Condensed Consolidated Financial Statements
For the Period Ended March 31, 2022 and 2021
Notice of No Auditor Review of Interim Financial Statements
Under National Instrument 51-102,"Continuous Disclosure Obligations", part 4 subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial
statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The Corporation's external auditors
have not performed a review of these financial statements.
VULCAN MINERALS INC.
March 31, 2022
Table of Contents
PAGE | |
Condensed Consolidated Balance Sheets | 1 |
Condensed Consolidated Statements of Loss | 2 |
Condensed Consolidated Statements of Comprehensive Loss | 3 |
Condensed Consolidated Statements of Changes in Equity | 4 |
Condensed Consolidated Statements of Cash Flows | 5 |
Notes to the Condensed Consolidated Financial Statements | 6 |
VULCAN MINERALS INC.
Condensed Consolidated Balance Sheets (Unaudited)
As at
March 31 | December 31 | |
(in Canadian dollars) | 2022 | 2021 |
$ | $ | |
Assets | ||
Current assets | ||
Cash | 5,460,393 | 5,449,161 |
Accounts receivable | 51,081 | 123,306 |
Prepaid expenses | 13,151 | 9,582 |
5,524,625 | 5,582,049 | |
Investments (Note 5) | 561,134 | 636,723 |
Investment in associate (Note 6) | 41,601,516 | 42,069,385 |
Exploration and evaluation assets (Note 7) | 1,060,333 | 999,489 |
Capital assets (Note 8) | 12,152 | 12,459 |
Total Assets | 48,759,760 | 49,300,105 |
Liabilities | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 91,647 | 101,157 |
91,647 | 101,157 | |
Loan (Note 9) | 28,898 | 28,543 |
Deferred income tax liability | 3,964,038 | 4,063,440 |
4,084,583 | 4,193,140 | |
Equity (Note 10) | ||
Shareholders' equity | 44,675,177 | 45,106,965 |
44,675,177 | 45,106,965 | |
Total Liabilities and Equity | 48,759,760 | 49,300,105 |
Contingencies (Note 14) | ||
Subsequent events (Note 15) | ||
Approved on Behalf of the Board of Directors | ||
Patrick J. Laracy | Director | |
Carson Noel | Director |
See accompanying notes to the condensed consolidated financial statements
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VULCAN MINERALS INC.
Condensed Consolidated Statements of Loss Three Months Ended March 31 (Unaudited)
(in Canadian dollars) | 2022 | 2021 |
$ | $ | |
Income (Expenses) | ||
Income from option payments | 192,892 | - |
Interest income | 5,672 | 1,363 |
Share-based compensation (Note 11) | (445,427) | (212,794) |
Dilution loss | (410,510) | - |
General and administrative (Note 12) | (152,926) | (315,147) |
Loss from equity accounted investments | (57,359) | - |
Government assistance | (355) | (238) |
Depreciation | (307) | (1,381) |
Loss before income taxes | (868,320) | (528,197) |
Deferred income tax recovery | 69,350 | - |
Net loss | (798,970) | (528,197) |
Net loss attributable to: | ||
Common shareholders | (798,970) | (397,157) |
Non-controlling interest | - | (131,040) |
(798,970) | (528,197) | |
Net loss per share - basic | (0.007) | (0.006) |
Net loss per share - diluted | (0.005) | (0.006) |
Weighted-average number of common shares outstanding - basic
Weighted-average number of common shares outstanding - diluted
111,828,709 81,379,731
155,506,803 81,379,731
See accompanying notes to the condensed consolidated financial statements
2
VULCAN MINERALS INC.
