EX-99.1 2 exh_991.htm EXHIBIT 99.1

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Interim Financial Statements of

 

 

Almaden Minerals Ltd.

 

For the three and six months ended June 30, 2023

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTICE OF NO AUDITOR REVIEW OF CONDENSED

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

The accompanying unaudited condensed consolidated interim financial statements of Almaden Minerals Ltd (“the Company”) for the three and six months ended June 30, 2023 have been prepared by the management of the Company and approved by the Company’s Audit Committee and the Company’s Board of Directors.

 

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the consolidated interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.

 

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

 

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by CPA Canada for a review of the condensed consolidated interim financial statements by an entity’s auditor.

 

 

 

 

 

 

 

Almaden Minerals Ltd.

Condensed consolidated interim statements of financial position

(Unaudited - Expressed in Canadian dollars)

 

   June 30,
2023		   December 31,
2022		 
    $    $ 
ASSETS          
Current assets          
Cash and cash equivalents (Note 13)   4,918,149    6,658,076 
Gold in trust (Note 8)   1,000,459    974,397 
Accounts receivable and prepaid expenses (Note 4)   232,013    259,471 
    6,150,621    7,891,944 
           
Non-current assets          
Right-of-use assets (Note 5)   381,458    432,319 
Property, plant and equipment (Note 6)   6,605,571    6,610,871 
Exploration and evaluation assets (Note 7)   63,795,195    63,115,076 
    70,782,224    70,158,266 
TOTAL ASSETS   76,932,845    78,050,210 
           
LIABILITIES          
Current liabilities          
Trade and other payables (Note 11 (c))   238,321    340,509 
Current portion of lease liabilities (Note 5)   94,268    88,295 
    332,589    428,804 
           
Non-current liabilities          
Long-term portion of lease liabilities (Note 5)   328,978    377,635 
Gold loan payable (Note 8)   4,100,055    3,929,015 
Warrant liability (Note 9)   591    102,787 
Derivative financial liabilities (Note 8)   224,937    306,084 
Deferred income tax liability   3,090,208    3,090,208 
    7,744,769    7,805,729 
Total liabilities   8,077,358    8,234,533 
           
EQUITY          
Share capital (Note 10)   141,040,654    141,040,654 
Reserves (Note 10)   22,918,873    22,546,373 
Deficit   (95,104,040)   (93,771,350)
Total equity   68,855,487    69,815,677 
TOTAL EQUITY AND LIABILITIES   76,932,845    78,050,210 

Subsequent event (Note 17)

 

These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on August 10, 2023.

 

They are signed on the Company’s behalf by:

 

 

 

/s/Duane Poliquin  /s/ Elaine Ellingham
Director  Director

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

 

 

Almaden Minerals Ltd.

Condensed consolidated interim statements of comprehensive loss

(Unaudited - Expressed in Canadian dollars)

 

   Three months ended June 30,   Six months ended June 30, 
   2023   2022   2023   2022 
    $    $    $    $ 
Expenses                    
Professional fees (Note 11(a))   256,453    276,876    451,554    435,828 
Salaries and benefits (Note 11(a))   346,381    348,146    708,531    703,510 
Travel and promotion   17,356    36,555    29,812    54,042 
Depreciation (Note 6)   2,785    3,510    5,567    7,389 
Office and license (Note 11(b))   64,397    69,992    89,744    102,319 
Amortization of right-of-use assets (Note 5)   25,431    25,431    50,861    55,930 
Occupancy expenses (Note 5)   10,176    11,996    20,070    22,867 
Interest expense on lease liabilities (Note 5)   10,147    12,071    20,802    24,630 
Interest, accretion and standby fees on gold loan payable (Note 8)   131,536    112,664    261,881    218,652 
Listing and filing fees   12,534    19,816    158,489    134,104 
Insurance   24,974    24,005    48,838    48,340 
Directors’ fees (Note 11(a))   36,250    36,250    72,500    72,500 
Share-based payments (Note 10(c) and 11(a))   276,500    800,800    372,500    1,149,550 
    1,214,920    1,778,112    2,291,149    3,029,661 
                     
