manera capital corp. · “new chris” or “ncm” means new chris minerals ltd., a corporation...
TRANSCRIPT
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FILING STATEMENT
OF
MANERA CAPITAL CORP.
With respect to a Proposed Qualifying Transaction
for the Acquisition of all of the issued and outstanding shares of New Chris
Minerals Ltd.
October 28, 2016
Neither the TSX Venture Exchange Inc. (the “Exchange”) nor any securities regulatory authority has in any
way passed upon the merits of the Qualifying Transaction described in this Filing Statement.
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TABLE OF CONTENTS DEFINITIONS .............................................................................................................................................................. 4 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS ............................................................................ 9 CURRENCY ............................................................................................................................................................... 12 FORWARD LOOKING STATEMENTS ................................................................................................................... 12 INFORMATION RELATING TO NEW CHRIS ....................................................................................................... 12 DATE OF INFORMATION........................................................................................................................................ 13 SUMMARY ................................................................................................................................................................ 13 RISK FACTORS ......................................................................................................................................................... 16
Completion of the Acquisition and the Financing ................................................................................................... 16 Title Matters, Surface Rights and Access Rights .................................................................................................... 18 Infrastructure ........................................................................................................................................................... 18 Environmental Risks ............................................................................................................................................... 19 Reliance on Key Employees .................................................................................................................................... 19 Conflicts of Interest ................................................................................................................................................. 19 Permits and Licenses ............................................................................................................................................... 20 Contractual Risk ...................................................................................................................................................... 21 Unforeseen Expenses .............................................................................................................................................. 21
INFORMATION CONCERNING MANERA ............................................................................................................ 21 Corporate Structure ................................................................................................................................................. 21 General Development of the Business .................................................................................................................... 21 Selected Consolidated Financial Information and Management’s Discussion and Analysis .................................. 22 Description of the Securities ................................................................................................................................... 22 Stock Option Plan .................................................................................................................................................... 22 Prior Sales ............................................................................................................................................................... 23 Stock Exchange Price .............................................................................................................................................. 24 Arm’s Length Transaction ....................................................................................................................................... 24 Legal Proceedings ................................................................................................................................................... 24 Auditor, Transfer Agent and Registrar .................................................................................................................... 24 Material Contracts ................................................................................................................................................... 24
THE ACQUISITION ................................................................................................................................................... 25 The Acquisition ....................................................................................................................................................... 25 Acquisition Agreement............................................................................................................................................ 26 Escrow Restrictions ................................................................................................................................................. 28 Directors and Management ..................................................................................................................................... 29 Financing ................................................................................................................................................................. 29
INFORMATION CONCERNING NEW CHRIS ....................................................................................................... 29 Corporate Structure ................................................................................................................................................. 29 General Development of the Business .................................................................................................................... 30 Three Year History .................................................................................................................................................. 30 Tatogga Property ..................................................................................................................................................... 30 New Nanik Property ................................................................................................................................................ 98
INFORMATION CONCERNING THE RESULTING ISSUER ................................................................................ 99 Corporate Structure ................................................................................................................................................. 99 Narrative Description of the Business of the Resulting Issuer ................................................................................ 99 Description of the Securities ................................................................................................................................. 100 Pro Forma Consolidated Capitalization ................................................................................................................. 100 Available Funds and Principal Purposes ............................................................................................................... 102 Dividends .............................................................................................................................................................. 103 Principal Securityholders ...................................................................................................................................... 103 Directors and Officers ........................................................................................................................................... 103 Management .......................................................................................................................................................... 105 Promoter Consideration ......................................................................................................................................... 106 Corporate Cease Trade Orders or Bankruptcies .................................................................................................... 106
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Penalties or Sanctions ............................................................................................................................................ 106 Personal Bankruptcies ........................................................................................................................................... 106 Conflicts of Interest ............................................................................................................................................... 106 Investor Relations Arrangements .......................................................................................................................... 110 Options to Purchase Securities .............................................................................................................................. 110 Auditor, Transfer Agent and Registrar .................................................................................................................. 112 Sponsorship ........................................................................................................................................................... 112 Experts................................................................................................................................................................... 113 Other Material Facts .............................................................................................................................................. 113 Board Approval ..................................................................................................................................................... 113
SCHEDULES
SCHEDULE “A”
Audited Financial Statements of Manera for the years ended May 31, 2016 and 2015
SCHEDULE “B”
Management’s Discussion & Analysis of Manera for the years ended May 31, 2016 and 2015
SCHEDULE “C”
Audited Financial Statements of New Chris for the years ended December 31, 2015, 2014 and 2013
SCHEDULE “D”
Interim Financial Statements of New Chris for the period ended June 30, 2016
SCHEDULE “E”
Pro Forma Statement of Financial Position of Resulting Issuer
CONSENTS AND CERTIFICATES
CONSENTS OF GEOLOGISTS IN RESPECT OF THE TATOGGA REPORT
CONSENT OF MANERA AUDITOR
CONSENT OF NEW CHRIS AUDITOR
CERTIFICATE OF MANERA
CERTIFICATE OF NEW CHRIS
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DEFINITIONS
“Acquisition” means the acquisition by Manera of all of the issued and outstanding shares of New Chris, which will
constitute Manera’s Qualifying Transaction in accordance with the CPC Policy.
“Acquisition Agreement” means the acquisition agreement dated June 30, 2016 as amended on October 18,
2016 among Manera, New Chris, Wildville Enterprises and Mehra, pursuant to the terms of which Manera is
acquiring all of the issued and outstanding shares of New Chris.
“Affiliate” means a Person or Company that is affiliated with another Person or Company as described below. A
Company is an “Affiliate” of another Company if:
(a) one of them is the subsidiary of the other, or
(b) each of them is controlled by the same Person or Company.
A Company is a subsidiary of another Company if the Company is controlled by that other Company. A Company is
“controlled” by a Person if:
(a) voting securities of the Company are held, other than by way of security only, by or for thebenefit
of that Person, and
(b) the voting securities, if voted, entitle the Person to elect a majority of the directors of the
Company.
A Person beneficially owns securities that are beneficially owned by:
(a) a Company controlled by that Person, or
(b) an Affiliate of that Person or an Affiliate of any Company controlled by that Person.
“Associate” when used to indicate a relationship with a Person or Company, means
(a) an Issuer of which the Person or Company beneficially owns or controls, directly or indirectly,
voting securities entitling the Person or Company to more than 10% of the voting rights attached
to outstanding securities of the Issuer,
(b) any partner of the Person or Company,
(c) any trust or estate in which the Person or Company has a substantial beneficial interest or in
respect of which a Person or Company serves as trustee or in a similar capacity,
(d) in the case of a Person, a relative of that Person, including
(i) the spouse or adult interdependent partner of that Person,
(ii) a relative of the Person's spouse or adult interdependent partner if the relative has the
same home as that Person,
(iii) another Person who has the same home as, and is in a conjugal relationship with, that
Person;
but
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(e) where the Exchange determines that two Persons shall, or shall not, be deemed to be Associates
with respect to a Member firm, Member corporation or holding company of a Member
corporation, then such determination shall be determinative of their relationships in the application
of Rule D of the Rule Book of the TSX Venture Exchange with respect to that Member firm,
Member corporation or holding company.
“BCBCA” means the Business Corporations Act (British Columbia) S.B.C. 2002 c.57, as amended, including the
regulations promulgated thereunder.
“Board” means the board of directors of Manera.
“Change of Control” includes situations where after giving effect to the contemplated transaction and as a result of
such transaction:
(a) any one Person holds a sufficient number of the Voting Shares of the Issuer or Resulting Issuer to
affect materially the control of the Issuer or Resulting Issuer, or
(b) any combination of Persons, acting in concert by virtue of an agreement, arrangement,
commitment or understanding hold in total a sufficient number of the Voting Shares of the Issuer
or Resulting Issuer to affect materially the control of the Issuer or Resulting Issuer;
where such Person or combination of Persons did not previously hold a sufficient number of Voting Shares to affect
materially the control of the Issuer or Resulting Issuer. In the absence of evidence to the contrary, any Person or
combination of Persons acting in concert by virtue of an agreement, arrangement, commitment or understanding,
holding more than 20% of the Voting Shares of the Issuer or Resulting Issuer is deemed to materially affect the
control of the Issuer or Resulting Issuer.
“Closing” means the concurrent completion of the Acquisition and the Financing.
“Closing Date” means the date on which the Closing occurs.
“Company” unless specially indicated otherwise, means a corporation, incorporated association or organization,
body corporate, partnership, trust, association or other entity other than an individual.
“Completion of the Qualifying Transaction” means the date the Final Exchange Bulletin is issued by the
Exchange.
“Control Person” means any Person that holds or is one of a combination of Persons that holds a sufficient number
of any of the securities of an Issuer so as to affect materially the control of that Issuer, or that holds more than 20%
of the outstanding Voting Shares of an Issuer except where there is evidence showing that the holder of those
securities does not materially affect the control of the Issuer.
“CPC” means a corporation:
(a) that has been incorporated or organized in a jurisdiction in Canada;
(b) that has filed and obtained a receipt for a preliminary CPC prospectus from one or more of the
securities regulatory authorities in compliance with the CPC Policy; and
(c) in regard to which the Completion of the Qualifying Transaction has not yet occurred.
“CPC Escrow Agreement” means the escrow agreement dated March 20, 2014 among Manera, the Escrow Agent
and the Principals.
“CPC Policy” means Policy 2.4 – Capital Pool Companies of the Corporate Financial Manual of the Exchange.
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“Escrow Agent” means Computershare Investor Services Inc., the registrar and transfer agent of Manera.
“Escrow Agreement” means the escrow agreement to be entered into in conjunction with the Acquisition in
accordance with the Escrow Policy among Manera, the Escrow Agent, Mehra, Wildville Enterprises and the
Property Optionors.
“Escrow Policy” means Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions of the
Corporate Financial Manual of the Exchange.
“Exchange” or “TSX-V” means the TSX Venture Exchange Inc.
“Filing Statement” means this filing statement dated October 28, 2016.
“Final Exchange Bulletin” means the bulletin issued by the Exchange following the Closing which evidences the
final Exchange acceptance of the Acquisition.
“Financing” means an offering of the following:
(a) 16,000,000 Units of Manera at a price of $0.15 per Unit; and
(b) 600,000 Flow-Through Manera Shares at a price of $0.20 per share.
“Flow-Through Manera Shares” means previously unissued Manera Shares issued on a flow-through basis
pursuant to the Income Tax Act (Canada), with the subscription proceeds to be used to incur Qualifying Expenses
under the Income Tax Act (Canada), with such Qualifying Expenses to be renounced to the subscribers.
“Insider” if used in relation to an Issuer, means:
(a) a director or officer of the Issuer;
(b) a director or officer of a Person or Company that is itself an Insider or subsidiary of the Issuer;
(c) a Person or Company that has beneficially ownership of, or control or direction over, directly or
indirectly, securities of an Issuer carrying more than 10% of the voting rights attached to all the
Issuer's outstanding voting securities, excluding, for the purpose of the calculation of the
percentage held, any securities held by the Person or Company as underwriter in the course of a
distribution;
(d) an Issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for so
long as it continues to hold that security;
(e) a Person designated as an Insider in an order made by the Alberta Securities Commission;
(f) a Person that is in a prescribed class of Persons;
“Issuer” means a Company and its subsidiaries which have any of its securities listed for trading on the Exchange,
and in this Filing Statement means Manera, as the context requires.
“Manera” means Manera Capital Corp., a corporation incorporated under the BCBCA and having its common
shares listed on the Exchange under the trading symbol “MEA.P”.
“Manera Options” means options to purchase Manera Shares, pursuant to the Stock Option Plan.
“Manera Securities” means an aggregate of 38,351,948 shares in the capital of Manera to be issued in accordance
with the terms of the Acquisition Agreement.
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“Manera Shares” means the common shares in the capital of Manera.
“MD&A” means management’s discussion and analysis, as such term is defined in National Instrument 51-102 –
Continuous Disclosure Obligations.
“Mehra” means Ashwath Mehra, one of the New Chris shareholders.
“Member” means a member of the Exchange as defined in the TSX Venture Exchange Rules.
“Named Executive Officer” means each of the following individuals:
(a) a chief executive officer;
(b) a chief financial officer;
(c) each of the three most highly compensated executive officers, or the three most highly
compensated individuals acting in a similar capacity, other than the chief executive officer and
chief financial officer, at the end of the most recently completed financial year whose total
compensation was, individually, more than $150,000, for that financial year; and
(d) each individual who would be a Named Executive Officer under paragraph (c) but for the fact that
the individual was neither an executive officer of the company, nor acting in a similar capacity, at
the end of that financial year.
“New Chris” or “NCM” means New Chris Minerals Ltd., a corporation incorporated under the BCBCA.
“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects, and the companion
policies and forms thereto, as amended from time to time.
“Non Arm’s Length Party” means in relation to a Company, (i) a promoter, officer, director, other Insider or
Control Person of that Company and any Associates or Affiliates of any of such Persons, or (ii) another entity, or an
Affiliate of that entity, if that entity or its Affiliate have the same promoter, officer, director, Insider or Control
Person as the Company. In relation to an individual, it means any Associate of the individual or any Company of
which the individual is a promoter, officer, director, Insider or Control Person.
“Non Arm’s Length Qualifying Transaction” means a proposed Qualifying Transaction where the same party or
parties or their respective Associates or Affiliates are Control Persons in both the CPC and in relation to the
Significant Assets which are to be the subject of the proposed Qualifying Transaction. The Acquisition described in
this Filing Statement is not a Non Arm’s Length Qualifying Transaction.
“Party” means a party to the Acquisition Agreement, being Manera, New Chris, Wildville Enterprises and Mehra,
and “Parties” means all of them.
“Person” means a Company or individual.
“Principals” means Alfredo De Lucrezia, Maurizio Grande, John Pallot, Gordon Kettleson, Leo Savino and Ben
Colangelo.
“Pro Group” means:
(a) subject to subparagraphs (b), (c), and (d) “Pro Group” shall include, either individually or as a
group:
(i) the Member;
(ii) employees of the Member;
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(iii) partners, officers and directors of the Member;
(iv) Affiliates of the Member; and
(v) Associates of any parties referred to in subparagraphs (i) through (iv).
(b) the Exchange may, in its discretion, include a Person or party in the Pro Group for the purposes of
a particular calculation where the Exchange determines that the Person is not acting at arm’s
length to the Member;
(c) the Exchange may, in its discretion, exclude a Person from the Pro Group for the purposes of a
particular calculation whether the Exchange determines that the Person is acting at arm’s length of
the Member;
(d) the Member may deem a Person who would otherwise be included in the Pro Group pursuant to
subparagraph (a) to be excluded from the Pro Group where the Member determines that:
(i) the Person is an Affiliate or the Associate of the Member acting at arm’s length of the
Member;
(ii) the Associate or Affiliate has a separate corporate and reporting structure;
(iii) there are sufficient controls on information flowing between the Member and the
Associate or Affiliate; and
(iv) the Member maintains a list of such excluded Person.
“Property Option Agreements” means:
(a) in respect of the Tatogga Property, the option agreement among New Chris and the Property
Optionors dated June 13, 2011 and amended March 25, 2014, June 10, 2016 and October 18,
2016; and
(b) in respect of the New Nanik Property, the option agreement dated April 24, 2012 among New
Chris, Richard Billingsley and Gaye Richards, as amended March 20, 2014, June 1, 2016 , June
10, 2016 and October 18, 2016.
“Property Optionors” means Richard Billingsley, Gaye Richards and 0886260 B.C. Ltd.
“Qualifying Transaction” means a transaction where a CPC acquires Significant Assets other than cash, by way of
purchase, amalgamation, merger or arrangement with another company or by other means, and in this Filing
Statement means the Acquisition.
“Red Cloud” means Red Cloud Klondike Strike Inc.
“Resulting Issuer” means the Issuer that was formerly a CPC that exists upon the issuance of the Final Exchange
Bulletin, and in this Filing Statement means Manera following completion of the Acquisition.
“SEDAR” means System for Electronic Document Analysis and Retrieval, being the official database and
associated website at www.sedar.com that provides access to most public securities documents and information filed
by Issuers and investment funds with the Canadian Securities Administrators (CSA).
“Significant Assets” means the assets, business, property or interest therein, being purchased, optioned or otherwise
acquired in connection with the Qualifying Transaction, and in this Filing Statement means the issued and
outstanding shares of New Chris.
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“Sponsor” has the meaning specified in the Exchange Sponsorship Policy.
“Sponsorship Policy” means Policy 2.2 – Sponsorship and Sponsorship Requirements of the Corporate Finance
Manual of the Exchange.
“Stock Option Plan” means the stock option plan of Manera, as amended from time to time, as described at
“Information Concerning Manera – Stock Option Plan”.
“Tatogga Report” means the independent National Instrument 43-101 report entitled “Technical Report on the
Tatogga Lake Gold/Copper Project, British Columbia, Canada” dated August 12, 2016 prepared for New Chris and
Manera by Qualified Persons Cornelis A. Dekker, Pr.Sci.Nat. and Clinton P. Smyth, P. Geo.
“Termination Date” means the date on which the Acquisition Agreement terminates in accordance with its terms.
“Transfer Agent” means Computershare Investor Services Inc.
“Units” means the units being offered pursuant to the Financing, with each Unit consisting of one Manera Share and
one-half (1/2) of a share purchase warrant, with each whole share purchase warrant to entitle the holder to purchase
one additional Manera Share at a price of $0.20 for a period of two years from Closing.
“Voting Share” means a security of an Issuer that:
(a) is not a debt security, and
(b) carries a voting right either under all circumstances or under some circumstances that have
occurred and are continuing.
“Wildville Enterprises” means Wildville Enterprises Pty. Ltd. as Trustee for the McMullen Family Trust, one of
the New Chris shareholders.
Words importing the masculine shall be interpreted to include the feminine or neuter and the singular to include the
plural and vice versa where the context so requires.
Certain additional terms are defined within the body of this Filing Statement and in such cases will have the
meanings ascribed thereto.
GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS
The following is a glossary of certain technical terms used in this Filing Statement:
“Ag” means Silver.
“Alteration” means any change in the mineralogical composition of a rock that is brought about by physical or
chemical means, especially by the action of hydrothermal solutions. Also, a secondary, i.e. supergene change in a
rock or mineral.
“Argillaceous” means containing, made of, or resembling, clay; clayey.
“Assay” means in economic geology, to analyze the proportions of metal in a soil, rock or overburden sample; to
test an ore or mineral for composition, purity, weight or other properties of commercial interest.
“Assessment Work” means the amount of work, specified by mining law, that must be performed each year in order
to retain legal control of mining claims.
“Au” means Gold.
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“Azimuth” means the horizontal angular deviation, in degrees, from a reference direction, usually cardinal north.
“Bedrock” means solid rock underlying surficial deposits.
“Breccias” means rock in which angular fragments are surrounded by a mass of finer-grained material.
“Carbonate” means a rock composed principally of calcium carbonate (CaCO3).
“Chalcopyrite” means copper iron sulphide mineral (CuFeS2), a common copper ore.
“Claim” means a portion of land held either by a prospector or a mining company. In British Columbia, claims are
now acquired using the Mineral-Titles Online system, which allows for selection of either individual or multiple
adjoining grid cells, each cell ranging in size from approximately 21 hectares (457 by 463 metres) in the south of the
province to approximately 16 hectares (400 by 400 metres) in the north of the province.
“Clastic” means a sedimentary rock composed of fragments from pre-existing rock.
“Diorite” means an igneous rock that is of a “salt and pepper” appearance and is composed primarily of
sodium/calcium feldspar and mafic minerals with little or no quartz.
“Dip” means the angle in degrees at which a stratum is inclined from the horizontal.
“Dyke” means a tabular body of igneous rock cross cutting the host strata at a high angle.
“Facies” means a rock or stratified body distinguished from others by its appearance or composition.
“Fault” means a fracture in a rock along which there has been relative movement between the two sides either
vertically or horizontally.
“Feldspar” means a group of common sodium-potassium-calcium aluminosilicate minerals.
“Fold” means a bend in strata or any planar structure.
“Fracture” means breaks in rocks due to intensive folding, faulting or other stresses.
“g/t” means grams per tonne.
“g” means gram.
“Gabbro” means a dark, usually coarse-grained igneous rock composed chiefly of plagioclase feldspare, pyroxene,
and often olivine.
“Gangue” means commercially valueless rock or other matter in which metal or mineral ores are found.
“Host” means a rock or mineral that is older than rocks or minerals introduced into it.
“Hydrothermal” means precipitated from hot-water solutions circulating through a magma or through rocks
proximal to or associated with an igneous intrusion.
“Intrusion” means the process of emplacement of magma in a pre-existing rock.
“km” means a kilometre.
“m” means metre.
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“Mafic” means pertaining to or denoting dark coloured rocks composed mainly of ferromagnesian minerals such as
pyroxene and olivine.
“Metamorphic” means rocks that have experienced profound textural/physical and chemical changes due to
subjection to heat and pressure generally imposed at depth below the surface.
“Mineral” means a naturally occurring substance having particular physical properties and chemical composition
and, if formed under favourable conditions, a definite crystal form.
“Mineralization” means a concentration of mineral/chemical compounds bearing economically important metals or
elements within a body of rock.
“Monzonite” means a granualar igneous rock composed of approximately equal amounts of plagioclase and
orthoclase, with composition intermediate between syenite and diorite.
“Option” means an agreement to acquire an ownership interest in a mineral property, either in whole or in part
(subject generally to the buyer completing, within a particular timeframe, some combination of work commitments,
cash, and share payments) between the property vendor and a third party.
“Outcrop” means an exposure of bedrock at the surface, with no soil or other matter on it.
“Pluton” means a generally coarser-grained body of igneous rock formed at some depth beneath the surface of the
earth, from the slow cooling and consolidation of magma.
“Porphyry” means an igneous rock of “porpyritic texture” comprised of larger crystals of quartz or feldspar minerals
contained and dispersed within a finer groundmass of minerals. Porphyries are important hosts to copper,
molybdenum, silver and gold mineralization.
“ppb” means parts per billion (one ppb = 1,000 ppm). Commonly used to designate gold values in soil assays.
“ppm” means parts per million (one ppm = one g/t. 10,000 ppm = 1%). Commonly used to designate silver values
in soil assays.
“Pyrite” means a mineral composed of iron and sulphur (FeS2).
“Quartz” means a mineral composed of silicon dioxide (SiO2).
“Schist” means any of various medium-grained to coarse-grained metamorphic rocks composed of laminated, often
flaky, parallel layers of chiefly micaceous minerals.
“Sediment” means solid material that has settled down from a state of suspension in a liquid. More generally, solid
fragmental material transported and deposited by wind, water or ice, chemically precipitated from solution, or
secreted by organisms, and that forms in layers in loose unconsolidated form.
“Strike” means direction or trend of a geologic structure, measured in degrees of azimuth, generally from cardinal
north.
“Sulphide” means a group of minerals in which one or more metals are found in combination with sulphur.
“Tonne” means 1,000 kilograms in the metric system (1 tonne = approx. 2,200 pounds).
“Tuff” means a rock composed of compacted volcanic ash varying in size from fine sand to coarse gravel.
“Vein” means an irregular, sheet or lens-like body hosted within a larger volume of rock, resulting from the filling
of fissures or cracks by quartz, and often containing mineralization.
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“Volcanic” means generally finer-grained rocks that result from the rapid cooling of magma erupted onto the surface
of the earth by volcanic activity.
“>” means greater than.
CURRENCY
Unless otherwise indicated, all references to “$” or “dollars” in this Filing Statement refer to Canadian dollars.
Manera’s accounts are maintained in Canadian dollars.
FORWARD LOOKING STATEMENTS
The information provided in this Filing Statement, including information incorporated by reference, may contain
“forward-looking statements” or “forward-looking information” (collectively referred to hereafter as “forward-
looking statements”) about Manera and/or New Chris. In addition, Manera and/or New Chris may make or approve
certain statements in future filings with Canadian securities regulatory authorities, in press releases, or in oral or
written presentations by representatives of Manera and/or New Chris that are not statements of historical fact and
may also constitute forward-looking statements.
All statements, other than statements of historical fact, made by Manera and/or New Chris that address activities,
events or developments that Manera and/or New Chris expects or anticipates will or may occur in the future are
forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words
such as “may”, “will”, “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”,
“plans”, “intends”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, or the negative of those
words or other similar or comparable words. Forward-looking statements may relate to expected use of proceeds,
future financial conditions, results of operations, plans, objectives, performance or business developments, including
the costs of exploration and development activities and programs, timing of, completion and success of exploration
and development activities and programs at the Tatogga Property. These statements speak only as of the date they
are made and are based on information currently available and on the then current expectations of Manera and/or
New Chris and assumptions believed to be reasonable concerning future events, economic conditions and
governmental approvals, which are subject to a number of known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements to be materially different from that which was expressed
or implied by such forward-looking statements. See “Risk Factors”.
Consequently, all forward-looking statements made in this Filing Statement and other documents of Manera and/or
New Chris are qualified by such cautionary statements and there can be no assurance that the anticipated results or
developments will actually be realized or, even if realized, that they will have the expected consequences to or
effects on Manera and/or New Chris. The cautionary statements contained or referred to in this section should be
considered in connection with any subsequent written or oral forward-looking statements that Manera and/or New
Chris and/or persons acting on their behalf may issue. Manera and/or New Chris undertake no obligation to update
or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required by applicable law.
INFORMATION RELATING TO NEW CHRIS
The information contained or referred to in this Filing Statement relating to New Chris has been furnished by New
Chris. In preparing this Filing Statement, Manera relied upon New Chris to ensure that the Filing Statement contains
full, true and plain disclosure of all material facts relating to New Chris. Although Manera has no knowledge that
would indicate that any statements contained herein concerning New Chris are untrue or incomplete, neither
Manera nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such
information or for any failure by New Chris to ensure disclosure of events or facts that may have occurred which
may affect the significance or accuracy of any such information.
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DATE OF INFORMATION
Except as otherwise indicated in this Filing Statement, all information disclosed in this Filing Statement is as of
October 28, 2016 and the phrase “as of the date hereof” and equivalent phrases refer to October 28, 2016.
SUMMARY
The following is a summary of information related to Manera, New Chris and the Resulting Issuer (assuming
completion of the Acquisition and the Financing) and should be read together with the more detailed information
and financial data and statements contained elsewhere in this Filing Statement. Certain capitalized words and terms
used in this Summary are defined in the Glossary.
The Parties
Manera is a CPC listed on the Exchange. The head office of Manera is located at 423 East 10th
Street, North
Vancouver, British Columbia, V7L 2E5. The registered and records offices of Manera are located at Suite 1710 –
1177 West Hastings Street, Vancouver, British Columbia, V6E 2L3. See “Information Concerning Manera” for
further information.
New Chris is a private holding company having interests in properties located in the Skeena and Omineca Mining
Divisions in British Columbia. See “Information Concerning New Chris” for further information.
The Acquisition
Pursuant to the Acquisition Agreement, Manera will acquire all of the issued and outstanding shares of New Chris.
The Acquisition is by way of the purchase of all of the issued and outstanding shares of New Chris from Mehra and
Wildville Enterprises pursuant to the terms of the Acquisition Agreement entered into by the Parties, the
consideration to consist of the following:
(a) the issuance of a total of 38,351,948 Manera Shares to Mehra, Wildville Enterprises and the
Property Optionors;
(b) Manera making staged cash payments to Mehra and Wildville Enterprises totaling $656,500 over
two years (including $206,500 on account of shareholder loans, to be paid at Closing); and
(c) Manera making staged cash payments to the Property Optionors totaling $575,000 over four years.
Upon completion of the Acquisition, the Resulting Issuer will have acquired all of the issued and outstanding shares
of New Chris. The Acquisition is subject to certain conditions, including the completion of the Financing and
Manera obtaining all necessary regulatory approvals, including the acceptance of the Exchange.
For more detailed information regarding the Acquisition, see “The Acquisition”.
The Financing
The Financing consists of the offering of 16,000,000 Units and 600,000 Flow-Through Manera Shares. Finders’
fees totaling $83,905 in cash and the issuance of 496,033 finder warrants will be paid in connection with investors
introduced to Manera by various finders.
Manera has received an exemption from the Exchange to waive the requirement to engage a Sponsor pursuant to the
Sponsorship Policy.
Please see “The Acquisition – Financing” for additional information.
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Directors and Officers
In connection with the Acquisition, all of the current directors and officers of Manera, with the exception of John
Pallot (currently a director), will resign in favour of nominees of New Chris. New Chris’s nominees for directors, in
addition to John L. Pallot, are Ashwath Mehra, Kevin M. Keough, Charles J. Greig and Taj Singh. Ashwath Mehra
will be appointed Chairman, Kevin Keough will be appointed President and Chief Executive Officer, Charles Greig
will be appointed Vice-President Exploration, Tracy Albert will be appointed Chief Financial Officer and Shaun
Drake will be appointed Corporate Secretary.
Please see “The Acquisition – Directors and Management” and “Information Concerning the Resulting Issuer –
Directors, Officers and Promoters” for additional information.
Interest of Insiders, Promoters or Control Persons
As of the date of this Filing Statement, Insiders and former Insiders of Manera currently hold 4,097,000 Manera
Shares, 4,000,000 of which were issued at a price of $0.05 per Manera Share and are held in escrow pursuant to the
CPC Escrow Agreement. See “Information Concerning the Resulting Issuer – Escrowed Securities” for additional
information.
In accordance with the CPC Policy, all 4,000,000 Manera Shares purchased by the Principals prior to Manera’s
initial public offering are subject to the CPC Escrow Agreement. Upon Completion of the Qualifying Transaction,
10% of the shares subject to the CPC Escrow Agreement will be released and the remaining Manera Shares held in
escrow will be released in six equal tranches of 15% every six months following the date of the Final Exchange
Bulletin.
On completion of the Acquisition and the Financing, and assuming the conversion of no convertible securities,
Mehra and Wildville Enterprises will hold 26,851,948 Manera Shares, representing approximately 42.72% of the
issued and outstanding Manera Shares.
See “Information Concerning the Resulting Issuer – Escrowed Securities” and “Pro-Forma Capitalization” for
additional information.
Arm’s Length Transaction
Manera and New Chris have determined that the Acquisition is not a Non Arm’s Length Qualifying Transaction
within the meaning of the CPC Policy.
Available Funds
Upon Closing of the Acquisition and the Financing, the Resulting Issuer will have approximately $2,636,095 of
estimated funds available, comprised of $200,000 in Manera’s working capital as of the Closing and $2,520,000 in
gross proceeds from the Financing less $83,905 in finders fees.
The principal purpose of such funds, after giving effect to the Acquisition and for the 12 months thereafter, will be
for, among other things, working capital and future exploration activities on its mineral properties, primarily
exploration activities on the Tatogga Property as recommended in the Tatogga Report. It is anticipated that the
Resulting Issuer will use such funds as follows:
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Description Budgeted Expenditures
Estimated general and administrative expenses over the 12 months following the
Closing Date $493,000
Exploration costs on the Tatogga Property $1,386,000
Payments to Mehra, Wildville Enterprises and the Property Optionors $531,500(1)
Unallocated working capital $225,595
Total $2,636,095
Note:
(1) The following payments will be made:
(a) $206,500 to Mehra and Wildville Enterprises on Closing to satisfy outstanding shareholder
loans owed to them by New Chris
(b) $200,000 to Mehra and Wildville Enterprises twelve months from Closing ($100,000 to each)
(c) $100,000 to the Property Optionors in respect of the Tatogga property ($50,000 on Closing,
with an additional $50,000 to be paid twelve months from Closing)
(d) $25,000 to be paid to the Property Optionors in respect of the New Nanik property twelve
months from Closing
Total $531,500
See “Information Concerning the Resulting Issuer – Available Funds and Principal Purposes” for more information.
Market for Securities
The Manera Shares are listed on the Exchange with the trading symbol “MEA.P”. The price of the Manera Shares
on the last day the Manera Shares traded prior to the announcement of the Acquisition on June 30, 2016 was $0.10
(on June 10, 2016). Trading in the Manera Shares was halted in accordance with the CPC Policy on July 4, 2016.
Reinstatement to trading is expected to occur once Manera completes the Acquisition See “Information
Concerning Manera – Stock Exchange Price” for more information.
Upon completion of the Acquisition, the Manera Shares will continue to be listed on the Exchange as shares of the
Resulting Issuer under the trading symbol “MEA”. See “Information Concerning Manera” for more
information.
There is no public market for the New Chris Shares.
Sponsor
Pursuant to the Sponsorship Policy, sponsorship is required in conjunction with a Qualifying Transaction. Manera
has received an exemption from the Exchange from the sponsorship requirement on the basis that the Qualifying
Transaction is generally in compliance with relevant standards and guidelines applicable in the Sponsorship Policy.
Please see “Information Concerning the Resulting Issuer – Sponsorship”.
Conflicts of Interest
The directors and officers of Manera and New Chris are involved in other private and public companies and
projects, including companies actively acquiring and exploring natural resource properties in British Columbia and
elsewhere. As such, conflicts of interest may from time to time arise between the business of Manera and the other
businesses or projects in which they are or may become involved. Please see “Information Concerning the
Resulting Issuer – Conflicts of Interest”.
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For information concerning the director and officer positions held by the proposed directors and officers of the
Resulting Issuer, see “Information Concerning the Resulting Issuer – Other Reporting Issuer Experience”.
Interests of Experts
To the best of New Chris’s and Manera’s knowledge, no direct or indirect interest in Manera or New Chris is held or
will be received by any experts. See “Information Concerning the Resulting Issuer – Experts” for more information.
Risk Factors
Shares of the Resulting Issuer will be a high risk, speculative investment. Manera at present has no businesses or
assets, other than that which remains of the proceeds of the initial public offering. Manera has no history of
earnings, it has not paid any dividends and it is unlikely to pay any dividends in the immediate or foreseeable future.
Manera is and will be subject to certain risk factors which should be carefully considered in connection with the
review of the Acquisition. See “Risk Factors” for a more detailed description of the risk factors.
Additionally, there are certain risks that the Resulting Issuer will face in its normal course of business following
completion of the Acquisition, which include, but are not limited to, the following: (i) capitalization and
commercial viability risks; (ii) current global financial condition risks; (iii) exploration and development risks; (iv)
title and access risks; (v) First Nation rights and title risks; (vi) infrastructure risks; (vii) competition risks; (viii)
environmental risks; (ix) key employee risks; (x) conflict of interest risks; (xi) permits and licenses risks; (xii) no
history of earnings risks; (xiii) negative operating cash flow risks; (xiv) uninsurable risks; (xv) litigation risks; (xvi)
contractual risks; (xvii) force majeure risks; and (xviii) unforeseen expense risks.
Exchange Acceptance
The Exchange has conditionally accepted the Acquisition and the Financing, subject to Manera fulfilling all of the
requirements of the Exchange on or before December 29, 2016.
RISK FACTORS
The Resulting Issuer’s securities should be considered high risk and speculative due to the nature of the Resulting
Issuer’s business. An investor should consider carefully the risk factors set out below. In addition, investors should
carefully review and consider all other information contained in this Filing Statement before making an investment
decision. An investment in securities of the Resulting Issuer should only be made by persons who can afford a
significant or total loss of their investment.
An investment in the Manera Shares and the shares of the Resulting Issuer should be considered highly speculative,
not only due to the nature of Manera’s existing and proposed business and operations, but also because of the
uncertainty related to completion of each of the Acquisition and the Financing, and the business of the Resulting
Issuer, if they are not completed. In addition to the other information in this Filing Statement, an investor should
carefully consider each of, and the cumulative effect of, the following factors, which assume the completion of each
of the Acquisition and the Financing.
Completion of the Acquisition and the Financing
There are risks associated with the Acquisition and the Financing including (i) market reaction to these matters and
the future trading prices of the shares of the Resulting Issuer cannot be predicted; (ii) uncertainty as to whether these
matters will have a positive impact on the entities involved in the transactions; and (iii) there is no assurance that
required approvals will be received.
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The completion of the Acquisition and the Financing is subject to several conditions under the Acquisition
Agreement. See “The Acquisition – Conditions to the Acquisition”. In the event that any of those conditions are not
satisfied or waived, the Acquisition and the Financing may not be completed.
Capitalization and Commercial Viability
The Resulting Issuer will require additional funds to further explore and, conditional upon exploration success,
potentially develop and mine its properties. The Resulting Issuer has limited financial resources, and there is no
assurance that additional funding will be available to it to carry out the completion of all proposed activities, for
additional exploration, or for financing the high-cost development typically required to place a property into
commercial production. Although both Manera and New Chris have in the past been successful in obtaining
financing through the sale of equity securities, there can be no assurance that the Resulting Issuer will in future be
able to obtain adequate financing on acceptable terms. Failure to obtain additional financing could result in the
delay or indefinite postponement of further exploration and development of its properties, the loss of part or all of its
ownership position in its properties, and declines in the price of the Resulting Issuer’s securities.
While, upon completion of the Offering, the Resulting Issuer will have sufficient financial resources to undertake
the recommended Stage 1 exploration program in respect of the Tatogga Property, the Resulting Issuer will in future
require additional funds to further explore and develop the Tatogga Property and its other property assets.
Current Global Financial Conditions
Global financial conditions have in recent years been, and continue to be, subject to heightened instability and
increased volatility. Numerous financial institutions have experienced losses and either gone into bankruptcy or had
to be rescued by governmental authorities. Access to public capital markets for junior exploration companies has
at times been restricted and/or cut off entirely, as credit markets froze following financial sector losses from sub-
prime mortgages and the collapse of the asset-backed commercial paper market. These factors may negatively
impact the ability of the Resulting Issuer to in future obtain equity or debt financing on terms favourable to the
Resulting Issuer, if at all. If these increased levels of volatility and market turmoil continue, the Resulting Issuer’s
operations could be adversely impacted and the value and the price of the shares of the Resulting Issuer could
decline.
Exploration and Development
Mineral exploration and development involves a high degree of risk. Very few properties which are explored,
ultimately develop into producing mines.
The Resulting Issuer’s properties do not presently contain mineral “resources” or “reserves”, as those terms are
defined in National Instrument 43-101, nor is there any guarantee that they ever shall. The process of confirming, or
alternatively disproving, the presence of resources or reserves on the Resulting Issuer’s properties will require
following an exploration and development pathway comprised of sequential steps, the execution of each of which is
fraught with risk and predictated on successful results from the step immediately prior to it. Failure at any step
generally, though not always, puts an end to exploration or development activities. As the exploration and
development pathway is followed, the metal or mineral content of the area under exploration is quantified and
assessed to an increasing degree of certainty, generally by increasing the density of drilling and the amount of
sampling and assaying, coupled with volume and grade modelling. With increasing certainty comes, initially,
“Inferred” level resources, followed by resources in the “Indicated” and “Measured” categories, none of which have
demonstrated economic viability. Only through the later application of technical (metallurgical, mining, processing,
environmental etc.) and economic parameters appropriate to the resources under study, and the completion of pre-
feasibility and ultimately, feasibility studies by qualified geologists, engineers and geoscientists, can resources
potentially be converted to “reserves” (“ore”), which by definition would be potentially economic to mine and
process, under the technical and economic criteria utilized in the feasibility study or studies applied to them. These
steps and activities are costly. Should ore reserves ultimately be demonstrated to exist on the Resulting Issuer’s
properties, a positive decision to take the ore reserves thus demonstrated to commercial production would not be a
given. In addition to the steps and studies detailed above, a positive production decision would require
environmental approvals, the securing of various permits, and consideration and evaluation of additional factors
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including, but not limited to: (1) the cost of construction of production facilities; (2) the availability and cost of
financing; (3) anticipated ongoing costs of production; (4) market prices for the minerals to be produced; (5)
environmental compliance regulations and restraints (including potential environmental liabilities associated with
historical exploration activities); and (6) the political climate and/or governmental regulation and control.
The ability of the Resulting Issuer to sell, and profit from the sale of any eventual production from any of the
Resulting Issuer’s properties will be subject to the prevailing conditions in the marketplace at the time of sale. Many
of these factors are beyond the control of the Resulting Issuer and therefore represent a market risk which could
impact the long term viability of the Resulting Issuer and its operations.
Title Matters, Surface Rights and Access Rights
While the Resulting Issuer has performed its own due diligence with respect to title of the Tatogga and New Nanik
Properties, this should not be construed as a guarantee of title. The Tatogga and New Nanik Properties may be
subject to prior unregistered agreements of transfer or indigenous land claims, and title may be affected by
undetected defects. Until any such competing interests have been determined, there can be no assurance as to the
validity of title of the Tatogga and New Nanik Properties and any other mining or property interests derived from or
in replacement or conversion of or in connection with the claims comprising the Tatogga and New Nanik Properties
or the size of the area to which such claims and interests pertain.
Although the Resulting Issuer acquires the rights to some or all of the minerals in the ground subject to the tenures
that it acquires, or has a right to acquire, it does not thereby acquire any rights to, or ownership of, the surface to the
areas covered by its mineral tenures. In such cases, applicable mining laws usually provide for rights of access to the
surface for the purpose of carrying on mineral exploration and development activities, however, the enforcement of
such rights can be costly and time consuming. In areas where there are local populations or land owners, it is
necessary, as a practical matter, to negotiate surface access. There is a risk that local communities or affected groups
may take actions to delay, impede or otherwise terminate the contemplated activities of the Resulting Issuer. There
can be no guarantee that the Resulting Issuer will be able to negotiate a satisfactory agreement with any such
existing landowners/occupiers for such access, and therefore it may be unable to carry out significant exploration
and development activities. In addition, in circumstances where such access is denied, or no agreement can be
reached, the Resulting Issuer may need to rely on the assistance of local officials or the courts in such jurisdiction,
which assistance may not be provided or, if provided, may not be effective. There can be no assurance that the
Resulting Issuer will be successful in acquiring any such rights.
First Nation Rights and Title
The nature and extent of First Nation rights and title remains the subject of active debate, claims and litigation in
Canada and including with respect to intergovernmental relations between First Nation authorities and federal,
provincial and territorial authorities. There can be no guarantee that such claims will not cause permitting delays,
unexpected interruptions or additional costs for the Resulting Issuer’s projects.
