CEO @ WORK, FINANCAILS, FOR NIOBAY METALS INC., NOV 25, 2016
Niobay Metals Inc. (formerly MDN Inc.)
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2016
In Canadian Dollars
Unaudited
NOTICE TO READER
The accompanying unaudited condensed interim consolidated financial statements of Niobay Metals Inc. (formerly MDN Inc.) have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these unaudited condensed interim consolidated financial statements.
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Niobay Metals Inc. (formerly MDN Inc.) Consolidated Statements of Financial Position
September 30, December 31, (unaudited, in Canadian dollars) 2016 2015
$ $
ASSETS
Current
Cash 1,464,600 69,343 Temporary investments - 250,000 Accounts receivable 45,543 39,371 Tax credits related to resources and mining taxes receivable 141,158 181,305 Prepaid expenses and deposits 22,751 11,123
1,674,052 551,142 Non-current Accounts receivable 91,912 101,633 Property and equipment 48,664 56,021 Exploration and evaluation assets (Note 3) 484,931 7,638,134
TOTAL ASSETS 2,299,559 8,346,930
LIABILITIES Current Accounts payable and accrued liabilities (Note 4) 379,958 236,894 Non-current Deferred income tax liability (Note 3) - 195,188
TOTAL LIABILITIES 379,958 432,082
EQUITY Share capital (Note 5) 66,686,758 64,530,913 Contributed surplus 6,825,680 6,653,091 Deficit (73,513,524) (67,188,424) Cumulative translation adjustment 1,699,248 2,786,446
Equity attributable to shareholders of the Company 1,698,162 6,782,026 Non-controlling interests 221,439 1,132,822
TOTAL EQUITY 1,919,601 7,914,848
TOTAL LIABILITIES AND EQUITY 2,299,559 8,346,930
Going concern (Note 1), Contingencies (Note 9).
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
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Niobay Metals Inc. (formerly MDN Inc.) Consolidated Statements of Comprehensive (Loss) Income
Three months ended September 30, Nine months ended September 30, (unaudited, in Canadian dollars) 2016 2015 2016 2015 $ $ $ $
Expenses and other items Management and administration (Note 7) 204,191 115,283 524,923 486,625
Write-down of exploration and evaluation assets (Note 3) 25,700 490,675 6,643,156 2,447,175
Income related to flow-through shares - (287) - (48,058)
Gain on settlement of liabilities - (638,414) - (638,414)
Finance income (379) (839) (890) (3,861)
Loss (gain) on foreign exchange 714 32,904 (942) 85,223
(Loss) income before income taxes (230,226) 678 (7,166,247) (2,328,690)
Deferred income tax recovery (Note 3) - - (195,188) -
Net (loss) income for the period (230,226) 678 (6,971,059) (2,328,690)
Other comprehensive income (loss)
Foreign currency translation differences for foreign operations 1,310 606,974 (1,087,198) 1,351,387
Total comprehensive (loss) income for the period (228,916) 607,652 (8,058,257) (977,303)
Net (loss) income attributable to: Shareholders of the Company (229,622) 7,062 (6,059,676) (2,308,588)
Non-controlling interests (604) (6,384) (911,383) (20,102)
Total comprehensive (loss) income attributable to: Shareholders of the Company (228,312) 614,036 (7,146,874) (957,201)
Non-controlling interests (604) (6,384) (911,383) (20,102)
Basic and diluted (loss) earnings per common share (0.01) 0.00 (0.28) (0.10)
Weighted average number of common shares - basic and diluted 28,396,283 22,931,501 24,873,554 22,902,270
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
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Niobay Metals Inc. (formerly MDN Inc.) Consolidated Statements of Shareholders’ Equity
Number of
Equity
issued
Cumulative attributable to Non- Total
and outstanding
Share Contributed
translation shareholders controlling shareholders’
(unaudited, in Canadian dollars) common shares (1)
capital surplus Deficit adjustment of the company interests equity
$ $ $ $ $ $ $
Balance at December 31, 2015 22,931,501 64,530,913 6,653,091 (67,188,424) 2,786,446 6,782,026 1,132,822 7,914,848
Shares issued pursuant to a private placement (Note 5) 7,180,000 1,795,000 - - - 1,795,000 - 1,795,000