Other income (loss)                    
Administrative services fees (Note 11(b))   277,221    220,446    551,714    435,795 
Interest and other income   98,918    22,867    157,029    54,174 
Unrealized gain on derivative financial liabilities (Note 8)   57,047    48,938    74,658    52,272 
Unrealized gain (loss) on gold in trust (Note 8)   (39,549)   (56,524)   49,869    (4,935)
Unrealized foreign exchange gain (loss) on gold loan payable (Note 8)   93,896    (114,326)   97,330    (62,467)
Unrealized foreign exchange gain (loss) on gold in trust (Note 8)   (23,016)   29,788    (23,807)   16,638 
Unrealized gain on warrant liability (Note 9)   28,631    548,215    102,196    383,219 
Foreign exchange gain (loss)   (60,653)   152,333    (50,530)   88,672 
    432,495    851,737    958,459    963,368 
                     
Total comprehensive loss for the period   (782,425)   (926,375)   (1,332,690)   (2,066,293)
                     
Basic and diluted net loss per share (Note 12)   (0.01)   (0.01)   (0.01)   (0.02)

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

 

 

Almaden Minerals Ltd.

Condensed consolidated interim statements of cash flows

(Unaudited - Expressed in Canadian dollars)

 

   Three months ended June 30,   Six months ended June 30, 
   2023   2022   2023   2022 
   $   $   $   $ 
Operating activities                    
Net loss for the period   (782,425)   (926,375)   (1,332,690)   (2,066,293)
Items not affecting cash                    
Depreciation   2,785    3,510    5,567    7,389 
Amortization of right-of-use assets   25,431    25,431    50,861    55,930 
Interest expenses on lease liability   10,147    12,071    20,802    24,630 
Interest, accretion and standby fees on gold loan payable   131,536    112,664    261,881    218,652 
Unrealized gain on derivative financial liabilities   (57,047)   (48,938)   (74,658)   (52,272)
Unrealized (gain) loss on gold in trust   39,549    56,524    (49,869)   4,935 
Unrealized foreign exchange (gain) loss on gold loan payable   (93,896)   114,326    (97,330)   62,467 
Unrealized foreign exchange (gain) loss on gold in trust   23,016    (29,788)   23,807    (16,638)
Unrealized gain on warrant liability   (28,631)   (548,215)   (102,196)   (383,219)
Share-based payments   276,500    800,800    372,500    1,149,550 
Changes in non-cash working capital components                    
Accounts receivable and prepaid expenses   (3,545)   7,798    27,458    (56,356)
Trade and other payables   30,338    4,421    (111,788)   (13,193)
Net cash used in operating activities   (426,242)   (415,771)   (1,005,655)   (1,064,418)
Investing activities                    
Property, plant and equipment – purchase   -    (4,536)   (267)   (4,536)
Exploration and evaluation assets – costs   (352,203)   (535,328)   (670,519)   (943,940)
Net cash used in investing activities   (352,203)   (539,864)   (670,786)   (948,476)
Financing activities                    
Repayment of lease liabilities   (32,155)   (31,331)   (63,486)   (67,394)
Net cash used in financing activities   (32,155)   (31,331)   (63,486)   (67,394)
                     
Change in cash and cash equivalents   (810,600)   (986,966)   (1,739,927)   (2,080,288)
Cash and cash equivalents, beginning of period   5,728,749    9,077,054    6,658,076    10,170,376 
Cash and cash equivalents, end of period   4,918,149    8,090,088    4,918,149    8,090,088 

 

Supplemental cash flow information (Note 13)

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

 

 

Almaden Minerals Ltd.