Infrastructure
Mining, processing, development and exploration activities depend, to one degree or another, on adequate
infrastructure. Reliable roads, bridges, power sources and water supply are important determinants which affect
capital and operating costs. The Resulting Issuer’s properties lie in remote areas with limited infrastructure. In
addition, unusual or infrequent weather phenomena, terrorism, sabotage, government or other interference in the
maintenance or provision of such infrastructure could adversely affect operations on these properties and the
Resulting Issuer’s operations, financial condition and results of operations.
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Competition
The mining industry is highly competitive. Many of the Resulting Issuer’s competitors for the acquisition,
exploration and development of mineral properties, and for capital to finance such activities, will include
companies that have greater financial and personnel resources available to them than the Resulting Issuer.
Environmental Risks
All phases of the exploration and mining business present environmental risks and hazards and are subject to
environmental regulation pursuant to a variety of international conventions and provincial and municipal laws and
regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills,
releases or emissions of various substances produced in association with mining operations. The legislation also
requires that mines and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of
applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach
may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is
evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and
potentially increased capital expenditures and operating costs. Environmental assessments of proposed projects carry
a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance
with changes in governmental regulations has the potential to reduce the profitability of operations.
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions
thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed,
and may include corrective measures requiring capital expenditures, installation of additional equipment, or
remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or
damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of
applicable laws or regulations and, in particular, environmental laws.
Amendments to current laws, regulations and permits governing operations and activities of mineral resource
companies, or more stringent implementation thereof, could have a material adverse impact on the Resulting Issuer
and cause increases in capital expenditures or production costs or reduction in levels of production at any future
producing properties or require abandonment or delays in the development of new mining properties.
Reliance on Key Employees
The success of the Resulting Issuer will be largely dependent upon the performance of its management and key
employees. In assessing the risk of an investment in the shares of the Resulting Issuer, potential investors should
realize that they are relying on the experience, judgment, discretion, integrity and good faith of the proposed
management of the Resulting Issuer. The Resulting Issuer does not maintain life insurance policies in respect of its
key personnel. The Resulting Issuer could be adversely affected in the event such individuals do not remain with the
Resulting Issuer. See also “Information Concerning the Resulting Issuer – Directors and Officers” and “Information
Concerning the Resulting Issuer – Management”.
Conflicts of Interest
Concurrent with their roles with the Resulting Issuer, certain of the directors and officers of the Resulting Issuer
including Mr. Ashwath Mehra, proposed Chairman, Kevin M. Keough, proposed President & CEO, Charles J.
Greig, proposed Vice President, Exploration, Tracy K. Albert, proposed Chief Financial Officer, and Shaun A.
Drake, proposed Corporate Secretary, will be engaged in, and will continue to be engaged in, either individually or
with other directors and officers of the Resulting Issuer, other business activities on their own behalf and on behalf
of other companies, including mineral resource companies active in gold exploration in British Columbia. Kevin
Keough and Charles Greig are presently co-owners of Skyline Gold Corp., a private company established in 2015,
with mineral properties also located in the Golden Triangle of northern B.C., although well removed from the
Resulting Issuer’s flagship Tatogga Property. Further, Mr. Greig as a well-regarded geologist has for years run a
20
consulting geological practice, C.J. Greig & Associates, with multiple current clients active in B.C. mineral
exploration in the Golden Triangle and elsewhere.
As a result of these and other activities, directors and officers of the Resulting Issuer may become subject to
conflicts of interest. The directors and officers of the Resulting Issuer intend to avoid the potential for such conflicts
by 1) limiting the number of other mineral resource companies active in B.C. with which they are involved, 2)
applying and respecting, robust ‘areas of interest’ around existing properties in the property portfolios of the
companies with which they are involved, 3) ensuring that any property acquistion opportunities (whether by staking
or optioning) that they may become aware of are first brought to the attention of and/or offered to, the company
whose existing properties are closest to the new opportunities, and 4) ensuring shareholders, the general public, and
fellow officers and directors of the Resulting Issuer are aware of these varied corporate relationships.
In the event that a director or senior officer of the Resulting Issuer believes the potential for a conflict exists, in
accordance with the BCBCA the director or senior officer will disclose his or her interest in such property, contract,
agreement or engagement and shall refrain from voting on any matter in respect of such property, contract,
agreement or engagement.
To the knowledge of the proposed management of the Resulting Issuer, as at the date of this Filing Statement there
are no existing or potential material conflicts of interest between the Resulting Issuer and a proposed director or
officer of the Resulting Issuer except as otherwise disclosed in this Filing Statement.
Permits and Licenses
The operations of the Resulting Issuer will require various licenses and permits from various government authorities
which are or may be granted subject to various conditions and may be subject to renewal from time to time. There
can be no assurance that the Resulting Issuer will be able to comply with such conditions and obtain or retain all
necessary licenses and permits that may be required to carry out exploration, development and mining operations at
its projects. Failure to comply with these conditions may render the licenses liable to forfeiture.
The activities of the Resulting Issuer are subject to government approvals, various laws governing prospecting,
development, land resumptions, production taxes, labour standards and occupational health, mine safety, toxic
substances and other matters, including issues affecting local First Nation populations. Although the Resulting
Issuer believes that its activities are currently carried out in accordance with all applicable rules and regulations, no
assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will
not be applied in a manner which could limit or curtail exploration, production or development. Amendments to
current laws and regulations governing operations and activities of exploration and mining, or more stringent
implementation thereof, could have a material adverse impact on the business, operations and financial performance
of the Resulting Issuer. Further, the exploration and mining licenses and permits issued in respect of its projects may
be subject to conditions which, if not satisfied, may lead to the revocation of such licenses. In the event of
revocation, the value of the Resulting Issuer’s investments in such projects may decline.
No History of Earnings
The Resulting Issuer has no history of earnings, and there is no assurance that any of its mineral properties will
generate earnings, operate profitably or provide a return on investment in the future. The Resulting Issuer expects to
incur losses and negative operating cash flow for the foreseeable future as it conducts its exploration activities on its
properties. The Resulting Issuer has not paid dividends in the past and has no plans to pay dividends for the
foreseeable future. The future dividend policy of the Resulting Issuer will be determined by its directors.
Negative Operating Cash Flow
Since inception, the Resulting Issuer has had negative operating cash flow and incurred losses. The negative
operating cash flow and losses are expected to continue for the foreseeable future. The Resulting Issuer may never
achieve positive operating cash flow.
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Uninsurable Risks
In the course of exploration, development and production of mineral properties, several risks and, in particular,
unexpected or unusual geological or operating conditions, may occur. It is not always possible to fully insure against
such risks, and the Resulting Issuer may decide not to take out insurance against such risks as a result of high
premiums or other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and
result in an increase in costs and a decline in value of the securities of the Resulting Issuer.
The Resulting Issuer is not insured against most environmental risks. Insurance against environmental risks
(including potential liability for pollution or other hazards as a result of the disposal of waste products occurring
from exploration and production) has not been generally available to companies within the industry. The Resulting
Issuer periodically evaluates the cost and coverage of the insurance against certain environmental risks that is
available to determine if it would be appropriate to obtain such insurance. Without such insurance, and if the
Resulting Issuer becomes subject to environmental liabilities, the payment of such liabilities would reduce or
eliminate its available funds or could exceed the funds the Resulting Issuer has to pay such liabilities and result in
bankruptcy. Should the Resulting Issuer be unable to fully fund the remedial cost of an environmental problem it
might be required to enter into interim compliance measures pending completion of the required remedy.
Litigation Risk
Litigation risks to the Resulting Issuer may include, but are not limited to, contesting development or regulatory
approvals, traditional title claims, land tenure disputes, environmental claims, and occupational health and safety
claims.
Contractual Risk
The Resulting Issuer will become a party to various contracts and it is always possible that contracts to which it is a
party will not be fully performed by other contracting parties.
Force Majeure
The Resulting Issuer’s projects now or in the future may be adversely affected by risks outside the control of the
Resulting Issuer, including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods,
explosions or other catastrophes, epidemics or quarantine restrictions.
Unforeseen Expenses
While the Resulting Issuer is not aware of any expenses that may need to be incurred that have not been taken into
account, if such expenses were subsequently incurred, the expenditure proposals of the Resulting Issuer may be
adversely affected.
INFORMATION CONCERNING MANERA
Corporate Structure
Manera was incorporated under the BCBCA on September 9, 2013. The head office of Manera is located at 423 East
10th
Street, North Vancouver, British Columbia, V7L 2E5, and the registered and records offices of Manera are
located at Suite 1710 – 1177 West Hastings Street, Vancouver, British Columbia, V6E 2L3. Manera is a reporting
issuer in the provinces of British Columbia and Alberta and the Manera Shares are listed for trading on the
Exchange under the trading symbol “MEA.P”. Manera has no subsidiaries.
General Development of the Business
Manera is a CPC pursuant to the CPC Policy. The sole business of Manera since its incorporation has been to
identify and evaluate opportunities for the acquisition of an interest in assets or businesses, and once identified and
22
evaluated, to negotiate an acquisition or participation so as to complete a Qualifying Transaction. Manera does not
have any business operations or assets other than cash, and currently has no written or oral agreements in principle
for the acquisition of an asset or business other than the Acquisition Agreement. Upon completion of the Acquisition
and the Financing, the Manera Shares will continue to be listed on the Exchange as a Tier 2 Mining Issuer under its
existing name “Manera Capital Corp.“ and trading symbol “MEA”. (Manera has announced its intention to seek,
immediately after the Closing, shareholder approval to change its name to “GT Gold Corp.”.)
Selected Consolidated Financial Information and Management’s Discussion and Analysis
Since incorporation, Manera has incurred the following operating costs in carrying out its initial public offering, in
seeking, evaluating and negotiating potential Qualifying Transactions and in meeting the disclosure obligations
imposed upon it as a reporting issuer in the provinces of British Columbia and Alberta.
The following is a summary of selected financial information for Manera for the periods indicated, which should be
read in conjunction with the audited annual statements of Manera for the years ended May 31, 2016 and 2015
included as Schedule “A” to this Filing Statement.
Manera’s Financial Statements are presented in Canadian dollars and its financial statements for the years ended
May 31, 2016 and 2015 have been prepared in accordance with IFRS.
Year Ended May 31, 2016
(audited)
Year Ended May 31, 2015
(audited)
Total Expenses $106,033 $102,895
Amounts deferred in connection with
the Qualifying Transaction $Nil $Nil
Management’s Discussion and Analysis
Manera’s management’s discussion and analysis for the years ended May 31, 2016 and 2015 are attached to this
Filing Statement as Schedule “B”, and should be read in conjunction with Manera’s audited consolidated financial
statements and the notes thereto for the years ended May 31, 2016 and 2015, also attached to this Filing Statement
as Schedule “A”.
Description of the Securities
The authorized capital of Manera consists of an unlimited number of Manera Shares without par value. As at the
date of this Filing Statement, there are 7,850,000 Manera Shares issued and outstanding. The holders of the Manera
Shares are entitled to vote at all meetings of holders of Manera Shares, to receive dividends if, as and when declared
by the directors and to participate rateably in any distribution of property or assets upon the liquidation, winding-up
or other dissolution of Manera. The Manera Shares carry no pre-emptive rights, conversion or exchange rights, or
redemption, retraction, repurchase, sinking fund or purchase fund provisions. There are no provisions requiring a
holder of Manera Shares to contribute additional capital and no restrictions on the issuance of additional
securities by Manera. There are no restrictions on the repurchase or redemption of Manera Shares by Manera except
to the extent that any such repurchase or redemption would render Manera insolvent.
Stock Option Plan
Manera has adopted a “rolling” Stock Option Plan which provides that the number of Manera Shares reserved for
issuance will not exceed 10% of the issued and outstanding Manera Shares at the time of grant and provided that for
so long as Manera remains classified as a CPC the number of Manera Shares reserved for issuance under the Stock
Option Plan will not exceed 10% of the number of issued and outstanding Manera Shares as of the closing of its
initial public offering. The options granted under the Stock Option Plan comply with the rules and regulations of the
Exchange regarding share incentive arrangements. The purpose of the Stock Option Plan is to attract and retain
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employees, consultants, officers and directors to Manera and to motivate them to advance the interests of Manera by
affording them with the opportunity, through share options, to acquire an equity interest in Manera and benefit from
its growth.
The Stock Option Plan authorizes the Board to grant, in its absolute discretion, stock options to directors, officers,
employees or consultants on such terms, limitations, conditions and restrictions as it deems necessary and advisable.
Under the Stock Option Plan, the number of Manera Shares reserved for issuance to any one individual in a 12
month period may not exceed 5% of the issued and outstanding Manera Shares and the number of Manera Shares
reserved for issuance to consultants may not exceed 2% of the issued and outstanding Manera Shares. The Stock
Option Plan contains no vesting requirements except as to options granted to persons engaged in Investor Relations
Activities (as defined in the Stock Option Plan), but permits the Board to specify a vesting schedule at its discretion.
Manera Options may be granted for a maximum term of ten years. Manera Options may be exercised the greater of
the term of the option and 90 days following cessation of the optionee’s position with Manera, provided that if the
cessation of office, directorship, consulting arrangement or employment is by reason of death, the option may be
exercised within a maximum period of one year after such death, subject to the earlier expiry date of such option. In
the situation of options granted to persons engaged in Investor Relations Activities, the options granted to this
individual will expire 30 days following the optionee ceasing to provide such services.
The exercise price of any options granted under the Stock Option Plan will be determined by the Board, in its
discretion, but shall not be less than the closing price of the Manera Shares on the day preceding the date of grant,
less any discount permitted by the Exchange. Manera Options granted under the Stock Option Plan shall not be
subject to any resale restrictions imposed by the Exchange unless granted to directors or officers or at the maximum
discount permitted by the Exchange.
Manera Options are non-assignable and non-transferable (subject to options being exercisable by the optionee’s
heirs or administrator). The number of Manera Shares reserved for option and the exercise price payable for the
Manera Shares subject to such option shall be adjusted appropriately in the event of any consolidation, subdivision,
conversion or exchange of the Manera Shares. The Stock Option Plan requires annual shareholder approval.
Any Manera Shares acquired pursuant to the exercise of options prior to the Closing Date until the issuance of the
Final Exchange Bulletin must be deposited in escrow.
Prior Sales
Since the date of incorporation, 7,850,000 Manera Shares have been issued as follows:
Date Number of
Manera Shares
Issue Price per
Common Share
($)
Aggregate Issue
Price
($)
Consideration
Received
($)
September 9, 2013 1(1)
0.05 0.05 0.05
February 28, 2014 3,999,999(1)
0.05 199,999.95 199,999.95
August 28, 2014 3,500,000(2)
0.10 350,000.00 350,000.00
August 26, 2016 350,000(3)
0.10 35,000.00 35,000.00
Total: 7,850,000 585,000.00 585,000.00
Notes:
(1) Placed in escrow pursuant to the CPC Escrow Agreement in accordance with the Escrow Policy. See
“Information concerning the Resulting Issuer – Escrowed Securities”.
(2) Issued in connection with Manera's initial public offering.
(3) Issued pursuant to the exercise by P I Financial Corp. of the Compensation Options issued in connection
with Manera’s initial public offering
24
Stock Exchange Price
The Manera Shares have been listed and posted for trading on the Exchange since August 28, 2014. The following
table sets out the high and low trading of the Manera Shares for the periods indicated as reported by the Exchange:
Quarter High
($)
Low
($)
Close
($) Volume
Sept. 1, 2014 to Nov. 30, 2014 0.130 0.110 0.110 37,500
Dec. 1, 2014 to Feb. 28, 2015 0.110 0.100 0.100 90,000
March 1, 2015 to May 31, 2015 0.105 0.090 0.100 52,500
June 1, 2015 to Aug. 31, 2015 0.120 0.040 0.090 68,000
Sept. 1, 2015 to Nov. 30, 2015 N/A N/A N/A Nil
Dec. 1, 2015 to Feb. 29, 2016 0.100 0.100 0.100 10,000
Month High $ Low $ Close $ Volume
March 2016 0.110 0.085 0.110 40,000
April 2016 N/A N/A N/A Nil
May 2016 0.090 0.090 0.090 15,000
June 2016 0.100 0.100 0.100 15,000
July 4, 2016 to Present Trading Halted
Trading of Manera Shares on the Exchange commenced on August 28, 2014.
The Manera Shares were halted on July 4, 2016 pending the announcement of Manera's Qualifying Transaction. The
last trade of the Manera Shares prior to the trade halt was on June 10, 2016 at a price of $0.10.
Arm’s Length Transaction
The Acquisition is not a Non-Arm’s Length Qualifying Transaction.
Legal Proceedings
Manera is not involved in any legal proceedings and no such proceedings are known to Manera to be contemplated.
Auditor, Transfer Agent and Registrar
The auditor of Manera is Davidson & Company LLP, Chartered Professional Accountants, 1200 – 609 Granville
Street, Vancouver, British Columbia, V7Y 1G6. The registrar and transfer agent of the Manera Shares is
Computershare Investor Services Inc., 3rd Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9.
Material Contracts
The following are the material contracts of Manera that are outstanding as of the date of this Filing Statement:
(a) Acquisition Agreement. See “The Acquisition – The Acquisition” for further particulars;
(b) CPC Escrow Agreement dated March 20, 2014 between Manera, the Principals and the Escrow
Agent;
25
(c) Escrow Agreement dated October 28, 2016 among Manera, Mehra, Wildville Enterprises, the
Property Optionors and the Escrow Agent. See “Information Concerning the Resulting Issuer –
Escrow Securities” for further particulars;
(d) Advisory Agreement dated July 7, 2016 among Manera, New Chris and Red Cloud. See “The
Acquisition – The Acquisition” for further particulars; and
(f) Stock Option Agreements with certain directors and officers, each dated August 28, 2014.
Copies of the contracts specified may be inspected without charge at the offices of Manera, during normal business
hours until the Closing Date and for a period of 30 days thereafter.
THE ACQUISITION
The Acquisition
The parties to the Acquisition are Manera, New Chris, Mehra and Wildville Enterprises. The Acquisition is an
Arm’s Length Transaction as neither New Chris, Mehra nor Wildville Enterprises has any relationship to Manera or
its Affiliates and Associates, and Manera has no relationship to either New Chris, Mehra or Wildville Enterprises or
any of their Affiliates and Associates.
Pursuant to the terms of the Acquisition Agreement, Manera has agreed to purchase all of the issued and outstanding
shares of new Chris from Mehra and Wildville Enterprises for the following consideration:
(a) Manera will make a non-refundable cash payment of $10,000 to New Chris following the
execution of the Acquisition Agreement upon receipt of acceptance from the Exchange for the
making of said payment;
(b) Manera will issue 26,851,948 Manera Shares at a deemed price of $0.10 per share as follows:
(i) 13,426,447 shares to Wildville Enterprises;
(ii) 13,425,501 shares to Mehra;
(c) Manera will issue an additional 11,500,000 Manera Shares to the Property Optionors at a deemed
price of $0.10 per share as follows:
(i) Richard Billingsley – 3,850,000 shares;
(ii) Gaye Richards – 3,850,000 shares; and
(iii) 0886260 B. C. Ltd. – 3,800,000 shares;
(d) at Closing, Manera shall deliver to New Chris an aggregate of $206,500, such funds to be paid by
New Chris to Wildville Enterprises and Mehra to satisfy outstanding New Chris shareholder loans;
(e) Manera shall complete a private placement of Manera Shares at a minimum price of $0.15 per
share, for gross proceeds of not less than $1,500,000;
(f) Manera will cause New Chris to pay $100,000 in cash to each of Wildville Enterprises and Mehra
12 months following the Closing, and a further $120,000 in cash to each of Wildville Enterprises
and Mehra 24 months following the Closing, and will provide New Chris with the funds to make
such payments; and
(g) Manera will provide New Chris with the funds to make cash payments to the Property Optionors
over 4 years following the Closing in the aggregate amount of $575,000 in satisfaction of the
remaining cash payments due under the Property Option Agreements.
26
Acquisition Agreement
The Acquisition will be effected in accordance with the Acquisition Agreement, a copy of which has been filed by
Manera on SEDAR at www.sedar.com as a material document. The Acquisition Agreement contains certain
representations and warranties made by each of (i) Manera and (ii) New Chris in respect of the assets, liabilities,
capital, financial position and operations of Manera and New Chris, respectively. In addition, each of Manera and
New Chris provide covenants which govern the conduct of their operations and affairs prior to the completion of the
Acquisition. The Acquisition Agreement contains a number of conditions precedent to the obligations of the Parties
thereunder. Unless all of such conditions are satisfied or waived by the Party or Parties for whose benefit such
conditions exist, to the extent they may be capable of waiver, the Acquisition will not proceed. There is no assurance
that the conditions will be satisfied or waived on a timely basis, or at all.
Covenants
Manera and New Chris have each given to the other usual and customary covenants in respect of the Acquisition
until the earlier of the Closing Date or the Termination Date to cooperate fully with each other and to use
its commercial best efforts to:
(a) assist the other Party in its efforts to complete the Acquisition;
(b) cause its board of directors to take all actions to complete the Acquisition and not take any action
contrary to or in opposition to the Acquisition;
(c) preserve Manera’s assets and carry on its business in the ordinary course, except as contemplated
by the Acquisition Agreement; and
(d) obtain the necessary approvals for the completion of the Acquisition as expeditiously as possible.
The Parties have agreed to bear their own costs in association with the Acquisition. However, the Parties have
agreed, for the purposes of completing the Acquisition, that New Chris will pay for third party costs in connection
with the Acquisition, and for certain exploration expenditures, which costs shall be reimbursed at the Closing of the
Acquisition. In the event the Acquisition is not closed, unless the Closing is a result or breach of the Acquisition
Agreement by Manera, then New Chris will be responsible for paying the costs incurred by Manera in connection
with the Acquisition Agreement.
Conditions to the Acquisition
The respective obligations of the Parties to complete the transactions contemplated by the Acquisition Agreement
are subject to a number of conditions which must be satisfied or waived in order for the Acquisition to be completed.
There is no assurance that these conditions will be satisfied or waived on a timely basis or at all. The following
significant conditions, in addition to other conditions, are contained in the Acquisition Agreement:
(a) Manera completing the Financing;
(b) the Board and Manera shareholders approving the Acquisition in accordance with the
requirements of the Exchange;
(c) receipt of all necessary regulatory requirements, consents, orders, negotiations and approvals,
including regulatory approvals and orders necessary or desirable for the completion of the
Acquisition, including the approval of the Exchange;
(d) there shall not be in force any order or decree restraining or enjoining the consummation of the
Acquisition or any transactions contemplated therewith; and
(e) satisfactory due diligence by each Party.
27
The obligation of Manera to complete the transactions contemplated by the Acquisition Agreement is subject to the
fulfillment or waiver of certain additional conditions, as set forth in the Acquisition Agreement, at or before the
Closing Date, including, but not limited to:
(a) material compliance by New Chris with the terms of the Acquisition Agreement;
(b) the representations and warranties of New Chris in the Acquisition Agreement as adjusted
pursuant to the Acquisition shall be true and correct in all material respects as of all relevant dates,
including the Closing Date;
(c) no material adverse change shall have occurred in the share capital, the business, results of
operations, assets, liabilities, financial condition or affairs of New Chris, financial or otherwise,
between the date of the Acquisition Agreement and the completion of the Acquisition that would
have a negative effect on the Tatogga Property or the ability of Mehra and Wildville Enterprises to
sell all of the issued and outstanding shares of New Chris to Manera in accordance with the terms
of the Acquisition Agreement;
(d) the mineral claims comprising the Tatogga Property being in good standing, free and clear of all
encumbrances and underlying interests whatsoever, except as set out in the Acquisition
Agreement, and the Property Option Agreements being in good standing, and all payments
required thereunder having been made in a timely manner, and New Chris, Mehra and Wildville
Enterprises having the exclusive right and necessary authority to enter into the Acquisition
Agreement in accordance with the terms of the Acquisition Agreement.
The obligation of New Chris to complete the transactions contemplated by the Acquisition Agreement is subject to
the fulfillment or waiver of certain additional conditions, as set forth in the Acquisition Agreement, at or before the
Closing Date, including, but not limited to:
(a) material compliance by Manera with the terms of the Acquisition Agreement;
(b) the New Chris directors approving the Acquisition Agreement;
(c) the representations and warranties of Manera in the Acquisition Agreement as adjusted pursuant to
the Acquisition shall be true and correct in all material respects as of all relevant dates, including
the Closing Date;
(d) no material adverse change shall have occurred in the share capital, the business, results of
operations, assets, liabilities, financial condition or affairs of Manera, financial or otherwise,
between the date of the Acquisition Agreement and the completion of the Acquisition;
(e) at Closing New Chris’s nominees will be appointed and will comprise the board of directors of
Manera; and
(f) at the Closing Date, there will be no Manera Options or Manera warrants outstanding in excess of
525,000 Manera Options at the exercise price of $0.10 per Manera Share exercisable as to 450,000
Manera Shares until 90 days following the Closing and 75,000 Manera Shares until August 28,
2019.
28
Representations and Warranties
The Acquisition Agreement contains representations and warranties made by each of the Parties. The assertions
embodied in those representations and warranties are solely for the purposes of the Acquisition Agreement. Certain
representations and warranties may not be accurate or complete as of any specified date because they are subject to a
standard of materiality or are qualified by a reference to the concept of an “adverse event” or “adverse change”.
Therefore, the representations and warranties in the Acquisition Agreement should not be relied on as statements of
factual information.
The Acquisition Agreement contains representations and warranties of each of the Parties relating to certain matters,
including, among other things: incorporation; absence of conflict with or violation of constating documents,
agreements or applicable laws; authority to execute and deliver the Acquisition Agreement and perform its
obligations under the Acquisition Agreement; due authorization and enforceability of the Acquisition Agreement;
composition of share capital; options or other rights for the purchase of securities; financial condition, records and
accounts; its assets, and conduct of operations; absence of litigation, judgment or order; employment matters;
reporting issuer and listing status; and matters related to the Acquisition.
Termination of the Acquisition Agreement
The Acquisition Agreement may be terminated (i) by mutual agreement of the Parties, (ii) by either of Manera or
New Chris, if the other Party has breached or are in default of a material term of the Acquisition Agreement and fail
to cure such breach or default within 30 days after receiving written notice of same from the terminating Party, (iii)
by either Manera or New Chris in the event they are notified by any applicable regulatory authority that it will not
permit the Acquisition to close; or (iv) in the event the Acquisition does not close by a date agreed to by the parties
and either Manera or New Chris advises the other Party by providing written notice of termination.
Non-Solicitation and Exclusivity
During the period commencing on the date of the Acquisition Agreement and continuing until the earlier of (i) the
Closing Date, and (ii) the Termination Date, each Party agreed that it will not, directly or indirectly, and will not
authorize or permit any representative or agent thereof to, directly or indirectly, (a) solicit, initiate, encourage,
engage in or respond to any inquiry or proposal regarding any merger, amalgamation, share exchange, business
combination, take-over bid, sale or other disposition of all or substantially all of its assets, any recapitalization,
reorganization, liquidation, material sale or issue of treasury securities or rights or interest therein or thereto or rights
or options to acquire any material number of treasury securities or any type of similar transaction which would or
could, in any case, constitute or result in a de facto change of control of either party or the disposition of
substantially all of its assets, other than the Acquisition, (b) encourage or participate in any discussions or
negotiations regarding any acquisition proposal, (c) agree to, approve or recommend an acquisition proposal, or (d)
enter into any agreement related to an acquisition proposal.
Escrow Restrictions
The Manera Securities issued pursuant to the Acquisition Agreement will be subject to escrow restrictions pursuant
to the terms of the Escrow Agreement, and will be released from escrow based upon the passage of time in
accordance with the Escrow Policy, such that 10% of the securities will be released on the date of the Final
Exchange Bulletin and the remaining escrowed securities will be released in six equal tranches of 15% every six
months thereafter. For additional information concerning the escrow restrictions applicable to the securities issued
pursuant to the Acquisition Agreement, see “Information Concerning the Resulting Issuer – Escrowed Securities”.
29
Directors and Management
In connection with the Acquisition, all of the current directors and officers of Manera, with the exception of John
Pallot (currently a director) will resign in favour of nominees of New Chris. New Chris’s nominees for director, in
addition to John Pallot, are Ashwath Mehra, Kevin Keough, Charles Greig and Taj Singh. Ashwath Mehra will be
appointed Chairman, Kevin Keough will be appointed President and Chief Executive Officer, Charles Greig will be
appointed Vice-President Exploration, Tracy Albert will be appointed Chief Financial Officer and Shaun Drake will
be appointed Corporate Secretary.
Financing
The Financing consists of 16,000,000 Units and 600,000 Flow-Through Manera Shares being sold on a non-
brokered basis, at subscription prices of $0.15 per Unit and $0.20 per Flow-Through Manera Share, respectively.
Finders fees totaling $83,905 in cash and 496,033 finder warrants will be paid in connection with the Financing.
Each finder warrant will entitle the holder to purchase one Manera Share at a price of $0.20 for a period of two years
from Closing.
In the negotiations leading up to the Financing, Manera and New Chris entered into an Advisory Agreement with
Red Cloud dated July 7, 2016, pursuant to which New Chris agreed to pay to Red Cloud on behalf of Manera a
monthly cash advisory fee of $4,000 for a period of two months ($8,000 in aggregate), which Manera has agreed to
reimburse to New Chris in the event of the closing of the Financing. In addition, in the event of the closing of the
Financing, Manera has agreed to issue to Red Cloud $4,000 worth of common shares in its capital stock in respect of
each 30 day period of service provided by Red Cloud pursuant to the Advisory Agreement, such shares to be issued
at a deemed price of $0.15 per share. As the Advisory Agreement with Red Cloud extends for two months to
September 7, 2016 and expires thereafter, Manera shall issue to Red Cloud $8,000 worth of common shares at $0.15
per share, for a total of 53,333 common shares.
Manera has received an exemption from the Exchange from the requirement to engage a Sponsor pursuant to the
Sponsorship Policy.
The proceeds of the Financing will be used primarily for expenses related to exploration work on the Tatogga
Property, for costs and expenses of the Acquisition, and for general working capital of the Resulting Issuer. Please
see “Information Concerning the Resulting Issuer – Available Funds and Principal Purposes.”
INFORMATION CONCERNING NEW CHRIS
The following information reflects the current business of New Chris. See “Information Concerning the Resulting
Issuer” for pro forma business, financial and share capital information following the conclusion of the
Acquisition.
Corporate Structure
New Chris was incorporated under the BCBCA on February 25, 2011 under the name “0903964 B.C. Ltd.”. It
changed its name to “New Chris Minerals Ltd.” effective May 2, 2011. New Chris has its operations office at 729
Okanagan Avenue East, Penticton, British Columbia, V2A 3K7. Its registered and records offices are currently
located at Suite 1710 – 1177 West Hastings Street, Vancouver, British Columbia, V6E 2L3.
30
The directors of New Chris are Michael James McMullen, an Australian citizen currently resident at Denver,
Colorado, USA, and Ashwath Mehra, of Zug, Switzerland. Its officers are Michelle McAuliffe, Corporate
Secretary, an Australian citizen resident in Perth, Australia, and Michael James McMullen, President, of Denver,
Colorado, USA.
New Chris has no subsidiaries.
General Development of the Business
New Chris is a holding company focused on acquiring, exploring and developing natural resource properties in
British Columbia.
Three Year History
Following its incorporation in 2011, New Chris entered into the Property Option Agreements covering the Tatogga
Property (2011 – subsequently amended) and New Nanik Property (2012 – subsequently amended). Since then New
Chris has acquired no further properties, but rather has focused exclusively on exploring Tatogga and New Nanik.
The Tatogga Property has been the recipient of the majority of exploration outlays.
Tatogga Property
Manera and New Chris commissioned Cornelis Dekker, Pr.Sci.Nat. and Clinton P. Smyth, P.Geo. to complete a
technical report in accordance with NI 43-101 on the Tatogga Property dated August 12, 2016 (the “Tatogga
Report”) which has been filed on SEDAR at www.sedar.com in conjunction with this Filing Statement. The
following is a summary of information contained in the Tatogga Report. This summary is qualified in its entirety by
the full Tatogga Report. Readers are encouraged to review the Tatogga Report in its entirety.
Property Description and Location
Location
The Property is located in the Stikine region of north-western British Columbia on the Klastline Plateau.
Figure 4.1_1 shows that the property is situated within an area generally referred to as the “Golden
Triangle” of British Columbia.
31
Figure 4.1_1 Location of the Property
It is located approximately 14km west of the Red Chris copper-gold mine and is just to the west of
Highway 37 and less than one kilometre west of the town of Iskut,
Mineral Rights
The Property consists of 105 contiguous claims totalling 30,755.79 hectares, as well as three small satellite
claims (see Figure 4.2_1 for outlines of the various claim blocks).
32
Figure 4.2_1 Tatogga Lake Property Claims Map
Table 4.2_1 provides details on the various claims that constitute the project area.
33
Table 4.2_1
New Chris Minerals Limited
Details of Various Claims that Constitute the Tatogga Lake Project Area
Tenure No. Claim Name Issue Date Expiry Date Area (ha)
593806
4 November 08
31 July ‘18
17.26
593807 380.09
593814 CHRIS 2 34.52
593824 CHRIS 3 431.76
593830 CHRIS 3A 17.27
593852 CHRIS 3A 17.28
593918 BOND 1 6 November ‘08 34.65
598669 RED CHRIS 2 (“Ginside”)
4 February ‘09
31 January ‘24 415.34
598683 RED CHRIS (“Gambit”) 31 January ‘18 379.34
598779 NEW AXE 2
6 February ‘09
31 July ‘18
328.21
598780 NEW AXE 1 397.08
598781 NEW AXE 3 414.74
598783 NEW AXE 4 414.82
598784 NEW AXE 5 103.70
599155 PEANUT 11 February ‘09 17.31
599156 11 February ‘09
31 July ‘18
17.30
599717 20 February ’09 432.30
602144 VIOLET EAST 05 April ‘09 103.59
666204 RED CHRIS 99
7 November ‘09
397.09
666205 RED CHRIS 100 414.35
667863 RED CHRIS WEST 1
11 November ‘09
431.37
667864 RED CHRIS WEST 2 431.36
667865 RED CHRIS WEST 3 431.32
667866 RED CHRIS WEST 4 431.60
667883 RED CHRIS WEST 5 379.40
34
Table 4.2_1
New Chris Minerals Limited
Details of Various Claims that Constitute the Tatogga Lake Project Area
667884 RED CHRIS WEST 6 431.12
667885 RED CHRIS WEST 7 431.07
667886 RED CHRIS WEST 8 430.88
667903 RED CHRIS WEST 9 430.87
667904 RED CHRIS WEST 10 430.85
667905 RED CHRIS WEST 11 413.59
667906 RED CHRIS WEST 12 431.03
667923 RED CHRIS WEST 13 431.27
667924 RED CHRIS WEST 14 431.50
667925 RED CHRIS WEST 15 431.75
667926 RED CHRIS WEST 16 431.95
667943 RED CHRIS WEST 17 431.95
667944 RED CHRIS WEST 18 432.14
667945 RED CHRIS WEST 19 432.42
667946 RED CHRIS WEST 20 398.10
667963 RED CHRIS WEST 21 430.89
667964 RED CHRIS WEST 22 431.15
667965 RED CHRIS WEST 23 431.41
667967 RED CHRIS WEST 24 103.74
730343 PEANUT 1A 18 March ‘10 121.12
743123 NEW PASS GOSSAN
8 April ‘10
431.78
743124 432.05
743162 51.83
743163 17.29
743222 259.01
743242 34.57
35
743263
190.00
743282 103.67
743283 RED CHRIS 33 432.04
743302 172.69
743322 34.57
743342 17.28
743362 17.29
743382 17.29
743422 RED CHRIS WEST 34 431.99
836165 RED CHRIS CONNECTOR 18 October ‘10 51.85
840669 NORTH RED CHRIS 2 12 December ’10 430.35
840676 NORTH RED CHRIS 1
12 December ‘10
31 July ‘18
430.46
840678 NORTH RED CHRIS 3 413.03
840679 NORTH RED CHRIS 4 430.20
840680 NORTH RED CHRIS 5 103.23
841209
19 December ‘10
430.60
841212 430.67
841214 NORTH RED CHRIS 8 430.62
841217 NORTH RED CHRIS 10 430.37
841218 NEW RED CHRIS 7 430.61
841219 258.24
841222 172.11
841224 NORTH RED CHRIS 12 413.32
841225 NORTH RED CHRIS 11 378.76
841226 NEW RED CHRIS 13 430.35
841227 NEW RED CHRIS 14 430.51
841229 NORTH RED CHRIS 15 430.29
841231 NORTH RED CHRIS 16 430.56
841232 NEW RED CHRIS 17 430.32
36
841233 NEW RED CHRIS 18
430.43
841234 NEW RED CHRIS 19 17.21
841235 NORTH RED CHRIS 20 361.40
841236 NORTH RED CHRIS 21 430.41
843538 WEST GIN 3
19 January ‘11
121.01
843543 WEST GIN 4 415.01
843550 WEST GIN 5 415.13
843551 WEST 1 17.29
843554 WEST GIN 6 173.03
843556 WEST GIN 2 34.58
844004 NORTH RED CHRIS A
22 January ‘11/
51.66
844005 NORTH RED CHRIS B 68.92
844007 NORTH RED CHRIS C 396.19
859067 RED CHRIS WEST 25
25 June ‘11
345.39
859087 RED CHRIS WEST 26 69.07
867849 LITTLE RED CHRIS 1A 25 July ‘11 16 October ‘16 17.28
918849 WEST GIN 1 19 October ‘11
31 July ‘18
432.84
1012474 RED CHRIS WEST 27
1 September ‘12
294.60
1012477 RED CHRIS WEST 28 329.45
1013105 WEST GIN 7 22 September ‘12 69.15
1015797 RED CHRIS WEST 29
8 January ‘13
467.71
1015802 RED CHRIS WEST 30 398.57
1016142 RED CHRIS WEST 32
19 January ‘13
190.66
1016147 17.33
1016150 RED CHRIS WEST 31 225.34
1016235 RED CHRIS WEST 33
23 January ‘13
138.58
1016236 RED CHRIS WEST 34 103.98
1027870 RED CHRIS WEST 29 28 April 2014 693.92
37
Ownership
NCM holds a 100% interest in the 107 mineral rights comprising the Tatogga Property listed in Table
4.2_1, subject to the terms of an underlying property Option agreement dated June 13, 2011 and amended
March 25, 2014 and June 10, 2016 with, collectively, Richard Billingsley, Gaye Richards and 0886260
B.C. Ltd. (“the Optionors”). Separately, NCM also holds a 100% interest in a second B.C. mineral
property, New Nanik, which is not the subject of this Technical Report, but is also encompassed by the
“Proposed Manera Capital Corp. Qualifying Transaction”, discussed below.
Key terms of the Tatogga Property Option Agreement as amended March 25, 2014 and June 10, 2016
include:
1. Achieve listing on the TSXV: NCM was to achieve a listing of its shares on the TSX Venture
Exchange.
2. Cash Payments: NCM must make staged cash payments to the Optionors as follows:
$25,000 on signing (paid);
$50,000 within five days of the listing date;
$50,000 on the first anniversary of the listing;
$100,000 on the second anniversary;
$100,000 on the third anniversary; and
$100,000 on the fourth anniversary.
3. Work Commitments: NCM was required to carry out $500,000 in allowable exploration work on
the Property by December 31, 2013. This requirement has been fulfilled.
4. Share Payments: NCM was to make a single issuance to the Optionors for the Tatogga Property of
8,260,870 common shares on listing.
5. NSR: Payment of a 2% Net Smelter Returns (“NSR”) royalty in the event production is achieved from
the Property. NCM may buy back 1% of the NSR for $1,500,000 within five years from the date upon
which commercial production begins.
Proposed Manera Capital Corp. Qualifying Transaction
On June 30, 2016, Manera Capital Corp. (“Manera”) (TSXV: MEA.P) entered into an agreement to acquire
New Chris Minerals Ltd. (the “NCM Agreement”). Pursuant to the NCM Agreement, Manera has agreed
to acquire 100% of the issued and outstanding shares of NCM, making NCM a wholly-owned subsidiary of
Manera, and to exercise NCM’s property options for consideration (aggregating both pre-existing NCM
obligations to the property Optionors and Manera’s obligations to New Chris shareholders) consisting of
36,351,948 common shares of Manera and staged cash payments to be made over four years totalling
$1,231,500, plus the 2% NSR royalty potentially payable in future to the property Optionors (together, the
“Purchase Price”) (the “NCM Acquisition”).
In connection with the NCM Acquisition, Manera intends to carry out the Financing (the “Manera
Financing”). Following the concurrent closing of the New Chris Acquisition and the Manera Financing
(collectively, “the Closing”), the resulting entity proposes to change its name to “GT Gold Corp.”
Subject to Exchange acceptance, the completion of the Manera Financing and the satisfaction of other
conditions contained in the NCM Agreement, Manera will:
1. Issue on Closing to the New Chris shareholders 26,851,948 Manera common shares at a deemed price
of C$0.10 per share, in satisfaction of the share issuance portion of the Purchase Price;
38
2. As further consideration make cash payments to the New Chris shareholders of (a) a non-refundable
cash deposit of C$10,000 on signing of the NCM Agreement (conditional on the acceptance of the
Exchange), (b) C$206,500 on Closing, (c) C$200,000 on the 12 month anniversary thereof, and (d) a
final payment of C$240,000 on the 24 month anniversary thereof, for an aggregate total of C$656,500,
in satisfaction of the cash payment portion of the Purchase Price;
3. Issue on Closing to the Property Optionors 11,500,000 Manera common shares at a deemed price of
C$0.10 per share in satisfaction of the share issuance portion of the property option agreements
presently held by NCM (9,760,870 of these shares relate to the Tatogga property, the remainder to the
New Nanik property), which will result in New Chris (by then a wholly owned subsidiary of Manera)
acquiring a 100% interest in both properties;
4. As further consideration to the property Optionors, make cash payments over four years totaling in
aggregate C$575,000 in satisfaction of the remaining cash payments portion of the property option
agreements ($400,000 of this amount relates to the Tatogga property, the remainder to the New Nanik
property).
None of the agreements and properties discussed above pertain to surface rights.
