is collected.
|
Stock-based Compensation
|
Under Canadian GAAP, vesting of employee stock options can be recognized on a straight-line basis whereas IFRS requires that each tranche of stock option vesting is treated as having a separate fair value.
|
The amount of the expense recognized under IFRS may be different to that under Canadian GAAP and is recognized more up-front.
|
Impairment of long-lived assets
|
IFRS requires the assessment of asset impairment to be based on discounted cash flows while Canadian GAAP only requires discounting if the carrying value of assets exceeds the undiscounted cash flows.
IFRS also requires the reversal of any previous asset impairments, excluding goodwill, where circumstances have changed. GAAP prohibits the reversal of impairment losses.
|
The differences in methodology may result in asset impairments upon transition to IFRS. In addition, the potential for asset impairments will increase in the future.
|
Asset retirement obligations (ARO)
|
IFRS requires asset retirement obligations to be adjusted to the discount rate in affect at each balance sheet date while GAAP retains the historical discount rate. In addition, IFRS requires that ARO are accrued for constructive as well as legal obligations. Canadian GAAP only requires that legal obligations are included.
|
The ARO recorded under IFRS may be greater than that under Canadian GAAP and the accounting treatment in the future may see more fluctuations in the amount reported.
|
|
•
|
The relative strength of the U.S. dollar against other currencies;
|
|
•
|
Government monetary and fiscal policies;
|
|
•
|
Expectations of the future rate of global monetary inflation and interest rates;
|
|
•
|
General economic conditions and the perception of risk in capital markets;
|
|
•
|
Political conditions including the threat of terrorism or war;
|
|
•
|
Speculative trading;
|
|
•
|
Investment and industrial demand; and
|
|
•
|
Global production and inventory stocks.
|
Common shares
|
118,900,563
|
|
Common share purchase options
|
4,160,000
|
exercisable between $0.23 - $0.94 per share
|
(in thousands of Canadian dollars)
|
December 31, 2009
|
December 31, 2008
|
|||||||||
|
$ | $ | |||||||||
ASSETS
|
|||||||||||
Current
|
|||||||||||
Cash and cash equivalents (Note 4)
|
5,197 | 9,225 | |||||||||
Short-term investments (Note 5)
|
2,246 | 11,723 | |||||||||
Marketable securities (Note 6)
|
15,382 | 2,024 | |||||||||
Other receivables and prepaid expenses
|
52 | 96 | |||||||||
Total Current Assets
|
22,877 | 23,068 | |||||||||
Other long-term assets
(Note 8)
|
525 | 525 | |||||||||
Restricted cash
(Note 9)
|
214 | 214 | |||||||||
Resource interests
(Note 10)
|
5,053 | 5,053 | |||||||||
Plant and equipment
(Note 12)
|
483 | 661 | |||||||||
Total Assets
|
29,152 | 29,521 | |||||||||
LIABILITIES
|
|||||||||||
Current
|
|||||||||||
Accounts payable
|
189 | 314 | |||||||||
Accrued liabilities
|
212 | 197 | |||||||||
Total Current Liabilities
|
401 | 511 | |||||||||
Asset retirement obligation
(Note 13)
|
1,238 | 1,162 | |||||||||
Total Liabilities
|
1,639 | 1,673 | |||||||||
Commitments
(Notes 10 and 21)
|
|||||||||||