Share issue expenses (Note 5) - - 109,418 (265,424) - (156,006) - (156,006)
Shares issued on acquisition of the James Bay project (Note 5) 1,000,000 350,000 - - - 350,000 - 350,000
Shares issued on exercise of stock options 30,000 10,845 (3,345) - - 7,500 - 7,500
Share-based remuneration - - 66,516 - - 66,516 - 66,516
Net loss for the period - - - (6,059,676) - (6,059,676) (911,383) (6,971,059)
Other comprehensive loss
Foreign currency translation differences - - - - (1,087,198) (1,087,198) - (1,087,198)
Balance at September 30, 2016 31,141,501
66,686,758 6,825,680 (73,513,524) 1,699,248 1,698,162 221,439 1,919,601
Balance at December 31, 2014 22,791,501
64,481,913 6,622,308 (49,908,226) 1,279,016 22,475,011 1,797,715 24,272,726
Shares issued to acquire the Prairie Lake project 140,000 49,000 - - - 49,000 - 49,000
Share-based remuneration - - 30,056 - - 30,056 - 30,056
Net loss for the period - - - (2,308,588) - (2,308,588) (20,102) (2,328,690)
Other comprehensive income
Foreign currency translation differences -
- - - 1,351,387 1,351,387 - 1,351,387
Balance at September 30, 2015 22,931,501
64,530,913 6,652,364 (52,216,814) 2,630,403 21,596,866 1,777,613 23,374,479
(1) On September 20, 2016, the Company’s common shares were consolidated on the basis of one post-consolidation share for every 5 pre-consolidation shares held. The number of shares presented in these condensed interim consolidated financial statements have all been adjusted to reflect the impact of this share consolidation.
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
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Niobay Metals Inc. (formerly MDN Inc.) Consolidated Statements of Cash Flows
Nine months ended September 30,
(unaudited, in Canadian dollars)
2016 2015 $ $
Operating activities
Net loss for the period (6,971,059) (2,328,690) Adjustments Share-based remuneration 59,007 30,056 Amortization of property and equipment 7,785 4,938 Write-down of exploration and evaluation assets 6,643,156 2,447,175 Gain on settlement of liabilities - (638,414) Deferred income tax recovery (195,188) - Finance income accrued (890) (3,861) Finance income received 1,257 (9,209) Foreign exchange (gain) loss (942) 52,403 Changes in working capital items 106,936 472,003 (349,938) 26,401 Investing activities Disposal of investments 250,000 400,000 Additions to property and equipment (2,100) - Additions to exploration and evaluation assets (149,947) (522,018) 97,953 (122,018) Financing activities Issuance of shares 1,802,500 - Share issue expenses (156,006) - 1,646,494 -
Effect of exchange rate changes on cash held in foreign currency 748 (17,899) Net change in cash 1,395,257 (113,516) Cash, beginning of period 69,343 264,796
Cash, end of period 1,464,600 151,280
Supplemental cash flow information Change in tax credits related to resources capitalized to exploration and evaluation assets - 40,146 Share-based remuneration capitalized to exploration and evaluation assets 7,509 - Change in accounts payable and accrued liabilities related to exploration and evaluation assets 63,735 67,203 Value of shares issued on acquisition of exploration and evaluation assets 350,000 49,000
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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1. GENERAL INFORMATION AND GOING CONCERN
On September 20, 2016, following receipt of shareholder approval at a special meeting of shareholders held on September 1, 2016 and subsequent approval by the Company’s board of directors of the filing of the applicable articles of amendment, the Company changed its name from MDN Inc. to Niobay Metals Inc. (“Niobay” or the “Company”) and proceeded with the consolidation of its common shares on the basis of one post-consolidation share for every five pre-consolidation shares. All outstanding share purchase warrants and stock options were also adjusted to reflect the one for five share consolidation. The Company’s shares commenced trading on the TSX Venture Exchange ("TSXV") on a post-consolidation basis and under the new name and ticker symbol “NBY” on September 21, 2016.