There are no known encumbrances or environmental liabilities to which the Tatogga property is subject.
Permitting and Work Requirements
The British Columbian mineral tenure system allows individuals and corporations to acquire mineral rights
and conduct exploration for minerals situated on crown and private land. Before registering mineral claims
electronically, the company or individual is required to register with the government and pay a fee to obtain
a Free Miner Certificate. Mineral rights are acquired by registering a mineral claim to land through an
online staking system.
The value of exploration and development required to maintain a mineral claim for one year is at least:-
$5 per hectare for each of the first and second anniversary years $4 per hectare during each of the
first, second and third anniversary years
$10 per hectare for each of the third and fourth anniversary years $8 per hectare for each subsequent
anniversary year
$15 per hectare for each of the fifth and sixth anniversary years
NCM is in possession of a drill permit for the Tatogga Lake property. No further permits are required to
conduct the work proposed in this report for the property.
The Tahltan Nation is the only First Nation with known historical rights in the region of the property. The
Nation has been fully informed of New Chris Minerals exploration activities on its properties, and has
registered no objections to these. During the five years of New Chris Minerals work on its properties, the
Talthan Nation has approved the development of the Red Chris mine, approximately 20 kilometers to the
south west of the Tatogga property.
39
New Chris Minerals Expenditures on the Property
Table 4.5_1 lists the exploration expenditures incurred on the property within the period 2011 to the date of
this report, as recorded in Assessment Reports filed with, and accepted by, the Ministry of Mines of British
Columbia.
Table 4.5_1
New Chris Minerals Ltd
NCM’s Expenditures on the Property
Calendar Year Breakdown of Expenditure (C$)
Assessment Report Exploration
2011 32,875 221,611
2012 33,764 468,736
2013 34,435 231,187
2014 35,329 272,928
2015
2016
Total – 2011-2016 136,403 1,194,462
Access, Climate, Local Resources, Infrastructure and Physiology
Access
Access to the area is gained via Highway 37, commonly referred to as the Stewart-Cassiar Highway,
approximately 500 km north from Smithers, B.C. (approximately 6 hours driving) or by taking a scheduled
air flight from Smithers to Dease Lake, approximately 80 km north of the claims. The nearest Helicopter
base is in Dease Lake. During the 2013 and 2014 seasons helicopters were stationed in Iskut to provide
support to the projects active within the area.
Climate
The climate in the area is northern temperate with moderate summers and cold winters. Typical daytime
temperature ranges are from the mid to upper 20°’s Celsius in summer and mid to lower negative 20°’s
Celsius in winter. Precipitation averages about 100cm per year. Thick accumulations of snow are common
in winter.
Fieldwork can normally start at lower elevations in early June and at the upper elevations by July. Cold
weather, winds and snow squalls make field work difficult at the upper elevations past September, although
drilling programmes have continued well into November at the nearby Red Chris property where weather
conditions are similar. North facing slopes maintain snow packs until the end of August with some cirques
maintaining permanent snow packs and glaciers.
The nearest weather station providing data is in Dease Lake. Data from this weather station are
summarised in Table 5.2_1.
40
Table 5.2_1
New Chris Minerals Ltd
Dease Lake Climate Data (Canadian Weather Office. 2013)
Parameter Unit Season
Annual Summer Fall Winter Spring
Average Temperature °C 11.7 4.2 -13.6 0.5 -0.8
Average Daily High °C 18.4 9.2 -8.8 7.2 5.0
Average Daily Low °C 5.0 -1.0 -18.2 -6.1 -6.5
Average Total Rainfall mm 163.1 68.2 2.8 30.6 264.8
Average Total Snowfall cm 0.2 21.1 154.8 42.5 218.4
Average Snow Depth cm - 1.0 40.8 31.3 21
Total Average Precipitation mm 163.2 86.5 113.1 62.6 425.5
Local Resources
The nearest full-service community is Dease Lake, approximately 70km to the north of the Property. Fuel,
air transport (fixed wing and helicopter) and groceries are available in Dease Lake.
Accommodation, meals, telephone and fax are available at Tatogga Lake Resort, 15km north-east of the
project camp site, or at Eddontenajon, 2km south of Iskut Village and 25km north-east from the camp. At
both localities there are a helicopter staging area, covered storage and local expediting services to assist in
both receiving and shipping of supplies and samples to and from Smithers. Gasoline and diesel fuel are
available at Tatogga Lake Resort and Iskut.
A nursing station, grocery store, school and the Iskut First Nation Band office are located in Iskut. Dease
Lake has a hospital, hardware and grocery store, RCMP detachment, Government of BC Forestry office,
nursing station, school, Tahltan Band office, gas station, hotel, airport and seasonal restaurant.
Both unskilled labourers and skilled personnel trained at the old Eskay Creek, Snip and Golden Bear mines
are available at nearby Iskut Village, Dease Lake and Telegraph Creek.
Infrastructure
There are many mining and exploration-related projects in Northwest British Columbia for which
supporting infrastructure has been, and continues to be, developed.
A daily freight service exists between Iskut and Smithers (375km southeast of the Property) and most
activities, except helicopter logistics, are being sourced from this town.
In addition to the Highway 37 access route to the area, a railway roadbed, including many of the required
bridges, was constructed into the area almost 30 years ago. It terminates approximately 30km east of the
Property. This was part of the B.C. Rail plan to extend track to Dease Lake. There are currently three
enterprises studying the feasibility of constructing a railway line on this roadbed to serve coal and
anthracite mines planned in the Klappan area.
The Northwest Transmission Line (“NTL”) is a 344km, 287 kV transmission constructed between the
Skeena Substation (near Terrace) and a new substation near Bob Quinn Lake (Figure 5.4_2).
41
Figure 5.4_2 The Northwest Transmission Line
A subsidiary of Imperial Metals, the owner of the Red Chris Mine, has completed a 93km extension (Iskut
Extension) from Bob Quinn to Tatogga to provide power for the mine (Figure 5.4_3). This effectively
brings the provincial power grid to the boundary of the Tatogga Lake Property.
42
Figure 5.4_3 The Northwest Transmission Line Extension
Physiography
The Tatogga Lake Project is located within the very rugged Stikine region of north-west British Columbia.
The topography on the claims is characterised by a relatively flat to rolling hills atop the plateaus and
extremely steep slopes in deeply incised, east-west oriented valleys. Elevations range from 823m above
mean sea level (“amsl”) to 2,103m amsl.
Vegetation consists primarily of poplar, alder, spruce and fir at the lower elevations but the plateaus are
almost completely above the tree-line (approximately 1,370m amsl) with plant-life dominated by subalpine
scrub and lichen-covered rock (Olfert, 1991).
History
Summary
The Tatogga Lake Project area has seen sporadic exploration over the years, the earliest useful
documentation of which dates from 1990. Table 6.1_1 provides a timeline of exploration activity reported
on the project area.
43
Table 6.1_1
New Chris Minerals Ltd
Historical Exploration Activities in the Project Area
Period Explorer Target Area
Activity
Assessment Report No.
Geophysics Mapping Prospec-
ting
Trenchs Drilling Sampling
No. No. metres Soils Sills Rocks
1959 Totem Minerals Ltd Northern Edziza Volcanics Airborne Mag. Radiometrics Yes 283
1960 Southwest Potash Corp Wolf Minfile Showing Yes See Report 21156
1960 Nuspar Resources Ltd Art Minfile Showing Yes See Report 21156
1964 Conwest Exploration GJ, QC and Horn Minfile
Showing See Report 21156
1988 Geol. Survey of Canada Regional BC Publication RGS 19, GF2003-19 and -20
1989 Teck Corp. Horn East, Quash 26 19337
1989 Noranda Exploration Quash 8 36 21 19444
1989 Ascot Resources Bond, Beauchamp Yes 97 30 19802
1990 Noranda Quash, Petal 1,491 20616
1990 Ascot Resources Pass Gossan, GoNo, Curt,
Petal-Violet 7 at
Violet 1 150.88 136 137 236 20715
1990 Chris W. Graff Quash 32 20760
1990 Ascot Bond, Beauchamp IP, Ground Mag. 425 9 80 21128
1991 Ascot GoNo, Quash, Seester IP, Ground Mag. 912 8 245 21156
1991 Noranda Quash Grnd Mag (39km), VLF-EM (19km) 21259
44
1991 Ascot Horn 61 119 21337
1991 Brooklyn Resources Saddle Gossan Yes 5 21617
1991 Yuma Gold Mines Inc. Northern Edziza Volcanics 41 8 21679
1991 Noranda Quash IP (6.9km) Yes 2 203 1 98 21832
1991 Ascot Central GoNo, Violet-Petal IP (5.6km), Ground Mag. (31km) Yes Yes Yes 2,377 75 460 21858
2010 Solitaire Minerals Ltd Bond, Beauchamp Yes Yes 64 5 32021
2011 New Chris Minerals Whole Project Area Airborne Mag and TEM (760km) Yes 32875
2012 New Chris Minerals Quash, Central, GoNo, Fossil,
Violet-Petal Airborne Mag and TEM (1,619km) 638 36 33764
2013 New Chris Minerals Quash/Pass Gossan; Saddle Yes Yes 2,122 154 34435
2014 New Chris Minerals Quash/Pass Gossan; Saddle IP (14km) Yes Yes 939 48 35329
45
Historical Exploration Activities
Being a large collection of mineral licences, the Tatogga Property had no single previous owner prior to its
staking by the optionor over the period 2009 to 2010. The most significant owners of the constituent
licences now part of the Property are listed in Table 6.1_1, and the most significant of those listed, and the
periods of their contribution to exploration of the Property are discussed below.
The first significant work known in the Tatogga Lake area was in 1960 when Southwest Potash
Corporation found the chalcopyrite-pyrite bearing veining of the Wolf occurrence, immediately to the west
of the Property. Regional evaluation of the Klastline plateau completed in 1964 by Conwest Exploration
Ltd identified a number of porphyry copper-gold and precious metal-bearing vein and shear targets
including the GJ, QC and Horn occurrences, also immediately to the west of the Property.
Following these initial discoveries the Tatogga Lake area remained relatively inactive until 1988 when a
regional stream silt sampling programme was completed in the area by the Geological Survey of Canada
(“GSC”). In 1989, on the basis of these silts, Ascot Resources Ltd. contracted Keewatin Engineering Inc.
to carry out an exploration programme including stream sediment sampling and limited prospecting over an
area overlapping most of the Tatogga Lake Property. This programme identified a number of zones on the
Property with anomalous Cu-Au±Ag, Au±Ag and Cu-Pb-Zn-Ag.
In 1990 and 1991 this work was followed up with small ground magnetic and Induced Polarisation (“IP”)
geophysical surveys, prospecting, geological mapping, and extensive contour soil and rock geochemical
sampling. The exploration was focused in nine primary zones: Trevor Peak, West Wolf, Seestor, Sun
Plateau, Horn, all being to the immediate west of the property, and Violet, Petal, GoNo, and Central all
being within the Property. Ascot and Keewatin were responsible for the majority of historical work carried
out in the current Tatogga Lake claims.
In 1991 Noranda Exploration completed a soil geochemistry survey, ground magnetics survey and a
follow-up very low frequency electromagnetic (“VLF-EM”) and IP survey over the Quash occurrence on
the Property. The magnetics and VLF-EM were considered successful at mapping lithological contacts and
major structural features. A chargeability anomaly in the IP survey was subsequently trenched.
Unfortunately samples from the trench were not economically mineralised, but contained significant pyritic
siltstone, which was interpreted as the source of the chargeability anomaly.
A trench through the Central soil anomaly showed galena and sphalerite-bearing iron-carbonate stringers
and veinlets with low Au, Ag and Cu values with up to 1,088 ppm Pb and 4,417 ppm Zn. Likewise, the
Quash soil grid was presented as primarily a Pb-Zn anomaly with only minor scattered anomalous Cu
values. Based on these results Noranda decided not to follow up on this property.
These soil sample results have, however, assumed a much greater importance in the context of the
significant copper/gold soil anomaly delimited between Quash and Pass Gossan during the 2013 season of
work.
The northern portion of the Tatogga Lake Property, in which two gossanous zones have been encountered,
has had the least exploration work to date. The first zone, which is referred to as the Saddle Gossan (on the
Property), was sampled by Brooklyn Resources Inc., which, in 1991, defined a “pyritic, silicified zone in
scattered exposures and float” (Mitchell, 1991). They took five rock samples, three of which returned
elevated gold (40, 60 and 370 ppb respectively), but did not report assays for copper. Whereas the report
recommended a follow-up programme of geophysics, geochemistry and trenching, no further work was
completed on the property.
The second gossanous zone is an area of extremely red-rusty looking rock, referred to by NCM as the Ash
Gossan, that was noted during regional mapping by the Geological Survey of British Columbia (“GSBC”)
(Ash, et al., 1996), but was not examined or sampled until 2013 by NCM. The only other exploration work
recorded for the northern portion of the property was a 1991 programme by Yuma Gold Mines Inc.
consisting of 41 soil and 8 sediment samples focused on a magnetic high in a 1958 airborne survey. This
sampling returned no significant results. From the current government mapping it is probable that this
magnetic high represents part of the recent Edziza volcanic package.
46
In 2012, because of its deemed prospectivity, Geoscience BC decided to conduct an airborne magnetics
survey over Block 3 of its QUEST Northwest Project, an area that completely surrounds the Tatogga Lake
Property.
As NCM had, in 2011 and 2012, already flown most of the Property for magnetics, rather than re-flying the
Property, Geoscience BC purchased the NCM magnetics data for incorporation into their flying of the
balance of Block 3.
This data set is a significant contribution to the information needed to explain the structural history of the
Tatogga Property and its surrounds – a structural history which, together with its relationship to
mineralisation, is still being pieced together.
During 2012, 2013 and 2014 NCM completed limited geological mapping and soil geochemistry surveys
on the Property as well as an IP survey in 2014 over the Quash-Pass Gossan target.
Geological Setting and Mineralisation
Introduction
The Tatogga Lake Property lies in an area of complex geology, which has been, and continues to be,
studied in great detail because of its rich mineral endowment. Integration of the results of these studies into
ongoing exploration is likely to play a significant role in future mineral deposit discoveries.
Regional Geology
The northern Cordilleran Orogen of western Canada, within which the Tatogga Lake Property is located,
comprises rocks subject to 1.8 billion years of tectonic history, from cratonisation of the Laurentian
continental core to current subduction and transform motion off the west coast today (see Figure 7.2_1 as
per Nelson, et al., 2013).
47
Figure 7.2_1 Paleogeographic Realms and Terranes of the Northern Cordilleran Orogen in Western Canada
During this time, the evolution of tectonic regimes, from Proterozoic intra-cratonic basin subsidence and
Palaeozoic rifting to construction of Mesozoic and younger intra-oceanic and continent-margin arcs, has led
to the development of considerable mineralisation of diverse metallogenic styles in the area.
Within the Cordilleran Orogen, the Tatogga Lake Property lies, importantly, entirely within the island arc
component of the Stikine Terrane (Figure 7.2_2 as per Nelson et. Al., 2013), this being a part of the peri-
Laurentian palaeogeographic realm (Figure 7.2_1).
48
Figure 7.2_2 Triassic to Middle Jurassic Magmatic Belts and Associated Deposits of the Peri-Laurentian Terranes
As such, it lies in a geological and metallogenic setting similar to the modern, well-mineralised, western
Pacific basin. While this observation supports the prospective regional geological setting of the property, it
does not guarantee the presence on the property of any economically exploitable mineral deposits.
Unlike the current western Pacific basin, however, the contemporaneous and originally collinear, Stikine
and Quesnellia terranes have undergone considerable tectonic deformation since the inferred time of their
mineralising events – which may lead their mineral deposits to be structurally more complex, in their
present day disposition, than equivalent deposits in the western Pacific.
Figure 7.2_3 (after Nelson et.al, 2013) shows the scale of deformation to which the Stikine and Quesnellia
island arcs were subject between the Late Triassic and the Middle Jurassic – the time interval during which
almost all currently identified mineral deposits in the Stikine terrane were formed.
49
Figure 7.2_3 Paleogeographic Reconstruction of Northwestern Canada for Late Triassic
Paleogeographic Reconstruction of Northwestern Canada for Middle Jurassic
The geological history of the Iskut/Tatogga Lake area of the Stikine Terrane is described (Alldrick, et al.,
2004) as a “series of five mid-Paleozoic to mid-Mesozoic volcanic arcs” with two lulls in volcanism
corresponding with tectonic uplift at the Triassic-Jurassic boundary (the Inklinian orogeny) and in the
Lower Jurassic (the Nassian orogeny). The area is primarily underlain by Mesozoic volcanic and
associated volcaniclastic and sedimentary rocks consisting of the Middle to Upper Triassic Stuhini Group,
the Lower Jurassic Hazelton Group, and the Middle Jurassic Bowser Lake Group (Ash, et al., 1996).
These rocks are faulted against and partially overlie metasedimentary and metavolcanic rocks of the
Paleozoic Stikine Assemblage, which appear in the northeast corner of the map in Figure 7.2_4. In the
north-western portion of the Tatogga Lake regional map Late Miocene to Holocene volcanics of the mount
Edziza volcanic complex are found.
Stratigraphic sections, as interpreted by Ash (Ash, 2011) for the western and eastern halves of the Tatogga
Lake area are presented in Figure 7.2_5.
50
Figure 7.2_5 Volcano-stratigraphy of the Tatogga Project Area With Associated Settings for Known Mineral Occurrences
The five rock packages represented in these sections are described as follows:
The Paleozoic Stikine assemblage is composed of a belt of Early Devonian to mid-Permian foliated and
deformed metasedimentary and metavolcanic rocks including phyllitic mafic and felsic metavolcanics
argillites, massive limestone and banded marbles (Ash, et al., 1996).
The Stuhini arc succession is dominated by clastic sedimentary rocks with lesser mafic volcanics and
related epiclastics. Intercalated porphyritic basaltic flows appear at the base, overlain by breccias and
sedimentary rocks ranging from siltstones to mudstones and volcanic sandstones, and minor carbonates.
These sequences are thought to be broadly folded into an anticline within the map area (Ash, et al., 1996).
The Hazelton Group is an island arc succession consisting of intermediate volcanics and epiclastics
overlain by a thin interval of felsic volcanics and capped by fine-grained clastic sediments locally
51
intercalated with bimodal volcanics dominated by basalts (Alldrick, et al., 2004). The Hazelton Group
unconformably overlies the Stuhini group.
The contact between the Middle Jurassic marine sedimentary succession of the Bowser Lake Group and the
underlying Hazelton group is gradational. Some researchers have placed the boundary where the
tuffaceous laminae common in the upper zone of the Hazelton group are no longer present within the black
siltstones (Alldrick, et al., 2004). The gradational nature of the contact can make the boundary very
difficult to place, particularly in areas of more limited exposure.
The Mount Edziza volcanic complex is composed of alkaline basalt and hawaiite with lesser intermediate
and felsic volcanic flows. There were five major magmatic events related to this complex ranging from
approximately 7.5 Ma to 2,000 B.P. (Alldrick, et al., 2004).
Gagnon, et al., 2012, have documented a comprehensive re-interpretation of the Upper Hazelton Group
stratigraphy across the province (Figure 7.2_6). This is an important reference in regard to future mapping
on the Tatogga Lake Property, in particular with respect to determining the location of the important
Stuhini – Hazelton contact described below.
Figure 7.2_6 Lithostratigraphic Subdivisions of the Hazelton Group In The Vicinity of Around the Iskut River Area
52
Kyba (2014) has drawn attention to the importance of the Stuhini-Hazelton contact in regard to its possible
controlling influence on the development of mineralization in north-western British Columbia. He wrote:
“Within the Stikine terrane of northwestern BC, clusters of Triassic-Jurassic mineral occurrences,
including several large porphyry copper-gold deposits, are located within 2 km of the contact of the
Triassic Stuhini Group and Jurassic Hazelton Group. The contact approximates a level of exposure of the
volcanic pile and, more importantly, the paleotopography and related depositional environment at the
onset of Hazelton volcanism. It varies from a sharp, angular unconformity, where the Hazelton Group
overlays folded and strongly deformed Stuhini group, to a subtle (~15o strike) difference in bedding. The
unconformity represents a Late Triassic hiatus of volcanism, during which the Stikine terrane underwent
significant structural tectonic change and deformation, resulting in crustal pre-conditioning. To identify
crustal preconditioning and specific structures that were exploited by mineralised systems, cross-sections
transecting the Stuhini-Hazelton contact have been documented in detail in three mineral districts:
Brucejack-KSM, Snip –Johnny Mountain and Red Chris. Although each district is unique, common themes
include contractional deformation of the Stuhini Group succeeded by mild extension or transtension at the
onset of the younger, more mineralized magmatic episode; and the key role of long-lived structures in the
formation of economic deposits.”
Figure 7.2_7 shows the Stuhini-Hazelton contact (as a red line) in the Tatogga-region, extracted from
Kyba’s map. While the “red-line” map shows the contact as a single, relatively straight line crossing the
Tatogga Lake Property, in reality, as determined by more detailed mapping, detailed mapping by NCM
geologists has found this contact present at many more locations on the Property. While this mapping
supports the prospective nature of the Property, it does not guarantee the presence on the property of any
economically exploitable mineral deposits.
Figure 7.2_7 Location of the Stuhini-Hazelton Contact Indicated By Red Line (Kyba, 2014)
Regional Mineralisation
Northwest British Columbia is well-endowed with economic minerals and has a long history of mining.
53
Figure 7.3_1 and Figure 7.3_2 show the locations and types of significant copper and gold deposits
respectively, in northwest British Columbia. A number of deposits, which are mineralised in both copper
and gold, appear on both maps.
Figure 7.3_1 Map Showing Different Types of Copper Deposits in NW British Columbia
Figure 7.3_2 Map Showing Different Types of Gold Deposits in NW British Columbia
54
The Iskut area of the Stikine Terrane is particularly well-mineralised in copper and gold. All mineral
occurrences of the BC MINFILE database, which lie in and immediately around the Tatogga Lake
Property, are listed in Table 7.3_1 and are shown on the map in Figure 6_1. While the proximity of these
mineral occurrences to the property supports its prospective nature, it does not guarantee the presence on
the property of any economically exploitable mineral deposits.
Table 7.3_1
New Chris Minerals Ltd
Summary Descriptions of Mineral Occurrences In and Around the Tatogga Project Area
MinFile
Occurrence MinFile No.
Controlled
by Status Commodity Deposit Type
Deposit
Characteristics
Central 104G-167
NCM Showing
Zn-Pb-Cu-
Au-Ag VMS
Massive-
Stratabound
GoNo 104G-168 Au-Ag-Cu-
Zn-Pb-As Polymetallic Veins Vein
Pass Gossan 104G-166 Pb-Zn-Cu-Au Polymetallic Veins Vein-Shear
Petal 104G-165 Au-Ag-Cu Cu+/- Ag quartz
veins Vein-Shear
Quash 104G-161 Zn-Pb-Au-
Ag-Cu Polymetallic Veins
Disseminated-
Vein
Violet 104G-164 Au-Cu Cu+/- Ag quartz
veins Vein-Shear
Violet East 104G-163 Au-Cu Cu+/- Ag quartz
veins
Vein-
Disseminated
Edon 104H-004
Colorado Showing
Zn-Pb-Cu-
Au-Ag Stockwork-Vein
Mabon 104H-035 Zn-Pb-Cu-
Au-Ag Disseminated
Castle 104G-076
Freeport Prospect
Zn-Pb-Cu-
Au-Ag Porphyry Vein-Shear
Red Chris 104H-005
Imperial Mine
Zn-Pb-Cu-
Au-Ag Porphyry Vein-Stockwork
Curt 104G-169
Teck
Showing
Zn-Pb-Cu-
Au-Ag Au quartz veins
Disseminated-
Vein
GJ 104G-034
Prospect
Zn-Pb-Cu-
Au-Ag Porphyry Vein-Stockwork
Horn 104G-035 Zn-Pb-Cu-
Au-Ag Polymetallic Veins Vein-Stockwork
55
QC 104G-033
Zn-Pb-Cu-
Au-Ag Porphyry
Disseminated-
Vein
South Seestor 104G-170
Showing
Zn-Pb-Cu-
Au-Ag Disseminated
Trevor Peak 104G-173 Zn-Pb-Cu-
Au-Ag Au quartz veins Shear-Vein
Wolf 104G-045
Prospect
Zn-Pb-Cu-
Au-Ag Porphyry Vein-Massive
Wolf West 104G-172
Showing
Zn-Pb-Cu-
Au-Ag Porphyry Shear-Vein
Coyote 104H-012
Oz Showing
Zn-Pb-Cu-
Au-Ag Vein
Coyote 3 104H-024 Zn-Pb-Cu-
Au-Ag Vein
B31 104H-036
Victory Showing
Zn-Pb-Cu-
Au-Ag Disseminated
Gin 104H-031
Cazador Showing
Zn-Pb-Cu-
Au-Ag Vein
Property Geology
Tatogga Lake Property Geology
The Tatogga Lake Property is underlain by three, and possibly four, of the five distinct successions of
volcanic and volcanogenic sedimentary rocks described in Section 7.2 – the Stuhini Group, the Hazelton
Group, possibly the Bowser Group and the Mount Edziza Volcanic Complex.
The geological map of the Property is reproduced in Figure 7.4.1_1, which represents the results of detailed
mapping by the GSBC (Ash, et al., 1997) combined with the results of mapping by NCM in 2012, 2013 and
2014.
56
Figure 7.4.1_1 Geological Map of the Tatogga Lake Property
57
The main lithologies in the project area are therefore, in order of deposition:
Stuhini shales and volcanic wackies (in the legend denominated uTs and dark blue; for example
refer to top left photo in Figure 7.3_2) and limestone (uTs and light blue) with occasional intervals
of augite phyric basalt (uTbv and uTbve).
The Stuhini group is unconformably overlain by Upper Triassic to Lower Jurassic intermediate
volcaniclastic breccia, tuffs and epiclastics (lJavb) of the Hazelton Group (refer to the top right
photo in Figure 7.3_2).
The Lower Hazelton intermediate volcanics are coeval and chemically equivalent with the quartz
monzonitic “Red Suite” Intrusions (EJmd) which are found intruding the Stuhini Group (refer to the
bottom left photo in Figure 7.3_2).
Lower to middle Jurassic Upper Hazelton Group bimodal mafic and felsic volcanic and epiclastics
(lJb lJfv and lJfve) unconfomably overly the Lower Hazelton units. They are distinct from the
earlier bimodal volcanics in that they contain intervals of fossil-bearing black shales and limestones
(lJl). (refer to the bottom right photo in Figure 7.3_2). These units are coeval and chemically
equivalent to the alkali granites and diorites (EJg and EJgd) found intruding the Lower and Upper
Hazelton successions.
Figure 7.4.1_2 Examples of Lithologies Encountered in Project Area
Shales and mudstones – uTs
Volcanic Breccia - IJavb
Granitic dyke (EJmd) intruding volcanics
(IJmv)
Fossiliferous carbonate sediments - lJL
The northern portion of the Property contains two Tertiary Mount Edziza volcanos and smaller occurrences
of this volcanic material and its derivatives. These tertiary volcanics are composed of alkaline basalt and
hawaiite with lesser intermediate and felsic volcanic flows.
58
NCM’s exploration at the Property from 2011 to 2014 has progressed three significant exploration
prospects: a grassroots gold mineralisation discovery called Saddle, a porphyry copper-gold prospect
called Quash – Pass Gossan, and an epithermal zinc, lead, (gold, copper) prospect called Quash.
Saddle Target Geology and Mineralisation
Figure 7.4.2_1 indicates the location of the Saddle Target demarcated by the white outline on the geological
map for the northwest Tatogga Lake area. The target takes its name from a saddle in the valley which runs
north-west to south-east just north of the Saddle Prospect, which valley is the host to a ~4 km long shear
zone.
59
Figure 7.4.2_1 Geological Map of the Northwest Tatogga Area (legend in Figure 7.4.1_1)
60
The Saddle valley lies 6 kilometres due east of the Castle Au/Cu prospect, also indicated on the map in
Figure 7.4.2_1. While this proximity may be coincidental, it is not uncommon for mineralised intrusive
rocks to occur on related geological structures within such a distance.
With rock exposure within this area generally poor, mapping was completed based on frost boils and rare
outcrops consisting entirely of very sheared, completely quartz-sericite-pyrite altered rock. Some of these
have relict textures suggestive of Hazelton rocks and some look more intrusive in origin. However, most of
the material is so altered and sheared as to have destroyed the protolith textures entirely.
NCM therefore has interpreted most of the valley area to be dominated by Hazelton Group rocks. They are
maroon to deep green volcanic breccias and epiclastics with bedding-parallel mafic flows, including
amygdaloidal and some pillow basalts. They are generally strongly weathered and variably altered with
sericite, epidote and chlorite-rich zones and an almost pervasive carbonate alteration. Pervasive oxidation
has made it difficult to identify some of the more subtle differences in alteration.
Large, and very prominently visible, occurrences of rusty-red gossanous material can be found in the
bottom of the valley, which first attracted exploration in 1991 and were the reason for NCM’s initial field
exploration. The valley-bottom zone within which these gossans are developed is a zone of completely
sheared and quartz – sericite – pyrite ± clay-altered material with pyrite content often exceeding 10%.
Relict textures within this zone hint at two very distinct protoliths.
The first protolith is the epiclastic unit that dominates the valley being the most easily recognisable from its
more blocky and “mottled” appearance as its heterogeneity provides more breakup of the patterns imposed
by shearing.
The second protolith is a fine-grained intrusive unit that is now completely leucocratic. Due to the
complete nature of the alteration and textural destruction from strong shearing, it is not known whether this
composition is representative of the protolith or whether previously existing mafic content has been
completely replaced by the pyrite. Despite the abundance of pyrite, little to no copper-bearing minerals are
seen within this zone with malachite and chalcopyrite more often seen to the south of this zone, often
associated with smaller zones of less intense shearing, and, to a lesser extent, in the hillside to the north of
the zone.
When low grade mineralisation is observed in the valley, it is in sub-vertical, sub-parallel, relatively large
(10 cm - 30 cm) malachite + chalcopyrite-bearing quartz-carbonate veins that appear to be syn- or post-
deformation that are oriented roughly parallel to the dominant shearing directions measured across the
whole zone - approximately 215°/80° (dip, direction/dip). These veins were seen in varying frequencies
dispersed throughout the cliffs, ridges and plateaus on the north margin of the valley.
Additional mineralisation was seen in a much more widely dispersed network of white to orange carbonate
veinlets and fracture coatings with abundant malachite and rare visible sulphides.
Abundant structural complexity, including tight overturned folds and textures suggestive of at least two
major (roughly perpendicular) folding events, was seen in most of the rocks in the valley.
The epiclastics in the cliffs on northeast side of valley show a predominantly shallow northeasterly dip
while those on the southwest of the saddle valley are much more irregular, but with a predominantly
moderate to steeply south-westerly dip. This suggests the presence of an anticline roughly parallel to the
valley bottom, the shear zone, and intrusion contained therein. The small-scale folding observed in the
outcrop is likely parasitic on these larger structures.
While the main mineralisation is on the southern side of Saddle valley, visible mineralisation is also
observable on the lower north side of the valley, with several chalcopyrite and malachite-bearing quartz-
carbonate and quartz veins with similar nature and orientation to those observed in the south of the Saddle
area. These occur in outcrop down small stream-incised valleys through the steep cliffs on this side of the
plateau and reported high levels of copper and gold in rock samples.
Figure 7.4.2_2 shows a detailed the geological map for the Saddle target on the southwest of the valley.
61
Figure 7.4.2_2 Detailed Geological Map by New Chris Minerals of the Saddle Target Area
The rocks in the main Saddle Target area are typically massive with only rare locations that show bedding,
including two that show grading from volcanic breccias to the finer epiclastics. These are locally
accompanied by rarer andesitic or basaltic flows, often amygdaloidal, and rarely showing indistinct
deformed pillows, that appear to be concordant with the surrounding rocks. The Hazelton volcanics and
volcaniclastics here have the same dull maroon to green colouration as in the valley, depending on the
alteration. Generally, the green colouration seems to result from chlorite and/or epidote alteration. Due to
the massive and repetitive nature of most of the Hazelton strata and the strong deformation that is evident in
the area it is very difficult to trace these distinct units over any significant distance. It is also probable that,
with a shallow water setting suggested by the distinct maroon colouration, rapid facies changes complicate
the stratigraphy in the region as well.
The volcanic breccia is fairly variable in composition even between outcrops only a few metres separated.
The predominant clast type is typically composed of feldspar-phyric crowded porphyry and a groundmass
that appears to be of almost the same composition. It is unclear if the phenocrysts in the matrix of the
breccia are primary to the rock or fragments with minimal reworking. While the volcanic breccia can be
almost monomictic locally, these clasts are often accompanied by hornblende-phyric clasts, maroon
mudstone clasts, and rare pumice fragments. Clasts are generally poorly-sorted, commonly ranging from
granule to cobble size and from sub-angular to rounded often within the same outcrop. Rarely clasts can be
several metres in diameter. Very commonly the clasts are significantly more altered than the groundmass
leading to a mottled appearance. One of the most striking examples is where strong epidote alteration
disproportionately affects the clasts leaving them pale green in a matrix that mineralogically looks almost
identical but is a deep maroon.
In almost every cliff-face over the Saddle gold target there are prominent pale dykes cutting the darker
Hazelton rock. These rhyolitic dykes are strongly flow-banded and are often seen intruding shear zones
and showing signs of significant shearing themselves. In some areas they are seen entering intense shear
zones where they are dismembered into lozenge shaped boudins, or show shear-parallel sheath folding, and
other shear-related fold features.
62
While the rocks in the main mineralised area are significantly less pervasively deformed than in the shear
zone in the centre of Saddle valley, there are distinct, discrete zones, away from the main shear, of high
strain that appear to be brittle-ductile in nature that introduce local foliation and fracture sets subparallel to
the primary valley shear at least up to several km away on the perimeter of this main shear. Most of the
rocks in the main mineralised zone appear to at least be weakly deformed and fractured.
As the horizons in the Hazelton rocks are difficult to reliably trace over any distance and bedding planes are
only rarely observed, it is these rhyolitic dykes that give the best indication of how deformed the rock in
this zone really is. In addition to the shear features discussed above they show larger-scale tight to open
folding. This folding is variable even across the main ridge, which shows folding that ranges from upright
to recumbent, with axes that range from steeply plunging to nearly horizontal. In a few locations at least
two generations of folding are apparent within the same outcrop, producing complicated fold interference
patterns. In contrast to the Hazelton units, these rhyolitic dykes are much more easily traced over the
surface. Their high quartz content means that they are quite resistant to weathering and often produce
outcrop even when the Hazelton rocks surrounding them are weathering recessively. Their meandering and
tight folding style may be due the rheological contrast between these thinner but more competent rhyolites
and the surrounding Hazelton rocks.
These rhyolites are associated with gossanous zones that appear to be associated with the high gold
response in both rock and soil samples at the Saddle Target. The gossanous zones represent intensely to
completely quartz – sericite – pyrite replaced rock, similar in appearance to the shear-zone rocks in the
valley. They range in size from decimetre-scale to rarely linear features traceable up to 10 m across the
surface and seem to always be in close proximity to the rhyolites. While many of them have no fresh mafic
phases remaining, most of the gossan appears to be Hazelton material - with some exceptions where the
gossanous zone spans the contact zone of both rhyolite and Hazelton epiclastics. It is currently
hypothesised that the folding and other deformation of these competent rhyolite dykes may have created
pressure shadows allowing for the concentration of mineralized fluids within these distributed pods.
Consequently, the rhyolitic dykes may be the controlling factors on localisation of high-grade gold
mineralisation.
The Geology and Mineralisation Over the Quash and Pass Gossan Target Areas
The Quash – Pass Gossan target is a gold-copper porphyry prospect characterised by high levels of copper,
gold, zinc and lead in soil associated with a monzonitic intrusion in contact with both Hazelton and Stuhini
Group strata. The intrusion is represented on a map produced by the Geological Survey of British
Columbia as being of the same age as the nearby Red Chris and GJ Cu/Au porphyry deposits (Ash et al,
1996). The author has not been able to independently verify this age, but finds it to be plausible, given the
geological structures also present on the geological map and verified by the author during a field visit with
Mr. Ash in 2011.
Figure 7.4.3_1 shows the geological map for the Quash and Pass Gossan areas generated by fieldwork of
NCM geologists.
63
Figure 7.4.3_1 Geological Map for the Quash/Pass Gossan Area (legend in Figure 7.4.1_1)
The map illustrates that the Quash and Pass Gossan area has complex geology with contacts between the
following rock types:
bimodal mafic and felsic volcanic and epiclastic rocks, siltstones and several intercalations of
fossiliferous limestone, cut by several roughly east-west oriented fine-grained, porphyritic granitoid
bodies.
completely carbonate altered volcanic breccias and crystal to crystal-lithic tuffs, together with local
development of green amygdaloidal basalts.
Mapping has specifically attempted to locate the Hazelton-Stuhini unconformity. While it did identify
outcrops that appear to be typical for rocks of both groups, no outcrop was identified that showed this
contact explicitly.
A thrust fault was identified in the ridge to the north of the Pass Gossan mineral occurrence, which
appeared to superpose Stuhini strata on top of other Stuhini rocks. However, the ridge in question is
outside of NCM’s claim block and the Stuhini identification was based on the bedded nature of the
outcrop and was not checked up close. The presence of this fault and the identification of the rocks at the
bottom of the Pass Gossan valley as Hazelton may indicate that the Stuhini-Hazelton contact in this
region is actually a fault contact rather than an unconformity as has hitherto been reported (Ash et al,
1996).
Detailed geological mapping by Ascot Resources Ltd in 1991 (Mehner, D. T., 1991) of the Quash Zn-Pb-
Ag prospect southwest of the Pass Gossan area, reported minor amounts of disseminated galena and
possible sphalerite hosted within light green silicious siltstone, together with sphalerite, galena and pyrite-
mineralised iron carbonate stringers, veinlets and fracture in-fillings. Outcrops of diorite intrusive were
noted. Bedding, displaying evidence of two phases of folding, was seen to strike north-south, whereas
chargeability trends more east-west.
64
No estimates of lengths, widths, depths or degree of continuity of mineralisation on the property have yet
been established. These must await drilling results of the of soil geochemical anomalies, the tenor and
sizes of which are described under the heading “Exploration” below.
Deposit Types
NCM’s exploration strategy has focused on the prospective nature of the Tatogga Lake Property for gold-
copper porphyry deposits, as well as related proximal or distal epithermal mineralisation. The Property is
also prospective for volcanogenic massive sulphide deposits, which may, or may not, be related to
porphyry-style mineralising events.
This is supported by the similarity of the geology on the Property to that hosting the very large Red Chris
Au/Cu porphyry mine only 15 km distant from the Property boundary, and the presence of three other
advanced Au/Cu porphyry prospects (GJ, Castle, North ROK) all less than 5 km distant from the Property
boundary.
The Property’s prospectivity for VMS deposits, and Au/Ag-enriched VMS deposits in particular, is
supported by the large extent of Upper Hazelton Formation present on the Property, the Upper Hazelton
being host to the Eskay Creek deposit, which produced 104 tonnes of gold and 5,400 tonnes of silver from
very high grade ore (British Columbia Geological Survey, 2010).
In respect of potential porphyry-related gold mineralisation, the “Transitional Meso-to-Epithermal
Stockwork Gold” model developed by Pretivm Resources Inc. for their Brucejack gold deposit is also
particularly relevant to the Tatogga Lake Property, because of the large extent to which the
Stuhini/Hazelton unconformity is present on the Property.
The fact the Stuhini/Hazelton has been identified close to the GJ deposit in particular, which is
itself close to NCM’s Quash – Pass Gossan prospect described below, makes it an important
geological feature to locate during exploration of the Quash – Pass Gossan prospect.
Exploration
Introduction
Exploration activities and surveys carried out by NCM at Tatogga Lake comprise airborne and ground
geophysics, sampling and mapping of selected areas combined with rock and soil sampling.
Based on the results from airborne geophysical surveys and initial sampling, mapping and follow-up
sampling has focused on two areas: the Saddle Gossan area in the north of the centre of the Property area
and the Pass Gossan/Quash targets further to the southwest.
Another prospect, the Valleyside gold target at 1.2 km south-east of the Pass Gossan target, has been
identified by soil sampling conducted at relatively wide spacing.
The procedures followed and parameters applied to both the geophysical and geochemical surveys
described below are considered appropriate for the scale and maturity of exploration being conducted, and
absent of factors likely to have caused material bias in any regard.
Airborne Geophysics – Tatogga Lake Property
Introduction
During 2011 and 2012 airborne magnetic and transient electromagnetic (“TEM") airborne surveys were
carried out over the bulk of the Property, involving approximately 8,100 line-km, with approximately 45%
of this flown area covered by an airborne radiometric survey.
The 2011 survey was conducted by AeroQuest between August 23rd
and December 7th
, and consisted of a
total of 760.4 line-km of flight (Smyth, 2011). The 2012 survey was conducted by SkyTEM between May
16th
and June 10th
, and consisted of a total of 1,619 line-km of flight (Miller, 2013). All flight lines were
oriented at a bearing of 030o with a spacing of 100 m with Tie Lines spaced at 1,000 m flown at a bearing
of 120o
65
In 2012 Mira Geoscience was contracted to complete unconstrained one dimensional (“1D”) time-domain
electromagnetic inversion and unconstrained three dimensional (“3D”) magnetic inversion of the survey
results using the University of British Columbia Geophysical Inversion Facility (“UBC-GIF”) algorithms
for electromagnetics one dimensional time domain observations and magnetic sources and receivers
(“EM1DTM”) and forward modelling and inversion of magnetic data over 3 dimensional structures
(“MAG3D”) (Miller, 2013).
Airborne Magnetic Survey
The surface residual magnetics map of the Property is presented in the central area of Figure 9.2.2_1, the
surrounding area showing the results of a Geoscience BC survey flown in 2013. The map shows two
dominant regional trends – the SW-NE trend shows relatively sharp gradients, but no less prominent are a
series of E-W to SE-NW magnetic features.