SHAREHOLDERS' EQUITY
|
|||||||||||
Share capital
(Note 14)
|
65,583 | 65,621 | |||||||||
Contributed surplus
(Note 15)
|
8,668 | 8,354 | |||||||||
Accumulated other comprehensive income
|
- | - | |||||||||
Deficit
|
(46,738 | ) | (46,127 | ) | |||||||
Total Shareholders’ Equity
|
27,513 | 27,848 | |||||||||
Total Liabilities and Shareholders’ Equity
|
29,152 | 29,521 | |||||||||
Subsequent events
(Note 22)
|
|||||||||||
“John F. Kearney”
|
“Brian A. Atkins, CA”
|
||||
Director
|
Director
|
(
in thousands of Canadian dollars except share and per share amounts)
|
Year ended December 31,
|
||||||||
$ | 2009 | $ | 2008 | $ | 2007 | ||||
Income
Investment Income
|
242 | 899 | 1,234 | ||||||
Mineral exploration and development costs
(Note 11)
|
2,260 | 3,426 | 11,050 | ||||||
Expenses
|
|||||||||
Depreciation
|
23 | 21 | 13 | ||||||
Listing and regulatory fees
|
69 | 48 | 59 | ||||||
Management and directors fees
|
623 | 566 | 347 | ||||||
Office and general
|
359 | 360 | 463 | ||||||
Professional fees
|
380 | 220 | 396 | ||||||
Project evaluation
|
120 | 21 | 39 | ||||||
Shareholder and investor communications
|
177 | 230 | 420 | ||||||
Stock based compensation
|
288 | 205 | 267 | ||||||
2,039 | 1,671 | 2,004 | |||||||
Other income (expenses)
|
|||||||||
Foreign exchange (loss) gain
|
(260 | ) | 8 | - | |||||
American Eagle Option (Note 7)
|
(2,396 | ) | - | - | |||||
Gain (loss) on marketable securities (Note 6)
|
6,102 | (38 | ) | (150 | ) | ||||
3,446 | (30 | ) | (150 | ) | |||||
Loss before income taxes
|
(611 | ) | (4,228 | ) | (11,970 | ) | |||
Future income taxes income (Note 18)
|
- | - | 2,487 | ||||||
Net loss for the year
|
(611 | ) | (4,228 | ) | (9,483 | ) | |||
Other comprehensive income/(loss)
|
- | - | - | ||||||
Comprehensive loss
|
(611 | ) | (4,228 | ) | (9,483 | ) | |||
Deficit,
beginning of year
|
(46,127 | ) | (41,899 | ) | (32,416 | ) | |||
Net loss
|
(611 | ) | (4,228 | ) | (9,483 | ) | |||
Deficit,
end of year
|
(46,738 | ) | (46,127 | ) | (41,899 | ) | |||
Loss per share
- basic and diluted
|
(0.005 | ) | (0.04 | ) | (0.08 | ) | |||
Weighted average number of common shares outstanding
– basic and diluted
|
118,915,812 | 120,440,062 | 113,429,078 |
(in thousands of Canadian dollars)
|
Year ended December 31,
|
||||||||
|
$ | 2009 | $ | 2008 | $ | 2007 | |||
Operating Activities
|
|||||||||
Net loss for the year
|
(611 | ) | (4,228 | ) | (9,483 | ) | |||
Reclamation expenditures
|
(93 | ) | (286 | ) | (246 | ) | |||
Adjustment for items not involving cash:
|
|||||||||
- Accretion and depreciation
|
276 | 281 | 233 | ||||||
- Future income taxes
|
- | - | (2,487 | ) | |||||
- (Gain) loss on marketable securities (Note 6)
|
(6,102 | ) | 38 | 150 | |||||
- Unrealized foreign exchange
|
64 | - | - | ||||||
- American Eagle Option
|
1,811 | - | - | ||||||
- Stock based compensation
|
288 | 205 | 267 | ||||||
Change in non-cash working capital items:
|
|||||||||
- other receivables and prepaid expenses
|
44 | 76 | 98 | ||||||
- accounts payable and accrued liabilities
|
(17 | ) | (836 | ) | 790 | ||||
(4,340 | ) | (4,750 | ) | (10,678 | ) | ||||
Financing Activities
|
|||||||||