Condensed Consolidated Statements of Comprehensive Loss Three Months Ended March 31
(Unaudited)
(in Canadian dollars) | 2022 | 2021 |
$ | $ | |
Net loss | (798,970) | (528,197) |
Other comprehensive loss: | ||
Items that may subsequently be reclassified to profit or loss | ||
Change in fair value on investments classified as FVOCI, | ||
net of taxes | (185,711) | 260,442 |
(185,711) | 260,442 | |
Comprehensive loss | (984,681) | (267,755) |
Comprehensive loss attributable to: | ||
Common shareholders | (984,681) | (136,715) |
Non-controlling interest | - | (131,040) |
(984,681) | (267,755) |
See accompanying notes to the condensed consolidated financial statements
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VULCAN MINERALS INC.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
Accumulated Other | Total | Non- | ||||||
Contributed | Comprehensive | Shareholders' | Controlling | |||||
(in Canadian dollars) | Share Capital | Warrants | Surplus | Income (Loss) | Deficit | Equity | Interest | Total Equity |
$ | $ | $ | $ | $ | $ | $ | $ | |
(Note 10) | (Note 10) | (Note 10) | ||||||
Balance December 31, 2020 | 19,737,670 | 476,496 | 2,917,126 | 35,261 | (20,930,618) | 2,235,935 | 446,226 | 2,682,161 |
Net loss and comprehensive income (loss) | ||||||||
January 1, 2021 - March 31, 2021 | - | - | - | 440,442 | (397,157) | 43,285 | (131,040) | (87,755) |
Adjustment for change in ownership in subsidiary | - | - | - | - | (175,524) | (175,524) | 175,524 | - |
Exercise of warrants - parent | 49,200 | (9,200) | - | - | - | 40,000 | - | 40,000 |
Share issuance costs - parent | (3,128) | - | - | - | - | (3,128) | - | (3,128) |
Issuance of shares, options and warrants - subsidiary | - | - | - | - | 1,872,472 | 1,872,472 | 2,514,765 | 4,387,237 |
Sale of shares of subsidiary - parent | - | - | - | - | 288,445 | 288,445 | 71,555 | 360,000 |
Share issuance costs - subsidiary | - | - | - | - | (171,906) | (171,906) | (230,872) | (402,778) |
Exercise of warrants - subsidiary | - | - | - | - | 10,670 | 10,670 | 14,330 | 25,000 |
Share-based compensation in parent | - | - | 203,844 | - | - | 203,844 | - | 203,844 |
Share-based compensation in subsidiary | - | - | - | - | 6,895 | 6,895 | 9,261 | 16,156 |
Balance, March 31, 2021 | 19,783,742 | 467,296 | 3,120,970 | 475,703 | (19,496,723) | 4,350,988 | 2,869,749 | 7,220,737 |
Net loss and comprehensive income (loss) | ||||||||
April 1, 2021 - December 31, 2021 | - | - | - | (536,961) | 34,441,233 | 33,904,272 | (1,459,053) | 32,445,219 |
Adjustment for change in ownership in subsidiary | - | - | - | - | (536,560) | (536,560) | 536,560 | - |
Loss of control of subsidiary | - | - | - | - | - | - | (5,891,907) | (5,891,907) |
Issuance of shares and warrants pursuant | ||||||||
to private placements | 2,326,428 | 2,173,572 | - | - | - | 4,500,000 | - | 4,500,000 |
Issuance of brokers warrants pursuant | ||||||||
to private placements | - | 73,968 | - | - | - | 73,968 | - | 73,968 |
Exercise of options - parent | 43,505 | - | (13,505) | - | - | 30,000 | - | 30,000 |
Exercise of warrants - parent | 1,123,722 | (480,222) | - | - | - | 643,500 | - | 643,500 |
Share issuance costs, net of taxes - parent | (127,577) | - | - | - | - | (127,577) | - | (127,577) |
Issuance of shares, options and warrants - subsidiary | - | - | - | - | 1,294,947 | 1,294,947 | 2,777,803 | 4,072,750 |
Sale of shares of subsidiary - parent | - | - | - | - | 71,555 | 71,555 | (71,555) | - |
Share issuance costs - subsidiary | - | - | - | - | (48,046) | (48,046) | (136,653) | (184,699) |
Exercise of warrants - subsidiary | - | - | - | - | 514,914 | 514,914 | 863,889 | 1,378,803 |