Figure 9.2.2_1 Residual Magnetics over Project and Surrounding Areas
Evaluation of the 3D susceptibility model has been initiated at a broad scale (Figure 9.2.2_2) and merits a
much finer scale interpretation in the areas of the three drill targets that have discussed earlier in this report.
66
Figure 9.2.2_2 Magnetic Susceptibility
200 m Depth Slice
430 m Depth Slice
Airborne Electro-Magnetic Survey
As evidenced in Figure 9.2.3_1, apart from strong topographic effects from the deeply incised valleys at the
Property, conductivity readings were very flat, showing very high resistivity across the Property.
67
Figure 9.2.3_1 Conductivity Results over Project Area
The Mira Geoscience report (2012) concluded that, “no highly conductive zones extend to depth except in
major river and lake valleys. These are interpreted to be deep deposits of conductive sediments”.
Nevertheless, there is some detail discernible at depth in the EM survey that, with the assistance of the
magnetic susceptibility, may help identify intrusive bodies. There is a set of SW-NE linear features of
moderate to high resistivity features in the southwest portion of the Property that do not appear to be
correlated with topography (Figure 9.2.3_2).
68
Figure 9.2.3_2 3D Conductivity Model for the Tatogga Lake Project Area
Airborne Radiometric Survey
While the radiometrics results from the AeroQuest survey are considered to be of mediocre quality because
of the variable amount of snow on the ground at the time of the survey, as evidenced in the potassium map
(Figure 9.2.4_1), there is structure to the data that does not correlate to topography or the treeline and this
remains to be interpreted in conjunction with past and future mapping by NCM.
69
Figure 9.2.4_1 Potassium Channel Radiometrics for the Surveyed Area of the Tatogga Lake Property
Exploration Results for the Saddle Target Area
Rock Chip Sampling
The geological mapping programme at Saddle was completed by NCM during the 2013 and 2014
exploration seasons using a Garmin hand-held GPS unit for recording ground stations, and classical “pencil
on mylar over imagery” drafting of map elements for later digitising.
Concurrent with geological mapping 62 rock samples were collected for mapping purposes and analysis in
2013 from the Saddle area, followed by 66 rock samples in 2014. Of the eight rock samples that returned
over 1 g/t Au, yellow highlighted in Table 9.3.1_1, all but one of them came from an area with abundant
gossanous blebs or structures that included this gossanous material with some of the surrounding wall-rock.
70
Table 9.3.1_1
New Chris Minerals Ltd
Selected Assay Results For Rock Samples From The Saddle Target Area
Sample No Map Unit
Location Sample
Easting Northing Altitude Au
(ppm)
Ag
(ppm)
Cu
(ppm)
H222217 Epiclastic Sandstone and Basalt Flow 434548 6408121 1,665 0.91 3.1 2,150
H222219 Hornblende-Phyric Basalt 434072 6407865 1,827 0.01 49.4 14,800
H222220 Epiclastic Sandstone 434072 6407847 1,834 0.49 4.7 7,460
H222227 Epiclastic Sandstone and Rhyolite Dyke 433974 6407765 1,753 2.93 5.9 3,900
H222229 Gossanous Sheared Zone 434144 6407934 1,742 4.06 2.9 1,505
H222230 Gossanous Sheared Zone 433742 6408204 1,702 12.55 6.0 68
H222234 Gossanous Zone 434025 6407945 1,802 4.70 2.0 215
H222236 Gossanous Zone 433890 6408211 1,732 5.24 6.4 160
H222239 Gossanous Zone 434126 6408728 1,509 1.23 2.2 439
H222243 Rhyolite Dyke 434185 6408754 1,516 0.82 2.0 579
H222246 Gossanous Zone 434143 6408735 1,514 0.69 1.6 154
H222249 Gossanous Zone and Surrounding Volcanic Breccia 434165 6408067 1,703 7.76 9.7 179
Q343655 Late Mafic Dyke and Volcanic Breccia 434439 6408091 1,639 0.02 19.5 17,650
R269155 Rhyolitic Dyke and Cross-cutting Mafic Dyke 434122 6408083 1,741 7.26 9.0 23,800
R269157 Volcanic Breccia and Epiclastic Sandstone 434179 6408400 1,656 0.07 0.9 15,300
R269158 Sheared and Altered Gossanous Zone 434177 6408406 1,656 0.26 1.7 15,350
The table also illustrates that the highest copper results (five samples over 1% Cu) were returned from
much more lithologically variable material, including volcanic breccias, basalts, and epiclastic sandstones,
all of which contained chalcopyrite and/or malachite.
Figures 9.3.1_1 and 9.3.1_2 show the locations of anomalous gold and copper in rock samples at Saddle.
Of particular interest are the high copper samples in the south, indicating that copper mineralisation is open
to the (rugged) south of the area hitherto subjected to soil sampling.
71
Figure 9.3.1_1 Location of Anomalous Au Rock Sample Results Superimposed Over Saddle Area Geology
72
Figure 9.3.1_2 Location of Anomalous Cu Rock Sample Results Superimposed Over Saddle Area Geology
Soil Sampling Results
During 2013 a reconnaissance survey of 879 soil samples was undertaken in the Saddle valley along lines
spaced approximately 400 m apart, with 50 m between sample sites. In 2014 an in-fill sampling program
(939 samples) was undertaken over the anomalous area delimited in 2013 with line spacing ranging from
50 m to 100 m, and sample spacing ranging from 25 m to 50 m. Sampling procedures and quality control
are described in Section 11 below.
The results from soil sampling in the Saddle target area show two coherent areas highly anomalous (defined
as exceeding 0.1 g/t Au) in gold (Figure 9.3.2_1): the Northern Gold anomaly and the Southern Gold
anomaly.
Figure 9.3.2_1 Au Assay Results of Soil Samples Superimposed Over Saddle Area Geology
73
The southernmost of these anomalies, defined by 80 samples with grades above 0.1g/t Au, is almost 1 km
long and from 100-300 m in width. It is located along a flat/plateau-like ridge of residual soils. The
northern anomaly, defined by 40 samples with grades above 0.1g/t Au, is smaller, ~ 300 m by 400 m, and
while the soils from this anomaly appear to also be residual, the steeper nature of the slope does mean there
may be some downward slope movement of soil.
In both cases these high gold results are associated with regions in which there are gossanous zones of
almost completely quartz-sericite-pyrite-replaced rocks.
Figure 9.3.2_2 shows the two soil sample anomalies at a larger scale with the location of the rock sample
results listed in Table 9.3.1_1 shown in relation to the most anomalous gold assays. There is an obvious
and close relationship between rock samples and most anomalous values. This could be a function of the
mineralisation outcropping with the lower assays over areas with deeper soils, or the highest soil sample
values defined discrete mineralised bodies in the subsoil.
74
Figure 9.3.2_2 Location of Mineralised Rock Samples Within the Soil Sample Anomalies at the Saddle Target
Figure 9.3.2_3 shows the soil sampling grid in relation to the geology and geomorphology to illustrate the
constraints imposed on sampling by the nature of the terrain and by the presence of alluvium/glacial till
cover. It indicates that there is potential to extend the Southern Anomaly to the southwest and southeast.
75
Figure 9.3.2_3 Soil Sample Gold Anomalies at the Saddle Area in Relation to Geology and Geomorphology
While both gold anomalies are associated with elevated copper (meaning defined by sample results above
50 ppm, yielding an average for the anomaly of more than 150 ppm) there is a particularly striking 250 m
by 100 m copper anomaly (11 samples exceeding 500 ppm Cu) that separates these two (Figure 9.3.2_4).
76
Figure 9.3.2_4 Cu Assay Results of Soil Samples Superimposed Over Saddle Area Geology
The copper anomaly is spatially associated with mapped chalcopyrite and malachite-bearing quartz-
carbonate veining on the ridge above, and to the south. The soils in this anomaly are mixed residual and
fines from the scree slope below the cliff face on which these veins are found. It is likely that the copper in
this region is from material transported downslope from this veining.
The gold results in the soils are also tied closely with elevated arsenic (Figure 9.3.2_5) and mercury
suggesting a higher stratigraphic position for the mineralisation than the Pass Gossan porphyry target, and
many veins in the region show signs of being open-space-filling.
77
Figure 9.3.2_5 As Assay Results of Soil Samples Superimposed Over Saddle Area Geology
Classic epithermal textures, such as those associated with boiling conditions, are not observed. Therefore
the target is being tentatively referred to as a mesothermal gold target, pending more specific evidence of
temperature and depth of mineralisation.
Exploration Results for Quash and the Pass Gossan Area
Rock Chip Sampling
The geological mapping program at Quash/Pass Gossan was completed by Emily Miller during the 2012
and 2013 exploration seasons using a Garmin hand-held GPS unit for recording ground stations, and
classical “pencil on mylar over imagery” drafting of map elements for later digitising.
Concurrent with geological mapping 34 rock samples were collected for mapping purposes and analysis in
2012 from the Quash/Pass Gossan area, followed by 62 in 2013, and 5 in 2014. Table 9.4.1_1 gives
descriptions and assay results of selected anomalous rocks from the Quash/Pass Gossan area.
78
Table 9.4.1_1
New Chris Minerals Ltd
Description and Assay Results of Rock Samples From the Quash/Pass Gossan Area
Area Lithology Photo
Sample
No. Au
(ppb)
Cu
(ppm) Zn (ppm)
Quash-
Pass
Gossan
Highly oxidised and Fe-carbonate altered. Py-bearing.
Unknown lithology Q343514 30 557 531
Heavily altered (ankerite) +/- sphalerite +/- tetrahedrite,
cut by carbonate veins, sheared X Q343516 2 221 142,500
Highly mineralised (Py +/- Cpy) intrusive (monzonite?),
highly silicified, oxidised X Q343522 43 274 33
Float: Mineralised quartz vein, very gossaneous X Q343544 43 412 29
Quartz-sericite-pyrite-galena +/- tetrahydrite alteration
and mineralisation in a fine grained, greenish intrusive
rock X Q344101 60 202 2,890
Volcanic breccia. Medium grained to coarse grained
carbonate-Fe carbonate veining with galena-pyrite +/-
malachite +/- chalcopytite selvedge X Q344861 25 41 8,940
Fe-carbonate, brecciated mudstone – completely altered X Q344863 98 573 5,390
Slide path that containes quartz-carbonate-ankerite
veins, nakerite breccias, sediment +/- volcanics. Strongly
oxidised with 30-35% coarse grained pyrite, primarily as
pyritehedrons X Q344864 903 658 44,700
Notes for sample are missing Q345401 5 879 402
Soil Sampling Results
During 2012 a reconnaissance survey of 637 soil samples was undertaken in the Quash/Pass Gossan region
of the Property. In 2013 an in-fill sampling programme of 1,384 samples was undertaken over the
anomalous areas delimited in 2012 with line spacing ranging from 100 m to 200 m, and sample spacing
ranging from 50 m to 100 m. Sampling procedures and quality control are described in Section 11 below.
Figure 9.4.2_1 presents soil sample copper assay results and illustrates1 that soils in the Quash/Pass Gossan
area show a 1,200 m by 200 m copper anomaly (100 adjacent samples with >150 ppm Cu, including 8
samples >500 ppm Cu) trending along the north-facing plateau edge to the northwest of the Pass Gossan
Minfile occurrence, coincident with a monzonitic intrusion close to the mapped Stuhini/Hazelton contact.
1 For the evaluation of soil sampling results, seven different colour (cold/low to warm/high) thresholds for each element plotted
were set to approximately double for each colour change, this being an effective first-pass method for pattern and anomaly
recognition in trace element soil and stream sediment data, which usually has a positively-skewed value distribution, provided the
first threshold is appropriately chosen for each element. The first threshold for each element discussed in this report was chosen
after examination of the element’s histogram, in conjunction with histograms of its distribution in British Columbia stream
sediments available on the www.rockstorichesbc.com/gpage.html website.
79
Figure 9.4.2_1 Soil Sample Cu Assay Results Superimposed Over the Quash/Pass Gossan Area Geology
The map also shows the constraints imposed by the terrain on sampling the area south of the main anomaly.
This anomaly is coincident with a soil gold anomaly of 20 ppb to 250 ppb (Figure 9.4.2_2), as well as with
soil zinc (Figure 9.4.2_3) and lead (Figure 9.4.2_4) anomalies. It should be noted that this multi-metal
anomaly is as extensive in area and of similar tenor to the soil anomalies documented over the Cu/Au
porphyry deposits for which resources have been reported on properties immediately adjoining the Tatogga
Lake Property.
80
Figure 9.4.2_2 Soil Sample Au Assay Results Superimposed Over the Quash/Pass Gossan Area Geology
Figure 9.4.2_3 presents soil sample zinc assay results and illustrate that soils at Quash show a 400 m by
300 m zinc anomaly (150 to 2,000 ppm Zn) one kilometre west-southwest of the Quash/ Pass Gossan
copper anomaly.
Figure 9.4.2_3 Soil Sample Zn Assay Results Superimposed Over the Quash/Pass Gossan Area Geology
81
The Quash zinc anomaly is coincident with similar-sized lead (Figure 9.4.2_4) and silver anomalies, and is
supported both internally and externally by scattered anomalous levels of copper and gold (Figures 9.4.2_1
and 9.4.2_2).
Figure 9.4.2_4 Soil Sample Pb Assay Results Superimposed Over the Quash/Pass Gossan Area Geology
Quash/Pass Gossan Prospect Geophysics
A Volterra-3D ground IP survey was completed by SJ Geophysics (Polutnik, 2014) over the
defined Quash/Pass-Gossan copper/gold target as well as the Quash Pb-Zn Prospect to the south.
The lines were set at a spacing of 200 m with stations every 100 m along the lines. With the
melting of snow the ground was well saturated with water and excellent contact was reported by
the survey team.
Figure 9.4.3_1 shows the location of the IP survey lines and reading points. The lines in the southwest
cover Quash and the more northerly lines Quash/Pass-Gossan.
82
Figure 9.4.3_1 Ground IP Survey Locations Over the Pass-Gossan and Quash Targets
Figure 9.4.3_2 shows selected depth slices through the chargeability inversion results, and Figure 9.4.3_3
shows the resistivity inversion results – in both cases, overlain by Cu and Zn soil sample result contours.
83
Figure 9.4.3_2 IP Chargeability Results Interpreted at 50 Metre Depth
IP Chargeability Results Interpreted at 100 Metre Depth
IP Chargeability Results Interpreted at 200 Metre Depth
84
Figure 9.4.3_3 IP Resistivity Results at 50 Metre Depth
IP Resistivity Results at 100 Metre Depth
IP Resistivity Results at 200 Metre Depth
The Pass-Gossan Cu target was found to be an area of low chargeability, whereas the lead-zinc Quash
target appears to overlie a region of high chargeability (defined as >20 ms). A second highly chargeable
target appears on the eastern edge of the grid extent beneath high levels of gold, zinc and copper in the soil.
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SJ Geophysics has confirmed that after close examination of the raw data, this is a real chargeability feature
as opposed to an edge effect. However, due to the position on the edge of the grid, SJ’s geophysicists
caution that the actual source of the anomaly could be slightly off of the grid and that the exact location of
the anomaly has a low certainty. An extension of the survey is needed to correct this uncertainty.
Final interpretation of the chargeability results are still outstanding with the high chargeability underlying
the Quash anomaly and at the eastern edge of the grid possibly representing a sulfide-rich/pyritic halo
around near surface mineralisation, or representing a more deeply rooted mineralisation that is not apparent
at surface.
The resistivity results show a contrast between the lower resistivity Hazelton rocks to the north of the
Quash/Pass Gossan target, and the relatively higher resistivity Stuhini Group south of the Pass Gossan
target.
Figure 9.4.3_4 shows the results of the conductivity (top) and chargeability (bottom) measurements along
N-S cross sections superimposed onto the geology.
Figure 9.4.3_4 Three Dimensional Conductivity (top) and Chargeability (bottom) Models With Geology Overlay
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It may be that some of the lower chargeability areas in the more resistive zones are the better drill targets
than the higher chargeability zones, which may be more pyritic halos.
Exploration Results for the Valleyside Gold Target
The Valleyside Gold target was discovered by soil sampling, although evidence of the target exists in a
historical line of ridge samples which are part of the anomaly, and which reached 80 ppb Au.
Grid soil sampling over the 600 m wide Valleyside gold target has, to date, been conducted at a line
spacing of 100 m and a sample spacing of 50 m. Figure 9.5_1 shows the gold assay results, which define a
600 metre long anomaly situated 1.2 kilometres south-east of the Pass Gossan mineral occurrence, open
both to the east and to the west. Three adjacent samples reported above 300 ppb Au over a 50 m by 100 m
sampling area. Along the western-most line a maximum level of 918 ppb Au is reported and 111ppb Au is
the maximum in the eastern-most line.
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Figure 9.5_1 Soil Sample Au Assay Results Over the Valleyside Target
The anomaly falls in an area of Stuhini Group rocks, Red Chris Suite intrusives and Quaternary cover,
based to the geological map of Ash et al (1996). It has yet to be mapped in detail by NCM. The
Quaternary cover, possibly present over most of the anomalous grid lines, may explain the somewhat
discontinuous nature of the anomaly, line to line.
The anomaly is strongly supported by arsenic (Figure 9.6_2), which reaches 2,640 ppm in the highest gold
sample. Arsenic also delimits an anomaly of similar size on the northern side of the valley, where scattered
anomalous gold values (50 – 100 ppb) are also present.
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Figure 9.6_2 Soil Sample As Assay Results Over the Valleyside Target
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Enhanced zinc (Figure 9.6_3) is also present in anomalous levels on both sides of the valley.
Figure 9.6_3 Soil Sample Zn Assay Results Over the Valleyside Target
Drilling
There has been no drilling undertaken to date on the Tatogga Property.
Sample Preparation, Analysis and Security
Sampling Procedure
Soil sampling consisted of both detailed grid work where sample site locations were chosen beforehand,
and reconnaissance lines where contours or other topographic features were followed and samples were
taken at regular intervals in order to cover large areas of the Property. In both cases samples were, on
occasion, moved off of the contour line or skipped entirely to account for drainages, outcrops, dangerous
terrain and snow.
The nature of the soils in the area was such that the soils were often very poorly developed and were
frequently very rocky. Consequently, in order to minimise contributions to the sample of transported and
organic material, collection aimed to be as deep as possible. In practice, this meant that most samples were
collected between 30cm and 40cm depth, corresponding to A, B, or C horizons, depending on the
geomorphology of the area. In some areas, only talus was available for collection. A 10mm sieve was used
in the field to ensure sufficient fine material was sampled to yield at least 40 grams of -200 mesh material
for analysis. Care was taken to note the soil horizon sampled, when sieves were used, the proportion of the
soil that was oversize, and any geomorphological features that may affect sampling or results such as the
presence of a moraine or drainage.
Depending on the nature of the soil, sampling was completed primarily with an auger or by digging a soil
pit, sometimes supplemented with a geotool depending on the rockiness at the sample site. Soil bags were
filled with as much sample material as was possible. Soil bags were all labelled clearly in permanent
marker on both sides of the bag with sample number while the tyvek sample tags were inserted directly into
the sample bag.
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Soil samples were laid out on a tarp to dry prior to shipment. While there were a couple shipments that
were sent while the samples were still damp, care was taken to ensure that they were not so damp as to be
in danger of damage during transit and the number of samples per shipping bag was adjusted down to
prevent sample damage.
For shipping, soil samples were put in order of sample numbers and tied together in groups of 10 on loops
of twine or secured within large polybags to reduce the amount of movement within the rice bags and to
ensure that receiving on the lab’s end was smooth.
Samples were batched weekly and recorded by the geologist in charge of the camp and were sealed, flown
out of camp by helicopter. They were either immediately taken to Smithers by Rugged Edge Holdings Ltd.
trucks to be shipped directly to the Vancouver ALS lab by Bandstra or were stored in a locked Seacan in
Iskut until the next truck to Smithers was scheduled. There were occasions that necessitated the storage of
these bags, on pallets, in the Rugged Edge Warehouse for short periods of time before they could be
delivered to the Bandstra shipping office.
In 2013, one soil sample shipment was reported by the laboratory as damaged with several samples
(H218466-67, H218463, H218477- H218480) destroyed or lost due to the piercing of one of the rice bags.
From the documentation photos sent by the lab (Figure 11.1_1) it appears that the damage may have been
caused by a forklift.
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Figure 11.1_1 Damage of Batch 13TL-NS-002
It could not be established when and where this occurred (during Bandstra Shipping or when received at the
laboratory).
Soil Sample Preparation and Analysis
After receiving the samples the soils were dried by the lab and screened to -200 mesh, as per special
direction. This ensures that the analysed portion of the sample had high clay content and thus, despite the
fact that many of the samples are from less than ideal sample locations the clays should still have captured
the mobilised ions.
The samples were analysed using ALS Chemex’s TL42-PKG analysis package, consisting of ME-MS41
and Au by Aqua Regia with ICP-Finish. ALS Chemex is an ISO- accredited laboratory independent of
New Chris Minerals and of Manera. This package gives 41 elements through aqua regia digestion of a
sample of 15g nominal weight followed by inductively coupled plasma-atomic emission spectroscopy
(“ICP-AES”) and inductively coupled plasma-mass spectroscopy (“ICP-MS”) analyses while the additional
gold ICP analysis allows a much lower detection threshold for gold.
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No extra quality assurance – quality control (“QAQC”) samples were added at this early stage of
exploration, but the lab-provided QAQC sample information has been incorporated into NCM database.
Rock Sample Preparation and Analysis
Rock samples were taken for several purposes, but predominantly where visible mineralisation, veining or
alteration indicated a zone of interest, while others were taken as hand samples or for investigation of the
geochemistry of the less altered/mineralised rock.
All sample sites were located with a GPS, and described in the field. Samples were assigned a name based
on the GPS point. Upon returning to camp rock sample cards were filled out, a tyvek sample tag and
number were assigned to the samples that were selected for the lab and representative hand samples for
photography and a rock library were selected. The sample number was written in permanent marker on
either side of the plastic sample bags and one tyvek sample tag was placed in the bag and another with the
same number and barcode was stapled to the top of the bag for easy scanning when received by the
laboratory.
All rock samples were sent to ALS Chemex for analysis. Rocks were dried, crushed to a screen of 2mm
before a split of up to 1000 grams was taken and pulverized to a -200 mesh screen. The samples were
analysed using ALS Chemex’s TL44-PKG analysis package, consisting of ME-MS41 and Au by Aqua
Regia with ICP-Finish. This package gives 41 elements through aqua regia digestion of a sample of 50 g
nominal weight followed by ICP-AES and ICP-MS analysis while the additional gold ICP analysis allows a
much lower detection threshold for gold.
No extra QAQC samples were added at this early stage of exploration but the lab-provided QAQC sample
information is being incorporated into our database.
Data Verification and Appropriateness of Sample Preparation and Security and Analytical
Procedures
Two qualified persons (QPs) authored the NI 43-101 report on the Tatogga Property. The first author, Mr.
C.A. Dekker, was initially retained by NCM in 2013 following completion of the 2013 exploration
programme. Spot checks were carried out in 2013 by Mr. Dekker for a number of anomalous soil sample
locations in the Saddle Area. Mr Dekker was again retained in 2016 to supervise the preparation of an
updated NI 43-101 report. Mr. Dekker is satisfied that the data in the Tatogga NI 43-101 report is adequate
for the purposes of the report.
The services of the second author, Mr. C. P. Smyth, were retained by NCM to validate the work completed
on the Property in 2013 and 2014. No work was conducted on the Property in 2015 and 2016. Verification
of the soil gold and copper anomalies discovered at Saddle in 2013 was carried out in 2014 as infill
sampling on the 2013 sampling grid in the area of anomalous samples. This sampling was overseen by Mr.
Smyth. The 2014 results were found to correspond very well with the 2013 results.
Mr. Smyth also confirmed sites of gossanous outcrop within the areas of the soil gold anomalies, and
inspected the 2014 field operations of SJ Geophysics during their IP survey over the Quash-Pass Gossan
prospect.
Mr. Smyth spent the period 27 July to 1 August 2016 on the Tatogga Property, visiting both the Saddle and
Quash/Pass Gossan exploration target areas to carry out orthophotography surveys. No material changes
were observed anywhere on the Property in respect of its exploration status in 2014.
Mr. Smyth is satisfied that the data in the Tatogga NI 43-101 report is adequate for the purposes of the
report.
It is the authors’ opinion that the sample preparation, security and analytical procedures adopted by New
Chris Minerals were adequate for the purposes of achieving high quality exploration goals.
Mineral Resource Estimates
There have been no mineral resource estimates prepared in respect of the Tagotta Lake Property.
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Other Relevant Information
Other New Chris Minerals Properties Near Tatogga Lake
In the Klastline area NCM is also responsible for two small satellite properties, Ginside and Gambit,
consisting of single claims to the east of the Alaska Highway. The Ginside and Gambit properties are
considered part of the Tatogga Property project area. The individual claims of which they are comprised
remain in good standing until 31 January 2024 and 31 January 2018 respectively, with neither cash
payments, share issuances nor work commitments specific to each claim required in the interim. The
Ginside and Gambit claims are not considered material to the Resulting Issuer’s future prospects, and no
further exploration plans have presently been formulated for them.
Figure 17.1_1 shows the location of the two prospects and assays from samples taken.
Figure 17.1_1 Location of the Gambit and Ginside Prospects
These claims are staked on the basis of Minfile occurrences and have had minimal exploration work
completed. The first work completed directly on the claims was completed in September at the end of the
2013 season by NCM.
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The Gambit property is staked in proximity to the Plateau and B31 Minfile Occurrences and is accessible
by a reasonably well-maintained gravel road providing access to Ealue Lake and the railway along the
Klappan River. The B31 occurrence is a sample taken by the British Columbia Geological Survey in 1994
of a 5cm-10cm sulfide-rich area in megacrystic syenite that assayed 0.34% Cu (Open File 1997-3).
Subsequent work includes a 2011 9.3 line- km ground magnetic survey and reconnaissance prospecting, but
this work did not extend onto the NCM’s claim block. The Plateau Occurrence is a 3m by 5m chalcopyrite
mineralised area in polymictic volcanic lapilli tuff breccia that returned cupper up to 2% and silver up to 71
g/tonne (Fieldwork 1994). Subsequent work includes chip sampling in 20120 by Brett Resources Inc.
yielding elevated copper values up to 0.28% (Assessment Report 31817).
During the 2013 field season over the course of two days a total of 83 widely-spaced soil samples (400 m
spaced lines with 100 m sample intervals), as well as 3 silt samples were taken and the, very limited, rock
exposure was examined. Most of the soil samples were relatively low to background with scattered results
of above 80 ppm Cu. And one line with 200m (3 samples) over 110 ppm including one sample at 1,110
ppm. The silt sample taken upstream from this sample was background while the two stream samples
downstream returned 86.7 ppm and 151,5 ppm respectively and correspond with a single anomalous (84
ppm Cu) soil sample in the furthest east line. Unfortunately the streams within the property were high
energy and strongly erosive making it difficult to find suitable sampling points.
The Ginside property is staked on a colour anomaly to the south of the Gin Minfile Occurrence and
approximately 6km to the southwest of the Red Chris deposit. It is currently accessible only via helicopter.
The Gin Minfile Occurrence is underlain by Lower Jurassic Hazelton and Upper Triassic Stuhini Group
sediments and andesitic flows with an east-trending Early Jurassic dioritic stock. Mineralisation is
characterised by widely scattered narrow pyrite veins with trace chalcopyrite, arseonpyrite and rare galena
and sphalerite samples, which have returned up to 1.24 g/tonne Au and 45.1 g/tonne Ag. Exploration for
copper porphyry around Gin has continued off and on from the 1970s to the present day.
In 2013 a single day was spent on the Ginside property during which time a total of 61 widely spaced soil
(500m spaced lines with 100m sample intervals), 7 rock, and 4 silt samples. Two silt samples from near the
geneses of two first order streams in the eastern portion of the property returned anomalous (above 85 ppm)
copper. The soils returned low to background with the most consistently low, but anomalous (above 80
ppm) samples being returned from the central to eastern-most lines. Rock samples taken on the property
were low, with one returning 88.5 ppm Cu. One sample 200 m to the south of the property boundary
returned 747 ppm Cu.
Interpretation and Conclusions
General Observation
The authors have not identified any significant risks or uncertainties in the information presented in this
report, which could reasonably be expected to affect confidence in or reliability of the report.
Project Area
The project area is located in a terrane, which has a long geological history of great diversity with several
stages of basin and arc formation, resulting in development of considerable mineralisation of diverse
metallogeny.
The Property is underlain by three, and possibly four distinct successions of volcanic and volcanogenic
sedimentary rocks – the Stuhini Group, the Hazelton Group, possibly the Bowser Group, and the Mount
Edziza Volcanic Complex.
The large extent of Upper Hazelton Formation on the Property makes it prospective for VMS deposits and
the large extent to which the Stuhini/Hazelton unconformity, in association with intrusive rocks, is present
on the Property is supportive of potential porphyry gold/copper and porphyry-related gold mineralisation,
based on the “Transitional Meso-to-Epithermal Stockwork Gold” model developed by Pretivm Resources
Inc. for their Brucejack gold deposit. This does not provide any assurance that a mineral deposit exists on
the property.
Significant anomalous assays for rock samples and soil samples were obtained from two areas, the Saddle
Target area, and the Quash/Pass Gossan Target Area, which require follow-up work. To support this
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follow up work, NCM has access to its Property-wide airborne magnetics and EM survey results, which
have not shown any obvious anomalies, but have not yet been interpreted in detail around these
geochemical anomalies.
Less than 30% of the Property has been subjected to soil geochemical prospecting and anything but
regional mapping by the BC Geological Survey. NCM experience in the Saddle area suggests that soil
geochemical sampling of the balance of the Property will yield additional targets.
Detailed analysis of the results of the airborne geophysical surveys carried out by NCM has not yet been
undertaken in the Pass Gossan and Saddle areas. It is recommended that such analysis be undertaken in the
light of the latest mapping, soil and rock geochemical results.
The Saddle Target Area
The exploration strategy of NCM is based on the Brucejack model for porphyry-related gold mineralisation
based on proximity to the Stuhini/Hazelton unconformity. The Saddle area is characterised by numerous
contact zones between Stuhini and Hazelton units.
Geological mapping has encountered completely quartz-sericite-pyrite altered rock with numerous outcrops
of gossanous material. The nature of mineralisation is not yet understood, but there are indications that it is
related to relatively large (i.e. 10 cm - 30 cm) malachite + chalcopyrite-bearing quartz-carbonate veins that
are present to the north of the gossans and appear to be syn- or post-deformation and which are oriented
roughly parallel to the dominant shearing directions measured across the whole area - approximately
215°/80° (dip, direction/dip).
At the Saddle area two particularly strong gold with associated copper anomalies have been defined which
have the same trend as the shearing direction. The northern anomaly is a 300 m by 400 m anomaly of gold
levels above 0.1 g/t Au (with four assays in excess of 1 g/t Au). The other anomaly, approximately 800 m
southwest from the first, is almost 1 km long and between 100 m to 300 m wide, with in general higher
assay values than the northern anomaly.
In both cases these high gold results are associated with regions in which there are gossanous zones of
almost completely quartz-sericite-pyrite-replaced rocks.
Associated with the anomalous gold are elevated copper values (on average >150 ppm), but there is a
particularly striking 250 m by 100 m copper anomaly (>500 ppm with most results >1,000 ppm) in the area
between the gold anomalies.
The Quash/Pass Gossan Area
In this area two different targets have been identified through soil sampling, Cu/Au mineralisation and Zn-
Pb-Ag mineralisation.
Soil and rock samples define a 1,200 m by 200 m copper anomaly (150 ppm to >500 ppm), trending along
the north-facing plateau edge to the northeast of the Pass Gossan occurrence, coincident with a monzonitic
intrusion close to the mapped Stuhini/Hazelton contact. This anomaly is coincident with a soil gold
anomaly of 20 ppb to 250 ppb, as well as elevated zinc and lead assays.
One kilometre to the west-southwest of the Pass Gossan anomaly a very strong 400 m by 400 m zinc, lead,
silver soil anomaly is present at the Quash mineral occurrence. Elevated levels of these elements occur
erratically in the soil for a considerable distance away from the anomaly centre, and throughout the area
lying between Quash and Pass Gossan. These elevated metal levels are entirely consistent with the kind of
geochemical halo one would expect to find surrounding a copper/gold porphyry deposit, which may
underly the Pass Gossan Cu/Au soil anomaly
The areal extent and tenor of the soil copper and gold anomalies associated with the intrusives at the
Quash/Pass Gossan are equivalent to or greater than the anomalies associated with the two copper/gold
porphyry deposits immediately adjacent to the Property – namely the GJ and North ROK deposits. This
does not provide any assurance that a mineral deposit exists on the property. The anomalous values at
Quash show a greater consistency than is apparent from both the GJ and Colorado maps and with the
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highest assays outlining a coherent zone exceeding 500 ppm Cu, whereas for GJ this is >57 ppm and for
North Rock >190 ppm. This does not provide any assurance that a mineral deposit exists on the property.
For these reasons, the Quash/Pass Gossan soil anomaly is considered a very promising copper/gold
porphyry deposit drilling target.
The Quash/Pass Gossan area also clearly possesses potential for epithermal gold deposition, as exemplified
by the gold-only Valleyside anomaly situated 1.2 km along strike to the south-east of the Pass Gossan.
Three adjacent samples reported above 300 ppb Au over a 50 m by 100 m sampling area.
Recommendations
Project Area
NCM has been able to identify a number of areas within the greater Tatogga Lake project area, which are of
particular interest. The focus has been on geophysical and geochemical surveys, supported by mapping of
the lithology. From the field visit it was apparent that structure could be an important control to
emplacement.
The Saddle Target Area
The results at the Saddle area seem to be the most attractive and the area should receive at this stage the
most attention, in particular as it has historically never been explored in detail.
Figure 19.2_1 shows copper mineralisation in the north portion of the Saddle area in a NW striking
structure, which is parallel to the structural grain of the area.
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Figure 19.2_1 Cu Mineralisation Located in NW Striking Structure
The soil sample anomalies for both gold and copper seem to follow this trend.
As there has not yet been a mapping exercise to specifically determine any structural control on the
mineralisation, it is recommended that a structural map be generated to place the location of encountered
mineralisation and alteration in the context of structural controls. This should be carried out in preparation
of a borehole programme to assist in determining the location, azimuth and dip of the various boreholes.
The porphyry copper potential needs to be further explored to the south and south-east of the cluster of rock
outcrop samples highly anomalous in copper – an area which, according to historical records, has yet to be
sampled, or mapped in detail.
The Quash/Pass Gossan Area
The anomaly around the Pass gossan is well-defined and seems to be associated with the Stuhini-Hazelton
contact. Whereas it constitutes an immediate drill target, there is a possibility that the extent of the soil
anomaly is overstated down hill and that the source may be a relative narrow horizon of mineralisation.
Drilling should be designed to:-
delineate the true thickness of near-surface mineralisation;
gain structural/geological information about mineralising controls;
test deeper continuation, and
establish possible broadening of intrusive bodies thought to host the mineralisation or ideally
identify a larger mineralised stock/pluton from which the more limited in volume dykes come.
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The base metal soil anomaly at the Quash gossan area south of the Pass gossan is well-defined and also
constitutes an immediate drill target. Trenching results by Ascot Resources in 1991 concluded that the
probable source for the soil anomaly are sphalerite, galena and pyrite mineralised iron-carbonate stringers,
veinlets and fracture in-fillings. Minor amounts of disseminated fine grained galena, and possible
sphalerite, hosted within the light green siliceous siltstone unit were observed, and considered a secondary,
lesser source of the base metal geochemical anomaly. Although the assays of the trench samples were sub-
economic, the target warrants some drilling to verify whether grades improve with depth.
Scope of Recommended Exploration and Cost Estimate
Table 19.4_1 sets out the recommended scope and budget for the next stage of exploration.
Table 19.4_1
New Chris Minerals Ltd
Scope and Cost Estimate for Recommended Exploration
Target Activity Scope
Rate
(C$/unit)
Amount
(C$)
Saddle
Structural Mapping One month 15,000 15,000
Drilling and Assaying – Initial 40 holes for 2,000m 150 300,000
Sub-total Saddle Area 315,000
Quash/
Central
Structural Mapping One month 15,000 15,000
Drilling and Assaying –Initial 20 holes for 2,000m 150 300,000
Sub-total Quash/Central Area 315,000
Camp/Labour/Support Services 450,000
Supervision and Reporting/Miscellaneous 75,000
Sub-total 1,155,000
Contingency – 20% 231,000
Total Budget 1,386,000
The total budget excludes any provision for corporate support services and activities.
Whereas the Saddle target and Quash/Gossan target can both be considered immediate drill targets, they
stand to benefit from a dedicated structural mapping exercise to plan the location and azimuth/inclination of
the various boreholes.
As the initial drilling programme should be directed to gain a better understanding of the nature and
controls of the mineralisation, the holes should be relatively short and cover the full extent of the
anomalies. At Saddle, given the strong geochemical anomalies in the soil samples, the proposed average
depth of 50 m of the holes is shorter than the proposed average depth of 100 m at Quash/Gossan.
New Nanik Property
The New Nanik property encompasses approximately 13,000 hectares and covers a significant zone of copper-gold-
silver-molybdenum porphyry-style mineralization discovered in the late 1960s. It remains in good standing until
June 1, 2018, with no property work commitments required in the interim. The Resulting Issuer will, however, be
required to make a total of $175,000 in staged cash payments to the Property Optionors as follows: $25,000 on the
12 month anniversary of Closing, and $50,000 on each of dates which fall 24, 36 and 48 months respectively from
Closing. The New Nanik Property is located in west-central B.C. approximately 100 kilometres southeast of
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Terrace, and 35 kilometres west of Imperial Metals / Mitsubishi’s Huckleberry Cu-Mo mine. The New Nanik
property has strong copper and molybdenum in soils over an area of approximately 2000 X 500 metres, associated
with a large, northeast tending, intensely altered, shattered and faulted contact zone between intrusives and Hazelton
rocks. This zone was the target of 33 historical holes in the 1967-73 timeframe, along with ground IP and
magnetics. Drilling results were encouraging, with many holes returning intercepts of >0.2% Cu plus Au, Ag and
Mo credits for lengths up to 200 metres, some bottoming in mineralization. Sampling was spotty and many
intervals were left unsampled. A best intercept of 48.8 metres of 0.6% Cu, 0.3 g/t Au, 20 g/t Ag, and 0.02% Mo
within a longer intercept of 85.3 metres of 0.48% Cu, 0.26 g/t Au, 15.4 g/t Ag, and 0.01% Mo was achieved in hole
GR-69-03. The property is believed to offer excellent resource-definition potential coupled with abundant
exploration upside. As such, it is considered potentially material to the Resulting Issuer’s future prospects.
However, at this point in time no specific plans for further exploration have been formulated.
Upon Closing, the Resulting Issuer will be engaged in the business of mineral exploration and the development of
the Tatogga and the New Nanik properties, and will assume all future obligations in respect of these properties. In
addition, the Resulting Issuer may explore and develop such other properties and interests as it may subsequently
acquire.
INFORMATION CONCERNING THE RESULTING ISSUER
The following information is presented on a post-Acquisition basis and is reflective of the projected business,
financial and share capital position of Manera, as the Resulting Issuer, after giving effect to the Acquisition and the
Financing. This section only includes information respecting the Resulting Issuer after the Acquisition that is
materially different from information provided earlier in this Filing Statement under “Information Concerning
Manera” and “Information Concerning New Chris”.
Corporate Structure
The Resulting Issuer was incorporated on September 9, 2013 pursuant to the provisions of the BCBCA, under the
name “Manera Capital Corp.”.
The Resulting Issuer’s head and exploration offices will be located at 729 Okanagan Avenue East, Penticton, British
Columbia, V2A 3K7. The registered and records office of the Resulting Issuer will be located at 666 Burrard Place,
Suite 1700, Vancouver, British Columbia, V6C 2X8.
Narrative Description of the Business of the Resulting Issuer
Forward-Looking Information
Statements in the following sections concerning the exploration plans, objectives and milestones of the Resulting
Issuer are “forward-looking information” and are subject to a number of known and unknown risks, uncertainties
and other factors that may cause actual results, performance or achievements to be materially different from that
which is expressed or implied by such forward-looking statements. Please refer to “Risk Factors” in this Filing
Statement.
Stated Business Objectives
The Resulting Issuer will continue to be a junior mineral exploration company engaged in the identification,
acquisition, exploration and if warranted, development of mineral properties. The Resulting Issuer will continue to
focus on advancing the Tatogga Property, carrying out the exploration plan as described in the Tatogga Report.
Please see “Property Description and Location” in this Filing Statement.
Milestones
To pursue the foregoing business objectives, the Resulting Issuer will target the milestones and conduct the
recommended exploration programs set forth in the Tatogga Report. Please see “Property Description and Location”
for additional information.
As indicated above, the Resulting Issuer expects to utilize the proceeds from the Financing to finance its operations
going forward, being primarily the recommended exploration and development work on the Tatogga Property, to
make required property payments, to maintain the mineral claims comprising the Tatogga Property and the
Resulting Issuer’s other properties in good standing, to pay outstanding indebtedness, and for general working
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capital over the next 12 months. Please see “Information Concerning the Resulting Issuer – Available Funds and
Principal Purposes” for further detail regarding the Resulting Issuer’s budgeted use of funds.
Exploraton and Development Activities
It is anticipated that the program recommended in the Tatogga Report, being the completion of additional mapping,
sampling and an initial program of drilling, will commence in the fourth quarter of 2016 and be completed in the
first quarter of 2017. The total estimated costs for the exploration program recommended in the Tatogga Report, is
$1,386,000. See “Information Concerning the Resulting Issuer – Property Description and Location” for a
breakdown of these costs.
The Resulting Issuer plans to use its unallocated working capital as a contingency to support ongoing operations.
Description of the Securities
Upon the Closing of the Acquisition, the share structure of the Resulting Issuer will be the same as the share
structure of Manera. See “Information Concerning Manera – Description of the Securities”.