Niobay is primarily engaged in the acquisition and exploration of mineral properties. In June 2016, the Company completed the acquisition of the James Bay niobium property, located in northern Ontario, Canada. The Company also holds interests in other exploration properties located in Quebec, Canada and Tanzania through its subsidiaries Crevier Minerals Inc. (“CMI”, 72.5% interest) and MDN Tanzania Ltd. (“MDN Tanzania”, 100% interest). All amounts in these condensed interim consolidated financial statements are expressed in Canadian dollars unless otherwise indicated. The Board of Directors approved and authorized for issuance these unaudited condensed interim consolidated financial statements on November 24, 2016.
Going concern
These unaudited condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue to operate for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events and conditions that may cast a significant doubt about the Company’s ability to continue as a going concern as described in the following paragraph, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. These unaudited condensed interim consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities, expenses and financial position classification that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.
At September 30, 2016, the Company had a working capital of $1,294,094, had an accumulated deficit of $73,513,524 and incurred a loss of $6,971,059 for the nine months ended September 30, 2016. Working capital included cash of $1,464,600. However, the Company will require additional funds to meet its exploration and development objectives, to provide for management and administration expenses for at least the next 12 months and to settle all current obligations. Such funding requirements may be met in the future in a number of ways, including the issuance of securities or other arrangements. If the Company is not successful in raising additional funds, it may be required to reduce the scope of, or eliminate its future exploration and development activities, any of which could have a negative impact on the business, financial condition and results of operation of the Company.
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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2. STATEMENT OF COMPLIANCE AND BASIS OF PRESENTATION
These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting and follow the same accounting policies as the Company’s most recent annual consolidated financial statements. They do not contain all of the information and disclosures required for annual financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2015 and 2014 which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Restatement for the three and six months ended June 30, 2016
The Company’s condensed interim consolidated financial statements for the three and six months ended June 30, 2016 have been restated to properly reflect the foreign exchange impact of the write-down of the Tanzanian properties recorded during those periods. The effect of the restatement is summarized as follows:
Previously
reported Adjustment Restated $ $ $
Financial Position at June 30, 2016
Deficit (73,939,216) 920,738 (73,018,478) Cumulative translation adjustment 2,618,676 (920,738) 1,697,938 Comprehensive Loss for the three months ended June 30, 2016 Write-down of exploration and evaluation assets 7,538,194 (920,738) 6,617,456 Net loss for the period (7,531,278) 920,738 (6,610,540) Other comprehensive (income) loss Foreign currency translation difference for foreign operations 95,940 (920,738) (824,798) Total comprehensive loss of the period (7,435,338) - (7,435,338) Comprehensive Loss for the six months ended June 30, 2016 Write-down of exploration and evaluation assets 7,538,194 (920,738) 6,617,456 Net loss for the period (7,661,571) 920,738 (6,740,833) Other comprehensive loss Foreign currency translation difference for foreign operations (167,770) (920,738) (1,088,508) Total comprehensive loss of the period (7,829,341) - (7,829,341)
The restatement had no impact on total Operating Activities and Investing Activities in the Consolidated Statements of Cash Flows statement for the six-months ended June 30, 2016.