Condensed consolidated interim statements of changes in equity

(Unaudited - Expressed in Canadian dollars)

 

   Share capital   Reserves         
   Number of shares   Amount   Share-based payments   Warrants   Total
reserves		   Deficit  

 

Total

 
       $   $   $   $   $   $ 
Balance, January 31, 2022   137,221,408    141,040,654    20,352,305    715,968    21,068,273    (81,924,790)   80,184,137 
Share-based payments   -    -    1,149,550    -    1,149,550    -    1,149,550 
Total comprehensive loss for the period   -    -    -    -    -    (2,066,293)   (2,066,293)
Balance, June 30, 2022   137,221,408    141,040,654    21,501,855    715,968    22,217,823    (83,991,083)   79,267,394 
Share-based payments   -    -    328,550    -    328,550    -    328,550 
Total comprehensive loss for the period   -    -    -    -    -    (9,780,267)   (9,780,267)
Balance, December 31, 2022   137,221,408    141,040,654    21,830,405    715,968    22,546,373    (93,771,350)   69,815,677 
Share-based payments   -    -    372,500    -    372,500    -    372,500 
Total comprehensive loss for the period   -    -    -    -    -    (1,332,690)   (1,332,690)
Balance, June 30, 2023   137,221,408    141,040,654    22,202,905    715,968    22,918,873    (95,104,040)   68,855,487 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

1.Nature of operations

 

Almaden Minerals Ltd. (the “Company” or “Almaden”) was formed by amalgamation under the laws of the Province of British Columbia, Canada on February 1, 2002. The Company is an exploration stage public company that is engaged directly in the exploration and development of exploration and evaluation property in Mexico. The address of the Company’s registered office is Suite 1710 –1177 West Hastings Street, Vancouver, BC, Canada V6E 2L3.

 

The Company is in the business of exploring and developing mineral projects and its principal asset is the Ixtaca precious metals project located on its Tuligtic claim in Mexico. The Company has not yet determined whether this project has economically recoverable mineral reserves. The recoverability of amounts shown for mineral properties is dependent upon the establishment of a sufficient quantity of economically recoverable reserves, the ability of the Company to obtain the necessary financing or participation of joint venture partners to complete development of the properties, and upon future profitable production or proceeds from the disposition of exploration and evaluation assets.

 

2.Basis of presentation

 

(a)Statement of Compliance with International Financial Reporting Standards (“IFRS”)

 

These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance and compliance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

 

(b)Basis of preparation

 

These condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. This interim financial report does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the annual audited consolidated financial statements of the Company for the year ended December 31, 2022. However, this interim financial report provides selected significant disclosures that are required in the annual audited consolidated financial statements under IFRS.

 

Except as described below, these condensed consolidated interim financial statements follow the same accounting policies and methods of application as the annual audited consolidated financial statements for the year ended December 31, 2022.

 

The changes in accounting policies are also expected to be reflected in the Company's consolidated financial statements as at and for the year ending December 31, 2023.

 

Certain amounts in prior years have been reclassified to conform to the current period presentation.

 

 6 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

3.Significant accounting policies

 

These condensed consolidated interim financial statements do not include all note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the annual financial statements for the year ended December 31, 2022. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

 

4.Accounts receivable and prepaid expenses

 

Accounts receivable and prepaid expenses consist of the following:

 

   June 30,   December 31, 
   2023   2022 
Accounts receivable (Note 11(b))  $114,437   $198,942 
Prepaid expenses   117,576    60,529 
   $232,013   $259,471 

 

During the period ended June 30, 2023, the Company has recorded value added taxes of $72,119 included in exploration and evaluation assets, as the value added tax relates to certain projects and is expected to be recovered when the assets are sold (Note 7).

 

5.Right-of-use assets and lease liabilities

 

The Company has lease agreements for its headquarter office space in Vancouver, B.C.

 

One lease containing an extension option exercisable only by the Company was exercised on November 22, 2021. The lease was therefore extended from March 31, 2022 to March 31, 2027. The Company reassessed this significant event as a lease modification and has estimated that the potential future lease payments under the extended lease term would result in an increase in lease liability by $508,799.