Pro Forma Consolidated Capitalization
The following table sets forth the capitalization of the Resulting Issuer after giving effect to the Acquisition and the
Financing:
Designation of
Security Authorized Number
Number Outstanding
After Giving Effect to
the Acquisition
Number Outstanding After
Giving Effect to the
Acquisition and the Financing
Common Shares Unlimited 46,201,948(1)
62,855,281
Options 10% of issued and
outstanding shares at
time of grant(2)
525,000(2)
5,250,000(3)
Warrants N/A Nil 8,000,000(4)
Finder Warrants N/A Nil 496,033(5)
Long Term Debt Nil Nil Nil
Notes:
(1) Of these shares, 38,351,948 will be subject to the Escrow Agreement and 4,000,000 are subject to the CPC
Escrow Agreement. See “Escrowed Securities” below. The number of stock options that the Resulting Issuer
may grant is limited by the terms of the Stock Option Plan and Exchange Policies. See “Information
Concerning Manera – Stock Option Plan”.
(2) 525,000 Manera Options at an exercise price of $0.10 per Manera Share in place prior to the Closing. A total
of 450,000 Manera Options will expire 90 days following the Closing, and 75,000 Manera Options will
expire on August 28, 2019. See “Information Concerning the Resulting Issuer – Options to Purchase
Securities”.
(3) Comprised of 525,000 Manera Options at an exercise price of $0.10 per Manera Share in place prior to the
Closing (see Note 2 above for particulars), 1,575,000 Manera Options at an exercise price of $0.15 per
Manera Share exercisable for a period of 5 years from the Closing Date, 1,575,000 Manera Options at an
exercise price of $0.225 exercisable for a period of 5 years from the Closing Date, and 1,575,000 Manera
Options at an exercise price of $0.30 exercisable for a period of 5 years from the Closing Date. See
“Information Concerning the Resulting Issuer – Options to Purchase Securities”.
(4) 8,000,000 Manera warrants issued pursuant to the Financing, exercisable for two years from the Closing Date
at an exercise price of $0.20 per Manera Share.
(5) 496,033 finder warrants issued to various finders pursuant to the Financing, exercisable for a period of two
years from the Closing Date at an exercise price of $0.20 per Manera Share.
Fully Diluted Share Capital
Manera Options: Effective immediately following Closing, the Resulting Issuer intends to grant options to directors
and officers of the Resulting Issuer to purchase an aggregate of 4,725,000 Manera Shares, comprised of 1,575,000
Manera Options at an exercise price of $0.15 per Manera Share exercisable for a period of 5 years from the Closing
Date, plus 1,575,000 Manera Options at an exercise price of $0.225 exercisable for a period of 5 years from the
101
Closing Date, plus 1,575,000 Manera Options at an exercise price of $0.30 exercisable for a period of 5 years from
the Closing Date.
The following table states the anticipated fully diluted share capital of the Resulting Issuer after giving effect to the
Acquisition and the Financing:
Description of Security Number of Securities
Percentage of Total after Giving
Effect to the Acquisition and the
Financing and all other dilutive
instruments
Manera Shares issued and
outstanding prior to the Closing 7,850,000 10.25%
Manera Shares to be issued pursuant
to the Acquisition 38,351,948
(1)
50.07%
Manera Shares to be issued pursuant
to the Financing 16,600,000
21.67%
Manera Shares reserved for issuance
on exercise of Manera Warrants
issued pursuant to the Financing
8,000,000(2)
10.44%
Manera Shares reserved for issuance
on exercise of Manera Finder
Warrants issued pursuant to the
Financing
496,033(2)
0.65%
Manera Shares reserved for issuance
on exercise of Manera Options
currently outstanding
525,000(3)
0.68%
Manera Shares to be issued to Red
Cloud pursuant to the Advisory
Agreement
53,333(4)
0.07%
Manera Shares reserved for issuance
on exercise of Manera Options to be
granted effective immediately after
the Closing
4,725,000(5)
6.17%
Total Fully Diluted Share Capital 76,601,314 100%
Notes:
(1) See “The Acquisition” for more information.
(2) These warrants are exercisable for Manera Shares at an exercise price of $0.20 per Manera Share
for two years from the Closing Date.
(3) These options are exercisable for Manera Shares at an exercise price of $0.10 per Manera Share.
Options in respect of a total of 450,000 Manera Shares will expire 90 days following the Closing,
and an option in respect of 75,000 Manera Shares will expire on August 28, 2019.
(4) These shares will be issued at a deemed price of $0.15 per share
(5) These options shall be exercisable for Manera Shares at exercise prices as follows: 1,575,000 at
$0.15 per Manera Share for 5 years from the Closing Date, 1,575,000 at $0.225 per Manera Share
for 5 years from the Closing Date, and 1,575,000 at $0.30 per Manera Share for 5 years from the
Closing Date.
102
Available Funds and Principal Purposes
Available Funds
As of the most recent month end prior to the date of this Filing Statement, Manera had working capital of
approximately $200,000. Manera expects to raise net proceeds of $2,436,095 pursuant to the Financing. The
Resulting Issuer is therefore expected to have approximately $2,636,095 in available funds after giving effect to the
Acquisition and the Financing.
Principal Purpose of Funds
The Resulting Issuer will spend the funds available to it upon Closing to further the Resulting Issuer’s stated
business objectives. There may be circumstances where, for sound business reasons, a reallocation of funds may be
necessary in order for the Resulting Issuer to achieve its stated business objectives.
The Resulting Issuer, should it experience success with its initial exploration program, will require additional
capital. If so, this capital will have to come from equity and/or debt financing or through joint ventures. There is no
assurance that additional capital will be available to the Resulting Issuer or that the terms of such capital, if
available, will be favourable. Failure to obtain additional capital could result in the delay or indefinite postponement
of such programs, a decline in the Resulting Issuer’s share price, or its bankruptcy. See “Risk Factors”.
The following table sets out the principal purposes, using approximate amounts, for which the Resulting Issuer
currently intends to use the net total available funds of approximately $2,636,095 after giving effect to the
Acquisition and Financing, as set forth in “Available Funds” above:
Description Budgeted Expenditures
Estimated general and administrative expenses over the 12 months following the
Closing Date $493,000
Exploration costs on the Tatogga Property $1,386,000
Payments to Mehra, Wildville Enterprises and the Property Optionors $531,500(1)
Unallocated working capital $225,595
Total $2,636,095
Note:
(1) The following payments will be made:
(a) $206,500 to Mehra and Wildville Enterprises on Closing to satisfy outstanding shareholder
loans owed to them by New Chris
(b) $200,000 to Mehra and Wildville Enterprises twelve months from Closing ($100,000 to each)
(c) $100,000 to the Property Optionors in respect of the Tatogga property ($50,000 on Closing,
with an additional $50,000 to be paid twelve months from Closing)
(d) $25,000 to be paid to the Property Optionors in respect of the New Nanik property twelve
months from Closing
Total $531,500
103
Dividends
The proposed management and directors of the Resulting Issuer do not anticipate declaring any dividends payable to
the holders of the Manera Shares. The Resulting Issuer will have no restrictions on paying dividends, but if the
Resulting Issuer generates earnings in the foreseeable future, it expects that they will be retained to finance growth.
The directors of the Resulting Issuer will determine if and when dividends should be declared and paid in the future
based upon the Resulting Issuer’s financial position at the time. All Manera Shares are entitled to an equal share in
any dividends declared and paid.
Principal Securityholders
To the knowledge of the directors and senior officers of Manera and New Chris, upon completion of the Acquisition
and the Financing, the following persons are anticipated to beneficially own, directly or indirectly, or exercise
control or direction over, more than 10% of the voting securities (being Manera Shares) of the Resulting Issuer.
Name and
Municipality of
Residence
Number of
Manera Shares
Held Prior to the
Acquisition and
the Financing
Percentage of
Manera Shares
Held Prior to the
Acquisition and
the Financing
Number of
Manera Shares
Held After the
Acquisition and
the Financing
Percentage of
Manera Shares
Held After the
Acquisition and the
Financing
(undiluted basis)
Ashwath Mehra
Zug, Switzerland Nil Nil 13,425,501
(1) 21.36%
McMullen Family
Trust
Coonamble, NSW,
Australia
Nil Nil 13,426,447(1)
21.36%
Notes:
(1) All of these Manera Shares will be subject to escrow restrictions under the Escrow Agreement. See
“Information Concerning the Resulting Issuer – Escrowed Securities” for additional information.
Upon completion of the Acquisition and the Financing a total of 27,018,614 Manera Shares, or approximately
42.99% of the common shares of the Resulting Issuer that will then be issued and outstanding, will be held by
Insiders of the Resulting Issuer.
Directors and Officers
Manera’s current directors and officers are Alfredo De Lucrezia (President, Chief Executive Officer, Chief Financial
Officer and Director), Maurizio Grande (Director), Gordon Kettleson (Director), John Pallot (Director) and Ben
Colangelo (Secretary). In connection with the Acquisition, all of the current directors and officers of Manera, with
the exception of John Pallot, will resign in favour of nominees of New Chris. New Chris’s nominees for directors, in
addition to John Pallot, are Ashwath Mehra, Kevin Keough, Charles Greig and Taj Singh. Ashwath Mehra will be
appointed Chairman, Kevin Keough will be appointed President and Chief Executive Officer, Charles Greig will be
appointed Vice-President Exploration. Tracy Albert will be appointed Chief Financial Officer and Shaun Drake will
be appointed Corporate Secretary.
The term of office of each of the present directors expires at Manera’s next annual general meeting. Each director
elected or appointed will hold office until the next annual general meeting of the Resulting Issuer or until his or her
successor is elected or appointed, unless his or her office is earlier vacated in accordance with the Articles of the
Resulting Issuer or with the provisions of the BCBCA.
The following table sets out the names of the proposed directors and officers of the Resulting Issuer, the
municipality in which each is ordinarily resident, all offices of the Resulting Issuer proposed to be held by each of
them, their principal occupations during the past five years and the expected number of Manera Shares beneficially
owned by each, directly or indirectly, or over which control or direction is exercised, following completion of the
Acquisition and the Financing.
104
Name, Municipality
of Residence,
Proposed Offices
Principal
Occupation
During Last Five
Years
Prior Director of
Manera or New
Chris and Term
of Such Position
Number of
Manera
Shares Upon
Completion of
the Acquisition
and the
Financing(1)
Percentage of Class
Held or
Controlled on
Completion of the
Acquisition and the
Financing
(undiluted basis)
Ashwath Mehra
Zug, Switzerland
Chairman and
Director
Businessman Director, New
Chris, founding
(2011) to present
13,425,501(2)
21.36%
Kevin M. Keough
Woodlawn, Ontario
President, Chief
Executive Officer
and Director
Businessman Consultant /
Interim President,
New Chris, May-
Dec 2014
Nil(3)
Nil
Charles J. Greig
Penticton, British
Columbia
Vice-President
Exploration and
Director
Consulting
Geologist
No Nil(4)
Nil
John L. Pallot
New Westminster,
British Columbia
Director
Businessman Director, Manera,
2014 to present
166,666(5)
0.27%
Taj Singh
Toronto, Ontario
Director
VP, Engineering,
Projects & Business
Development,
Timmins Gold; VP
& Mining Equity
Research Analyst,
Macquarie Capital
Markets
No Nil(6)
Nil
Tracy K. Albert
Ottawa, Ontario
Chief Financial
Officer
Director of
Finance, National
Dental Examination
Board; Controller,
Northern Graphite
Corp.
No Nil(7)
Nil
Shaun A. Drake
Buckhorn, Ontario
Corporate Secretary
Corporate Secretary
to Premier Gold
Mines and several
other public issuers
No Nil(8)
Nil
Notes:
(1) Based on the number of Manera Shares beneficially owned, directly or indirectly, or over which
control or direction is exercised as at the date of this Filing Statement.
(2) Mr. Mehra will additionally hold 500,000 options to acquire shares of the Resulting Issuer at prices
of $0.15, $0.225 and $0.30 per share for a period of five years following the Closing Date.
(3)
Mr. Keough will hold 1,750,000 options to acquire shares of the Resulting Issuer at prices of $0.15,
$0.225 and $0.30 per share for a period of five years following the Closing Date.
(4)
Mr. Greig will hold 1,750,000 options to acquire shares of the Resulting Issuer at prices of $0.15,
$0.225 and $0.30 per share for a period of five years following the Closing Date.
(5)
Mr. Pallot will additionally hold 75,000 options to acquire shares of the Resulting Issuer at a price
of $0.10 per share until August 28, 2019, and 250,000 options to acquire shares of the Resulting
Issuer at prices of $0.15, $0.225 and $0.30 per share for a period of five years following the
Closing Date.
(6)
Mr. Singh will hold 250,000 options to acquire shares of the Resulting Issuer at prices of $0.15,
$0.225 and $0.30 per share for a period of five years following the Closing Date.
105
(7)
Ms. Albert will hold 25,000 options to acquire shares of the Resulting Issuer at prices of $0.15,
$0.225 and $0.30 per share for a period of five years following the Closing Date.
(8)
Mr. Drake will hold 25,000 options to acquire shares of the Resulting Issuer at prices of $0.15,
$0.225 and $0.30 per share for a period of five years following the Closing Date.
The Resulting Issuer’s Audit Committee will be made up of Kevin Keough, Taj Singh and John Pallot, with Taj
Singh acting as Chairman. John Pallot and Taj Singh will be considered the independent members of the audit
committee, while Kevin Keough will not be considered independent as he will be the President & CEO of the
Resulting Issuer. All members are considered financially literate.
The Resulting Issuer will also have a Governance and Nomination Committee, the members of which will be Taj
Singh, John Pallot and Ashwath Mehra, with Ashwath Mehra acting as Chairman.
Management
The following is a brief description of the key management and directors and officers of the Resulting Issuer.
Ashwath Mehra, Chairman, Director – BSc (Econ), London School of Economics. A former senior
partner with Glencore International AG and its predecessors, Mr. Mehra has more than 30 years experience
in minerals, commodities marketing, resource development and project finance. He is currently CEO of
Astor Management AG, and MRI Advisory AG of Zug, Switzerland.
Kevin M. Keough, President & CEO, Director – HBSc. Geological Sciences, Queen’s University. Mr.
Keough began his career with Anglo American Corporation and De Beers, and has more than 30 years
diverse business experience. He couples a technical background and international experience with
expertise in project and public company management, finance and capital markets, communications, and
business development.
Charles James Greig, VP Exploration, Director – P.Geo, B.Sc. & M.Sc. Geological Sciences – UBC,
and B.Comm - UBC. Mr. Greig is among the most experienced geologists in B.C., having worked on
projects such as Brucejack Lake (Pretium), Red Mountain (IDM), Silbak Premier (Ascot), and abroad on
projects such as La India in Mexico (Grayd–Agnico Eagle) and Bisha in Eritrea (Nevsun).
John L. Pallot, Director - Mr. Pallot studied at Simon Fraser University prior to serving with Telus Corp.
for 30 years. He has more than 20 years of involvement with public companies as a director and/or in
senior executive capacities with such companies as Statesman Resources, Messina Minerals, Windarra
Minerals (acquired by Wesdome Gold), Westward Exploration, and Redmile Capital (now Orla
Exploration). He presently serves as an independent director of Klondike Gold Corp. and Manera Capital
Corp.
Taj Singh, Director – M.Eng, P.Eng; CPA; B.Eng. (Metallurgy), U of T; M.Eng. (Metallurgy), McMaster
U. Mr. Singh is a Professional Engineer (P.Eng.) and a Chartered Professional Accountant (CPA, CMA).
He has 15 years of experience in the minerals sector and presently serves with Timmins Gold Corp. as Vice
President, Engineering, Projects & Business Development, responsible for providing engineering oversight
of the company’s existing operations, managing project development, and overseeing evaluations on
external assets. Prior to joining Timmins Gold, Mr. Singh was Vice President and Mining Equity Research
Analyst at Macquarie Capital Markets in Toronto. He also has a decade of experience working in various
operations, engineering and project development roles for Inco Limited and CVRD/Vale.
Tracy K. Albert, Chief Financial Officer – Ms. Albert is a Chartered Professional Accountant (CPA,
CMA) and Chartered Financial Analyst (CFA), with 25 years experience providing diversified accounting
services and financial leadership for not-for-profit, publicly-traded, and privately-held organizations and
companies. Her expertise includes financial analysis, budgeting, treasury management, financial statement
preparation, financial modelling, cash flow projections, variance analysis, and implementation and
oversight of internal controls.
Shaun A. Drake, Corporate Secretary – Mr. Drake is the founder of DSA Corporate Services. Since
2000 he has delivered corporate secretarial services to an array of publicly traded clients on the TSX and
TSXV, predominantly in the junior resource sector. Prior to founding DSA, Shaun worked in the global
trust services industry for fourteen years, and provided corporate services to a private bank. He is an
Associate (ACIS) of the Institute of Chartered Secretaries and Administrators (ICSA).
106
Promoter Consideration
The Resulting Issuer does not expect to have any promoters other than its directors and officers, nor has the
Resulting Issuer or New Chris had a promoter within the two years immediately preceding the date of this Filing
Statement.
Corporate Cease Trade Orders or Bankruptcies
Except as set out below, as at the date of this Filing Statement and within the ten years before the date of this Filing
Statement, no director, officer or proposed director or officer, promoter or any shareholder anticipated to hold
sufficient securities of the Resulting Issuer to affect materially the control of the Resulting Issuer is or has been a
director, officer or promoter of any company (including the Resulting Issuer) that, while that person was acting in
that capacity:
(a) was the subject of a cease trade or similar order or an order that denied the relevant company access to any
exemption under securities legislation, for a period of more than 30 consecutive days; or
(b) became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was
subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets;
save and except as follows:
- Manera director John Pallot was the President, Chief Executive Officer and a Director of
Westward Explorations Ltd. when it made a proposal in October 2006 to its creditors, pursuant to
the provisions of the Bankruptcy and Insolvency Act, to resolve an outstanding re-assessment
made by Revenue Canada in 2000. The re-assessment arose in respect of a transaction which
occurred in 1996. In March 2007, Westward Explorations Ltd. obtained court approval to the
proposal and the claims of the creditors were settled.
Penalties or Sanctions
To the knowledge of the Resulting Issuer, no current or proposed director, officer, promoter or shareholder
anticipated to hold a sufficient number of securities of the Resulting Issuer to affect materially the control of the
Resulting Issuer has:
(a) been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a
securities regulatory authority or has entered into a settlement agreement with a securities regulatory
authority; or
(b) been subject to any other penalties or sanctions imposed by a court or regulatory body, including a self-
regulatory body, that would be likely to be considered important to a reasonable securityholder making a
decision about the Acquisition.
Personal Bankruptcies
To the knowledge of the Resulting Issuer, there has been no current or proposed director, officer, promoter, or any
shareholder anticipated to hold sufficient securities of the Resulting Issuer to affect materially the control of the
Resulting Issuer, or a personal holding company of any such person, that has, within the ten years prior to the date of
this Filing Statement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency,
or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver,
receiver manager or trustee appointed to hold the assets of that person.
Conflicts of Interest
Concurrent with their roles with the Resulting Issuer, certain of the directors and officers of the Resulting Issuer
including Mr. Ashwath Mehra, proposed Chairman, Kevin M. Keough, proposed President & CEO, Charles J.
Greig, proposed Vice President, Exploration, Tracy K. Albert, proposed Chief Financial Officer, and Shaun A.
Drake, proposed Corporate Secretary, will be engaged in, and will continue to be engaged in, either individually or
with other directors and officers of the Resulting Issuer, other business activities on their own behalf and on behalf
of other companies, including mineral resource companies active in gold exploration in British Columbia. Kevin
107
Keough and Charles Greig are presently co-owners of Skyline Gold Corp., a private company established in 2015,
with mineral properties also located in the Golden Triangle of northern B.C., although well removed from the
Resulting Issuer’s flagship Tatogga Property. Further, Mr. Greig as a well-regarded geologist has for years run a
consulting geological practice, C.J. Greig & Associates, with multiple current clients active in B.C. mineral
exploration in the Golden Triangle and elsewhere.
As a result of these and other activities, directors and officers of the Resulting Issuer may become subject to
conflicts of interest. The directors and officers of the Resulting Issuer intend to avoid the potential for such conflicts
by 1) limiting the number of other mineral resource companies active in B.C. with which they are involved, 2)
applying and respecting, robust ‘areas of interest’ around existing properties in the property portfolios of the
companies with which they are involved, 3) ensuring that any property acquistion opportunities (whether by staking
or optioning) that they may become aware of are first brought to the attention of and/or offered to, the company
whose existing properties are closest to the new opportunities, and 4) ensuring shareholders, the general public, and
fellow officers and directors of the Resulting Issuer are aware of these varied corporate relationships.
In the event that a director or senior officer of the Resulting Issuer believes the potential for a conflict exists, in
accordance with the BCBCA the director or senior officer will disclose his or her interest in such property, contract,
agreement or engagement and shall refrain from voting on any matter in respect of such property, contract,
agreement or engagement.
For information concerning the director and officer positions held by the proposed directors of the Resulting Issuer,
please see “Other Reporting Issuer Experience” directly below.
Other Reporting Issuer Experience
The following table sets out the proposed directors, officers and promoters of the Resulting Issuer who are, or have
been within the last five years, directors, officers or promoters of other reporting issuers, other than Manera:
Name of Director,
Officer or Promoter Name of Reporting Issuer Exchange Position Period
Ashwath Mehra
EMED/Atalaya Mining PLC TSX Director October 2008 to
December 2014
Champion Iron Ltd. TSX Director October 2010 to
present
Fancamp Exploration Ltd. TSXV Director October 2013 to
present
Luminor Medical
Technologies Inc. TSXV Director
March 2016 to
present
Kevin M. Keough PC Gold Inc. TSX
President,
CEO and
Director
May 2008 to
December 2011
Charles J. Greig Windarra Minerals Ltd. TSXV Director June 2005 to
September 2013
108
John L. Pallot
Klondike Gold Corp. TSXV Director December 2013 to
present
Windarra Minerals Ltd. TSXV
Director
President &
CEO
April 1993 to
September 2013
June 2002 to
September 2013
Messina Minerals Ltd. TSXV Director April 2003 to
December 2013
Redmile Minerals Corp. TSXV Director May 2007 to
August 2012
Olympic Resources Ltd. TSXV Director December 2010 to
September 2011
Statesman Resources Ltd. TSXV Director August 2011 to
March 2015
Tracy K. Albert PC Gold Inc. TSX Controller
May 2008 to
December 2011
Northern Graphite Corp. TSXV Controller 2010 to present
Shaun A. Drake
Premier Gold Mines
Limited TSX
Corporate
Secretary
August 2006 to
present
PC Gold Inc. TSX Corporate
Secretary May 2008 to
December 2011
Taj Singh
Timmins Gold Corp. TSX Vice-
President
September 2012 to
present
Nevada Iron Ltd. TSX Director November 2013 to
July 2016
Executive Compensation and Management Contracts
Manera is currently prohibited from paying remuneration (including salaries, consulting fees, management or
directors fees, etc.) to Non-Arm’s Length Parties or to persons engaged in Investor Relations Activities pursuant to
the CPC Policy until it has completed a Qualifying Transaction and a Final Exchange Bulletin has been issued
therefore. Manera may reimburse Non-Arm’s Length Parties for rent, secretarial services and other general and
administrative expenses at fair market value.
Set out below is a summary of the anticipated compensation for each of the Resulting Issuer’s three most highly
compensated executive officers and members of management, in addition to the proposed Chief Executive Officer,
Chief Financial Officer, and Corporate Secretary for the 12 month period after giving effect to the Acquisition:
Summary Compensation Table
For the 12 months following the completion of the Acquisition and the Financing
Name and Principal Position
Fees ($)
Share-
Based
Awards
($)
Option-
Based
Awards
($)(1)
Non-Equity Incentive Plan
Compensation Pension
Value
($)
All Other
Compensation
($)
Total
Compensation
($)
Annual
Incentive
Plans ($)
Long Term
Incentive
Plans ($)
Ashwath Mehra
Chairman 50,000(2) Nil 31,620 Nil Nil Nil Nil 81.620
Kevin M. Keough
President & CEO 150,000(3) Nil 110,670 Nil Nil Nil Nil 260,670
Charles J. Greig
Vice-President,
Exploration
100,000(4) Nil 110,670 Nil Nil Nil Nil 210,670
Tracy K. Albert
Chief Financial Officer Nil Nil 1,581 Nil Nil Nil 48,000(5) 49,581
Shaun A. Drake
Corporate Secretary Nil Nil 1,581 Nil Nil Nil 18,000(6) 19,581
109
Notes:
(1) The value of any option-based award will be determined as the grant date fair value using the
Black-Scholes option-pricing model and the following assumptions: Share price on date of
grant of $0.15; exercise prices of $0.15, $0.225 and $0.30 each; expected life of options of
5 years; a risk-free interest rate of 0.74%; expected stock price volatility of 100%; and
dividend rate of 0%. As a result of these assumptions, the value of the incentive stock options
to be granted by the Resulting Issuer immediately following the Closing will be $0.06324 per
share under option.
(2) To be paid to Mr. Mehra as an annual retainer for acting as Chairman.
(3) To be retained under contract at a flat annual rate of $150,000 plus HST billable monthly.
(4) To be retained under contract at a flat annual rate of $100,000 plus HST plus a 15% markup
on goods and services billed through Mr. Greig’s consulting firm, C. J. Greig & Associates.
(5) To be retained as a consultant to perform all bookkeeping functions in addition to all CFO
functions for annual charges of $24,000 plus HST for CFO services, and $24,000 plus HST
for bookkeeping services.
(6) To be retained as a consultant to perform all corporate secretarial functions for annual charges
of $18,000 plus HST.
Apart from the foregoing, the Resulting Issuer is not expected to pay compensation to any of its directors or senior
officers apart from stock option compensation and a single annual fee for services of $25,000 payable to non-
Executive directors only.
Outstanding Share-Based Awards and Option-Based Awards
The Resulting Issuer has a “rolling” stock option plan. Pursuant to the Stock Option Plan, the Resulting Issuer can
grant options up to a maximum of 10% of the Resulting Issuer’s issued and outstanding share capital at the time of
grant. For further information regarding the terms of the Stock Option Plan, refer to the heading “Information
Concerning Manera – Stock Option Plan” above.
Pension Plan Benefits
Manera does not have and the Resulting Issuer does not propose to have a pension plan that provides for payments
or benefits to the Named Executive Officers at, following, or in connection with retirement.
Termination of Employment, Change in Responsibilities and Employment Contracts
Manera has not provided or agreed to provide any compensation to any Named Executive Officers as a result of a
change of control of Manera. However, the Resulting Issuer may in future have a plan or arrangement with respect
to compensation to its executive officers which would result from the resignation, retirement or any other
termination of the executive officers' employment with the Resulting Issuer or from a change of control of Manera
or a change in the executive officers' responsibilities following a change in control.
Management Contracts
The Resulting Issuer anticipates entering into management contracts with several of its Named Executive Officers
and key personnel, as follows:
(1) Kevin M. Keough: To be retained under contract as President & Chief Executive Officer at a flat annual rate of
$150,000 plus HST, billable monthly.
(2) Charles J. Greig: To be retained under contract as Vice-President, Exploration at a flat annual rate of $100,000
plus HST, plus a 15% markup on goods and services billed through Mr. Greig’s consulting firm, C. J. Greig &
Associates.
(3) Tracey K. Albert: To be retained as a part time consultant to perform all bookkeeping and CFO functions for
annual charges of $24,000 plus HST for CFO services, and $24,000 plus HST for bookkeeping services.
(4) Shaun A. Drake: To be retained as a part time consultant to perform all corporate secretarial functions for
annual charges of $18,000 plus HST.
Compensation of Directors
The Chairman of the Board of Directors of the Resulting Issuer will receive an annual retainer fee of $50,000. Each
of the non-executive directors of the Resulting Issuer shall receive an annual retainer fee of $25,000 and, in addition,
110
be reimbursed for out-of-pocket expenses related to their attendance at Board meetings.
Non-executive directors shall be entitled to participate in the Option Plan. In connection with the completion of the
Acquisition and the Financing, Options to purchase an aggregate of 500,000 Manera Shares are expected to be
granted to the Resulting Issuer’s non-executive directors, exercisable at price levels of $0.15, $0.225 and $0.30
respectively.
Except as set out above, the Resulting Issuer is not expected to pay compensation to any of its directors (who are not
also officers) for services as a director, other than stock option compensation and attendance fees relating to
directors and committee meetings, at rates to be determined. See “Information Concerning Resulting Issuer –
Options to Purchase Securities”.
Indebtedness of Directors and Officers
No individual who is a director or officer of Manera or New Chris or a proposed director or officer of the Resulting
Issuer or any individual who was a director or officer of Manera or New Chris at any time during the most recently
completed financial year, or any of their Associates or Affiliates, is or has been indebted to Manera or New Chris or
is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding
provided by Manera or New Chris, nor is any such person expected to be indebted to the Resulting Issuer on the
completion of the Acquisition.
Investor Relations Arrangements
The Resulting Issuer may draw on the services of Red Cloud, with which it retains some credit, for promotional or
investor relations services in the November through December 2016 period. The Resulting Issuer may also retain
the services of an recognized agent, qualified under the TSXV LiquidityPro Provider (LPP) program launching in
September 2016, to provide market-making and liquidity enhancement services under the oversight and governance
of the TSXV.
Options to Purchase Securities
The Resulting Issuer will continue to utilize the Stock Option Plan which permits the reservation of a maximum of
10% of the issued and outstanding shares of the Resulting Issuer as of the date of grant of stock options under such
plan. The principal terms of the Stock Option Plan are discussed in “Information Concerning Manera – Stock Option
Plan”.
It is expected that the Resulting Issuer will, upon completion of the Acquisition and the Financing, have outstanding
options to purchase up to 525,000 common shares of the Resulting Issuer at an exercise price of $0.10 per Manera
Share. Options in respect of 450,000 Manera Shares will expire 90 days following the Closing, and an option in
respect of 75,000 Manera Shares will expire on August 28, 2019.
The table below indicates the groups that currently hold options to purchase Manera Shares that will remain
outstanding upon completion of the Acquisition as noted below.
Outstanding Manera Options Prior to the Closing
Group (Number of Persons in
Group) (Current and Former)
Securities Under
Options Granted
(Number)
Exercise or Base
Price
($/Security)
Expiration Date
Directors (3) (who are not officers) 150,000
75,000
$0.10
$0.10
90 days following the Closing
August 28, 2019
Officers (2) (including directors who
are officers)
300,000 $0.10 90 days following the Closing
Total 525,000
Grant of Resulting Issuer Options Immediately Following the Closing
The directors of the Resulting Issuer will grant options to purchase up to 4,725,000 Resulting Issuer Shares,
comprised of 1,575,000 options at an exercise price of $0.15 per Resulting Issuer Share exercisable for a period of 5
years from the Closing Date, plus 1,575,000 options at an exercise price of $0.225 per Resulting Issuer Share
exercisable for a period of 5 years from the Closing Date, plus 1,575,000 options at an exercise price of $0.30 per
111
Resulting Issuer Share exercisable for a period of 5 years from the Closing Date, to the directors, officers,
employees and consultants of the Resulting Issuer as follows:
Name Manera Shares Under Option Exercise Price Expiration Date
Ashwath Mehra 500,000 $0.15, $0.225 and
$0.30
5 years from the Closing Date
Kevin Keough 1,750,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
Charles Greig 1,750,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
John Pallot 250,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
Taj Singh 250,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
Tracy Albert 25,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
Shaun Drake 25,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
Tatjana Krzman 150,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
L. Roulston 25,000 $0.15, $0.225 and
$0.30 5 years from the Closing Date
The options exercisable at $0.15 will vest on the date of grant, the options exercisable at $0.225 will vest on the first
anniversary of the date of grant, and the options exercisable at $0.30 will vest on the second anniversary of the date
of grant.
Escrowed Securities
The following table lists, to the knowledge of Manera and New Chris as of the date of this Filing Statement, the
holders of escrowed securities, the number of securities held in escrow, and the percentage of securities held in
escrow by each person who will be a holder of escrowed securities before and after the Closing.
Before Giving Effect to the
Acquisition and the
Financing
After Giving Effect to the Acquisition
and the Financing
Name and Municipality
of Residence of
Securityholder
Designation
of Class
Number of
Securities
Held in
Escrow
Percentage
of
Class
Number of
Securities to be
Held in Escrow
Percentage
of Class
Alfredo De Lucrezia
North Vancouver, B.C.
Manera Shares 3,150,000 78.75% 3,150,000 7.44%
Maurizio Grande
Vancouver, B.C.
Manera Shares 200,000 5.00% 200,000 0.47%
Gordon Kettleson
Tsawwassen, B.C.
Manera Shares 200,000 5.00% 200,000 0.47%
John Pallot
New Westminster, B.C.
Manera Shares 100,000 2.50% 100,000 0.24%
Ben Colangelo
North Vancouver, B.C.
Manera Shares 200,000 5.00% 200,000 0.47%
112
Leo Savino
North Vancouver, B.C.
Manera Shares 150,000 3.75% 150,000 0.35%
Ashwath Mehra
Zug, Switzerland
Manera Shares Nil Nil 13,425,501 31.70%
Wildville Enterprises Ltd.
Coonamble, NSW
Australia
Manera Shares Nil Nil 13,426,447 31.70%
Richard Billingsley
Surrey, B.C.
Manera Shares Nil Nil 3,850,000 9.09%
Gaye Richards
Surrey, B.C.
Manera Shares Nil Nil 3,850,000 9.09%
0886260 B. C. Ltd.
Squamish, B.C.
Manera Shares Nil Nil 3,800,000 8.98%
Totals 4,000,000 100% 42,351,948 100%
Notes:
(1) 4,000,000 Manera Shares will be held pursuant to the CPC Escrow Agreement and 38,351,948
Manera Shares will be held pursuant to the Escrow Agreement.
The Manera Shares held by the Principals are held under the CPC Escrow Agreement and include the following
principal terms:
10% of the escrowed Manera Shares will be released from escrow on Closing of the Qualifying
Transaction;
The remaining escrowed Manera Shares will be released in six tranches of 15% every six months following
completion of the Qualifying Transaction;
While in escrow, none of the escrowed Manera Shares can be transferred, either directly or indirectly
through a change in control of a holding company without the consent of the Exchange;
If Manera fails to complete a Qualifying Transaction or is delisted by the Exchange for any other reason,
all the seed Manera Shares remaining in escrow will be cancelled; and
The Manera Shares to be issued pursuant to the Acquisition Agreement will be held under the Escrow Agreement
among the Transfer Agent, Manera, Mehra, Wildville Enterprises and the Property Optionors, which includes the
following principal terms:
10% of the escrowed Manera Shares will be released from escrow on completion of the Acquisition;
The remaining escrowed Manera Shares will be released in six equal tranches of 15% every six months
following completion of the Acquisition; and
While in escrow, none of the escrowed Manera Shares can be transferred, either directly or indirectly
through a change in control of a holding company without the consent of the Exchange.
If the Resulting Issuer is elevated to the status of a Tier 1 Issuer on the Exchange at any time, releases of the Manera
Shares held in escrow will be accelerated in accordance with the Escrow Policy.
Auditor, Transfer Agent and Registrar
Following the Closing, the auditor of the Resulting Issuer will be Davidson & Company LLP, Chartered
Professional Accountants, 1200 – 609 Granville Street, Vancouver, British Columbia. The registrar and transfer
agent of the common shares of the Resulting Issuer will continue to be Computershare Investor Services Inc., 3rd
Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9.
Sponsorship
Pursuant to the Sponsorship Policy, sponsorship is required in conjunction with a Qualifying Transaction. Manera
has received an exemption from the Exchange from the sponsorship requirement on the basis that Manera is
generally in compliance with relevant standards and guidelines applicable in the Sponsorship Policy.
113
Experts
Manera and New Chris retained Cornelis A. Dekker, Pr. Sci. Nat. and Clinton P. Smyth, P. Geo. to prepare an
independent technical report on the Tatogga Property (the “Tatogga Report”). The Tagotta Report is referenced in
“Information Concerning New Chris – Property Description and Location”.
To the knowledge of Manera and New Chris, none of the experts above, or their respective Associates or Affiliates,
beneficially owns, directly or indirectly, any securities of Manera or New Chris, has received or will receive any
direct or indirect interests in the property of Manera or New Chris or is expected to be elected, appointed or
employed as a director, officer or employee of Manera or any Associate or Affiliate thereof.
Other Material Facts
To the knowledge of management of Manera and New Chris, there are no other material facts relating to Manera,
New Chris, the Resulting Issuer, the Acquisition or the Financing that are not otherwise disclosed in this Filing
Statement and are necessary in order for the Filing Statement to contain full, true and plain disclosure of all material
facts relating to Manera, New Chris and the Resulting Issuer, assuming completion of the Acquisition and the
Financing.
Board Approval
The board of directors of each of Manera and New Chris has approved this Filing Statement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
SCHEDULE “A”
Audited Financial Statements of Manera for the years ended May 31, 2016 and 2015
1
MANERA CAPITAL CORP.
(A Capital Pool Company)
FINANCIAL STATEMENTS
May 31, 2016 and 2015
(Stated in Canadian dollars)
Manera Capital Corp. Financial Statements For the years ended May 31, 2016 and 2015 Page
2
Auditor’s Report 3 Statements of Financial Position 4 Statements of Loss and Comprehensive Loss 5 Statements of Changes in Equity 6 Statements of Cash Flows 7 Notes to the Financial Statements 8 - 15
3
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Manera Capital Corp.
We have audited the accompanying financial statements of Manera Capital Corp., which comprise the statements of financial
position as at May 31, 2016 and 2015 and the statements of loss and comprehensive loss, changes in equity, and cash flows
for the years then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards, and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in
accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, these financial statements present fairly, in all material respects, the financial position of Manera Capital
Corp. as at May 31, 2016 and 2015 and its financial performance and its cash flows for the years then ended in accordance
with International Financial Reporting Standards.
“DAVIDSON & COMPANY LLP”
Vancouver, Canada Chartered Professional Accountants
August 25, 2016
MANERA CAPITAL CORP. Statements of Financial Position
As at May 31, 2016 and 2015
The accompanying notes are an integral part of these financial statements 4
2016 2015
Assets Current
Cash and cash equivalents $ 296,991 $ 365,423 Other receivables 1,123 2,376 Prepaid expenses 1,000 1,000
Total assets $ 299,114 $ 368,799
Liabilities Current
Trade and other payables $ 39,470 $ 5,478
Equity
Share capital (Note 6) 424,287 424,287 Share-based payments reserve 63,176 63,176 Deficit (227,819) (124,142)
Total equity 259,644 363,321
Total equity and liabilities $ 299,114 $ 368,799
Nature of operations and going concern (Note 1) Events after the reporting period (Note 11)
Approved and authorized by the Board of Directors on August 25, 2016 Signed Alfredo De Lucrezia Director Signed Maurizio Grande Director
MANERA CAPITAL CORP. Statements of Loss and Comprehensive Loss For the years ended May 31, 2016 and 2015
The accompanying notes are an integral part of these financial statements 5
2016
2015
Expenses
Accounting and audit $ 18,341 $ 13,775 Due diligence and investigations 12,530 8,464 Filing and transfer fees 14,794 23,164 Legal fees 47,585 404 Rent and office (Note 7) 12,783 12,313
Share-based compensation (Notes 6(c) and 7) - 44,775
(106,033) (102,895) Interest income 2,356 2,483
Loss and Comprehensive loss $ (103,677) $ (100,412)
Loss per share, basic and diluted (Note 6(e)) $ (0.03) $ (0.04) Weighted average number of common shares outstanding, basic and diluted (Note 6(e))
3,500,000
2,653,846
MANERA CAPITAL CORP. Statements of Changes in Equity For the year ended May 31, 2016 and 2015
The accompanying notes are an integral part of these financial statements 6
Share Capital Share-based
Number
Amount Payments Reserve
Deficit
Equity
Balance, May 31, 2014 4,000,000 $ 200,000 $ - $ (23,730) $ 176,270 Issue of share capital on August 28,
2014 3,500,000 350,000 - - 350,000 Share issue costs (Note 6(b)): Cash - (107,312) - - (107,312) Agent’s options - (18,401) 18,401 - - Share-based payments: Directors’ options (Note 6(c)) - -
44,775 - 44,775
Loss for the year - - - (100,412) (100,412)
Balance, May 31, 2015 7,500,000 424,287 63,176 (124,142) 363,321 Loss for the year - - - (103,677) (103,677)
Balance, May 31, 2016 7,500,000 $ 424,287 $ 63,176 $ (227,819) $ 259,644
MANERA CAPITAL CORP. Statements of Cash Flows For the years ended May 31, 2016 and 2015
The accompanying notes are an integral part of these financial statements 7
2016
2015
Cash flows used in operating activities Loss for the year $ (103,677) $ (100,412) Items not affecting cash:
Share-based payments - 44,775 Changes in non-cash working capital balances:
(Increase) decrease in other receivables 1,253 (2,376) Increase in prepaid expenses - (1,000) Increase in trade and other payables 33,992 1,978
Net cash used in operating activities
(68,432) (57,035)
Cash flows from financing activities
Proceeds from issue of share capital - 350,000 Share issue costs - (75,739)
Net cash flows from financing activities - 274,261
Net increase (decrease) in cash and cash equivalents
(68,432) 217,226
Cash and cash equivalents, beginning of year 365,423 148,197
Cash and cash equivalents, end of year $ 296,991 $ 365,423
Cash and cash equivalents consist of:
Cash $ 21,991 $ 15,423 Term deposits 275,000 350,000
$ 296,991 $ 365,423
Non-cash financing and investing activities
Agents’ options issued for share issue costs $ - $ 18,401
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
8
1. Nature of operations and going concern
Manera Capital Corp. (the “Company”) was incorporated under the Business Corporations Act of British Columbia on September 9, 2013 and is classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”). The Company proposes to identify and evaluate potential acquisitions or businesses in Canada, and once identified and evaluated, to negotiate an acquisition or participation subject to receipt of shareholder and regulatory approval. The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or business for future investment, with the exception that up to 30% of the gross proceeds or $210,000, whichever is less, may be used to cover prescribed costs of issuing the common shares or administrative and general expenses of the Company. These restrictions apply until completion of a Qualifying Transaction (“QT”) by the Company as defined under the policies of the Exchange. The Company’s shares commenced trading on the Exchange under the trading symbol “MEA.P” on August 28, 2014. The address of the Company’s head office is 423 East 10
th Street, North Vancouver, British Columbia,
Canada, V7L 2E5. The address of the Company’s registered office is Suite 1710 - 1177 West Pender Street, Vancouver, British Columbia, Canada, V6E 2L3.