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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3. EVALUATION AND EXPLORATION ASSETS
Evaluation and exploration assets by properties are detailed as follows:
Effect of
January 1,
foreign September 30, 2016 Additions Write-down exchange 2016 $ $ $ $ $
Mineral properties
Canada
James Bay (Nb) - 100% - 399,945 - - 399,945
- 399,945 - - 399,945
Exploration and evaluation expenditures
Canada
James Bay (Nb) - 100% - 84,986 - - 84,986
Crevier (Nb) - 72.5% 3,486,133 5,210 (3,491,343) - -
Prairie Lake (Nb) - 52,700 (52,700) - -
Tanzania
Ikungu (Au) - 84% 3,825,363 16,495 (2,848,171) (993,687) -
Ikungu East (Au) - 100% 326,638 11,855 (250,942) (87,551) -
7,638,134 171,246 (6,643,156) (1,081,238) -
7,638,134 571,191 (6,643,156) (1,081,238) 484,931
James Bay
On June 22, 2016, the Company completed the acquisition of the James Bay niobium property, located in northern Ontario, from Barrick Gold Inc., James Bay Columbium Ltd. and Goldcorp Inc. (the “Sellers”). In exchange for a 100% interest in the property, the Company issued to the Sellers a total of 1,000,000 common shares and paid a cash consideration of $25,000. The Sellers retain a 2% net smelter returns royalty (“Royalty”) over all metals produced from the property. The Company has the right to buy-back 1% of the Royalty for an amount of $2,000,000 (in constant 2016 dollars, subject to a cap of $3,000,000) at any time. Moreover, the Sellers have the right to reacquire a 51% interest in the property (the “Back-in Right”), in case of the establishment on the property of one or more deposits containing no less than 2 million gold ounces and/or gold equivalent ounces of resources in aggregate, upon payment by the Sellers to the Company of 2.5 times the Company’s expenditures incurred on the property. The Back-In Right does not apply to the niobium content.
The acquisition cost of the James Bay property includes an amount of $350,000 representing the value of the shares issued, using the closing price of the shares on the day immediately prior to the closing date, the cash consideration of $25,000 and legal and regulatory fees of $24,945.
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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3. EVALUATION AND EXPLORATION ASSETS (continued)
Crevier
Following the acquisition of the James Bay property, the Company has established that its focus will be the development of the James Bay property in Northern Ontario. The Company does not intend to conduct any exploration and / or development work on the Crevier property in the foreseeable future. Given the above and the significant amount of investments that would be required to potentially establish economic resources at Crevier, the Company proceeded with writing-down to nil during the three months ended June 30, 2016 its investments in the project, thus estimating no recoverable value of the Crevier property. The write-down resulted in the reversal of the deferred income tax liability and a corresponding deferred income tax recovery was recorded during the three months ended June 30, 2016.
The Company has a non-expiring right to acquire an additional interest of 15% in CMI by paying in cash or in shares, at the option of the Company, $750,000 to the non-controlling shareholder.
Prairie Lake
The Company incurred claims-related expenses of $52,700 during the nine-months ended September 30, 2016. In February 2016, the Company terminated its option on the property with the claim owners and has therefore writtendown to nil its costs incurred on the property, thus estimating no recoverable value of the Prairie Lake property.
Ikungu and Ikungu East
MDN Tanzania applied for the extension of prospecting licences on two of its permits, in April 2015 and in June 2016. The extension applications have not yet been approved. Although the Company believes that the extensions will be obtained, there is no assurance that such extensions will be granted to MDN Tanzania.
On May 10, 2016, the Company advised Sichuan Xinye Investment Corporation of Mining and Exploration (“XINYE”) that it was terminating the Heads of Agreement (“HOA”) entered into in September 2015, as the parties did not succeed in concluding a definitive agreement under the terms of the HOA. Given the termination of the HOA and that the Company does not anticipate conducting any exploration work on these properties in the foreseeable future, the Company proceeded with writing-down to nil during the three months ended June 30, 2016 its investments in the Tanzanian properties, thus estimating no recoverable value of the Ikungu and Ikungu East properties.