Capital stock issued and subscribed, net of issuance costs
|
- | 340 | 10,184 | ||||||
Capital stock repurchased (Note 14)
|
(12 | ) | (378 | ) | - | ||||
(12 | ) | (38 | ) | 10,184 | |||||
Investing Activities
|
|||||||||
Short-term investments
|
9,477 | 9,772 | (6,016 | ) | |||||
Marketable securities sold
|
6,100 | - | - | ||||||
Marketable securities purchased
|
(13,356 | ) | (1,962 | ) | - | ||||
American Eagle Option
|
(1,811 | ) | - | - | |||||
Restricted cash
|
- | (214 | ) | - | |||||
Other long-term assets
|
- | (100 | ) | (30 | ) | ||||
Plant and equipment
|
(22 | ) | (402 | ) | (149 | ) | |||
388 | 7,094 | (6,195 | ) | ||||||
Impact of exchange rate changes on cash and cash equivalents
|
(64 | ) | - | - | |||||
(Decrease) increase in cash and cash equivalents
|
(4,028 | ) | 2,306 | (6,689 | ) | ||||
Cash and cash equivalents,
beginning of year
|
9,225 | 6,919 | 13,608 | ||||||
Cash and cash equivalents
, end of year
|
5,197 | 9,225 | 6,919 | ||||||
Supplemental Information:
|
|||||||||
Interest paid
|
- | - | - | ||||||
Income taxes paid
|
- | - | - |
Common shares
|
Contributed
|
|||||||||||||
(in thousands of Canadian dollars except for share amounts)
|
Shares
|
Amount
|
Surplus
|
Deficit
|
Total
|
|||||||||
Balance,
December 31, 2006
|
107,590,212 | $ | 59,365 | $ | 6,479 | $ | (32,416 | ) | $ | 33,428 | ||||
Exercise of options at $0.23 per share
|
450,000 | 131 | (27 | ) | - | 104 | ||||||||
Future income tax effect of flow-through shares
|
- | (2,487 | ) | - | - | (2,487 | ) | |||||||
Exercise of options at $0.89 per share
|
100,000 | 153 | (64 | ) | - | 89 | ||||||||
Exercise of warrants between $0.72 - $0.93 per share
|
302,738 | 394 | (174 | ) | - | 220 | ||||||||
Issue of shares at $0.85 per unit
|
11,765,000 | 9,766 | - | - | 9,766 | |||||||||
Share purchase warrants
|
- | (1,366 | ) | 1,366 | - | - | ||||||||
Exercise of warrants at $0.72 per share
|
6,012 | 8 | (3 | ) | - | 5 | ||||||||
Stock-based compensation
|
- | - | 267 | - | 267 | |||||||||
Net loss for the year
|
- | - | - | (9,483 | ) | (9,483 | ) | |||||||
Balance,
December 31, 2007
|
120,213,962 | $ | 65,964 | $ | 7,844 | $ | (41,899 | ) | $ | 31,909 | ||||
Exercise of warrants at $0.72 per share
|
471,101 | 613 | (273 | ) | - | 340 | ||||||||
Shares cancelled under normal course issuer bid
|
(1,716,000 | ) | (956 | ) | 578 | - | (378 | ) | ||||||
Stock-based compensation
|
- | - | 205 | - | 205 | |||||||||
Net loss for the year
|
- | - | - | (4,228 | ) | (4,228 | ) | |||||||
Balance,
December 31, 2008
|
118,969,063 | $ | 65,621 | $ | 8,354 | $ | (46,127 | ) | $ | 27,848 | ||||
Shares cancelled under normal course issuer bid
|
(68,500 | ) | (38 | ) | 26 | - | (12 | ) | ||||||
Stock-based compensation
|
- | - | 288 | - | 288 | |||||||||
Net loss for the year
|
- | - | - | (611 | ) | (611 | ) | |||||||
Balance,
December 31, 2009
|
118,900,563 | $ | 65,583 | $ | 8,668 | $ | (46,738 | ) | $ | 27,513 | ||||
2.
|
Significant Accounting Policies
|
|
(a)
|
Measurement Uncertainty
|
2.
|
Significant Accounting Policies (continued)
|
|
(b)
|
Financial Instruments
|
|
(c)
|
Cash and Cash Equivalents
|
|
(d)
|
Short-term Investments
|
2.