 

The continuity of lease liabilities is as follows:

 

   June 30,
2023		   December 31,
2022		 
Opening balance  $465,930   $548,607 
Modification by extending the lease term   -    - 
Less: lease payments   (63,486)   (130,056)
Interest expense   20,802    47,379 
    423,246    465,930 
Less: current portion of lease liabilities   (94,268)   (88,295)
Long-term portion of lease liabilities  $328,978   $377,635 

 

 7 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

5.Right-of-use assets and lease liabilities (Continued)

 

The continuity of ROU assets is as follows:

 

   June 30,
2023		   December 31,
2022		 
Opening balance  $432,319   $539,110 
Modification by extending the lease term   -    - 
Less: amortization of ROU assets   (50,861)   (106,791)
   $381,458   $432,319 

 

During the six months ended June 30, 2023, the Company recognized occupancy expenses of $20,070 (2022 - $22,867) related to short term leases.

 

As at June 30, 2023, the remaining payments for the operating lease are due as follows:

 

   2023   2024   2025   2026   2027   Total 
Office lease  $83,687   $170,672   $173,970   $177,268   $44,523   $650,120 

 

6.Property, plant and equipment

 

   Furniture and fixtures and other   Computer hardware   Computer software   Geological library   Field equipment   Mill equipment   Total 
   $   $   $   $   $   $   $ 
Cost                            
December 31, 2022   159,171    271,540    198,981    51,760    245,647    6,568,841    7,495,940 
Additions   -    267    -    -    -    -    267 
June 30, 2023   159,171    271,807    198,981    51,760    245,647    6,568,841    7,496,207 
                                    
Accumulated depreciation                                   
December 31, 2022   153,203    251,441    192,138    50,975    237,312    -    885,069 
Depreciation   597    3,031    1,026    79    834    -    5,567 
June 30, 2023   153,800    254,472    193,164    51,054    238,146    -    890,636 
                                    
Carrying amounts                                   
December 31, 2022   5,968    20,099    6,843    785    8,335    6,568,841    6,610,871 
June 30, 2023   5,371    17,335    5,817    706    7,501    6,568,841    6,605,571 

 

 8 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

7.Exploration and evaluation assets

 

   Tuligtic 
Exploration and evaluation assets  $ 
Acquisition costs:     
Opening balance - (December 31, 2022)   11,308,721 
Closing balance - (June 30, 2023)   11,308,721 
Deferred exploration costs:     
Opening balance - (December 31, 2022)   51,806,355 
Costs incurred during the period     
Professional fees   113,010 
Geochemical, metallurgy   1,022 
Travel and accommodation   52,770 
Geology, geophysics and exploration   86,352 
Supplies and miscellaneous   225,268 
Environmental and permit   321,475 
Value-added tax (Note 4)   72,119 
Refund - Value-added tax   (191,897)
Total deferred exploration costs during the period   680,119 
Closing balance - (June 30, 2023)   52,486,474 
Total exploration and evaluation assets   63,795,195 

 

The following is a description of the Company’s most significant property interests:

 

(a)Tuligtic

 

In 2001, the Company acquired by staking a 100% interest in the Tuligtic property in Puebla, Mexico. The property contains the Ixtaca Zone.

 

(b)Other

 

Expenditures incurred by the Company in Mexico are subject to Mexican Value added tax (“VAT”). The VAT is included in exploration and evaluation assets as incurred. Under Mexican law, VAT paid can be used in the future to offset amounts resulting from VAT charged on sales. Under certain circumstances and subject to approval from tax authorities, A Company can also apply for an early refund of VAT prior to generating sales. During the six months ended June 30, 2023, the Company received a VAT recovery of $191,897 (2022 - $124,006) and other income of $54,714 (2022 - $33,493) related to a VAT refund from prior years which is recorded in interest and other income.

 

 9 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

8.Gold loan payable and gold in trust

 

The Company has entered into a secured gold loan agreement (“Gold Loan”) with Almadex Minerals Ltd. (“Almadex”) or the “Lender” pursuant to which Almadex has agreed to loan up to 1,597 ounces of gold bullion to the Company. The approximate value of this gold as at May 14, 2019 was USD$2,072,060 or $2,790,858.

 

Under the terms of the Gold Loan, the Company will be entitled to draw-down the gold in minimum 400 ounce tranches. At any given time, the amount of gold ounces drawn multiplied by the London Bullion Market Association (“LBMA”) AM gold price in US dollars, plus any accrued interest or unpaid fees, shall constitute the Loan Value.