The proposed business of the Company involves a high degree of risk and there is no assurance that the Company will identify an appropriate business for acquisition or investment and even if so identified and warranted, it may not be able to finance such acquisition or investment. Additional funds will be required to enable the Company to pursue such an initiative and the Company may be unable to obtain such financing on terms which are satisfactory. Further, there is no assurance that businesses acquired will be profitable. However, management believes that the Company has sufficient working capital to meet its projected minimum financial obligations for the next financial year.
2. Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and with interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
3. Basis of presentation and significant accounting policies
Basis of measurement
The financial statements have been prepared on the historical cost basis, except as otherwise specified. In addition, these financial statements are prepared using the accrual method of accounting, except for cash flow information.
Financial instruments
The Company’s financial instruments include cash and cash equivalents, and trade and other payables. Financial assets and financial liabilities are recognized on the Company’s statement of financial position when the Company becomes party to the contractual provisions of the instrument. Financial assets are de-recognized when the contractual rights to the cash flows from the financial asset expire or when the contractual rights to those assets are transferred. Financial liabilities are de-recognized when the obligation specified in the contract is discharged, cancelled or expired.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
9
3. Basis of presentation and significant accounting policies (continued)
Financial instruments (continued)
All financial instruments are measured at fair value on initial recognition of the instrument. Measurement in subsequent periods depends on whether the financial instrument has been classified as fair value through profit and loss (“FVTPL”), loans and receivables, available-for-sale, held-to-maturity or FVTPL liabilities or other liabilities. FVTPL assets and liabilities are measured at fair value with changes in fair value recognized in profit or loss during the period. Held to maturity assets, loans and receivables and other liabilities are subsequently measured at amortised cost using the effective interest rate method. Available for sale assets are subsequently measured at fair value with the changes in fair value recorded in other comprehensive income (loss), except for equity instruments without a quoted market price in an active market and whose fair value cannot be reliably measured, which are measured at cost.
Cash and cash equivalents are classified as FVTPL. Trade and other payables are classified as other liabilities.
Cash and cash equivalents
The Company’s cash is held by a Canadian chartered bank. Cash equivalents typically would consist of redeemable term deposits with original maturity dates of three months or less.
Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects.
Share-based payments
The Company has a stock option plan under which it may grant stock options to directors, employees, consultants and service providers.
The Company records share-based compensation expense of all options granted to employees, or to those providing similar services, at the fair value of the equity instruments over the vesting period, with a corresponding increase in share-based payments reserve. Each transfer of an award is considered separately with its own vesting date and grant date fair value. The Company uses the Black-Scholes option pricing model to estimate the fair value of each stock option at the date of grant. For awards with vesting conditions, a forfeiture rate is recognized at the grant date and is adjusted to reflect the number of awards expected to vest. As the options are exercised, the consideration paid, together with the amount previously recognized in share-based payments reserve, is recorded as an increase in share capital.
For equity-settled share-based payments to non-employees, the Company measures the value of the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably.
The Company has no cash-settled share-based payment transactions.
Basic and diluted loss per share
Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period which excludes shares held in escrow whose issuance is contingent on future events.
Diluted loss per share is computed similar to basic loss per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed exercise of in-the-money stock options and share purchase warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and share purchase warrants are exercised and that the proceeds from such exercises are used to acquire common shares at the average market price during the reporting period.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
10
3. Basis of presentation and significant accounting policies (continued)
Taxes
Tax provisions are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, a provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.
Deferred tax assets or liabilities, arising from temporary differences between the tax and accounting values of assets and liabilities, are recorded based on tax rates expected to be enacted when these differences are reversed. Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recovered.
This involves an assessment of when those deferred tax assets are likely to be realized, and a judgment as to whether or not there will be sufficient taxable profits available to offset the tax assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.
Tax provisions are based on enacted or substantively enacted laws. Changes in those laws could affect amounts recognized in income both in the period of change, which would include any impact on cumulative provisions, and in future periods.
4. Future accounting pronouncements
IFRS 9, Financial Instruments
The final version of IFRS 9 was issued in July 2014.This standard is the first step in the process to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measurement, impairment and hedge accounting of financial assets and liabilities, which may affect the Company’s accounting for its financial assets and liabilities. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.The Company has yet to assess the full impact of IFRS 9 on its financial statements.
5. Critical judgements and accounting estimates
When preparing the financial statements in conformity with IFRS, management undertakes a number of judgments, estimates and assumptions about the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by management.
The estimated values of financial assets and liabilities, by their very nature, are subject to measurement uncertainty.
a) Taxes
Provisions for income taxes are recorded using the best estimate of the expected amount to be paid based on a qualitative assessment of all factors. The Company reviews the adequacy of those provisions at the end of each reporting period. Adjustments to the final outcome of tax-related amounts are recorded in the period in which differences in outcome occur.
The amounts recorded for deferred income taxes are based on estimates of the probability of the Company utilizing certain assets and tax pools, where available, which in turn are dependent upon changes in legislation, tax rates and interpretations by taxation authorities.
b) Share-based payments
Management is required to make estimates when determining the fair value of stock options awards. These estimates, comprising the expected life of the option awards and the number of options expected to vest, affect the amount recorded as share-based payments in the statement of loss and comprehensive loss for the reporting period.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
11
6. Share capital
a) Authorized
Unlimited number of common shares without par value.
b) Issued and outstanding
On September 9, 2013, on incorporation, the Company issued one common share at a price of $0.05. On February 28, 2014, the Company issued 3,999,999 additional shares at a price of $0.05 per share, for total proceeds of $200,000. On August 28, 2014, the Company completed its initial public offering and issued 3,500,000 common shares at a price of $0.10 per share, for total proceeds of $350,000. The Company paid $107,312 in broker’s commissions, finance fees, legal fees and other issuance costs in connection with this financing.
In conjunction with the initial public offering, the Company issued agent’s options to purchase up to 350,000 common shares at a price of $0.10 per share, exercisable for a period of 24 months from the date of listing of the common shares on the Exchange. An amount of $18,401 was recorded as share issuance costs as the estimated fair value of the agent’s options. The fair value was estimated using the Black-Scholes option-pricing model with the following assumptions: Dividend yield of 0%, expected volatility of 100%, risk-free interest rate of 1.10%, forfeiture rate of 0% and weighted average life of two years. The weighted average fair value of the agent’s options granted during the period is $0.05. Agent’s options issued, outstanding and exercisable are as follows:
Weighted Weighted Number of average average grant agent’s options exercise price date fair value
Balance, May 31, 2014 - $ - $ - Issued, August 28, 2014 350,000 0.10 0.05
Balance, May 31, 2015 and 2016 350,000 $ 0.10 $ 0.05
c) Stock options
The Company has a stock option plan under which directors, employees and consultants are eligible to receive stock option grants. Under the plan, granted options are exercisable over periods up to ten years as determined by the Board of Directors. The maximum number of outstanding options under the plan is limited to 10% of the number of outstanding common shares. The number of options, the exercise price and the term of the exercise period is set by the Board of Directors at the time of granting. On August 28, 2014, the Company granted stock options to directors to purchase a total of 600,000 common shares of the Company at a price of $0.10 per share for a period of up to 5 years, provided that an optionee may not exercise the option later than the greater of 12 months from the completion of a QT and 90 days following the cessation of that optionee’s position with the Company. All stock options vested at the date of grant.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
12
6. Share capital (continued)
c) Stock options (continued)
An amount of $44,775 was recorded as the estimated fair value of the stock options. The fair value was estimated using the Black-Scholes option-pricing model with the following assumptions: Dividend yield of 0%, expected volatility of 100%, risk-free interest rate of 1.51%, forfeiture rate of 0% and weighted average life of five years. The weighted average fair value of options granted during the period was $0.07. Stock options issued and outstanding are as follows:
Weighted Weighted Number of average average grant options exercise price date fair value
Balance, May 31, 2014 - $ - $ - Issued August 28, 2014 600,000 0.10 0.07
Balance, May 31, 2015 600,000 0.10 0.07 Forfeited (75,000) 0.10 0.07
Balance, May 31, 2016 525,000 $ 0.10 $ 0.07
Number Number Weighted of options of options average
Exercise price outstanding vested remaining life (years)
$0.10 525,000 525,000 3.24
Total, as at May 31, 2016 525,000 525,000 3.24
No stock options were issued during the year ended May 31, 2016. 75,000 stock options expired
unexercised following the departure of one of the Company’s directors.
d) Escrowed shares
Pursuant to an Escrow Agreement dated March 20, 2014, 4,000,000 of the issued and outstanding common shares as at May 31, 2016 and 2015 are held in escrow. These shares will be released in accordance with the Exchange Policy 2.4 over a period of up to 36 months from the date of the Final Exchange Bulletin following the completion of a QT. All common shares acquired on the exercise of stock options prior to the completion of a QT must also be deposited in escrow and will be subject to escrow until a final exchange bulletin is issued by the Exchange.
e) Per share amounts
Consistent with the Company’s accounting policy, common shares held in escrow are excluded from the calculation of the weighted average number of common shares outstanding (basic and diluted). The weighted average number of common shares outstanding for purposes of calculating basic and diluted loss per share as at May 31, 2016 is 3,500,000 shares (2015 – 2,653,846 shares). For the calculation of diluted loss per share, no shares were added to the weighted average number of common shares for the dilutive effects of exercisable directors’ and agent’s options.
7. Related party transactions
During the year ended May 31, 2016, the Company expensed $12,000 (2015 - $12,000) in rent and office charges from a company controlled by Alfredo De Lucrezia, the President, Chief Executive Officer, Chief Financial Officer and a Director of the Company. As at May 31, 2016, a total of $1,428 (May 31, 2015 - $Nil) is owing to this individual and is included in trade and other payables.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
13
7. Related party transactions (continued)
Key management compensation
Key management personnel are those directly having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and Board of Director members. Remuneration to key management personnel is as follows:
2016 2015
Share-based compensation $ - $ 44,775
8. Income Taxes
The provision for income tax differs from the amount that would have been expected if the reported earnings had been subject to the Canadian statutory income tax rate of 26% (2015 - 26%).
2016 2015
Loss for the year $ (103,677) $ (100,412)
Expected income tax recovery based on statutory rates
(27,000)
(26,000)
Increase (decrease) in taxes
Permanent differences 1,000 12,000
Share issue costs - (28,000) Change in unrecognized deductible temporary differences
26,000
42,000
Income tax expense (recovery) $ - $ -
The components of the Company’s unrecognized deferred tax assets are as follows:
2016 2015
Deferred income tax assets
Non-capital loss carry forwards $ 56,000 $ 26,000
Share issue costs 17,000 22,000
73,000 48,000
Less: unrecognized amount (73,000) (48,000)
Deferred income tax asset $ - $ -
The Company has not recorded deferred tax assets in the amount of approximately $73,000 (2015 - $48,000) related to unused non-capital losses and share issue costs as it is not probable that the Company will have sufficient future taxable profits against which a deduction may be offset.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
14
8. Income Taxes (continued)
The Company has Canadian non-capital loss carry forwards of approximately $216,000 (2015 - $101,000) that may be available for tax purposes. The losses expire as follows:
Expiry Amount
May 31, 2034 $ 24,000 May 31, 2035 73,000
May 31, 2036 119,000
$216,000
The Company also has share issue costs deductible in future periods in the amount of $64,000 (2015 - $86,000) that will expire through 2039. Tax attributes are subject to review, and potential adjustment, by tax authorities.
9. Risk and fair value measurement
Fair values
The Company’s financial instruments consist of cash and cash equivalents, and trade and other payables. The fair value of cash and cash equivalents and trade and other payables approximate their carrying value due to the short-term nature of those instruments. The significance of inputs used in making fair value measurements are examined and classified according to a fair value hierarchy. Fair values of assets and liabilities included in Level 1 are determined by reference to quoted prices in active markets for identical assets and liabilities. Assets and liabilities in Level 2 include valuations using inputs other than quoted prices for which all significant outputs are observable, either directly or indirectly, and can be substantially observed or corroborated in the marketplace. Level 3 valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Cash and cash equivalents are measured at fair value based on a Level 1 designation. Risk factors
The Company is exposed to financial risks arising from its financial assets and liabilities. The Company manages its exposure to financial risks by operating in a manner that minimizes its exposure to the extent practical. It is management’s opinion that the Company is not exposed to significant interest, currency and credit risks arising from these financial statements.
10. Capital management
The Company’s objectives when managing capital are to maintain its ability as a going concern and to maintain sufficient cash on hand to meet its ongoing operating costs and to raise additional equity as necessary to identify and evaluate potential acquisitions.
The Company considers its capital structure to consist of equity. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes to the Company’s approach to capital management during the year ended May 31, 2016.
MANERA CAPITAL CORP. Notes to the Financial Statements For the years ended May 31, 2016 and 2015
15
11. Events after the reporting period
On June 30, 2016, the Company entered into an agreement (the “Acquisition Agreement”) to acquire New Chris Minerals Ltd. (“New Chris”), a private British Columbia mineral exploration company. New Chris holds options to acquire 100% of the Tatogga and New Nanik gold-copper properties in north-western B.C. (the “Option Agreements”). Pursuant to the Acquisition Agreement, the Company has agreed to acquire 100% of the issued and outstanding shares of New Chris from their shareholders (the “Share Exchange”), and to exercise New Chris’s property options pursuant to the Option Agreements. As consideration for the Share Exchange, the Company will issue a total of 26,351,948 common shares for all of the New Chris shares, pay a total of $200,000 within 12 months of the closing of the Acquisition Agreement, with an additional payment of $240,000 being required within 24 months of closing of the Acquisition Agreement. Further, the Acquisition Agreement also requires that the Company pay $10,000 to New Chris on Exchange acceptance, and a total of $206,500 to settle outstanding New Chris shareholder loans. The acquisition will constitute a Reverse Takeover of the Company pursuant to Exchange policies. Pursuant to the Acquisition Agreement, the Company will also be required to issue a total of 10,000,000 common shares to the underlying optionors of the Tatogga and New Nanik properties on closing, and to make staged cash payments to the optionors totalling $575,000 over a period of 4 years. The properties are also subject to a 2% net smelter return (“NSR”) royalty. The transaction contemplated by the Acquisition Agreement will constitute the Company’s QT (Note 1) and in connection with the acquisition, the Company intends to carry out certain concurrent transactions as follows: a) On June 30, 2016, the Company entered into an agreement (the “Greig Agreement”) to acquire a 100%
interest in a series of mineral claims located in north-western British Columbia collectively referred to as the Greig Claims. The Greig Agreement is contingent on closing of the Acquisition Agreement, and as consideration for the claims, the Company has agreed to issue 2,000,000 common shares and to pay cash consideration as follows:
$11,000 due on closing of the Greig Agreement;
$15,000 due 12 months from closing of the Greig Agreement; and
$20,000 due 24 months from closing of the Greig Agreement.
The Greig Claims are subject to a 0.5% NSR royalty on all future production.
b) The Company has entered into subscription agreements in respect of a financing of 16,000,000 units at a price of $0.15 and 600,000 flow-through common shares at a price of $0.20 (the “Financing”). Each unit is comprised of one common share and one half of one share purchase warrant, with each whole warrant being exercisable into an additional common share at a price of $0.20 for a period of 2 years from closing, which is conditional upon the closing under the Acquisition Agreement.
In connection with the above mentioned transactions, on July 7, 2016, the Company entered into an Advisory Agreement with Red Cloud Klondike Strike Inc. (“Red Cloud”) whereby Red Cloud is to provide certain marketing services for the Company, as well as to assist the Company in the Financing. The Advisory Agreement is for a maximum of two months and may be extended thereafter by mutual consent. Red Cloud will receive a monthly fee of $4,000 plus $4,000 worth of common shares on closing of the Financing.
SCHEDULE “B”
Management’s Discussion & Analysis of Manera for the years ended May 31, 2016 and 2015
MANERA CAPITAL CORP.
Management’s Discussion and Analysis
May 31, 2016
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
2
Dated: August 25, 2016
The following management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of Manera Capital Corp. (the “Company”) was prepared by management of the Company as at August 25, 2016 and should be read in conjunction with the Company’s audited annual financial statements and corresponding notes thereto for the year ended May 31, 2016 (the “Financial Statements”). Additional information relating to the Company is available on SEDAR at www.sedar.com.
The Financial Statements have been prepared by management and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). All amounts are expressed in Canadian dollars unless otherwise stated. Other information contained in this document has also been prepared by management and is consistent with the data contained in the Financial Statements.
The Company’s certifying officers are responsible for ensuring that the Financial Statements and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made. The Company’s certifying officers certify that the Financial Statements together with the other financial information included in the filings fairly present in all material respects the financial condition, financial performance and cash flows of the Company as the date of and for the periods presented in the filings.
The Audit Committee and the Board of Directors provide an oversight role with respect to all public financial disclosures by the Company. The Board of Directors approves the Financial Statements and MD&A after the completion of its review and recommendation for approval by the Audit Committee, which meets periodically to review all financial reports, prior to filing.
Forward-Looking Statements
Certain statements contained in this document constitute “forward-looking statements”. All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to risks associated with: limited operating history; no history of earnings or payment of any dividends; unlikely to generate earnings or pay dividends in the immediate or foreseeable future; no current business operations; no current assets other than cash; ability to complete a qualifying transaction; ability to raise additional funds if required; potential dilution of shares as a result of potential qualifying transaction; reliance on management team; conflicts of interest among certain directors and officers of the Company; lack of liquidity for shareholders of the Company; and market risk. See “Risks and Uncertainties”.
Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this MD&A and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
3
The forward-looking statements in this MD&A are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding business and operating strategies. Description of the Business
The Company was incorporated under the Business Corporations Act (British Columbia) on September 9, 2013 with the intent to being classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”) corporate finance manual. The Company’s shares commenced trading on the Exchange under the trading symbol “MEA.P” on August 28, 2014. The Company has no significant assets other than cash and cash equivalents and proposes to identify and evaluate potential acquisitions or businesses, and once identified and evaluated, to negotiate an acquisition or participation subject to receipt and, if required, shareholder’s approval.
As a Capital Pool Company, the proceeds raised by the Company from the issuance of common shares may only be used to identify and evaluate assets or business for future investment, with the exception that not more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used to cover prescribed costs of issuing common shares or administrative and general expenditures of the Company. These restrictions apply until the completion of a Qualifying Transaction (“QT”) by the Company as defined under the policies of the Exchange.
The Company’s continuing operations as intended are dependent upon its ability to identify, evaluate and negotiate an acquisition of, a participation in or an interest in properties, assets or businesses. Such an acquisition will be subject to regulatory approval and, if required, shareholder approval.
The head office of the Company is located at 423 East 10
th Street, North Vancouver, British Columbia V7L 2E5, and
its registered office is located at Suite 1710 – 1177 West Hastings Street, Vancouver, British Columbia V6E 2L3.
Overall Performance and Discussion of Operations
The Company does not have any c o m m e r c i a l o p e r a t i o n s and will not conduct any business other than the identification and evaluation of business and assets for potential acquisition. On August 28, 2014, the Company successfully completed its listing and Initial Public Offering (“IPO”) process, and its shares commenced trading on the Exchange.
Year ended May 31, 2016 During the year ended May 31, 2016, the Company earned no revenue and reported a net loss of $103,677 and $0.03 basic and diluted loss per share (2015: loss of $100,412; $0.04 basic and diluted loss per share). Net loss primarily related to accounting and audit fees of $18,341 (2015: $13,775), due diligence and investigations expense of $12,530 (2015: $8,464), filing and transfer agent fees of $14,794 (2015: $23,164), legal fees of $47,585 (2015: $404), rent and office of $12,783 (2015: $12,313) and share-based compensation expense of $nil (2015: $44,775). The increases in accounting and audit fees, due diligence and investigations, and legal fees were primarily a result of the heightened level of activities in pursuing potential Qualifying Transactions. In particular, the large increase in legal fees in the current year related mainly to costs incurred in reviewing numerous proposals presented as potential Qualifying Transactions, and additionally, in preparing for the Company’s Annual General Meeting, held on December 4, 2015. The share-based compensation expense of $44,775 in the comparative year related to the 600,000 incentive stock options granted to directors and officers. No stock options were issued during the current year.
Current liabilities at May 31, 2016, totaled $39,470 (May 31, 2015: $5,478). Shareholders’ equity consists of share capital of $424,287 (May 31, 2015: $424,287), share-based payment reserve of $63,176 (May 31, 2015: $63,176) and deficit of $227,819 (May 31, 2015: $124,142) for a net equity of $259,644 (May 31, 2015: $363,321). The increase in current liabilities consisted mainly of accruals for costs relating to legal services rendered but for which invoices had not yet been received as at May 31, 2016.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
4
Working capital was $259,644 at May 31, 2016 (May 31, 2015: $363,321). Management believes that the Company has sufficient cash to meet its current obligations for the next 12 months and to meet its objective of completing a Qualifying Transaction. The weighted average number of common shares (basic and diluted) of the Company outstanding for the year ended May 31, 2016, was 3,500,000 (2015: 2,653,846).
Three month ended May 31, 2016 The Company’s net loss totaled $42,611 for the three month period ended May 31, 2016, with basic and diluted loss per share of $0.01. For the quarter ended May 31, 2015, the net loss totaled $11,879, with basic and diluted loss per share of $0.00. Net loss for the current quarter comprised mainly accounting and audit fees of $9,623 (2015: $6,050), due diligence and investigations expense of $1,125 (2015: $2,694), filing and transfer agent fees of $1,124 (2015: $841), legal fees of $28,122 (2015: $nil) and rent and office expense of $3,017 (2015: $3,000).
Selected Annual Financial Information
The following selected financial data is derived from the audited financial statements of the Company at May 31, 2016 and May 31, 2015.
As at May 31, 2016 As at May 31, 2015
Net working capital $259,644 $363,321 Total current assets $299,114 $368,799 Total current liabilities $39,470 $5,478 Total shareholders’ equity $259,644 $363,321 Year ended May 31, 2016 Year Ended May 31, 2015
Expenses $106,033 $102,895 Net loss for the period $103,677 $100,412 Basic and diluted loss per share $0.03 $0.04 Selected Quarterly Financial Information
Three Months Ended
Net Loss
Weighted Average
Number of Shares
Basic and Diluted
Loss Per Share
May 31, 2016 $ 42,661 3,500,000(1)
$ (0.01)
February 29, 2016 $ 19,991 3,500,000(1)
$ (0.01)
November 30, 2015 $ 31,809 3,500,000(1)
$ (0.01)
August 31, 2015 $ 9,216 3,500,000(1)
$ (0.00)
May 31, 2015 $ 11,879 3,500,000(1)
$ (0.00)
February 28, 2015 $ 10,614 3,500,000(1)
$ (0.00)
November 30, 2014 $ 10,436 3,500,000(1)
$ (0.00)
August 31, 2014 $ 67,483 114,130(1)
$ (0.59)
(1) Consistent with the Company’s accounting policy, common shares held in escrow are excluded from the
weighted average basic and diluted shares outstanding. As at May 31, 2016, the weighted average number of common shares outstanding for purposes of calculating basic and diluted loss per share was 3,500,000 shares for both the twelve months and the three months ended May 31, 2016. For the calculation of diluted loss per share, no shares were added to the weighted average number of common shares for the diluted effects of exercisable directors’ and agent’s options.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
5
Variations over the quarters are related to changes in professional fees and general corporate and administration costs. Additional Disclosure for Venture Corporations without Significant Revenue
The following table sets forth a breakdown of material components of the general and administration costs of the Company for the three months ended May 31, 2016 and 2015. Three months ended
May 31, 2016 Three months ended
May 31, 2015
Accounting and Audit $9,623 $6,050 Due diligence and investigations $1,125 $2,694 Filing and transfer fees $1,124 $841 Legal fees $28,122 $- Rent and office $3,017 $3,000
$43,011 $12,585
Liquidity, Capital Resources, and Outlook As at May 31, 2016, the Company had working capital of $259,644 (May 31, 2015: $363,321). This included $296,991 in cash and cash equivalents, $2,223 in other receivables and prepaid expenses, and $39,470 in liabilities. Management believes that it has sufficient cash and cash equivalents to meet its ongoing obligations and its objective of completing a Qualifying Transaction. However, additional equity or debt financing may be required to complete a Qualifying Transaction. Except as described in the Company’s final CPC prospectus dated July 18, 2014, the funds raised pursuant to the Company’s initial public offering and any subsequent financing will be utilized only for the identification and evaluation of potential Qualifying Transactions. There can be no assurance that the Company will be able to obtain adequate financing to complete a Qualifying Transaction. To date the Company has relied entirely upon the sale of common shares to provide working capital to fund its administration and overhead costs. The following financings have been completed by the Company:
Date Gross Proceeds Type of Transaction
February 28, 2014
August 28, 2014
$200,000
$350,000
Private Placement
IPO
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements as at May 31, 2016. Contractual Obligations
There are no significant contractual obligations. Transactions with Related Parties
During the three months and twelve months ended May 31, 2016, the Company expensed $3,000 and $12,000, respectively, in rent and office charges from a Company controlled by Alfredo De Lucrezia, the President, Chief Executive Officer, Chief Financial Officer and a Director of the Company.
On August 28, 2014, options to purchase 600,000 common shares were granted to the following participants in the respective numbers, option exercise prices and expiry dates set forth below:
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
6
Participant
Position
No. of Options
Granted
No. of Options
Outstanding
Exercise Price
($)
Expiry Date
Alfredo De Lucrezia Director and
Officer
250,000 250,000 0.10 August 28, 2019
Maurizio Grande Director 75,000 75,000 0.10 August 28, 2019
Leo Tom Savino Former-Director(1)
75,000 - 0.10 March 3, 2016
Ben James Colangelo Officer 50,000 50,000 0.10 August 28, 2019
Gordon R. Kettleson Director 75,000 75,000 0.10 August 28, 2019
John L. Pallot Director 75,000 75,000 0.10 August 28, 2019
Total 525,000
(1) Mr. Savino served as a director since the Company’s incorporation in September 2013, and did not stand for re-election at the Company’s most recent Annual General Meeting held on December 4, 2015. Accordingly, his options expired unexercised on March 3, 2016.
Events after the Reporting Date
On June 30, 2016, the Company entered into an agreement (the “Acquisition Agreement”) to acquire New Chris
Minerals Ltd. (“New Chris”), a private British Columbia mineral exploration company owned by Ashwath Mehra of
Switzerland and Wildville Enterprises Pty Ltd. (“Wildville), which is a private company incorporated in Australia and
which is the Trustee for the McMullen Family Trust, which was also established in Australia and remains an
Australian entity.
New Chris holds options to acquire 100% of the approximately 31,000-hectare Tatogga and 13,000 hectare New
Nanik gold-copper properties in north-western B.C. (the “Option Agreements”).
Pursuant to the Acquisition Agreement, the Company has agreed to acquire 100% of the issued and outstanding
shares of New Chris from their shareholders (the “Share Exchange”), and to exercise New Chris’s property options
pursuant to the Option Agreements. As consideration for the Share Exchange, the Company will issue a total of
26,351,948 common shares for all of the New Chris shares, pay a total of $200,000 within 12 months of the closing of
the Acquisition Agreement, with an additional payment of $240,000 being required within 24 months of closing of the
Acquisition Agreement. Further, the Acquisition Agreement also requires that the Company pay $10,000 to New Chris
on Exchange acceptance, and a total of $206,500 to settle outstanding New Chris shareholder loans. The acquisition
will constitute a Reverse Takeover of the Company pursuant to Exchange policies.
Pursuant to the Acquisition Agreement, the Company will also be required to issue a total of 10,000,000 common
shares to the underlying optionors of the Tatogga and New Nanik properties on closing, and to make staged cash
payments to those optionors totaling $575,000 over a period of 4 years. The properties are also subject to a 2% net
smelter return (“NSR”) royalty.
The transaction contemplated by the Acquisition Agreement will constitute the Company’s QT and in connection with the acquisition, the Company intends to carry out certain concurrent transactions as follows: a) On June 30, 2016, the Company entered into an agreement (the “Greig Agreement”) to acquire a 100% interest
in a series of mineral claims located in north-western British Columbia collectively referred to as the Greig Claims. The Greig Agreement is contingent on closing of the Acquisition Agreement, and as consideration for the claims, the Company has agreed to issue 2,000,000 common shares and to pay cash consideration as follows:
$11,000 due on closing of the Greig Agreement;
$15,000 due 12 months from closing of the Greig Agreement; and
$20,000 due 24 months from closing of the Greig Agreement.
The Greig Claims are subject to a 0.5% NSR royalty on all future production.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
7
b) The Company has entered into subscription agreements in respect of a financing of 16,000,000 units at a price of $0.15 and 600,000 flow-through common shares at a price of $0.20 (the “Financing”). Each unit is comprised of one common share and one half of one share purchase warrant, with each whole warrant being exercisable into an additional common share at a price of $0.20 for a period of 2 years from closing, which is conditional upon the closing under the Acquisition Agreement.
In connection with the above mentioned transactions, on July 7, 2016, the Company entered into an Advisory Agreement with Red Cloud Klondike Strike Inc. (“Red Cloud”) whereby Red Cloud is to provide certain marketing services for the Company, as well as to assist the Company in the Financing. The Advisory Agreement is for a maximum of two months and may be extended thereafter by mutual consent. Red Cloud will receive a monthly fee of $4,000 plus $4,000 worth of common shares on closing of the Financing.
Critical Accounting Estimates and Policies
The Company’s significant accounting policies and the adoption of new accounting policies are disclosed in the audited financial statements prepared as at May 31, 2016. Recent Accounting Pronouncements
IFRS 9, Financial Instruments
The final version of IFRS 9 was issued in July 2014.This standard is the first step in the process to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measurement, impairment and hedge accounting of financial assets and liabilities, which may affect the Company’s accounting for its financial assets and liabilities. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.The Company has yet to assess the full impact of IFRS 9 on its financial statements.
Financial Instruments and Other Instruments
The Company’s financial instruments consist of cash, trade and other receivables and accounts payable and accrued liabilities. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments and that the fair value of these financial instruments approximates their carrying values. Disclosure of Outstanding Share Data
As at the date of this MD&A, the following is a description of the outstanding equity securities and convertible securities previously issued by the Company:
Authorized Outstanding
Voting or equity securities issued and outstanding
Unlimited Common Shares
7,500,000 Common Shares
Securities convertible or exercisable into voting or equity securities – stock options
Directors’ and officers’ stock options to acquire up to 10% of the outstanding
Common Shares
Directors’ and officers’ stock options to acquire up to 525,000 Common Shares
at $0.10 per share
Agent’s compensation options to acquire up to 10% of the number of
Common Shares sold in connection with the initial public offering
Agent’s compensation stock options to acquire up to 350,000 Common Shares
at $0.10 per share
Voting or equity securities issuable on conversation or exchange of outstanding securities
(as above) (as above)
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2016
8
Risks and Uncertainties
The Company has a limited history of existence. There can be no assurance that a Qualifying Transaction will be completed. Equity or debt financing may be required to complete a Qualifying Transaction. There can be no assurance that the Company will be able to obtain adequate financing to continue. The securities of the Company should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Company's securities: (a) until completion of a Qualifying Transaction, the Company is not permitted to carry on any business other
than the identification and evaluation of potential Qualifying Transactions;
(b) the Company has only limited funds with which to identify and evaluate potential Qualifying Transactions; (c) there can be no assurance that the Company will be able to successfully complete a proposed
Qualifying Transaction;
(d) there can be no assurance that an active and liquid market for the common shares will develop and an
investor may find it difficult to resell its common shares;
(e) trading in the common shares may be halted at any time and may remain halted for an indefinite period
of time in connection with a proposed Qualifying Transaction; and
(f) trading in the common shares may be halted at other times for other reasons, including for failure by the
Company to submit documents to the Exchange in the time periods required. Other Information
Additional information about the Company is available on SEDAR at www.sedar.com
9
MANERA CAPITAL CORP. 423 East 10th Street
North Vancouver, B.C. V7L 2E5 Tel: 604-619-0225 Fax: 604-980-6264
Email: [email protected] Trading Symbol: TSX-V: MEA.P
CORPORATE INFORMATION
Alfredo De Lucrezia, North Vancouver, B.C. President, Chief Executive Officer, Chief Financial
Officer and Director Maurizio Grande, Vancouver, B.C. Director John L. Pallot, New Westminster, B.C. Director Gordon R. Kettleson, Tsawwassen, B.C. Director Ben James Colangelo, North Vancouver, B.C. Secretary Registered Office Suite 1710 – 1177 West Hastings Street Vancouver, B.C. V6E 2L3
Transfer Agent Computershare Investor Services Inc. 2nd Floor – 510 Burrard Street Vancouver, B.C. V6C 3B9
Auditors Davidson & Company LLP Suite 1200 – 609 Granville Street Vancouver, B.C. V7Y 1G5
MANERA CAPITAL CORP.
Management’s Discussion and Analysis
May 31, 2015
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2015
2
Dated: September 3, 2015
The following management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of Manera Capital Corp. (the “Company”) was prepared by management of the Company as at September 3, 2015 and should be read in conjunction with the Company’s audited annual financial statements and corresponding notes thereto for the year ended May 31, 2015 (the “Financial Statements”). Additional information relating to the Company is available on SEDAR at www.sedar.com.
The Financial Statements have been prepared by management and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). All amounts are expressed in Canadian dollars unless otherwise stated. Other information contained in this document has also been prepared by management and is consistent with the data contained in the Financial Statements.
The Company’s certifying officers are responsible for ensuring that the Financial Statements and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made. The Company’s certifying officers certify that the Financial Statements together with the other financial information included in the filings fairly present in all material respects the financial condition, financial performance and cash flows of the Company as the date of and for the periods presented in the filings.
The Audit Committee and the Board of Directors provide an oversight role with respect to all public financial disclosures by the Company. The Board of Directors approves the Financial Statements and MD&A after the completion of its review and recommendation for approval by the Audit Committee, which meets periodically to review all financial reports, prior to filing.
Forward-Looking Statements
Certain statements contained in this document constitute “forward-looking statements”. All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to risks associated with: limited operating history; no history of earnings or payment of any dividends; unlikely to generate earnings or pay dividends in the immediate or foreseeable future; no current business operations; no current assets other than cash; ability to complete a qualifying transaction; ability to raise additional funds if required; potential dilution of shares as a result of potential qualifying transaction; reliance on management team; conflicts of interest among certain directors and officers of the Company; lack of liquidity for shareholders of the Company; and market risk. See “Risks and Uncertainties”.
Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this MD&A and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2015
3
The forward-looking statements in this MD&A are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding business and operating strategies. Description of the Business
The Company was incorporated under the Business Corporations Act (British Columbia) on September 9, 2013 with the intent to being classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”) corporate finance manual. The Company’s shares commenced trading on the Exchange under the trading symbol “MEA.P” on August 28, 2014. The Company has no significant assets other than cash and cash equivalents and proposes to identify and evaluate potential acquisitions or businesses, and once identified and evaluated, to negotiate an acquisition or participation subject to receipt and, if required, shareholder’s approval.
As a Capital Pool Company, the proceeds raised by the Company from the issuance of common shares may only be used to identify and evaluate assets or business for future investment, with the exception that not more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used to cover prescribed costs of issuing common shares or administrative and general expenditures of the Company. These restrictions apply until the completion of a Qualifying Transaction by the Company as defined under the policies of the Exchange.
The Company’s continuing operations as intended are dependent upon its ability to identify, evaluate and negotiate an acquisition of, a participation in or an interest in properties, assets or businesses. Such an acquisition will be subject to regulatory approval and, if required, shareholder approval.
The head office of the Company is located at 423 East 10
th Street, North Vancouver, British Columbia V7L 2E5, and
its registered office is located at Suite 1710 – 1177 West Hastings Street, Vancouver, British Columbia V6E 2L3.
Overall Performance and Discussion of Operations
The Company does not have any c o m m e r c i a l o p e r a t i o n s and will not conduct any business other than the identification and evaluation of business and assets for potential acquisition. On August 28, 2014, the Company successfully completed its listing and Initial Public Offering (“IPO”) process, and its shares commenced trading on the Exchange.
Year ended May 31, 2015 During the year ended May 31, 2015, the Company earned no revenue and reported a net loss of $100,412 and $0.04 basic and diluted loss per share (period ended May 31, 2014 – loss of $23,730; $0.00 basic and diluted loss per share). Net loss primarily related to accounting and audit fees of $13,775 (2014: $5,600), filing and transfer agent fees of $23,164 (2014: $8,927), promotion expense of $8,464 (2014: $nil), rent and office of $12,313 (2014: $9,203) and share-based compensation expense of $44,775 (2014: $nil). Fiscal 2015 was the first full year of operations for the Company, while 2014 was a partial year with nine months only, and hence higher operating expenses in general for the current year. Higher accounting and audit fees, and filing and transfer and agent fees were also a result of the Company’s going public during the year and its subsequent compliant costs associated with its public company reporting and disclosure obligations. Promotion expense was related primarily to activities for purpose of identifying assets or businesses with a view to completing a Qualifying Transaction. Share-based compensation expense represented the fair value of the 600,000 stock options that the Company granted to its directors and officers in conjunction with the IPO. No stock options were issued during the period ended May 31, 2014.
Current liabilities at May 31, 2015, totaled $5,478 (May 31, 2014: $3,500). Shareholders’ equity consists of share capital of $424,287 (May 31, 2014 - $200,000), share-based payment reserve of $63,176 (May 31, 2014 - $nil) and deficit of $124,142 (May 31, 2014 – $23,730) for a net of $363,321 (May 31, 2014 - $176,270) in shareholders’ equity.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2015
4
Working capital was $363,321 at May 31, 2015 (May 31, 2014 - $176,270). Management believes that the Company has sufficient cash to meet its current obligations for the next 12 months and to meet its objective of completing a Qualifying Transaction. The weighted average number of common shares (basic and diluted) of the Company outstanding for the year ended May 31, 2015, was 2,653,846 (period ended May 31, 2014 – nil).
Three month ended May 31, 2015 The Company’s net loss totaled $11,879 for the three month period ended May 31, 2015, with basic and diluted loss per share of $0.00. For the quarter ended May 31, 2014, the net loss totaled $14,052, with basic and diluted loss per share of $0.00. Net loss for the current quarter comprised accounting and audit fees of $6,050 (2014: $2,100), filing and transfer agent fees of $841 (2014: $8,927), promotion expense of $2,694 (2014: $nil), and rent and office expense of $3,000 (2014: 3,025).
Selected Annual Financial Information
The following selected financial data is derived from the audited financial statements of the Company at May 31, 2015 and May 31, 2014.
As at May 31, 2015 As at May 31, 2014
Net working capital $363,321 $176,270 Total current assets $368,799 $179,770 Total current liabilities $5,478 $3,500 Total shareholders’ equity $363,321 $176,270 Year ended May 31, 2015 Period Ended May 31, 2014
Expenses $102,895 $23,730 Net loss for the period $100,412 $23,730 Basic and diluted loss per share $0.04 -
Selected Quarterly Financial Information
Three
months ended
May 31, 2015
Three months ended
February 28, 2015
Three months ended
November 30, 2014
Three months ended
August 31, 2014
Period ended
May 31, 2014
Net loss for the period $11,879 $10,614 $10,436 $67,483 $23,730 Weighted average number of shares 3,500,000
(1) 3,500,000
(1) 3,500,000
(1) 114,130
(1) -
Net loss per share - (basic and diluted) $0.00 $0.00 $0.00 $0.59 -
(1) Consistent with the Company’s accounting policy, common shares held in escrow are excluded from the
weighted average basic and diluted shares outstanding. As at May 31, 2015, the weighted average number of common shares outstanding for purposes of calculating basic and diluted loss per share was 2,653,846 shares and 3,500,000 shares, respectively, for the twelve months and the three months ended May 31, 2015. For the calculation of diluted loss per share, no shares were added to the weighted average number of common shares for the diluted effects of exercisable directors’ and Agent’s options.
Variations over the quarters are related to changes in professional fees and general corporate and administration costs.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2015
5
Additional Disclosure for Venture Corporations without Significant Revenue
The following table sets forth a breakdown of material components of the general and administration costs of the Company for the three months ended May 31, 2015 and the period ended May 31, 2014. Three months ended May 31, 2015 Period ended May 31, 2014
Accounting and Audit $6,050 $5,600 Filing and transfer fees $841 $8,927 Legal fees - - Rent and office $3,000 $9,203 Share-based compensation - - Promotion $2,694 -
$12,585 $23,730
Liquidity, Capital Resources, and Outlook As at May 31, 2015, the Company had working capital of $363,321. This included $365,423 in cash and cash equivalents, $3,376 in trade and other receivables and prepaid expenses, and $5,478 in liabilities. Management believes that it has sufficient cash and cash equivalents to meet its ongoing obligations and its objective of completing a Qualifying Transaction. However, additional equity or debt financing may be required to complete a Qualifying Transaction. Except as described in the Company’s final CPC prospectus dated July 18, 2014, the funds raised pursuant to the Company’s initial public offering and any subsequent financing will be utilized only for the identification and evaluation of potential Qualifying Transactions. There can be no assurance that the Company will be able to obtain adequate financing to complete a Qualifying Transaction. To date the Company has relied entirely upon the sale of common shares to provide working capital to fund its administration and overhead costs. The following financings have been completed by the Company:
Date Gross Proceeds Type of Transaction
February 28, 2014
August 28, 2014
$200,000
$350,000
Private Placement
IPO
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements as at May 31, 2015. Contractual Obligations
There are no significant contractual obligations. Transactions with Related Parties
During the three months and twelve months ended May 31, 2015, the Company expensed $3,000 and $12,000, respectively, in rent and office charges from a Company controlled by Alfredo De Lucrezia, the President, Chief Executive Officer, Chief Financial Officer and a Director of the Company.