|
Significant Accounting Policies (continued)
|
|
(e)
|
Marketable Securities
|
|
(f)
|
Foreign Currency Transactions
|
|
(g)
|
Plant and Equipment
|
Mining equipment and pilot plant
|
30%
|
Furniture, fixtures and equipment
|
20%
|
|
(h)
|
Resource Interests
|
2.
|
Significant Accounting Policies (continued)
|
|
(i)
|
Exploration and Development Costs
|
|
(j)
|
Property Option Agreements
|
|
(k)
|
Asset Retirement Obligations
|
|
(l)
|
Long-lived Asset Impairment
|
|
(m)
|
Earnings (Loss) Per Common Share
|
2.
|
Significant Accounting Policies (continued)
|
|
(n)
|
Income Taxes
|
|
(o)
|
Flow-through Shares
|
|
(p)
|
Stock-based Compensation
|
|
(q)
|
Revenue Recognition
|
|
(a)
|
Section 3064, “Goodwill and Intangible Assets”
|
|
(b)
|
Section 3862, “Financial Instruments – Disclosure”
|
|
(i)
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
|
(ii)
|
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
|
|
(iii)
|
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
|
(c)
|
EIC-173, “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities”
|
|
(d)
|
EIC-174, “Mining Exploration Costs”
|
|
(e)
|
New Canadian Accounting Standards
|
7.
|
American Eagle Option / Warrants
|
December 31,
2009
|
December 31, 2008
|
|||||
Acquisition costs:
|
||||||
- Prairie Creek mining lands
|
$ | 3,158 | $ | 3,158 | ||
- Prairie Creek plant and mill
|
500 | 500 | ||||
3,658 | 3,658 | |||||
Asset retirement obligation
|
1,395 | 1,395 | ||||
$ | 5,053 | $ | 5,053 |
2009
|
2008
|
2007
|
|||||||
Assaying and metallurgical studies
|
$ | 46 | $ | 154 | $ | 307 | |||
Camp operation and project development
|
763 | 2,464 | 2,804 | ||||||
Drilling and underground exploration
|
- | 170 | 6,076 | ||||||
Insurance, lease rental
|
65 | 80 | 102 | ||||||
Permitting and environmental
|
1,052 | 862 | 694 | ||||||
Transportation and travel
|
82 | 390 | 847 | ||||||
2,008 | 4,120 | 10,830 | |||||||
Drilling and underground development cost recovery
|
- | (942 | ) | - | |||||
Depreciation – mining plant and equipment
|
176 | 168 | 143 | ||||||
Asset retirement accretion
|
76 | 80 | 77 | ||||||
252 | 248 | 220 | |||||||
Total mineral exploration and development costs
for the year
|
2,260 | 3,426 | 11,050 | ||||||
Mineral exploration and development costs
, beginning of year
|
35,993 | 32,567 | 21,517 | ||||||
Mineral exploration and development costs
, end of year
|
$ | 38,253 | $ | 35,993 | $ | 32,567 |
December 31, 2009
|
December 31, 2008
|
||||||
Cost
$
|
Accumulated
Amortization
$
|
Net Book
Value
$
|
Cost
$
|
Accumulated Amortization
$
|
Net Book Value
$
|
||
Mining equipment
|
1,084
|
680
|
404
|
1,073
|
510
|
563
|
|
Pilot plant
|
108
|
95
|
13
|
108
|
90
|
18
|
|
Furniture, fixtures & equipment
|
138
|
102
|
36
|
129
|
90
|
39
|
|
Leasehold improvements
|
60
|
30
|
30
|
60
|
19
|
41
|
|
1,390
|
907
|
483
|
1,370
|
709
|
661
|
2009
|
2008
|
|||||
Balance – beginning of year
|
$ | 1,162 | $ | 1,228 | ||
Reclamation activity
|
- | (366 | ) | |||
Accretion
|
76 | 80 | ||||
Change in estimates
|
- | 220 | ||||
Balance – end of year
|
$ | 1,238 | $ | 1,162 |
14.