Following the completion of the due diligence period and in accordance with the HOA, XINYE paid to MDN in January 2016 an amount of US$200,000, which included an amount of US$75,000 as reimbursement of transactionrelated expenses and a break fee of US$125,000. Following the termination of the HOA, the Company agreed to return the amount of US$125,000 to XINYE, which amount was paid on August 10, 2016. The difference of $96,878 (US$75,000) was presented as a reduction of management and administration expenses in Note 7.
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
At September 30, 2016, accounts payable and accrued liabilities included a provision of $144,000 related to the April 2015 notice of assessment issued by Revenu Québec (Note 9), a remaining retirement allowance of $25,000 payable to the Company’s former CFO on the anniversary date of his retirement, being May 26, 2017, and various payables and accruals in Tanzania ($7,252) and in Canada ($203,706).
5. SHARE CAPITAL AND WARRANTS
Issued and fully paid
On September 20, 2016, the Company proceeded with the consolidation of its common shares on a 1 for 5 basis. The number of shares, warrants, options and loss per share data presented in these condensed interim consolidated financial statements have all been adjusted to reflect the impact of this share consolidation.
At September 30, 2016, the Company had 31,141,501 issued and outstanding common shares (22,931,501 at December 31, 2015).
Issuance of shares
On August 4, 2016, the Company completed a non-brokered private placement of 7,180,000 shares at a price of $0.25 per share for gross proceeds of $1,795,000. As part of the private placement, the Company granted 500,000 compensation warrants exercisable into 500,000 common shares at an exercise price of $0.30 per share expiring on July 5, 2019. The fair value of the compensation warrants, estimated at $109,418 and presented as share issue expenses, was measured based on the Black-Scholes option pricing model, using a risk-free interest rate of 0.54%, an expected life of 3 years, an annualized volatility of 73% and a dividend rate of 0%. The underlying expected volatility was determined by reference to historical data of the Company’s share price over the expected life of the warrants. Other issue expenses of $156,006 consisted of legal, consulting and regulatory expenses.
On June 22, 2016, the Company issued 1,000,000 of its common shares as consideration for the acquisition of the James Bay niobium property (Note 3). These shares were valued at an amount of $350,000 using the June 21, 2016 closing price of the Company’s shares.
Warrants
At September 30, 2016, the Company had 500,000 issued and outstanding compensation warrants, granted as part of the August 4, 2016 non-brokered private placement (nil at December 31, 2015). The compensation warrants are exercisable at a price of $0.30 per unit until July 5, 2019.
On July 17, 2016, 736,349 share purchase warrants exercisable at a price of $0.55 per unit expired unexercised (736,349 outstanding share purchase warrants at December 31, 2015).
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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6. STOCK OPTIONS
The following table sets out the activity in stock options:
Three months ended September 30, Nine months ended September 30, 2016 2016
Weighted Weighted average exercise average exercise Number price ($) Number price ($)
Options, beginning of period 1,112,000 0.36 726,000 0.40 Granted 44,800 0.63 464,800 0.37 Exercised (30,000) (0.25) (30,000) (0.25) Expired (8,000) (1.25) (42,000) (1.04)
Options, end of period 1,118,800 0.37 1,118,800 0.37
In September 2016, the Company granted a total of 44,800 stock options to a consultant. These will vest over 2 years. The options have a five year term and are exercisable at a price of $0.625 per share. On the grant date, the market price of the Company’s shares was $0.625. The fair value of the stock options was estimated at $0.37 per option by applying the Black-Scholes option pricing model, using an expected time-period of 5 years, a semi-annual weighted-average risk-free interest rate of 0.7%, a volatility rate of 72% and a 0% dividend factor.