 

The maturity date for the Gold Loan is March 31, 2024, and can be extended by two years at the discretion of the Company (the “Term”). Repayment of the Loan Value shall be made either through delivery of that amount of gold drawn, or through the issuance of common shares of the Company (“Shares”), according to the Lender’s discretion. Mandatory prepayment shall be required in the event that the Company’s Ixtaca gold-silver project located in Puebla State, Mexico (the “Ixtaca Project”) enters into commercial production during the Term, requiring the Company to deliver 100 gold ounces per month to the Lender. In addition, the Company has the right to pre-pay the Loan Value at any time without penalty, in either gold bullion or Shares as chosen by the Lender, and the Lender has the right to convert the Loan Value into Shares at any time during the Term. The conversion rate is equal to 95% of the 5 trading day volume weighted average price of the Share on the Toronto Stock Exchange or an equivalent.

 

The interest rate of the Gold Loan is 10% of the Loan Value per annum, calculated monthly, paid in arrears. Interest payments can either be accrued to the Loan Value, or paid by the Company in cash or gold bullion. A standby fee of 1% per annum, accrued quarterly, will be applied to any undrawn amount on the Gold Loan.

 

In addition, the Company has issued Almadex 500,000 transferable share purchase warrants (“Warrants”), with an exercise price of $1.50 per Share and expiry date of May 14, 2024 as an arrangement fee to cover the administrative costs of setting up the credit facility. These warrants were valued at $50,000 using the Black-Scholes option-pricing model with the following assumptions: expected life of five years, risk-free interest rate of 1.54%, expected dividend yield of 0% and expected volatility of 44.25%.

 

Security for the loan is certain equipment related to the Rock Creek Mill, which is not required for the Ixtaca Project. The Gold Loan includes industry standard provisions in the event of default, material breach and change of control.

 

The Gold Loan was recorded at fair value at inception and is subsequently measured at amortized cost using the effective interest method, recognizing interest expense on an effective yield basis.

 

The Company has determined that the Gold Loan contains multiple derivatives which are embedded in the US dollar denominated debt instrument. As the convertible Gold Loan is denominated in US dollars and is convertible into common shares based upon a variable Canadian dollar conversion rate, the fixed for fixed criteria is not met. As such, the conversion option cannot be classified as an equity instrument and is deemed to have no value. The embedded derivative from indexation of the loan principal portion to the movement in the price of gold is classified as a derivate financial liability and is marked to market at each period end using the Black-Scholes option-pricing model.

 

 10 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

8.Gold loan payable and gold in trust (Continued)

 

At inception, the following assumptions were used: expected life of five years, risk-free interest rate of 1.57% and expected volatility of 11.06%. The fair value of the embedded derivative for the period ended June 30, 2023 decreased by $74,658 based on the following assumptions used in the Black-Scholes option-pricing model: expected life of 0.75 years, risk-free interest rate of 4.00% and expected volatility of 11.57%.

 

The continuity of gold loan payable and derivative financial liabilities are as follows:

 

   June 30,
2023		   December 31,
2022		 
Gold loan payable – opening balance  $3,929,015   $3,227,545 
Accrued interest expense   172,249    314,024 
Accrued standby fees   5,159    9,416 
Accretion expense   84,473    144,868 
Foreign exchange difference   (90,841)   233,162 
Gold loan payable  $4,100,055   $3,929,015 
           
Derivative financial liabilities – opening balance  $306,084   $391,620 
Change in fair value through profit & loss   (74,658)   (110,177)
Foreign exchange difference   (6,489)   24,641 
Derivative financial liabilities  $224,937   $306,084 

 

As at June 30, 2023, Almaden has 397 ounces of gold bullion on its account at a fair value of $1,000,459.