|
Share Capital
|
|
(a)
|
During the year ended December 31, 2009, 68,500 common shares were purchased for cancellation pursuant to the Company’s Normal Course Issuer Bid for a total expenditure of $12,000 or approximately $0.18 per share. The difference of $26,000 between the cost of the shares re-acquired and the average stated value of the shares based upon the Company’s share capital account was allocated to the contributed surplus account.
|
|
(b)
|
During the year ended December 31, 2008:
|
|
i.
|
471,101 warrants were exercised at a price of $0.72 per common share for proceeds of $340,000.
|
|
ii.
|
1,716,000 common shares were purchased for cancellation pursuant to the Company’s Normal Course Issuer Bid for a total expenditure of $378,000 or $0.22 per share. The difference of $578,000 between the cost of the shares re-acquired and the average stated value of the shares based upon the Company’s share capital account was allocated to contributed surplus.
|
|
(c)
|
During the year ended December 31, 2007:
|
|
iii.
|
308,750 broker warrants were exercised at $0.72 to $0.93 per common share for proceeds of $225,500.
|
|
iv.
|
On July 23, 2007 the Company completed a private placement of 11,765,000 Units at a price of $0.85 per Unit for total proceeds of $10,000,250. Each Unit consists of one common share and one-half of one common share purchase warrant. Each whole Warrant entitles the holder to purchase one common share at a price of $1.20 per Warrant Share, until July 23, 2009. A value of $1,365,667 was assigned to the warrants issued and added to contributed surplus. The fair value of the warrants was calculated at $0.23 each (see Note 15(b)). Share issue costs relating to the transaction amounted to $233,918.
|
2009
|
2008
|
2007
|
||||||||||||||||
Number of Options
|
Weighted Average
Exercise Price
|
Number of Options
|
Weighted Average
Exercise Price
|
Number of Options
|
Weighted Average
Exercise Price
|
|||||||||||||
Outstanding, beginning of year
|
4,205,000
|
$
|
0.73
|
4,865,000
|
$
|
0.73
|
4,780,000
|
$
|
0.66
|
|||||||||
Granted
|
2,905,000
|
0.23
|
-
|
-
|
695,000
|
0.94
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
(550,000)
|
0.35
|
||||||||||||
Forfeited / expired
|
(460,000)
|
0.86
|
(660,000)
|
0.72
|
(60,000)
|
0.89
|
||||||||||||
Outstanding, end of year
|
6,650,000
|
$
|
0.50
|
4,205,000
|
$
|
0.73
|
4,865,000
|
$
|
0.73
|
Year of Grant
|
2009
|
2008
|
2007
|
Dividend Yield
|
0%
|
N/a
|
0%
|
Risk free interest rate
|
1.90%
|
N/a
|
4.07%
|
Expected life
|
4 years
|
N/a
|
5 years
|
Expected volatility
|
83%
|
N/a
|
89%
|
Weighted average grant date fair value
|
$0.10
|
N/a
|
$0.68
|
2009
|
2008
|
2007
|
||||||||||||||||
Number of Warrants
|
Weighted Average
Exercise Price
|
Number of Warrants
|
Weighted Average
Exercise Price
|
Number of Warrants
|
Weighted Average
Exercise Price
|
|||||||||||||
Outstanding, beginning of year
|
5,882,500
|
$
|
1.20
|
17,569,243
|
$
|
1.02
|
11,995,493
|
$
|
1.02
|
|||||||||
Granted