In June 2016, the Company granted a total of 390,000 stock options to its directors, officers and consultants. A total of 215,000 stock options vested on the grant date and 175,000 stock options will vest over 2 years. The options have a five year term and are exercisable at a price of $0.35 per share. On the grant date, the market price of the Company’s shares was $0.35. The fair value of the stock options was estimated at $0.19 per option by applying the Black-Scholes option pricing model, using an expected time-period of 5 years, a semi-annual weighted-average riskfree interest rate of 0.6%, a volatility rate of 68% and a 0% dividend factor.
In March 2016, the Company granted a total of 30,000 stock options to a consultant. These will vest over 2 years. The options have a five year term and are exercisable at a price of $0.275 per share. On the grant date, the market price of the Company’s shares was $0.275. The fair value of the stock options was estimated at $0.19 per option by applying the Black-Scholes option pricing model, using an expected time-period of 5 years, a semi-annual weightedaverage risk-free interest rate of 0.7%, a volatility rate of 90% and a 0% dividend factor.
The underlying expected volatility of all option grants was determined by reference to historical data of the Company’s share price over the expected stock option life. No special features inherent to the stock options granted were incorporated into the measurement of fair value.
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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6. STOCK OPTIONS (continued)
The following table reflects the stock options issued and outstanding at September 30, 2016:
Number of Remaining
outstanding contractual
Range of exercise prices
options life
(years)
$0.05 - $0.99
1,070,800 3.8
$1.00 - $1.99
32,000 3.0
$2.00 - $2.50
16,000 3.9
1,118,800 3.8
7. MANAGEMENT AND ADMINISTRATION EXPENSES
The Company incurred the following management and administration expenses:
Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015
$ $ $ $
Wages and consulting 111,245 67,285 272,822 205,751 Legal, audit and tax 24,386 19,900 64,632 126,804 Office 27,192 17,909 66,563 55,200 Investor relations and travel 53,914 3,849 87,491 39,689 Reporting issuer costs 9,501 2,713 55,096 22,010 Recovery of expenses (Note 3) - - (96,878) - Mining titles management 1,909 1,254 8,405 2,177 228,147 112,910 458,131 451,631 Share-based remuneration (26,534) 727 59,007 30,056 Amortization of property and equipment 2,578 1,646 7,785 4,938 204,191 115,283 524,923 486,625
Niobay Metals Inc. (formerly MDN Inc.) Notes to Condensed Interim Consolidated Financial Statements September 30, 2016 (unaudited - in Canadian dollars)
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8. SEGMENTED INFORMATION
The Company has one reportable operating segment being the acquisition and exploration of mineral properties. Non-current assets are located as follows:
September 30, 2016 Canada Tanzania Total $ $ $
Accounts receivable - 91,912 91,912 Property and equipment 21,698 26,966 48,664 Exploration and evaluation assets 484,931 - 484,931
506,629 118,878 625,507
December 31, 2015
Canada
Tanzania Total $ $ $
Accounts receivable - 101,633 101,633 Property and equipment 23,417 32,604 56,021 Exploration and evaluation assets 3,486,134 4,152,000 7,638,134
3,509,551 4,286,237 7,795,788
9. CONTINGENCIES
Tanzania Revenue Authority (“TRA”)
MDN Tanzania received notices of assessment in April and June 2016 in respect of withholding taxes, claiming an amount of approximately $300,000 plus accrued interest of approximately $600,000. No provision has been recorded in these condensed interim consolidated financial statements as management believes that it has always paid its withholding taxes in accordance with local requirements and that the amounts claimed are unfounded. MDN Tanzania intends to vigorously defend its position with the Tanzanian tax authorities.
Revenu Québec
Following an audit of the tax credits relating to resources claimed by and paid to Crevier Minerals Inc. for the years 2010, 2011 and 2012, Revenu Québec issued in April 2015 a notice of assessment for an amount of $370,517, stipulating that certain expenses were not eligible for such tax credits relating to resources.
Despite its disagreement with the notice of assessment, the Company recorded a specific provision of $144,000 presented as accounts payable and accrued liabilities at September 30, 2016 and December 31, 2015.