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2015
6
On August 28, 2014, options to purchase 600,000 common shares were granted to the following participants in the respective numbers, option exercise prices and expiry dates set forth below:
Participant
Position
No. of Options
Exercise Price
($)
Expiry Date
Alfredo De Lucrezia Director and Officer 250,000 0.10 August 28, 2019
Maurizio Grande Director 75,000 0.10 August 28, 2019
Leo Tom Savino Director 75,000 0.10 August 28, 2019
Ben James Colangelo Officer 50,000 0.10 August 28, 2019
Gordon R. Kettleson Director 75,000 0.10 August 28, 2019
John L. Pallot Director 75,000 0.10 August 28, 2019
Total 600,000
Critical Accounting Estimates and Policies
The Company’s significant accounting policies and the adoption of new accounting policies are disclosed in the audited financial statements prepared as at May 31, 2015. Recent Accounting Pronouncements
IFRS 9, Financial Instruments
The final version of IFRS 9 was issued in July 2014.This standard is the first step in the process to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measurement, impairment and hedge accounting of financial assets and liabilities, which may affect the Company’s accounting for its financial assets and liabilities. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.The Company has yet to assess the full impact of IFRS 9.
Financial Instruments and Other Instruments
The Company’s financial instruments consist of cash, trade and other receivables and accounts payable and accrued liabilities. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments and that the fair value of these financial instruments approximates their carrying values. Disclosure of Outstanding Share Data
As at the date of this MD&A, the following is a description of the outstanding equity securities and convertible securities previously issued by the Company:
Manera Capital Corp. Management’s Discussion and Analysis
May 31, 2015
7
Authorized
Outstanding
Voting or equity securities issued and outstanding
Unlimited Common Shares
7,500,000 Common Shares
Securities convertible or exercisable into voting or equity securities – stock options
Directors’ and officers’ stock options to acquire up to 10% of the outstanding
Common Shares
Directors’ and officers’ stock options to acquire up to 600,000 Common Shares
at $0.10 per share
Agent’s compensation options to acquire up to 10% of the number of
Common Shares sold in connection with the initial public offering
Agent’s compensation stock options to acquire up to 350,000 Common Shares
at $0.10 per share
Voting or equity securities issuable on conversation or exchange of outstanding securities
(as above) (as above)
Risks and Uncertainties
The Company has a limited history of existence. There can be no assurance that a Qualifying Transaction will be completed. Equity or debt financing may be required to complete a Qualifying Transaction. There can be no assurance that the Company will be able to obtain adequate financing to continue. The securities of the Company should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Company's securities: (a) until completion of a Qualifying Transaction, the Company is not permitted to carry on any business other
than the identification and evaluation of potential Qualifying Transactions;
(b) the Company has only limited funds with which to identify and evaluate potential Qualifying Transactions; (c) there can be no assurance that the Company will be able to successfully complete a proposed
Qualifying Transaction;
(d) there can be no assurance that an active and liquid market for the common shares will develop and an
investor may find it difficult to resell its common shares;
(e) trading in the common shares may be halted at any time and may remain halted for an indefinite period
of time in connection with a proposed Qualifying Transaction; and
(f) trading in the common shares may be halted at other times for other reasons, including for failure by the
Company to submit documents to the Exchange in the time periods required. Other Information
Additional information about the Company is available on SEDAR at www.sedar.com
8
MANERA CAPITAL CORP. 423 East 10th Street
North Vancouver, B.C. V7L 2E5 Tel: 604-619-0225 Fax: 604-980-6264
Email: [email protected] Trading Symbol: TSX-V: MEA.P
CORPORATE INFORMATION
Alfredo De Lucrezia, North Vancouver, B.C. President, Chief Executive Officer, Chief Financial
Officer and Director Maurizio Grande, Vancouver, B.C. Director Leo Tom Savino, North Vancouver, B.C. Director John L. Pallot, New Westminster, B.C. Director Gordon R. Kettleson, Tsawwassen, B.C. Director Ben James Colangelo, North Vancouver, B.C. Secretary Registered Office Suite 1710 – 1177 West Hastings Street Vancouver, B.C. V6E 2L3
Transfer Agent Computershare Investor Services Inc. 2nd Floor – 510 Burrard Street Vancouver, B.C. V6C 3B9
Auditors Davidson & Company LLP Suite 1200 – 609 Granville Street Vancouver, B.C. V7Y 1G5
SCHEDULE “C”
Audited Financial Statements of New Chris for the years ended December 31, 2015, 2014 and 2013
- 1 -
NEW CHRIS MINERALS LTD.
Financial Statements
December 31, 2015
(Expressed in Canadian Dollars)
- 2 -
INDEPENDENT AUDITORS’ REPORT
To the Shareholders of New Chris Minerals Ltd.,
We have audited the accompanying financial statements of New Chris Minerals Ltd., which comprise the statements of financial position
as at December 31, 2015 and 2014, and the statements of comprehensive loss, changes in deficiency and cash flows for the years ended
December 31, 2015 and 2014, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with
Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of New Chris Minerals Ltd. as at
December 31, 2015 and 2014 and its financial performance and its cash flows for the years ended December 31, 2015 and 2014 in
accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 1 in the financial statements which indicates that the Company has no current
sources of revenue and is dependent upon its ability to secure new sources of financing. These conditions, along with other matters as set
forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a
going concern.
CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, British Columbia
June 16, 2016
NEW CHRIS MINERALS LTD. Statements of Financial Position
As at December 31,
(Expressed in Canadian Dollars)
- 3 -
2015
2014
$ $
Assets
Current assets
Cash 1,466 34,672
Mining exploration tax credits recoverable 62,086 62,086
Amounts receivable - 1,657
GST recoverable 1,035 12,830
64,587 111,245
Reclamation deposits (note 2) 56,500 56,500
Equipment (note 5) 9,256 11,652
130,343 179,397
Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities 4,510 12,995
Due to related parties (note 7) 400,732 400,732
405,242 413,727
Shareholders’ deficiency
Share capital (note 8) 2,185,197 2,185,197
Deficit (2,460,096) (2,419,527)
(274,899) (234,330)
130,343 179,397
See accompanying notes to the financial statements
Nature and continuance of operations (note 1)
Approved by the Board of Directors and authorized for issue on June 16, 2016.
“Michael McMullen” “Ashwath Mehra”
Michael McMullen, Director Ashwath Mehra, Director
NEW CHRIS MINERALS LTD. Statements of Comprehensive Loss
For the Years Ended December 31,
(Expressed in Canadian Dollars)
- 4 -
2015 2014
$ $
Operating costs and expenses
Accounting and legal 14,036 24,197
Bank charges and interest 1,099 1,562
Computer and internet - 3,740
Contractor 8,000 21,954
Depreciation (note 5) 2,396 2,345
Exploration expense (notes 4 and 6) - 389,826
Licenses and permits - 1,214
Occupancy 6,000 6,000
Office and miscellaneous 6,767 6,916
Salary 2,697 111,973
Travel - 14,927
Loss before other items (40,995) (584,654)
Interest income 426 302
Mining exploration tax credits - 63,693
Net loss and comprehensive loss for the year (40,569) (520,659)
Weighted average number of common shares outstanding 24,851,948 22,913,620
Basic and diluted loss per share $ (0.00) $ (0.02)
See accompanying notes to the financial statements
NEW CHRIS MINERALS LTD. Statements of Cash Flows
For the Years Ended December 31,
(Expressed in Canadian dollars)
- 5 -
2015 2014
$ $
Cash provided by (used for):
Operating activities
Net loss for the year (40,569) (520,659)
Items not involving the use of cash:
Depreciation 2,396 2,345
(38,173) (518,314)
Changes in non-cash working capital:
Mining exploration tax credits recoverable - 322,122
Amounts receivable 1,657 12,153
GST recoverable 11,795 4,590
Prepaid expenses - 2,752
Accounts payable and accrued liabilities (8,485) (35,117)
Due to related parties - 60,000
(33,206) (151,814)
Investing activities
Purchase of equipment - (4,995)
Reclamation deposits - (3,000)
- (7,995)
Financing activity
Due to related parties - 189,940
Increase (decrease) in cash (33,206) 30,131
Cash, beginning of the year 34,672 4,541
Cash, end of the year 1,466 34,672
See accompanying notes to financial statements
NEW CHRIS MINERALS LTD. Statements of Changes in Deficiency
(Expressed in Canadian dollars)
- 6 -
Number of
Shares
Share
Capital Deficit Total
$ $ $
December 31, 2013 24,851,948 2,185,197 (1,898,868) 286,329
Net loss for the year - - (520,659) (520,659)
December 31, 2014 24,851,948 2,185,197 (2,419,527) (234,330)
Net loss for the year - - (40,569) (40,569)
December 31, 2015 24,851,948 2,185,197 (2,460,096) (274,899)
See accompanying notes to financial statements
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 7 -
1) NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated under the Business Corporations Act (British Columbia) and its principal business
activity is the acquisition and exploration of resource properties. The properties of the Company are without a known
economically feasible ore body. The exploration programs undertaken and proposed constitute an exploratory search.
There is no assurance that the Company will be successful in its search. The business of exploring for minerals and
mining involves a high degree of risk. Major expenses may be required to establish ore reserves, to develop metallurgical
processes, and to construct mining and processing facilities at a particular site. It is not possible to ensure that the current
exploration programs planned by the Company will result in a profitable commercial mining operation.
Although the Company has taken steps to verify title to resource properties in which it has an interest in accordance with
industry standards for the current stage of exploration of such properties, these procedures do not guarantee the
Company’s title. Property title may be subject to unregistered prior agreements and noncompliance with regulatory
requirements.
These financial statements have been prepared on the going concern basis, which assumes the Company will continue in
operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in
the normal course of business. Several adverse conditions cast substantial doubt on the validity of this assumption. The
Company has incurred operating losses over the past two fiscal periods (2015 - $40,569; 2014 - $520,659), has limited
financial resources, no source of operating cash flow, and no assurances that sufficient funding, including adequate
financing, will be available to conduct further exploration and development of its mineral property projects.
The application of the going concern concept is dependent upon the Company’s ability to generate future profitable
operations and receive continued financial support from its creditors and shareholders. These financial statements do not
give effect to any adjustments that might be required should the Company be unable to continue as a going concern and
therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at
amounts differing from those reflected in the financial statements.
Management plans to continue to pursue equity or debt financing to support operations. Management believes this plan
will be sufficient to meet the Company’s liabilities and commitments as they become payable over the next twelve
months. There can be no assurance that management’s plan will be successful. Failure to maintain the support of creditors
and obtain additional external equity financing will cause the Company to curtail operations and the Company’s ability to
continue as a going concern will be impaired. The outcome of these matters cannot be predicted at this time. These
conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to
continue as a going concern.
2) SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial
Reporting Interpretations Committee (“IFRIC”).
Basis of preparation
These financial statements have been prepared on the historical cost basis. The presentation and functional currency of
the Company is the Canadian dollar.
Cash and cash equivalents
Cash and cash equivalents are comprised of cash on hand and deposits in banks. At December 31, 2015 and 2014, the
Company did not have any cash equivalents.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 8 -
2) SIGNIFICANT ACCOUNTING POLICIES (continued)
Significant accounting judgments, estimates and assumptions
The preparation of the Company’s financial statements in conformity with IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on
management’s experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. However, actual outcomes can differ from these estimates. Revisions to accounting estimates
are recognized in the period in which the estimates are revised and in any future periods affected.
Critical judgments in applying accounting policies:
The following are critical judgments that management has made in the process of applying accounting policies and that
have the most significant effect on the amounts recognized in the financial statements:
the determination that the Company will continue as a going concern for the next year.
Exploration and evaluation expenditures
The Company’s accounting policy relating to mineral property expenditures, incurred prior to the establishment of
economically recoverable reserves, is to expense all such expenditures as incurred. These costs include option and other
payments, made at the discretion of the Company which do not directly constitute the outright acquisition of title.
Share capital
The Company records proceeds from share issuances net of issue costs and any tax effects. Common shares issued for
consideration other than cash are valued based on their market value at the date the agreement to issue shares was
concluded.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting year. Financial assets are
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the asset has been adversely impacted.
For all financial assets objective evidence of impairment could include:
significant financial difficulty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial re-organization.
Impairment of non-financial assets
At the end of each reporting year, and when relevant triggering events and circumstances occur, the carrying amounts of
the Company’s non-financial assets are reviewed to determine whether there is any indication that those assets are
impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and the value in use. Fair value
is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between
knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 9 -
2) SIGNIFICANT ACCOUNTING POLICIES (continued)
carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss
for the year.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of
its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is
recognized immediately in profit or loss.
Income taxes
The Company uses the balance sheet method of accounting for income taxes. Under the balance sheet method, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Deferred income tax assets also result from unused
loss carry forwards, resource related pools and other deductions. A deferred tax asset is recognized for unused tax losses,
tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be
available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related tax benefit will be realized.
Loss per share
Basic loss per share is calculated by dividing the loss available to common shareholders by the weighted average number
of common shares outstanding in the period. Diluted loss per share is calculated by the treasury stock method. Under the
treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per
share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to
repurchase common shares at the average market price during the period. Where the effects of including all outstanding
options and warrants would be anti-dilutive, no dilution is calculated and the diluted loss per share is presented as the
same as basic loss per share.
Reclamation deposits
The Company maintains cash deposits, or letters of credit secured by cash deposits, as required by regulatory bodies as
assurance for the funding of reclamation costs. These funds are restricted to that purpose and are not available to the
Company until the reclamation obligations have been fulfilled. Reclamation deposits are designated as loans and
receivables, are recorded at amortized cost and are classified as non-current assets.
Mineral exploration tax credits (“METC”)
The Company recognizes METC amounts in income when the Company’s METC application is approved by Canada
Revenue Agency auditors or when the amount to be received can be reasonably estimated and collection is reasonably
assured.
Financial instruments
Financial assets
The Company classifies its financial assets in the following categories: fair value through profit or loss, loans and
receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of financial assets at recognition.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 10 -
2) SIGNIFICANT ACCOUNTING POLICIES (continued)
i. At fair value through profit or loss
Financial assets at fair value through profit or loss are initially recognized at fair value with changes in fair value
recorded through profit or loss. Cash and cash equivalents are included in this category of financial assets.
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are classified as current assets or non-current assets based on their maturity date. Loans and
receivables are carried at amortized cost less any impairment. Amounts receivable and reclamation deposits are
included in this category of financial assets. GST recoverable is not a financial asset.
iii. Available-for-sale
Available-for-sale (“AFS”) financial assets are non-derivatives that are either designated as AFS or not classified in
any of the other financial asset categories. Changes in the fair value of AFS financial assets are recognized as other
comprehensive income and classified as a component of equity.
Management assesses the carrying value of AFS financial assets at each reporting period and any impairment
charges are also recognized in profit or loss. When financial assets classified as AFS are sold, the accumulated fair
value adjustments recognized in other comprehensive income are included in profit and loss.
Financial liabilities
The Company’s financial liabilities are classified as other financial liabilities.
Other financial liabilities are non-derivatives and are recognized initially at fair value, net of transaction costs incurred
and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction
costs, and the redemption value is recognized in the statement of comprehensive loss over the period to maturity using the
effective interest method.
Other financial liabilities are classified as current or non-current based on their maturity dates. Financial liabilities
include accounts payable and accrued liabilities, and due to related parties.
The Company does not have any derivative financial assets and liabilities.
3) NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS
New standards, amendments and interpretations to existing standards not adopted by the Company
The following revised standards are effective for annual periods beginning on or after January 1, 2014 with earlier
application permitted. The Company has assessed the impact of these standards and has determined that they would not
have a material impact on the Company.
IAS 32, Financial Instruments: Presentation (January 1, 2014)
IFRS 9, Financial Instruments (January 1, 2017)
There are no other IFRS’s or IFRIC interpretations that are not yet effective that are expected to have a material impact
on the Company.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 11 -
4) EXPLORATION AND EVALUATION EXPENDITURES
Tatogga Lake
The Company entered into an option agreement dated June 13, 2011 with Richard Billingsley, Gaye Richards and
0886260 B.C. Ltd. (collectively, the “Optionors A”). Optionors A grant the Company the sole and exclusive right and
option to acquire a 100% undivided interest in 96 mineral claims situated in the Red Chris Mining Camp, British
Columbia, except for a 2% Net Smelter Return Royalty. The agreement specifies that the Company intends to file a
Prospectus with the B.C. Securities Commission and list its common shares on the TSX Venture Exchange.
In order to keep the option in good standing, the Company will pay cash to Optionors A, as follows:
$25,000 on signing (paid);
$50,000 within five days after the listing date;
$50,000 on the first anniversary of the listing date;
$100,000 on the second anniversary of the listing date;
$100,000 on the third anniversary of the listing date; and
$100,000 on the fourth anniversary of the listing date.
and issue shares to Optionors A, as follows:
2,500,000 shares within seven days of the listing date;
1,500,000 shares on the first anniversary of the listing date;
1,500,000 shares on the second anniversary of the listing date;
1,500,000 shares on the third anniversary of the listing date; and
2,500,000 shares on the fourth anniversary of the listing date.
The Company also needs to complete $500,000 in exploration work on the property by December 31, 2013 (completed).
Optionors A also grant to the Company the sole and exclusive option to purchase 1% of the Net Smelter Return Royalty
at a price of $1,500,000 within five years from the date the Red Chris Mining Camp is put into commercial production.
In an amendment dated March 25, 2014, the Optionors A and the Company expanded the agreement to cover 107 mineral
claims and to conditionally cover any future claims that may be staked within 10 kilometers of these claims by either the
Company or the Optionors A.
New Nanik
The Company entered into another option agreement dated April 24, 2012 with Richard Billingsley and Gaye Richards
(collectively, the “Optionors B”). Optionors B grant the Company the sole and exclusive right and option to acquire a
100% undivided interest in 11 mineral claims situated in New Nanik area in British Columbia, except a 2% Net Smelter
Return Royalty. The agreement specifies that the Company intends to file a Prospectus with the B.C. Securities
Commission and list its common shares on the TSX Venture Exchange.
In order to keep the option in good standing, the Company will pay cash to Optionors B, as follows:
$50,000 within 15 business days of signing (paid);
$25,000 on or before the first anniversary of the listing date;
$50,000 on or before the second anniversary of the listing date;
$50,000 on or before the third anniversary of the listing date; and
$50,000 on or before the fourth anniversary of the listing date.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 12 -
4) EXPLORATION AND EVALUATION EXPENDITURES (continued)
and issue shares to the Optionors B, as follows:
400,000 shares within seven days of the listing date;
400,000 shares on the first anniversary of the listing date;
400,000 shares on the second anniversary of the listing date;
400,000 shares on the third anniversary of the listing date; and
400,000 shares on the fourth anniversary of the listing date.
In an amendment dated March 20, 2014, the Optionors B and the Company expanded the agreement to cover 29 mineral
claims and to conditionally cover any future claims that may be staked within 10 kilometers of these claims by either the
Company or the Optionors B. On June 1, 2016, an amendment was made to delete the list of 29 claims mentioned above,
and add a revised list of 30 claims.
The continuity of mineral property costs incurred is provided in the table below. For purposes of financial statement
presentation, such costs are reflected as current year’s expenses and, cumulatively, within deficit, pursuant to the
Company’s accounting policy for such items.
December 31,
2013
Net
Additions
December 31,
2014
Net
Additions
December 31,
2015
$ $ $ $ $
BRITISH COLUMBIA
Tatogga Lake
Acquisition 25,000 – 25,000 - 25,000
Assay 98,956 34,333 133,289 - 133,289
Camp and travel 115,722 19,969 135,691 - 135,691
Communication 6,109 5,586 11,695 - 11,695
Consulting 30,000 30,000 60,000 - 60,000
Contractor 185,237 61,713 246,950 - 246,950
Employee wages 134,347 122,493 256,840 - 256,840
Equipment rental 25,647 25,533 51,180 - 51,180
Field office 17,422 9,536 26,958 - 26,958
Geophysical surveys 692,024 44,807 736,831 - 736,831
Total 1,330,464 353,970 1,684,434 - 1,684,434
BCMETC refund (258,051) (63,693) (321,744) - (321,744)
Net Expenditures 1,072,413 290,277 1,362,690 - 1,362,690
New Nanik
Acquisition 50,000 - 50,000 - 50,000
Assay 56,391 474 56,865 - 56,865
Camp and travel 80,498 - 80,498 - 80,498
Communication 3,000 - 3,000 - 3,000
Consulting 30,000 30,000 60,000 - 60,000
Contractor 189,731 955 190,686 - 190,686
Employee wages 16,322 4,427 20,749 - 20,749
Equipment rental 68,128 - 68,128 - 68,128
Field office 8,983 - 8,983 - 8,983
Geophysical surveys 80,408 - 80,408 - 80,408
Total 583,461 35,856 619,317 - 619,317
BCMETC refund (126,157) - (126,157) - (126,157)
Net Expenditures 457,304 35,856 493,160 - 493,160
Total Net Exploration
and Evaluation
Expenditures 1,529,717 326,133 1,855,850 - 1,855,850
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 13 -
5) EQUIPMENT
6) RELATED PARTY TRANSACTIONS
Key management personnel compensation:
2015 2014
$ $
Consulting (included in exploration expense) -) 60,000)
All transactions with related parties have occurred in the normal course of operations and management represents that
they have occurred on a basis consistent with those involving unrelated parties.
7) DUE TO RELATED PARTIES
At December 31, 2015, the Company owed $210,792 (2014 - $210,792) to a private company that is owned by a
director/shareholder of the Company. At December 31, 2015, the Company owed advances totalling $189,940 (2014 –
$189,940) being $94,940 from the above-noted director/shareholder of the Company and $95,000 from another
director/shareholder.
These amounts are non-interest bearing and have no specific terms of repayment.
8) SHARE CAPITAL
a) The authorized share capital of the Company consists of an unlimited number of common shares.
b) Common shares
For the years ending December 31, 2015 and 2014 the company did not issue any shares.
Computer
Equipment
Field
Equipment Total
$ $ $
Cost:
Balance, January 1, 2014 1,270 11,927 13,197
Addition 4,995 4,995
Balance, December 31, 2014 1,270 16,922 18,192
Addition - - -
Balance, December 31, 2015 1,270 16,922 18,192
Accumulated depreciation:
Balance, January 1, 2014 855 3,340 4,195
Addition 228 2,117 2,345
Balance, December 31, 2014 1,083 5,457 6,540
Addition 103 2,293 2,396
Balance, December 31, 2015 1,186 7,750 8,936
Net book value:
December 31, 2014 187 11,465 11,652
December 31, 2015 84 9,172 9,256
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 14 -
8) SHARE CAPITAL (continued)
c) Share purchase options and warrants
As of December 31, 2015 and 2014, there were no options and warrants outstanding.
9) CAPITAL MANAGEMENT
The Company’s objectives for the management of capital are to safeguard the Company’s ability to continue as a going
concern, including the preservation of capital, and to achieve reasonable returns on invested cash after satisfying the
objective of preserving capital.
The Company considers its cash and cash equivalents to be its manageable capital. The Company’s policy is to
maintain sufficient cash and deposit balances to cover operating and exploration costs over a reasonable future period.
The Company accesses capital markets as necessary and may also acquire additional funds where advantageous
circumstances arise.
The Company currently has no externally-imposed capital requirements.
10) FINANCIAL INSTRUMENT RISKS
The Company’s financial instruments are exposed to the following risks:
Credit Risk
The Company’s primary exposure to credit risk is the risk of illiquidity of cash amounting to $1,466 at December 31,
2015 (2014 - $34,672). As the Company’s policy is to limit cash holdings to instruments issued by major Canadian
banks, or investments of equivalent or better quality, the credit risk is considered by management to be negligible.
Interest Rate Risk
The Company currently has cash balances only. The Company’s current policy is to invest excess cash in investment-
grade short-term deposit certificates issued by its banking institution.
Fair Value of Financial Instruments
The fair value of the Company’s financial assets and liabilities approximates the carrying amount. Financial instruments
measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability
of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 – Inputs that are not based on observable market data.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 15 -
10) FINANCIAL INSTRUMENT RISKS (continued)
The fair value classification of the Company’s financial instruments as at December 31, 2015 and 2014 is as follows:
2015 2014
Fair
value
level
Fair value
through
profit or
loss
Loans and
receivables and
other financial
liabilities at
amortized cost
Fair value
through
profit or
loss
Loans and
receivables and
other financial
liabilities at
amortized cost
$ $ $ $
Financial assets:
Cash 1 1,466 - 34,672 -
Reclamation deposits – 56,500 – 56,500
1,466 56,500 34,672 56,500
Financial liabilities:
Accounts payable and accrued liabilities - 4,510 - 12,995
Due to related parties - 400,732 - 400,732
- 405,242 - 413,727
During the years ended December 31, 2015 and 2014, there were no transfers between level 1, level 2 and level 3
classified assets and liabilities.
11) INCOME TAXES
A reconciliation of income taxes at statutory rates is as follows:
2015 2014
$ $
Net loss for the year before tax 40,569 520,659
Expected income tax recovery (10,548) (135,371)
Net adjustment for deductible and non-deductible amounts 623 85,945
Unrecognized benefit of tax pool assets 9,925 49,426
– –
The significant components of the Company’s deferred income tax assets are as follows:
2015 2014
$ $
Deferred income tax assets:
Non-capital loss carry-forwards 139,000 149,000
Exploration and evaluation expenditures 476,000 428,000
615,000 577,000
Valuation allowance (615,000) (577,000)
Net deferred income tax assets – –
NEW CHRIS MINERALS LTD. Notes to the Financial Statements
For the years ended December 31, 2015 and 2014
(Expressed in Canadian dollars)
- 16 -
11) INCOME TAXES (continued)
Subject to certain restrictions, the Company has exploration and evaluation expenditures at December 31, 2015 of
approximately $1,906,000(2014 - $1,906,000) available to reduce taxable income in future years. The Company also has
non-capital losses available for possible deduction against future years’ taxable income of approximately $535,000 (2014
- $573,000). The Company has not recognized any future benefit for these tax losses, credits and resource deductions, as
the likelihood of their utilization is unknown. If unused, these non-capital losses will expire as follows:
$
2031 65,000
2032 94,000
2033 144,000
2034 194,000
2035 38,000
535,000
- 1 -
NEW CHRIS MINERALS LTD.
Financial Statements
December 31, 2013
(Expressed in Canadian Dollars)
INDEPENDENT AUDITORS’ REPORT
To the Shareholders of New Chris Minerals Ltd., We have audited the accompanying financial statements of New Chris Minerals Ltd., which comprise the statements of financial position as at December 31, 2013 and 2012, and the statements of comprehensive loss, changes in equity and cash flows for the years ended December 31, 2013 and 2012, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of New Chris Minerals Ltd. as at December 31, 2013 and 2012 and its financial performance and its cash flows for the years ended December 31, 2013 and 2012 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 1 in the financial statements which indicates that the Company has no current sources of revenue and is dependent upon its ability to secure new sources of financing. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.
CHARTERED ACCOUNTANTS Vancouver, British Columbia June 24, 2014
NEW CHRIS MINERALS LTD. Statements of Financial Position As at December 31, (Expressed in Canadian Dollars)
- 2 -
2013
2012 $ $ Assets
Current assets
Cash 4,541 35,081 Mining exploration tax credits recoverable 384,208 290,188 Amounts receivable 13,810 9,910 GST recoverable 17,420 149,838 Prepaid expenses 2,752 –
422,731 485,017 Reclamation deposits (note 2) 53,500 43,500 Equipment (note 5) 9,002 11,655 485,233 540,172 Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities 48,112 32,072 Due to related parties (note 7) 150,792 90,792
198,904 122,864 Shareholders’ equity
Share capital (note 8) 2,185,197 1,825,667 Deficit (1,898,868) (1,408,359)
286,329 417,308 485,233 540,172
See accompanying notes to the financial statements Nature and continuance of operations (note 1) Events after the reporting period (note 12) Approved by the Board of Directors and authorized for issue on June 24, 2014.
“Michael McMullen” “Ashwath Mehra” Michael McMullen, Director Ashwath Mehra, Director
NEW CHRIS MINERALS LTD. Statements of Comprehensive Loss For the Years Ended December 31, (Expressed in Canadian Dollars)
- 3 -
2013 2012
$ $ Operating costs and expenses
Accounting and legal 25,681 14,129 Bank charges and interest 1,212 960 Computer and internet 2,067 8,081 Community assistance – 10,000 Consulting (note 5) 60,000 60,000 Contractor 47,844 15,000 Depreciation 2,653 1,542 Dues and subscriptions 412 1,760 Exchange loss – 265 Exploration expense 258,580 1,008,417 Licenses and permits 4,268 7,348 Occupancy 6,035 4,155 Office and miscellaneous 5,488 6,063 Salary 150,669 121,936 Travel 33,871 7,769 Training 900 194
Loss before other items (599,680) (1,267,619) Interest income 77 7 Other income 15,074 20,056 Mining exploration tax credits 94,020 220,624
Net loss and comprehensive loss for the year (490,509) (1,026,932)
Weighted average number of common shares outstanding 22,913,620 6,639,600
Basic and diluted loss per share $ (0.02) $ (0.15) See accompanying notes to the financial statements
NEW CHRIS MINERALS LTD. Statements of Cash Flows For the Years Ended December 31, (Expressed in Canadian dollars)
- 4 -
2013 2012 $ $
Cash provided by (used for): Operating activities Net loss for the year (490,509) (1,026,932) Items not involving the use of cash:
Depreciation 2,653 1,542 (487,856) (1,025,390)
Changes in non-cash working capital: Amounts receivable (8,380) (7,407) Prepaid expenses (2,752) – GST recoverable 132,418 (120,662) Mining exploration tax credit recoverable (94,020) (220,624) Accounts payable and accrued liabilities 16,040 24,261 Due to related parties 60,000 60,000
(384,550) (1,289,822) Investing activities
Purchase of equipment – (13,197) Reclamation bonding (10,000) (43,500)
(10,000) (56,697) Financing activities
Shares issued for cash 364,010 1,378,311 Increase (decrease) in cash (30,540) 31,792 Cash, beginning of the year 35,081 3,289 Cash, end of the year 4,541 35,081
See accompanying notes to financial statements
NEW CHRIS MINERALS LTD. Statements of Changes in Equity (Expressed in Canadian dollars)
- 5 -
Number of
Shares Share
Capital Deficit Total $ $ $ December 31, 2011 7,473,540 447,356 (381,427) 65,929 Shares issued for cash 13,783,111 1,378,311 – 1,378,311 Net loss for the year – – (1,026,932) (1,026,932) December 31, 2012 21,256,651 1,825,667 (1,408,359) 417,308 Shares issued for cash 3,595,297 359,530 – 359,530 Net loss for the year – – (490,509) (490,509) December 31, 2013 24,851,948 2,185,197 (1,898,868) 286,329
See accompanying notes to financial statements
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
- 6 -
1) NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated under the Business Corporations Act (British Columbia) and its principal business activity is the acquisition and exploration of resource properties. The properties of the Company are without a known economically feasible ore body. The exploration programs undertaken and proposed constitute an exploratory search. There is no assurance that the Company will be successful in its search. The business of exploring for minerals and mining involves a high degree of risk. Major expenses may be required to establish ore reserves, to develop metallurgical processes, and to construct mining and processing facilities at a particular site. It is not possible to ensure that the current exploration programs planned by the Company will result in a profitable commercial mining operation. Although the Company has taken steps to verify title to resource properties in which it has an interest in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and noncompliance with regulatory requirements. These financial statements have been prepared on the going concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Several adverse conditions cast substantial doubt on the validity of this assumption. The Company has incurred operating losses over the past two fiscal periods (2013 - $490,509; 2012 - $1,026,932), has limited financial resources, no source of operating cash flow, and no assurances that sufficient funding, including adequate financing, will be available to conduct further exploration and development of its mineral property projects. The application of the going concern concept is dependent upon the Company’s ability to generate future profitable operations and receive continued financial support from its creditors and shareholders. These financial statements do not give effect to any adjustments that might be required should the Company be unable to continue as a going concern and therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the financial statements. Management plans to continue to pursue equity or debt financing to support operations. Management believes this plan will be sufficient to meet the Company’s liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management’s plan will be successful. Failure to maintain the support of creditors and obtain additional external equity financing will cause the Company to curtail operations and the Company’s ability to continue as a going concern will be impaired. The outcome of these matters cannot be predicted at this time. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.
2) SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). Basis of preparation These financial statements have been prepared on the historical cost basis. The presentation and functional currency of the Company is the Canadian dollar. Cash and cash equivalents Cash and cash equivalents are comprised of cash on hand and deposits in banks
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
- 7 -
2) SIGNIFICANT ACCOUNTING POLICIES (continued)
Significant accounting judgments, estimates and assumptions The preparation of the Company’s financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Critical judgments in applying accounting policies: The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the financial statements:
• the determination that the Company will continue as a going concern for the next year. Exploration and evaluation expenditures The Company’s accounting policy relating to mineral property expenditures, incurred prior to the establishment of economically recoverable reserves, is to expense all such expenditures as incurred. These costs include option and other payments, made at the discretion of the Company, which do not directly constitute the outright acquisition of title. Share capital The Company records proceeds from share issuances net of issue costs and any tax effects. Common shares issued for consideration other than cash are valued based on their market value at the date the agreement to issue shares was concluded. Impairment of financial assets Financial assets are assessed for indicators of impairment at the end of each reporting year. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the asset has been adversely impacted.
For all financial assets objective evidence of impairment could include: • significant financial difficulty of the issuer or counterparty; or • default or delinquency in interest or principal payments; or • it becoming probable that the borrower will enter bankruptcy or financial re-organization. Impairment of non-financial assets At the end of each reporting year, and when relevant triggering events and circumstances occur, the carrying amounts of the Company’s non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and the value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
- 8 -
2) SIGNIFICANT ACCOUNTING POLICIES (continued)
carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the year. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. Income taxes The Company uses the balance sheet method of accounting for income taxes. Under the balance sheet method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred income tax assets also result from unused loss carry forwards, resource related pools and other deductions. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Loss per share Basic loss per share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding in the period. Diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. Where the effects of including all outstanding options and warrants would be anti-dilutive, no dilution is calculated and the diluted loss per share is presented as the same as basic loss per share. Reclamation deposits The Company maintains cash deposits, or letters of credit secured by cash deposits, as required by regulatory bodies as assurance for the funding of reclamation costs. These funds are restricted to that purpose and are not available to the Company until the reclamation obligations have been fulfilled. Reclamation deposits are designated as loans and receivables, are recorded at amortized cost and are classified as non-current assets. Mineral exploration tax credits (“METC”) The Company recognizes METC amounts in income when the Company’s METC application is approved by Canada Revenue Agency auditors or when the amount to be received can be reasonably estimated and collection is reasonably assured. Financial instruments Financial assets The Company classifies its financial assets in the following categories: fair value through profit or loss, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at recognition.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
- 9 -
2) SIGNIFICANT ACCOUNTING POLICIES (continued)
i. At fair value through profit or loss
Financial assets at fair value through profit or loss are initially recognized at fair value with changes in fair value recorded through profit or loss. Cash and cash equivalents are included in this category of financial assets.
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non-current assets based on their maturity date. Loans and receivables are carried at amortized cost less any impairment. Amounts receivable and reclamation deposits are included in this category of financial assets. GST recoverable is not a financial asset.
iii. Available-for-sale
Available-for-sale (“AFS”) financial assets are non-derivatives that are either designated as AFS or not classified in any of the other financial asset categories. Changes in the fair value of AFS financial assets are recognized as other comprehensive income and classified as a component of equity. Management assesses the carrying value of AFS financial assets at each reporting period and any impairment charges are also recognized in profit or loss. When financial assets classified as AFS are sold, the accumulated fair value adjustments recognized in other comprehensive income are included in profit and loss.
Financial liabilities The Company’s financial liabilities are classified as other financial liabilities. Other financial liabilities are non-derivatives and are recognized initially at fair value, net of transaction costs incurred and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in the statement of comprehensive loss over the period to maturity using the effective interest method. Other financial liabilities are classified as current or non-current based on their maturity dates. Financial liabilities include accounts payable and accrued liabilities and related parties. The Company does not have any derivative financial assets and liabilities.
3) NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS
New standards, amendments and interpretations to existing standards not adopted by the Company The following revised standards are effective for annual periods beginning on or after January 1, 2013 with earlier application permitted. The Company has assessed the impact of these standards and has determined that they would not have a material impact on the Company.
• IAS 32, Financial Instruments: Presentation (January 1, 2014) • IFRS 9, Financial Instruments (to be determined)
There are no other IFRS’s or IFRIC interpretations that are not yet effective that are expected to have a material impact on the Company.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
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4) EXPLORATION AND EVALUATION EXPENDITURES
Tatogga Lake The Company entered into an option agreement dated June 13, 2011 with Richard Billingsley, Gaye Richards and 0886260 B.C. Ltd. (collectively, the “Optionors A”). Optionors A grant the Company the sole and exclusive right and option to acquire a 100% undivided interest in 96 mineral claims situated in the Red Chris Mining Camp, British Columbia, except for a 2% Net Smelter Return Royalty. The agreement specifies that the Company intends to file a Prospectus with the B.C. Securities Commission and list its common shares on the TSX Venture Exchange. In order to keep the option in good standing, the Company will pay cash to Optionors A, as follows:
• $25,000 on signing (paid); • $50,000 within five days after the listing date; • $50,000 on the first anniversary of the listing date; • $100,000 on the second anniversary of the listing date; • $100,000 on the third anniversary of the listing date; and • $100,000 on the fourth anniversary of the listing date.
and issue shares to Optionors A, as follows:
• 2,500,000 shares within seven days of the listing date; • 1,500,000 shares on the first anniversary of the listing date; • 1,500,000 shares on the second anniversary of the listing date; • 1,500,000 shares on the third anniversary of the listing date; and • 2,500,000 shares on the fourth anniversary of the listing date.
The Company also needs to complete $500,000 in exploration work on the property by December 31, 2013 (completed). Optionors A also grant to the Company the sole and exclusive option to purchase 1% of the Net Smelter Return Royalty at a price of $1,500,000 within five years from the date the Red Chris Mining Camp is put into commercial production. In an amendment dated March 25, 2014, the Optionors A and the Company expanded the agreement to cover 107 mineral claims and to conditionally cover any future claims that may be staked within 10 kilometers of these claims by either the Company or the Optionors A. New Nanik The Company entered into another option agreement dated April 24, 2012 with Richard Billingsley and Gaye Richards (collectively, the “Optionors B”). Optionors B grant the Company the sole and exclusive right and option to acquire a 100% undivided interest in 11 mineral claims situated in New Nanik area in British Columbia, except a 2% Net Smelter Return Royalty. The agreement specifies that the Company intends to file a Prospectus with the B.C. Securities Commission and list its common shares on the TSX Venture Exchange. In order to keep the option in good standing, the Company will pay cash to Optionors B, as follows:
• $50,000 within 15 business days of signing (paid); • $25,000 on or before the first anniversary of the listing date; • $50,000 on or before the second anniversary of the listing date; • $50,000 on or before the third anniversary of the listing date; and • $50,000 on or before the fourth anniversary of the listing date.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
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4) EXPLORATION AND EVALUATION EXPENDITURES (continued)
and issue shares to the Optionors B, as follows:
• 400,000 shares within seven days of the listing date; • 400,000 shares on the first anniversary of the listing date; • 400,000 shares on the second anniversary of the listing date; • 400,000 shares on the third anniversary of the listing date; and • 400,000 shares on the fourth anniversary of the listing date.
In an amendment dated March 20, 2014, the Optionors B and the Company expanded the agreement to cover 29 mineral claims and to conditionally cover any future claims that may be staked within 10 kilometers of these claims by either the Company or the Optionors B. The continuity of mineral property costs incurred is provided in the table below. For purposes of financial statement presentation, such costs are reflected as current year’s expenses and, cumulatively, within deficit, pursuant to the Company’s accounting policy for such items.
December 31, 2011
Net Additions
December 31, 2012
Net Additions
December 31, 2013
$ $ $ $ $ BRITISH COLUMBIA Tatogga Lake
Acquisition 25,000 – 25,000 – 25,000 Assay – 24,610 24,610 74,346 98,956 Camp and travel 341 40,412 40,753 45,831 86,584 Communication – 3,706 3,706 2,403 6,109 Contractor – 60,619 60,619 80,894 141,513 Equipment rental – 6,048 6,048 19,599 25,647 Field office 8,939 4,248 13,187 – 13,187 Geophysical surveys 314,216 377,808 692,024 – 692,024 348,496 517,451 865,947 223,073 1,089,020 BCMETC refund (69,564) (113,209) (182,773) (75,278) (258,051) 278,932 404,242 683,174 147,795 830,969
New Nanik Acquisition – 50,000 50,000 – 50,000 Assay – 55,706 55,706 685 56,391 Camp and travel – 70,015 70,015 5,749 75,764 Communication – 3,000 3,000 – 3,000 Contractor – 176,996 176,996 8,614 185,610 Equipment rental – 47,693 47,693 20,435 68,128 Field office – 7,148 7,148 24 7,172 Geophysical surveys – 80,408 80,408 – 80,408 490,966 490,966 35,507 526,473 BCMETC refund – (107,415) (107,415) (18,742) (126,157) – 383,551 383,551 16,765 400,316
Total exploration and evaluation expenditures 278,932 787,793 1,066,725 164,560 1,231,285
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
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5) EQUIPMENT
Computer
Equipment Field
Equipment Total $ $ $ Cost: Balance, January 1, 2012 – – – Addition 1,270 11,927 13,197 Balance, December 31, 2012 1,270 11,927 13,197 Addition – – – Balance, December 31, 2013 1,270 11,927 13,197 Accumulated depreciation: Balance, January 1, 2012 – – – Addition 350 1,192 1,542 Balance, December 31, 2012 350 1,192 1,542 Addition 505 2,148 2,653 Balance, December 31, 2013 855 3,340 4,195 Net book value: January 1, 2012 – – – December 31, 2012 920 10,735 11,655 December 31, 2013 415 8,587 9,002
6) RELATED PARTY TRANSACTIONS
Key management personnel compensation:
2013 2012 $ $ Consulting 60,000) 60,000)
All transactions with related parties have occurred in the normal course of operations and management represents that they have occurred on a basis consistent with those involving unrelated parties.