Share-based compensation capitalized to exploration and | ||||||||
evaluation assets in parent | - | - | 12,637 | - | - | 12,637 | - | 12,637 |
Share-based compensation capitalized to exploration and | ||||||||
evaluation assets in subsidiary | - | - | - | - | 12,086 | 12,086 | 20,196 | 32,282 |
Share-based compensation in parent | - | - | 117,804 | - | - | 117,804 | - | 117,804 |
Share-based compensation in subsidiary | - | - | - | - | 292,477 | 292,477 | 490,971 | 783,448 |
Balance, December 31, 2021 | 23,149,820 | 2,234,614 | 3,237,906 | (61,258) | 16,545,883 | 45,106,965 | - | 45,106,965 |
Net loss and comprehensive loss | ||||||||
January 1, 2022 - March 31, 2022 | - | - | - | (185,711) | (798,970) | (984,681) | - | (984,681) |
Adjustment for change in ownership in subsidiary | - | - | - | - | 15,538 | 15,538 | - | 15,538 |
Exercise of options | 30,030 | - | (10,030) | - | - | 20,000 | - | 20,000 |
Exercise of warrants | 117,111 | (51,111) | - | - | - | 66,000 | - | 66,000 |
Share issuance costs, net of taxes | (2,719) | - | - | - | - | (2,719) | - | (2,719) |
Share-based compensation capitalized to exploration and | ||||||||
evaluation assets in parent | - | - | 8,647 | - | - | 8,647 | - | 8,647 |
Share-based compensation in parent | - | - | 445,427 | - | - | 445,427 | - | 445,427 |
Balance, March 31, 2022 | 23,294,242 | 2,183,503 | 3,681,950 | (246,969) | 15,762,451 | 44,675,177 | - | 44,675,177 |
See accompanying notes to the condensed consolidated financial statements
4
VULCAN MINERALS INC.
Condensed Consolidated Statements of Cash Flows
Period Ended
March 31 | December 31 | |
(in Canadian dollars) | 2022 | 2021 |
$ | ||
Operating Activities | ||
Net (loss) income | (798,970) | 32,453,983 |
Adjustment for non cash items: | ||
Gain resulting from loss of control of a subsidiary | - | (38,546,475) |
Dilution loss | 410,510 | - |
Income from equity accounted investment | 57,359 | 3,193 |
Deferred option payments | (142,892) | (625,108) |
Interest accretion on loan | 355 | 1,393 |
Deferred income tax liability | (69,351) | 4,095,659 |
Share-based compensation | 445,427 | 1,121,252 |
Depreciation | 307 | 5,756 |
(97,255) | (1,490,347) | |
Changes in non-cash working capital | ||
Accounts receivable | 72,225 | (184,711) |
Prepaid expenses | (3,569) | (7,160) |
Accounts payable and accrued liabilities | (9,510) | 204,906 |
(38,109) | (1,477,312) | |
Financing Activities | ||
Share issuance costs, net of tax - parent | - | (56,737) |
Cash received upon exercise of options | 20,000 | 30,000 |
Cash received upon exercise of warrants | 66,000 | 683,500 |
Cash received upon exercise of options and warrants in subsidiary | - | 1,413,803 |
Sale of shares of subsidiary | - | 360,000 |
Private placement - parent | - | 4,500,000 |
Private placements - subsidiary | - | 8,583,321 |
Share issuance costs - subsidiary | - | (587,477) |
86,000 | 14,926,410 | |
Investing Activities | ||
Cash disposed of through the loss of control of a subsidiary | - | (8,561,117) |
Exploration and evaluation expenditures | (18,519) | (810,696) |
Refunds on exploration and evaluation assets | - | 31,650 |
Deposits on exploration and evaluation assets | (18,140) | (193,297) |
Purchase of capital assets | - | (12,077) |
Proceeds from gypsum revenues | - | 354,885 |
(36,659) | (9,190,652) | |
Net change in cash for the year | 11,232 | 4,258,446 |
Cash, beginning of year | 5,449,161 | 1,190,715 |
Cash, end of period | 5,460,393 | 5,449,161 |
See accompanying notes to the condensed consolidated financial statements
5
VULCAN MINERALS INC.