|
-
|
-
|
-
|
-
|
5,882,500
|
1.20
|
||||||||||||
Exercised
|
-
|
-
|
(471,101)
|
0.72
|
(308,750)
|
0.73
|
||||||||||||
Expired
|
(5,882,500)
|
1.20
|
(11,215,642)
|
1.04
|
-
|
-
|
||||||||||||
Outstanding,
end of year
|
-
|
$
|
-
|
5,882,500
|
$
|
1.20
|
17,569,243
|
$
|
1.09
|
2009
|
2008
|
2007
|
|
Dividend Yield
|
N/a
|
N/a
|
0%
|
Risk free interest rate
|
N/a
|
N/a
|
3.96%
|
Expected life
|
N/a
|
N/a
|
2 years
|
Expected volatility
|
N/a
|
N/a
|
67%
|
Options
$
|
Warrants
$
|
Unexercised Options and Warrants
$
|
Normal Course Issuer Bid
$
|
Total
$
|
|
Balance, December 31, 2006
|
2,004
|
4,361
|
114
|
-
|
6,479
|
Stock options issued
|
267
|
-
|
-
|
-
|
267
|
Stock options exercised
|
(91)
|
-
|
-
|
-
|
(91)
|
Stock options cancelled
|
(38)
|
-
|
38
|
-
|
-
|
Warrants issued
|
-
|
1,366
|
-
|
-
|
1,366
|
Warrants exercised
|
-
|
(177)
|
-
|
-
|
(177)
|
Balance, December 31, 2007
|
2,142
|
5,550
|
152
|
-
|
7,844
|
Stock-based compensation
|
205
|
-
|
-
|
-
|
205
|
Stock options cancelled
|
(311)
|
-
|
311
|
-
|
-
|
Warrants expired
|
-
|
(1,262)
|
1,262
|
-
|
-
|
Broker warrants exercised
|
-
|
(273)
|
-
|
-
|
(273)
|
Shares cancelled under normal course issuer bid
|
-
|
-
|
-
|
578
|
578
|
Balance, December 31, 2008
|
2,036
|
4,015
|
1,725
|
578
|
8,354
|
Stock-based compensation
|
288
|
-
|
-
|
-
|
288
|
Stock options forfeited / expired
|
(286)
|
-
|
286
|
-
|
-
|
Warrants expired
|
-
|
(4,015)
|
4,015
|
-
|
-
|
Shares cancelled under normal course issuer bid
|
-
|
-
|
-
|
26
|
26
|
Balance, December 31, 2009
|
2,038
|
-
|
6,026
|
604
|
8,668
|
2009
|
2008
|
2007
|
||||
Statutory tax rate
|
30.70%
|
31.00%
|
34.12%
|
|||
Recovery of income taxes computed at statutory rates
|
$
|
187
|
$
|
1,311
|
$
|
4,084
|
Permanent differences
|
256
|
(64)
|
(93)
|
|||
Expired losses
|
(183)
|
(192)
|
(162)
|
|||
Other
|
7
|
(118)
|
281
|
|||
Income tax rate changes
|
75
|
(403)
|
(1,612)
|
|||
Change in valuation allowance
|
(342)
|
(534)
|
(11)
|
|||
$
|
-
|
$
|
-
|
$
|
2,487
|
2009
|
2008
|
2007
|
||||
Future income tax assets
|
||||||
Non-capital loss carry forwards
|
$
|
3,392
|
$
|
2,964
|
$
|
2,136
|
Plant and equipment
|
281
|
139
|
183
|
|||
Resource interests
|
3,681
|
3,234
|
3,310
|
|||
Other
|
450
|
584
|
758
|
|||
7,804
|
6,921
|
6,387
|
||||
Valuation allowance
|
(7,263)
|
(6,921)
|
(6,387)
|
|||
Net future income tax assets
|
541
|
-
|
-
|
|||
Future income tax liability on marketable securities
|
(541)
|
-
|
-
|
|||
Future income tax asset (liability) net
|
$
|
-
|
$
|
-
|
$
|
-
|
Year
|
||
2010
|
$
|
1,033
|
2014
|
926
|
|
2015
|
936
|
|
2026
|
1,046
|
|
2027
|
2,755
|
|
2028
|
3,746
|
|
2029
|
2,455
|
|
$
|
12,897
|
|
(a)
|
Categories of financial assets and financial liabilities
|
Category
|
December 31,
2009
|
December 31, 2008
|
|||
Cash and cash equivalents
|
Designated held for trading
|
$
|
5,197
|
$
|
9,225
|
Short-term investments
|
Designated held for trading
|
2,246
|
11,723
|
||
Marketable securities
|
Designated held for trading