7) DUE TO RELATED PARTIES
At December 31, 2013, the Company owes a private company owned by a director $150,792 (2012 - $90,792) for consulting fees. The amounts are unsecured, do not bear interest and have no fixed terms of repayment.
8) SHARE CAPITAL
a) The authorized share capital of the Company consists of an unlimited number of common shares.
b) Common shares
For the year ending December 31, 2013, the Company issued 3,595,297 shares for total cash of $359,530.
For the year ending December 31, 2012, the Company issued 13,783,111 shares for total cash of $1,378,311.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
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8) SHARE CAPITAL (continued) Both issuances were made pursuant to the terms of private issuer prospectus exemptions.
c) Share purchase options and warrants
As of December 31, 2013 and 2012, there were no options and warrants outstanding.
9) CAPITAL MANAGEMENT
The Company’s objectives for the management of capital are to safeguard the Company’s ability to continue as a going concern, including the preservation of capital, and to achieve reasonable returns on invested cash after satisfying the objective of preserving capital. The Company considers its cash and cash equivalents to be its manageable capital. The Company’s policy is to maintain sufficient cash and deposit balances to cover operating and exploration costs over a reasonable future period. The Company accesses capital markets as necessary and may also acquire additional funds where advantageous circumstances arise. The Company currently has no externally-imposed capital requirements.
10) FINANCIAL INSTRUMENT RISKS
The Company’s financial instruments are exposed to the following risks:
Credit Risk The Company’s primary exposure to credit risk is the risk of illiquidity of cash amounting to $4,541 at December 31, 2013 (2012 - $35,081). As the Company’s policy is to limit cash holdings to instruments issued by major Canadian banks, or investments of equivalent or better quality, the credit risk is considered by management to be negligible. Interest Rate Risk The Company currently has cash balances only. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institution.
Fair Value of Financial Instruments The fair value of the Company’s financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and • Level 3 – Inputs that are not based on observable market data.
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
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10) FINANCIAL INSTRUMENT RISKS (continued)
The fair value classification of the Company’s financial instruments as at December 31, 2013 and 2012 are as follows:
2013 2012
Fair value level
Fair value through profit or
loss
Loans and receivables and other financial
liabilities at amortized cost
Fair value through profit or
loss
Loans and receivables and other financial
liabilities at amortized cost
$ $ $ $ Financial assets: Cash 1 4,541 – 35,081 – Reclamation deposits – 53,500 – 43,500 4,541 53,500 35,081 43,500 Financial liabilities: Accounts payable and accrued liabilities – 48,112 – 32,072 Due to related parties – 150,792 – 90,792 – 198,904 – 122,864
During the years ended December 31, 2013 and 2012, there were no transfers between level 1, level 2 and level 3 classified assets and liabilities.
11) INCOME TAXES
A reconciliation of income taxes at statutory rates is as follows:
2013 2012 $ $ Net loss for the year before tax 490,509 1,026,932 Expected income tax recovery (126,306) (256,733) Net adjustment for deductible and non-deductible amounts 43,544 197,334 Unrecognized benefit of tax pool assets 82,762 59,399 – –
The significant components of the Company’s deferred income tax assets are as follows: 2013 2012 $ $ Deferred income tax assets:
Non-capital loss carry-forwards 125,000 85,000 Exploration and evaluation expenditures 364,000 267,000 489,000 352,000
Valuation allowance (489,000) (352,000) Net deferred income tax assets – –
NEW CHRIS MINERALS LTD. Notes to the Financial Statements For the years ended December 31, 2013 and 2012 (Expressed in Canadian dollars)
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11) INCOME TAXES (continued)
Subject to certain restrictions, the Company has exploration and evaluation expenditures at December 31, 2013 of approximately $1,399,000 (2012 - $1,067,000) available to reduce taxable income in future years. The Company also has non-capital losses available for possible deduction against future years’ taxable income of approximately $480,000 (2012 - $340,000). The Company has not recognized any future benefit for these tax losses, credits and resource deductions, as the likelihood of their utilization is unknown. If unused, these non-capital losses will expire as follows:
$ 2031 65,000 2032 94,000 2033 321,000
480,000
12) EVENTS AFTER THE REPORTING PERIOD On March 20, 2014, the Company and Optionors B agreed to amend the option agreement entered on April 24, 2012 (see Note 4). On March 25, 2014, the Company and Optionors A agreed to amend the option agreement entered on June 13, 2011 (see Note 4).
SCHEDULE “D”
Interim Financial Statements of New Chris for the period ended June 30, 2016
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NEW CHRIS MINERALS LTD.
Interim Financial Statements
June 30, 2016
(Expressed in Canadian Dollars)
NEW CHRIS MINERALS LTD. Interim Statement of Financial Position (Expressed in Canadian Dollars)
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June 30,
2016 December 31,
2015 $ $ Assets
Current assets
Cash 32,312 1,466 Mining exploration tax credits recoverable 884 62,086 GST recoverable 1,926 1,035
35,122 64,587 Reclamation deposits (note 2) 56,500 56,500 Equipment (note 5) 8,316 9,256 99,938 130,343 Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities 16,933 4,510 Due to related parties (note 6) 250,732 400,732
267,665 405,242 Shareholders’ deficiency
Share capital (note 7) 2,335,197 2,185,197 Deficit (2,502,924) (2,460,096)
(167,727) (274,899) 99,938 130,343
See accompanying notes to the interim financial statements Nature and continuance of operations (note 1) Approved by the Board of Directors:
“Michael McMullen” “Ashwath Mehra” Michael McMullen, Director Ashwath Mehra, Director
NEW CHRIS MINERALS LTD. Interim Statement of Comprehensive Loss (Expressed in Canadian Dollars)
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Three months
ended June 30, 2016
Three months ended June
30, 2015
Six months ended June
30, 2016
Six months ended June
30, 2015 $ $ $ $ Operating costs and expenses
Accounting and legal 93 752 16,686 1,379 Bank charges and interest - - 275 - Contractor 13,024 2,800 15,024 2,800 Depreciation (note 5) 470 599 940 1,198 Licenses and permits - - 1,154 - Occupancy 1,500 1,500 3,000 1,500 Office and miscellaneous 1,693 1,229 2,386 1,229 Salary - - - 2,697 Travel 3,363 - 3,363 -
Net loss and comprehensive loss for the period (20,143) (6,880) (42,828) (10,803)
Weighted average number of common shares outstanding 25,181,618 24,851,948 25,016,783 24,851,948
Basic and diluted loss per share $(0.00) $(0.00) $(0.00) $(0.00) See accompanying notes to the interim financial statements
NEW CHRIS MINERALS LTD. Interim Statement of Cash Flows (Expressed in Canadian dollars)
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Six months ended
June, 30 2016 Six months ended
June 30, 2015 $ $
Cash provided by (used for):
Operating activities
Net loss for the period (42,828) (10,803) Item not involving the use of cash:
Depreciation 940 1,198 (41,888) (9,605)
Changes in non-cash working capital: Mining exploration tax credits recoverable 61,202 - GST recoverable (891) (562) Accounts payable and accrued liabilities 12,423 (8,533)
30,846 (18,700) Increase (decrease) in cash 30,846 (18,700) Cash, beginning of the period 1,466 34,672 Cash, end of the period 32,312 15,972
See accompanying notes to the interim financial statements
Supplementary Information: Shares issued to settle debt 150,000 - Due to related parties settled by shares issued (150,000) -
NEW CHRIS MINERALS LTD. Interim Statement of Changes in Deficiency (Expressed in Canadian dollars)
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Number of
Shares Share
Capital Deficit Total $ $ $ December 31, 2015 24,851,948 2,185,197 (2,460,096) (274,899)
Shares issued to settle debt 1,500,000 150,000 - 150,000
Net loss for the period - - (42,828) (42,828)
June 30, 2016 26,351,948 2,335,197 (2,502,924) (167,727)
December 31, 2014 24,851,948 2,185,197 (2,419,527) (234,330)
Net loss for the period - - (10,803) (10,803)
June 30, 2015 24,851,948 2,185,197 (2,430,330) (245,133) See accompanying notes to the interim financial statements
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
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1) NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated under the Business Corporations Act (British Columbia) and its principal business activity is the acquisition and exploration of resource properties. The properties of the Company are without a known economically feasible ore body. The exploration programs undertaken and proposed constitute an exploratory search. There is no assurance that the Company will be successful in its search. The business of exploring for minerals and mining involves a high degree of risk. Major expenses may be required to establish ore reserves, to develop metallurgical processes, and to construct mining and processing facilities at a particular site. It is not possible to ensure that the current exploration programs planned by the Company will result in a profitable commercial mining operation. Although the Company has taken steps to verify title to resource properties in which it has an interest in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and noncompliance with regulatory requirements. These interim financial statements have been prepared on the going concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Several adverse conditions cast substantial doubt on the validity of this assumption. The Company has incurred operating losses over the last six months of $42,828 and the past two fiscal periods (2015 - $40,569; 2014 - $520,659), has limited financial resources, no source of operating cash flow, and no assurances that sufficient funding, including adequate financing, will be available to conduct further exploration and development of its mineral property projects. The application of the going concern concept is dependent upon the Company’s ability to generate future profitable operations and receive continued financial support from its creditors and shareholders. These interim financial statements do not give effect to any adjustments that might be required should the Company be unable to continue as a going concern and therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the interim financial statements. Management plans to continue to pursue equity or debt financing to support operations. Management believes this plan will be sufficient to meet the Company’s liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management’s plan will be successful. Failure to maintain the support of creditors and obtain additional external equity financing will cause the Company to curtail operations and the Company’s ability to continue as a going concern will be impaired. The outcome of these matters cannot be predicted at this time. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.
2) SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance These interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board, and its interpretations. Accordingly, these interim financial statements do not include all of the information and foot notes required by International Financial Reporting Standards (“IFRS“) for complete financial statements for year-end reporting purposes. Results for the period ended June 30, 2016, are not necessarily indicative of future results. Basis of preparation These interim financial statements have been prepared on the historical cost basis. The presentation and functional currency of the Company is the Canadian dollar. Cash and cash equivalents Cash and cash equivalents are comprised of cash on hand and deposits in banks. At June 30, 2016 and December 31, 2015, the Company did not have any cash equivalents.
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
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2) SIGNIFICANT ACCOUNTING POLICIES (continued)
Significant accounting judgments, estimates and assumptions The preparation of the Company’s interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and contingent liabilities at the date of the interim financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Critical judgments in applying accounting policies: The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the interim financial statements:
• the determination that the Company will continue as a going concern for the next year. Exploration and evaluation expenditures The Company’s accounting policy relating to mineral property expenditures, incurred prior to the establishment of economically recoverable reserves, is to expense all such expenditures as incurred. These costs include option and other payments, made at the discretion of the Company which do not directly constitute the outright acquisition of title. Share capital The Company records proceeds from share issuances net of issue costs and any tax effects. Common shares issued for consideration other than cash are valued based on their market value at the date the agreement to issue shares was concluded. Impairment of financial assets Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the asset has been adversely impacted.
For all financial assets objective evidence of impairment could include: • significant financial difficulty of the issuer or counterparty; or • default or delinquency in interest or principal payments; or • it becoming probable that the borrower will enter bankruptcy or financial re-organization. Impairment of non-financial assets At the end of each reporting period, and when relevant triggering events and circumstances occur, the carrying amounts of the Company’s non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and the value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
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2) SIGNIFICANT ACCOUNTING POLICIES (continued)
carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. Income taxes The Company uses the balance sheet method of accounting for income taxes. Under the balance sheet method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred income tax assets also result from unused loss carry forwards, resource related pools and other deductions. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Loss per share Basic loss per share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding in the period. Diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. Where the effects of including all outstanding options and warrants would be anti-dilutive, no dilution is calculated and the diluted loss per share is presented as the same as basic loss per share. Reclamation deposits The Company maintains cash deposits, or letters of credit secured by cash deposits, as required by regulatory bodies as assurance for the funding of reclamation costs. These funds are restricted to that purpose and are not available to the Company until the reclamation obligations have been fulfilled. Reclamation deposits are designated as loans and receivables, are recorded at amortized cost and are classified as non-current assets. Mineral exploration tax credits (“METC”) The Company recognizes METC amounts in income when the Company’s METC application is approved by Canada Revenue Agency auditors or when the amount to be received can be reasonably estimated and collection is reasonably assured. Financial instruments Financial assets The Company classifies its financial assets in the following categories: fair value through profit or loss, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at recognition.
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
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2) SIGNIFICANT ACCOUNTING POLICIES (continued)
i. At fair value through profit or loss
Financial assets at fair value through profit or loss are initially recognized at fair value with changes in fair value recorded through profit or loss. Cash and cash equivalents are included in this category of financial assets.
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non-current assets based on their maturity date. Loans and receivables are carried at amortized cost less any impairment. Amounts receivable and reclamation deposits are included in this category of financial assets. GST recoverable is not a financial asset.
iii. Available-for-sale
Available-for-sale (“AFS”) financial assets are non-derivatives that are either designated as AFS or not classified in any of the other financial asset categories. Changes in the fair value of AFS financial assets are recognized as other comprehensive income and classified as a component of equity. Management assesses the carrying value of AFS financial assets at each reporting period and any impairment charges are also recognized in profit or loss. When financial assets classified as AFS are sold, the accumulated fair value adjustments recognized in other comprehensive income are included in profit and loss.
Financial liabilities The Company’s financial liabilities are classified as other financial liabilities. Other financial liabilities are non-derivatives and are recognized initially at fair value, net of transaction costs incurred and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in the statement of comprehensive loss over the period to maturity using the effective interest method. Other financial liabilities are classified as current or non-current based on their maturity dates. Financial liabilities include accounts payable and accrued liabilities, and due to related parties. The Company does not have any derivative financial assets and liabilities.
3) NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS
New standards, amendments and interpretations to existing standards not adopted by the Company The following revised standards are effective for annual periods beginning on or after June 30, 2016 with earlier application permitted. The Company has assessed the impact of these standards and has determined that they would not have a material impact on the Company.
• IFRS 9, Financial Instruments (January 1, 2017)
There are no other IFRS’s or IFRIC interpretations that are not yet effective that are expected to have a material impact on the Company.
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
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4) EXPLORATION AND EVALUATION EXPENDITURES
Tatogga Lake The Company entered into an option agreement dated June 13, 2011 with Richard Billingsley, Gaye Richards and 0886260 B.C. Ltd. (collectively, the “Optionors A”). Optionors A grant the Company the sole and exclusive right and option to acquire a 100% undivided interest in 96 mineral claims situated in the Red Chris Mining Camp, British Columbia, except for a 2% Net Smelter Return Royalty. The agreement specifies that the Company intends to file a Prospectus with the B.C. Securities Commission and list its common shares on the TSX Venture Exchange. In order to keep the option in good standing, the Company will pay cash to Optionors A, as follows:
• $25,000 on signing (paid); • $50,000 within five days after the listing date; • $50,000 on the first anniversary of the listing date; • $100,000 on the second anniversary of the listing date; • $100,000 on the third anniversary of the listing date; and • $100,000 on the fourth anniversary of the listing date.
and issue shares to Optionors A, as follows:
• 2,500,000 shares within seven days of the listing date; • 1,500,000 shares on the first anniversary of the listing date; • 1,500,000 shares on the second anniversary of the listing date; • 1,500,000 shares on the third anniversary of the listing date; and • 2,500,000 shares on the fourth anniversary of the listing date.
The Company completed $500,000 in exploration work on the property by December 31, 2013. Optionors A also grant to the Company the sole and exclusive option to purchase 1% of the Net Smelter Return Royalty at a price of $1,500,000 within five years from the date the Red Chris Mining Camp is put into commercial production. In an amendment dated March 25, 2014, the Optionors A and the Company expanded the agreement to cover 107 mineral claims and to conditionally cover any future claims that may be staked within 10 kilometers of these claims by either the Company or the Optionors A. New Nanik The Company entered into another option agreement dated April 24, 2012 with Richard Billingsley and Gaye Richards (collectively, the “Optionors B”). Optionors B grant the Company the sole and exclusive right and option to acquire a 100% undivided interest in 11 mineral claims situated in New Nanik area in British Columbia, except a 2% Net Smelter Return Royalty. The agreement specifies that the Company intends to file a Prospectus with the B.C. Securities Commission and list its common shares on the TSX Venture Exchange. In order to keep the option in good standing, the Company will pay cash to Optionors B, as follows:
• $50,000 within 15 business days of signing (paid); • $25,000 on or before the first anniversary of the listing date; • $50,000 on or before the second anniversary of the listing date; • $50,000 on or before the third anniversary of the listing date; and • $50,000 on or before the fourth anniversary of the listing date.
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
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4) EXPLORATION AND EVALUATION EXPENDITURES (continued)
and issue shares to the Optionors B, as follows:
• 400,000 shares within seven days of the listing date; • 400,000 shares on the first anniversary of the listing date; • 400,000 shares on the second anniversary of the listing date; • 400,000 shares on the third anniversary of the listing date; and • 400,000 shares on the fourth anniversary of the listing date.
In an amendment dated March 20, 2014, the Optionors B and the Company expanded the agreement to cover 29 mineral claims and to conditionally cover any future claims that may be staked within 10 kilometers of these claims by either the Company or the Optionors B. On June 1, 2016, an amendment was made to delete the list of 29 claims mentioned above, and add a revised list of 30 claims. On June 10, 2016, the Tatogga Lake and New Nanik option agreements were amended. The aggregate shares to be issued pursuant to both agreements was reduced from 11,500,000 shares to 10,000,000 shares. On June 30, 2016, the Company signed an agreement with Manera Capital Corp. (“Manera”) whereby Manera would purchase all of the issued capital of the Company (the “Acquisition”). The Acquisition will involve Manera acquiring 100% of the issued and outstanding shares of the Company from the Vendors and exercising the Company’s property options. Pursuant to the Acquisition, Manera will:
• issue at closing an aggregate of 26,351,948 Manera Shares to the Vendors at a deemed price of $0.10 per share (the “Share Consideration”);
• make cash payments to the existing Company shareholders consisting of a) a non-refundable cash deposit of $10,000 payable on signing of the Acquisition agreement (conditional on the approval of the TSX Venture Exchange), b) $150,000 payable on the closing of the Acquisition (“Closing”), c) $200,000 payable on the 12 month anniversary of Closing, and d) $240,000 payable on the 24 month anniversary of Closing for an aggregate total of $600,000, in satisfaction of the cash payment portion of the Purchase Price;
• issue on Closing to the Tatogga and New Nanik property optionors (the “Optionors”) 10,000,000 Manera shares at a deemed price of $0.10 per share in satisfaction of the share issuance portion of the Tatogga and New Nanik property option agreements, which will result in the Company (by then a wholly-owned subsidiary of Manera) acquiring a 100% interest in the Tatogga and New Nainik properties; and
• make cash payments to the Optionors over four years totaling in aggregate $575,000 in satisfaction of the remaining cash payments portion of the Tatogga and New Nanik property option agreements.
Closing of the Acquisition is subject to Manera raising a minimum of $2,000,000 at a price acceptable to the Company and regulatory approvals.
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
- 12 -
4) EXPLORATION AND EVALUATION EXPENDITURES (continued)
The continuity of mineral property costs incurred is provided in the table below. For purposes of financial statement presentation, such costs are reflected as current year’s expenses and, cumulatively, within deficit, pursuant to the Company’s accounting policy for such items.
December 31, 2014
Net Additions
December 31, 2015
Net Additions
June 30, 2016
$ $ $ $ $ BRITISH COLUMBIA Tatogga Lake
Acquisition 25,000 - 25,000 - 25,000 Assay 133,289 - 133,289 - 133,289 Camp and travel 135,691 - 135,691 - 135,691 Communication 11,695 - 11,695 - 11,695 Consulting 60,000 - 60,000 - 60,000 Contractor 246,950 - 246,950 - 246,950 Employee wages 256,840 - 256,840 - 256,840 Equipment rental 51,180 - 51,180 - 51,180 Field office 26,958 - 26,958 - 26,958 Geophysical surveys 736,831 - 736,831 - 736,831 Total 1,684,434 - 1,684,434 - 1,684,434 BCMETC refund (321,744) - (321,744) - (321,744) Net Expenditures 1,362,690 - 1,362,690 - 1,362,690
New Nanik Acquisition 50,000 - 50,000 - 50,000 Assay 56,865 - 56,865 - 56,865 Camp and travel 80,498 - 80,498 - 80,498 Communication 3,000 - 3,000 - 3,000 Consulting 60,000 - 60,000 - 60,000 Contractor 190,686 - 190,686 - 190,686 Employee wages 20,749 - 20,749 - 20,749 Equipment rental 68,128 - 68,128 - 68,128 Field office 8,983 - 8,983 - 8,983 Geophysical surveys 80,408 - 80,408 - 80,408 Total 619,317 - 619,317 - 619,317 BCMETC refund (126,157) - (126,157) - (126,157) Net Expenditures 493,160 - 493,160 - 493,160
Total Net Exploration and Evaluation Expenditures 1,855,850 - 1,855,850 - 1,855,850
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
- 13 -
5) EQUIPMENT
6) DUE TO RELATED PARTIES
At June 30, 2016, the Company owed $210,792 (December 31, 2015 - $210,792) to a private company that is owned by a director/shareholder of the Company. At June 30, 2016, the Company owed advances totalling $39,940 (December 31, 2015 – $189,940) being $19,940 (December 31, 2015 - $94,940) from the above-noted director/shareholder of the Company and $20,000 (December 31, 2015 - $95,000) from another director/shareholder. These amounts are non-interest bearing and have no specific terms of repayment.
7) SHARE CAPITAL
a) The authorized share capital of the Company consists of an unlimited number of common shares.
b) Common shares During the period ended June 30, 2016, the Company issued 1,500,000 common shares at a price of $0.10 per share to settle $150,000 of debt owing to related parties. During the year ended December 31, 2015, the Company did not issue any shares
c) Share purchase options and warrants
As at June 30, 2016 and December 31, 2015, there were no options and warrants outstanding.
Computer Equipment
Field Equipment Total
$ $ $ Cost: Balance, December 31, 2014 1,270 16,922 18,192 Addition - - - Balance, December 31, 2015 1,270 16,922 18,192 Addition - - - Balance, June 30, 2016 1,270 16,922 18,192 Accumulated depreciation: Balance, December 31, 2014 1,083 5,457 6,540 Addition 103 2,293 2,396 Balance, December 31, 2015 1,186 7,750 8,936 Addition 23 917 940 Balance, June 30, 2016 1,209 8,667 9,876 Net book value: December 31, 2014 187 11,465 11,652 December 31, 2015 84 9,172 9,256 June 30, 2016 61 8,255 8,316
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
- 14 -
8) CAPITAL MANAGEMENT
The Company’s objectives for the management of capital are to safeguard the Company’s ability to continue as a going concern, including the preservation of capital, and to achieve reasonable returns on invested cash after satisfying the objective of preserving capital. The Company considers its cash and cash equivalents to be its manageable capital. The Company’s policy is to maintain sufficient cash and deposit balances to cover operating and exploration costs over a reasonable future period. The Company accesses capital markets as necessary and may also acquire additional funds where advantageous circumstances arise. The Company currently has no externally-imposed capital requirements.
9) FINANCIAL INSTRUMENT RISKS
The Company’s financial instruments are exposed to the following risks:
Credit Risk The Company’s primary exposure to credit risk is the risk of illiquidity of cash amounting to $32,312 at June 30, 2016 (December 31, 2015 - $1,466). As the Company’s policy is to limit cash holdings to instruments issued by major Canadian banks, or investments of equivalent or better quality, the credit risk is considered by management to be negligible. Interest Rate Risk The Company currently has cash balances only. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institution. Fair Value of Financial Instruments The fair value of the Company’s financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and • Level 3 – Inputs that are not based on observable market data.
NEW CHRIS MINERALS LTD. Notes to the Interim Financial Statements Six Months Ended June 30, 2016 (Expressed in Canadian dollars)
- 15 -
9) FINANCIAL INSTRUMENT RISKS (continued)
The fair value classification of the Company’s financial instruments are as follows:
June 30, 2016 December 31, 2015
Fair value level
Fair value through profit or
loss
Loans and receivables and other financial
liabilities at amortized cost
Fair value through profit or
loss
Loans and receivables and other financial
liabilities at amortized cost
$ $ $ $ Financial assets: Cash 1 32,312 - 1,466 - Reclamation deposits – 56,500 – 56,500 32,312 56,500 1,466 56,500 Financial liabilities: Accounts payable and accrued liabilities - 16,933 - 4,510 Due to related parties - 250,732 - 400,732 - 267,665 - 405,242
During the period ended June 30, 2016 and the year ended December 31, 2015, there were no transfers between level 1, level 2 and level 3 classified assets and liabilities.
SCHEDULE “E”
Pro Forma Statement of Financial Position of Resulting Issuer
MANERA CAPITAL CORP.
PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Expressed in Canadian Dollars
MAY 31, 2016
MANERA CAPITAL CORP.
PRO-FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited - Expressed in Canadian Dollars)
Manera Capital
Corp.
as at
May 31, 2016
New Chris
Minerals Ltd.
as at
June 30, 2016
Note
Pro-forma
Adjustments
Pro-forma
Consolidated
ASSETS $ $ $ $
Current assets
Cash and cash equivalents 296,991 32,312 4(c) (206,500)
4(d) 2,520,000
4(d) (83,905)
4(f) (8,000)
4(h) (92,000) 2,458,898
Mining exploration tax credits recoverable - 884 - 884
GST recoverable - 1,926 - 1,926
Other receivables 1,123 - - 1,123
Prepaid expenses 1,000 - - 1,000
299,114 35,122 2,129,595 2,463,831
Reclamation deposits - 56,500 - 56,500
Mineral properties - - 4(b) 1,725,000 1,725,000
Equipment - 8,316 - 8,316
Total assets 299,114 99,938 3,854,595 4,253,647
LIABILITIES AND
SHAREHOLDERS’ EQUITY (DEFICIENCY)
Current liabilities
Trade and other payables 39,470 16,933 - 56,403
Due to related parties - 250,732 4(c) (250,732) -
Flow-through premium liability - - 4(d) 30,000 30,000
39,470 267,665 (220,732) 86,403
Acquisition obligations - - 4(a) 440,000 440,000
Total liabilities 39,470 267,665 219,268 526,403
Shareholders’ equity (deficiency)
Share capital 424,287 2,335,197 4(a) (424,287)
4(a) 4,027,792
4(b) 1,725,000
4(d) 2,490,000
4(d) (83,905)
4(e) (33,700)
4(f) 8,000 10,468,384
Reserves 63,176 - 4(a) (63,176)
4(e) 33,700
4(g) 251,376 285,076
Deficit (227,819) (2,502,924) 4(a) 227,819
4(a) (4,208,149)
4(c) 44,232
4(f) (16,000)
4(g) (251,376)
4(h) (92,000) (7,026,216)
Total shareholders’ equity (deficiency) 259,644 (167,727) 3,635,327 3,727,244
Total liabilities and shareholders’ equity
(deficiency)
299,114 99,938 3,854,595 4,253,647
The accompanying notes are an integral part of these pro-forma consolidated financial statements.
MANERA CAPITAL CORP.
PRO-FORMA CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS
(Unaudited - Expressed in Canadian Dollars)
Manera
Capital Corp.
Year ended
May 31, 2016
New Chris
Minerals Ltd.
Year ended
June 30, 2016
Note
Pro-forma
Adjustments
Pro-forma
Consolidated
$ $ $ $
EXPENSES
Advisory services - - 4(f) 16,000 16,000
Contractor - 20,224 - 20,224
Depreciation - 2,138 - 2,138
Due diligence and investigations 12,530 - - 12,530
Filing and transfer fees 14,794 - 4(h) 32,000 46,794
Licenses and permits - 1,154 - 1,154
Listing expense - - 4(a) 4,208,148 4,208,148
Office and miscellaneous 12,783 16,798 - 29,581
Professional fees 65,926 29,343 4(h) 60,000 155,269
Share-based compensation - - 4(g) 251,376 251,376
Travel - 3,363 - 3,363
(106,033) (73,020) (4,567,524) (4,746,577)
Interest income 2,356 426 - 2,782
Gain on debt settlement - - 4(c) 44,232 44,232
NET LOSS AND COMPREHENSIVE LOSS
FOR THE YEAR (103,677) (72,594) (4,523,292) (4,699,563)
Basic and diluted loss per common share (0.08)
The accompanying notes are an integral part of these pro-forma consolidated financial statements.
MANERA CAPITAL CORP.
NOTES TO THE PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - Expressed in Canadian Dollars)
MAY 31, 2016
1. BASIS OF PRESENTATION
The accompanying unaudited pro-forma consolidated financial statements of Manera Capital Corp. (“Manera” or “the
Company”) have been prepared by management in accordance with International Financial Reporting Standards
(“IFRS”) from information derived from the financial statements of Manera and the financial statements of New Chris
Minerals Ltd. (“New Chris”) to show effect of the proposed transaction as discussed in Note 3.
The unaudited pro-forma consolidated financial statements of the Company are compiled from and include:
a) Manera’s audited financial statements as at May 31, 2016 and for the year then ended.
b) New Chris’s audited financial statements as at December 31, 2015 and the year then ended.
c) New Chris’s unaudited condensed interim financial statements as at June 30, 2016 and for the three and six
months ended June 30, 2016 and 2015.
d) The additional information set out in Note 3.
The unaudited pro-forma consolidated financial statements should be read in conjunction with the audited financial
statements of Manera for the year ended May 31, 2016, the audited financial statements of New Chris for the year ended
December 31, 2015, and the unaudited condensed interim financial statements of New Chris as at June 30, 2016 and for
the three and six months ended June 30, 2016 and 2015.
The unaudited pro-forma consolidated statement of financial position as at May 31, 2016 has been prepared as if the
transactions had occurred on May 31, 2016. The unaudited pro-forma consolidated statement of loss and comprehensive
loss for the year ended May 31, 2016 has been prepared as if the transactions had occurred on June 1, 2015.
The unaudited pro-forma consolidated financial statements are not necessarily indicative of the financial position that
would have been achieved if the proposed transactions had been completed on the dates indicated, nor do they purport
to project the financial position or results of operations of the consolidated entities for any future period. In the opinion
of the management of Manera and New Chris, the unaudited pro-forma consolidated statements include all adjustments
necessary for a fair presentation of the proposed transaction in Note 3.
The pro-forma adjustments are based in part on estimates, including the fair values of the assets acquired and liabilities
assumed, as applicable. For purposes of the pro-forma consolidated statement of financial position, it is assumed that
there are no tax consequences and no income tax effect is being recorded. Both entities have incurred losses since
inception and when combined are also not expected to generate profits in the immediate future, and therefore neither
entity carries any deferred tax assets in its most recent financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies used in the preparation of the unaudited pro-forma consolidated financial statements are
consistent with those set out in the audited financial statements of Manera for the year ended May 31, 2016, the audited
financial statements of New Chris for the year ended December 31, 2015, and the unaudited condensed interim financial
statements of New Chris as at June 30, 2016 and for the three and six months ended June 30, 2016 and 2015, which are
applied in the preparation of the unaudited pro-forma consolidated financial statements as at and for the year ended May
31, 2016.
3. REVERSE TAKEOVER AND PURCHASE PRICE ALLOCATION
On June 30, 2016 (and as amended on October 18, 2016), the Company entered into a Share Purchase Agreement (the
“Acquisition Agreement”) to acquire New Chris, a private British Columbia mineral exploration company. New Chris
holds options to acquire 100% of the Tatogga and New Nanik gold-copper properties in north-western British Columbia
(the “Option Agreements”).
Pursuant to the Acquisition Agreement, the Company has agreed to acquire 100% of the issued and outstanding shares
of New Chris from their shareholders (the “Share Exchange”), and to exercise New Chris’s property options pursuant to
the Option Agreements.
MANERA CAPITAL CORP.
NOTES TO THE PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - Expressed in Canadian Dollars)
MAY 31, 2016
3. REVERSE TAKEOVER AND PURCHASE PRICE ALLOCATION (continued)
As consideration for the Share Exchange, the Company will issue a total of 26,851,948 common shares for all of the
New Chris shares, pay a total of $200,000 within 12 months of closing, with an additional payment of $240,000 being
required within 24 months of closing of the Acquisition Agreement. Further, the Acquisition Agreement also requires
that the Company pay $10,000 to New Chris on Exchange approval, and a total of $206,500 to settle outstanding New
Chris shareholder loans and advances. The acquisition will constitute a Reverse Takeover of the Company pursuant to
Exchange policies.
Pursuant to the Option Agreements, the Company will also be required to issue a total of 11,500,000 common shares
within 14 days of completion of the Share Exchange, and to make staged cash payments totalling $575,000 over a
period of 4 years. The properties are also subject to a 2% net smelter return (“NSR”) royalty.
The transaction contemplated by the Acquisition Agreement will constitute the Company’s Qualifying Transaction and
in connection with the acquisition, the Company intends to carry out the following concurrent transaction:
The Company has entered into subscription agreements in respect of a financing of 16,000,000 units at a price of
$0.15 and 600,000 flow-through common shares at a price of $0.20 (the “Financing”). Each unit is comprised of
one common share and one half of one share purchase warrant, with each whole warrant being exercisable into an
additional common share at a price of $0.20 for a period of 2 years from closing, which is conditional upon the
closing under the Acquisition Agreement.
In connection with the above mentioned transaction, on July 7, 2016, the Company entered into an Advisory
Agreement with Red Cloud Klondike Strike Inc. (“Red Cloud”) whereby Red Cloud is to provide certain marketing
services for the Company. The Advisory Agreement is for a maximum of two months and may be extended
thereafter by mutual consent. Red Cloud will receive a monthly fee of $4,000 plus $4,000 worth of common shares
on closing of the Financing.
4. PRO-FORMA ADJUSTMENTS AND ASSUMPTIONS
The fair value of net assets (liabilities) of Manera as at May 31, 2016, prior to the Acquisition were:
Cash and cash equivalents $ 296,991
Other receivables 1,123
Prepaid expenses 1,000
Trade and other payables (39,470)
$ 259,644
The consideration consists of 26,851,948 common shares valued at $4,027,792 and additional payments of
$440,000 to New Chris within 24 months after closing.
Consideration $ 4,467,792
Net monetary assets acquired (259,644)
Listing expense $ 4,208,148
MANERA CAPITAL CORP.
NOTES TO THE PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - Expressed in Canadian Dollars)
MAY 31, 2016
4. PRO-FORMA ADJUSTMENTS AND ASSUMPTIONS (continued)
The unaudited pro-forma consolidated statements reflect the following adjustments:
a) To record the issuance of 26,851,948 common shares of the Company at a fair value of $0.15 per share, to record
acquisition obligations associated with payments totaling $440,000 due within 24 months of Closing, and to
eliminate historical equity accounts.
b) To record the issuance of 11,500,000 common shares of the Company at a fair value of $0.15 per share pursuant to
the Option Agreements.
c) To record a cash payment of $206,500 in respect of shareholder loans, resulting in a gain on debt settlement of
$44,232.
d) To record completion of the Financing, consisting of 16,000,000 units of the Company at a price of $0.15 per unit
and 600,000 flow-through common shares at a price of $0.20 per flow-through common share for gross proceeds of
$2,520,000. The gross proceeds from the Financing are offset by a flow-through premium liability calculated as
$30,000 and share issue costs totaling $83,905.
e) To record the fair value of 496,033 finder’s warrants in the amount of $33,700 as share issue costs in connection to
the Financing. The finder’s warrants were valued using the Black-Scholes option pricing model with the following
assumptions: share price of $0.15, exercise price of $0.20, expected volatility of 100%, risk-free interest rate of
0.61% and a term of 2 years.
f) To record cash payments totaling $8,000 and the issuance of 53,333 common shares of the Company at a fair value
of $0.15 per share pursuant to the Red Cloud Advisory Agreement.
g) To recognize share-based compensation in the amount of $251,376 in connection with the granting of 3,975,000
stock options, one-third of which are exercisable at $0.15 for a period of 5 years, one-third of which are exercisable
at $0.225 for a period of 5 years and one-third of which are exercisable at $0.30 for a period of 5 years. The stock
options will be granted to new directors and officers of the Resulting Issuer and were valued using the Black-
Scholes option pricing model with the following assumptions: share price of $0.15, expected volatility of 100%,
risk-free interest rate of 0.74% and a term of 5 years. One-third of the options vest every year over a two-year
period beginning on the date of grant.
h) To record expected costs of $92,000 associated with the completion of the Filing Statement and associated Reverse
Takeover Transaction.
MANERA CAPITAL CORP.
NOTES TO THE PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - Expressed in Canadian Dollars)
MAY 31, 2016
5. PRO-FORMA SHARE CAPITAL
Share capital as at May 31, 2016 in the unaudited pro-forma consolidated statement of financial position is comprised of
the following:
Number of
Shares Amount
Authorized
Unlimited common shares without par value
Issued
New Chris common shares outstanding as at June 30, 2016 24,851,948 $ 2,335,197
Manera common shares outstanding as at May 31, 2016 7,500,000
424,287
RTO adjustment – eliminate New Chris shares (24,851,948) -
RTO adjustment – eliminate Manera share capital - (424,287)
Issuance of Manera shares to acquire New Chris 26,851,948 4,027,792
Issuance of Manera shares pursuant to the Option Agreements 11,500,000 1,725,000
Non flow-through units issued in connection with the
Financing 16,000,000 2,400,000
Flow-through common shares issued in connection with the
Financing, net of flow-through premium liability 600,000 90,000
Share issue costs associated with the Financing – cash - (83,905)
Share issue costs associated with the Financing – finder’s warrants - (33,700)
Issuance of Manera shares pursuant to the Red Cloud Advisory
Agreement 53,333 8,000
Common shares outstanding after the Acquisition Agreement 62,505,281 $ 10,468,384
CONSENTS OF GEOLOGISTS IN RESPECT OF THE TATOGGA REPORT
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reports\consents\Consent of Dekker - Geologist v3 .docx
CONSENT OF GEOLOGIST IN RESPECT OF TATOGGA REPORT
TO: British Columbia and Alberta Securities Commissions
TSX Venture Exchange
I, Cornelis A. Dekker, do hereby consent to the filing, with the regulatory authorities referred to above, of
the technical report titled “NI 43-101 Technical Report on the Tatogga Lake Gold/Copper Project, British
Columbia, Canada prepared for New Chris Minerals Ltd. and Manera Capital Corp. dated August 12,
2016” (the “Technical Report”). The Technical Report is being filed in support of the filing statement of
Manera Capital Corp. (the “Filing Statement”), which describes Manera Capital Corp.’s proposed
qualifying transaction, being the acquisition of all of the issued and outstanding shares of New Chris
Minerals Ltd.
I also consent to the use of extracts and a summary of the Technical Report in the Filing Statement. I
further hereby confirm that I have read the Filing Statement and confirm that it fairly and accurately
represents the information in the Technical Report.
Dated this 28th day of October, 2016
(signed) “Cornelis A. Dekker”
Cornelis A. Dekker, MSc, BCom, MBA, Pr.Sci.Nat.
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reports\consents\Consent of Smyth - Geologist v3.docx
CONSENT OF GEOLOGIST IN RESPECT OF TATOGGA REPORT
TO: British Columbia and Alberta Securities Commissions
TSX Venture Exchange
I, Clinton P. Smyth, do hereby consent to the filing, with the regulatory authorities referred to above, of
the technical report titled “NI 43-101 Technical Report on the Tatogga Lake Gold/Copper Project, British
Columbia, Canada prepared for New Chris Minerals Ltd. and Manera Capital Corp. dated August 12
2016” (the “Technical Report”). The Technical Report is being filed in support of the filing statement of
Manera Capital Corp. (the “Filing Statement”), which describes Manera Capital Corp.’s proposed
qualifying transaction, being the acquisition of all of the issued and outstanding shares of New Chris
Minerals Ltd.
I also consent to the use of extracts and a summary of the Technical Report in the Filing Statement. I
further hereby confirm that I have read the Filing Statement and confirm that it fairly and accurately
represents the information in the Technical Report.
Dated this 28th day of October, 2016
(signed) “Clinton P. Smyth”
Clinton P. Smyth, MSc, P. Geo
CONSENT OF MANERA AUDITOR
CONSENT OF NEW CHRIS AUDITOR
October 28, 2016 TSX Venture Exchange Dear Sirs: Re: New Chris Minerals Ltd. We refer to the Filing Statement of New Chris Minerals Ltd. (the “Company”) dated October 28, 2016 in respect of the Company’s acquisition by Manera Capital Corp. We consent to being named and to the use, in the above-mentioned Filing Statement, of our reports dated June 16, 2016, October 1, 2015 and June 24, 2014 to the shareholders of the Company on the following financial statements:
• Statements of financial position as at December 31, 2015, 2014, 2013 and 2012; and • Statements of comprehensive loss, changes in deficiency and cash flows for the years
ended December 31, 2015, 2014, 2013 and 2012, and a summary of significant accounting policies and other explanatory information.
We report that we have read the Filing Statement and all information therein and have no reason to believe that there are any misrepresentations in the information contained therein that are derived from the financial statements upon which we have reported or that are within our knowledge as a result of our audit of such financial statements. We have complied with Canadian generally accepted auditing standards for an auditor’s consent to the use of a report of the auditor included in an offering document, which does not constitute an audit or review of the Filing Statement as these terms are described in the CPA Canada Handbook – Assurance. This letter is provided solely for the purpose of assisting the stock exchange to which it is addressed in discharging its responsibilities and should not be used for any other purpose. Yours truly Chartered Professional Accountants
CERTIFICATE OF MANERA CAPITAL CORP.
The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities of Manera assuming completion of the Acquisition and the Financing. By Order of the Board of Directors October 28, 2016 Vancouver, British Columbia (Signed) “Alfredo De Lucrezia” Chief Executive Officer Manera Capital Corp. (Signed) “Maurizio Grande” Director Manera Capital Corp.
(Signed) “Gordon Kettleson” Director Manera Capital Corp.
CERTIFICATE OF NEW CHRIS MINERALS LTD.
The foregoing, as it relates to New Chris, constitutes full, true and plain disclosure of all material facts relating to the securities of New Chris. By Order of the Board of Directors October 28, 2016 Vancouver, British Columbia (Signed) “Michael James McMullen” President New Chris Minerals Ltd.