Notes to the Condensed Consolidated Financial Statements
March 31, 2022
1. NATURE OF OPERATIONS
Vulcan Minerals Inc. is engaged in the evaluation, acquisition and exploration of minerals in Newfoundland and Labrador. The Company plans to ultimately develop the properties as joint ventures, bring them into production, option or lease properties to third parties, or sell the properties outright. The Company is in the exploration stage on most of its projects. The Company is a publicly traded company, incorporated under the laws of the Province of
Alberta, Canada. Its registered address is 333 Duckworth Street, St. John's, NL A1C 1G9.
2. DECONSOLIDATION OF A SUBSIDIARY
As of December 31, 2020, the Company had 63.03% ownership interest in Atlas Salt Inc. ("Atlas Salt" or "Atlas") (previously Red Moon Resources Inc.) and determined that it had
control over Atlas. The Company assessed its investment in Atlas and judged that it had maintained control over Atlas as defined by IFRS 10 and continued to consolidate Atlas
from January 1, 2021 to October 31, 2021. Pursuant to four private placements in Atlas during 2021, as well as additional warrants and options exercised during the year, Vulcan's
ownership interest in Atlas was reduced to 37.44%. On October 31, 2021, management determined that Atlas no longer required to be consolidated and now accounts for the retained investment in Atlas as an investment using the equity method. A gain resulting from loss of control of a subsidiary of $38,943,667 and an equity investment in Atlas of $42,469,770 was recognized on that date.
The carrying value of Atlas Salt's net assets deconsolidated and the gain resulting from loss of control of a subsidiary are as follows:
October 31, 2021 | |
$ | |
Cash and cash equivalents | 8,561,117 |
Accounts receivable | 149,365 |
Prepaid expenses | 11,250 |
Capital assets | 8,007 |
Mineral exploration and evaluation assets | 1,213,831 |
Accounts payable and accrued liabilities | (251,829) |
Flow through share premium | (133,334) |
Asset retirement obligation | (140,397) |
9,418,010 | |
Non-controlling interest | (5,891,907) |
3,526,103 | |
Fair value of the investment in Atlas Salt Inc. | 42,469,770 |
Gain resulting from loss of control of subsidiary | 38,943,667 |
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VULCAN MINERALS INC.
Notes to the Condensed Consolidated Financial Statements
March 31, 2022
3. BASIS OF PRESENTATION
The Company prepares its condensed consolidated financial statements with Canadian generally accepted accounting principles ("GAAP") as set out in the Canadian Professional Accountants of Canada Handbook - Accounting - Part I ("CPA Canada Handbook") which incorporates International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB").
These condensed consolidated financial statements have been prepared on an historical cost basis, except for investments which are measured at fair value.
In addition to the Company, the consolidated financial statements include all subsidiaries. Subsidiaries are all corporations, over which the Company is able, directly or indirectly, to control financial and operating policies, which is the authority usually connected with holding majority voting rights. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. Intercompany transactions and balances are eliminated upon consolidation. They are deconsolidated from the date that control by the Company ceases. Any retained interest is measured to its fair value with the change in carrying amount recognized in income or loss. The fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate or joint venture.
As of March 31, 2022 and 2021, the subsidiaries of the Company are as follows:
Subsidiaries | 2022 | 2021 |
Atlas Salt Inc. | -% (*) | 42.61% |
Devonian Resources Inc. | 100% | 100% |
London Resources Inc. | 100% | 100% |
(*) On October 31, 2021, Atlas was deconsolidated as described in Note 2.
These unaudited interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the
International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The accounting policies used in preparing these unaudited interim condensed consolidated financial statements are consistent with those used in the preparation of the Company's annual financial statements.
A summary of the Company's significant accounting policies under IFRS is presented in Note 5 to the year-end financial statements, December 31, 2021.
These condensed consolidated financial statements were approved and authorized for issuance by the Board of Directors on May 30, 2022.
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