|
15,382
|
2,024
|
||
Other receivables and prepaid expenses
|
Loans and receivables
|
52
|
96
|
||
Restricted cash
|
Designated held for trading
|
214
|
214
|
||
Accounts payable and accrued liabilities
|
Other liabilities
|
$
|
(401)
|
$
|
(511)
|
|
(b)
|
Fair Value Measurements
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||
Cash and cash equivalents
|
$
|
5,197
|
$
|
-
|
$
|
-
|
$
|
5,197
|
Short-term investments
|
2,246
|
-
|
-
|
2,240
|
||||
Marketable securities
|
15,382
|
-
|
-
|
15,382
|
||||
Restricted cash
|
$
|
214
|
$
|
-
|
$
|
-
|
$
|
214
|
|
(c)
|
Market risk
|
|
(d)
|
Interest rate risk
|
|
(e)
|
Foreign currency risk
|
|
(f)
|
Credit risk
|
|
(g)
|
Liquidity risk
|
2009
|
2008
|
|||||
Share capital (Canadian GAAP)
|
$ | 65,583 | $ | 65,621 | ||
Increase due to future income tax recovery on renouncement of flow-through shares (b)
|
4,250 | 4,250 | ||||
Decrease due to flow-through share premium paid in excess of market value (b)
|
(1,531 | ) | (1,531 | ) | ||
Share capital (U.S. GAAP)
|
$ | 68,302 | $ | 68,340 | ||
Deficit (Canadian GAAP)
|
$ | (46,738 | ) | $ | (46,127 | ) |
Increase due to future income tax recovery on renouncement of flow-through shares (b)
|
(4,250 | ) | (4,250 | ) | ||
Decrease due to flow through share premium paid in excess of market value (b)
|
1,531 | 1,531 | ||||
Deficit (U.S. GAAP)
|
$ | (49,457 | ) | $ | (48,846 | ) |
2009
|
2008
|
2007
|
|||||||
Net loss and comprehensive loss (Canadian GAAP)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (9,483 | ) |
Flow through share premium reversal (b)
|
- | - | 1,531 | ||||||
Future income tax recovery elimination (b)
|
- | - | (2,487 | ) | |||||
Net loss and comprehensive loss (U.S. GAAP)
|
$ | (611 | ) | $ | (4,228 | ) | $ | (10,439 | ) |
Loss per share
- basic and diluted (U.S. GAAP)
|
$ | (0.005 | ) | $ | (0.04 | ) | $ | (0.09 | ) |
Weighted average number of common shares outstanding
- basic and diluted (U.S. GAAP)
|
118,915,812 | 120,440,062 | 113,429,078 | ||||||
20.
|
Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)
|
|
(a)
|
Income Taxes
|
20.
|
Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)
|
|
(a)
|
The Company has entered into operating lease agreements for office space. These agreements require the Company to make the following lease payments:
|
Office Leases
|
||
Year ending December 31, 2010
|
$
|
148
|
Year ending December 31, 2011
|
134
|
|
Year ending December 31, 2012
|
78
|
|
$
|
360
|
|
|
(b)
|
The Company has a letter of guarantee outstanding in the amount of $214,000 as security for the Company fulfilling certain obligations pursuant to an Authorization granted by DFO relating to road repairs in proximity to the Prairie Creek Mine Site (see Notes 9 and 10).
|
|
(a)
|
2,460,000 stock options at an exercise price of $0.60 per common share were forfeited having reached their expiry date and 30,000 stock options at an exercise price of $0.94 per common share expired following termination of an employee.
|