 

The continuity of gold in trust are as follows:

 

   June 30, 2023   December 31, 2022 
   Ounces   $   Ounces   $ 
Gold in trust, opening balance   397    974,397    397    915,995 
Change in fair value through profit & loss   -    49,869    -    (6,518)
Foreign exchange difference   -    (23,807)   -    64,920 
    397    1,000,459    397    974,397 

 

9.Warrant liability

 

In connection with the registered direct offering private placement completed during the year ended December 31, 2021, the Company issued a total of 7,923,077 warrants exercisable at US$0.80 per share. The fair value of these warrants on issuance was $2,371,174, valued using the Black-Scholes option-pricing model with the following assumptions:

 

Risk-free interest rate 0.53%
Expected life of warrants 3.00 years
Expected annualized volatility 72.42%
Dividend Nil
Forfeiture rate 0%

 

 11 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

9.Warrant liability (Continued)

 

The fair value is recorded as a derivative financial liability as these warrants are exercisable in US dollars, differing from the Company’s functional currency. The change in fair value resulted in an unrealized gain of $102,196 (June 30, 2022 – $383,219) and is recognized in the condensed consolidated interim statements of comprehensive loss for the period ended June 30, 2023. The fair value warrants were re-valued at period end using the Black-Scholes option-pricing model with the following assumptions:

 

   June 30, 2023  June 30, 2022
Risk-free interest rate  4.68%  3.12%
Expected life of warrants  0.72 years  1.72 years
Expected annualized volatility  67.24%  79.36%
Dividend  Nil  Nil
Forfeiture rate  0%  0%

 

10.Share capital and reserves

 

(a)Authorized share capital

 

At June 30, 2023, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

 

(b)Warrants

 

The continuity of warrants for the six months ended June 30, 2023 is as follows:

 

   Exercise   December 31,               June 30, 
Expiry date  price   2022   Issued   Exercised   Expired   2023 
March 27, 2023  $0.50    5,489,658    -    -    (5,489,658)   - 
August 6, 2023  $0.90    3,100,000    -    -    -    3,100,000 
March 18, 2024   USD$0.80    7,923,077    -    -    -    7,923,077 
March 18, 2024   USD$0.80    435,769    -    -    -    435,769 
May 14, 2024  $1.50    500,000    -    -    -    500,000 
Warrants outstanding and exercisable        17,448,504    -    -    (5,489,658)   11,958,846 
Weighted average exercise price       $0.88    -    -   $0.50   $1.04 

 

(c)Share purchase option compensation plan

 

The Company’s stock option plan permits the issuance of options up to a maximum of 10% of the Company’s issued share capital. Stock options issued to any consultant or person providing investor relations services cannot exceed 2% of the issued and outstanding common shares in any twelve month period. At June 30, 2023, the Company had reserved 1,392,141 stock options that may be granted. The exercise price of any option cannot be less than the volume weighted average trading price of the shares for the five trading days immediately preceding the date of the grant.

 

 12 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

10.Share capital and reserves (Continued)

 

(c)Share purchase option compensation plan (Continued)

 

The maximum term of all options is five years. The Board of Directors determines the term of the option (to a maximum of five years) and the time during which any option may vest. Options granted to consultants or persons providing investor relations services shall vest in stages with no more than 25% of such option being exercisable in any three month period. All options granted during the six months ended June 30, 2023 vested on the grant date.

 

The Company’s stock option plan permits the option holder to exercise cashless by surrendering a portion of the underlying option shares to pay for the exercise price and the corresponding withholding taxes, if applicable.

 

The continuity of stock options for the six months ended June 30, 2023 is as follows:

 

Expiry date  Exercise
price		   December 31,
2022		   Granted   Exercised   Expired   June 30,
2023		 
February 9, 2023  $0.97    350,000    -    -    (350,000)   - 
March 3, 2023  $0.96    250,000    -    -    (250,000)   - 
March 31, 2023  $0.68    1,975,000    -    -    (1,975,000)   - 
May 8, 2023  $0.69    100,000    -    -    (100,000)   - 
May 28, 2023  $0.65    100,000    -    -    (100,000)   - 
July 8, 2023  $0.62    2,420,000    -    -    -    2,420,000 
September 18, 2023  $0.51    960,000    -    -    -    960,000 
March 7, 2027  $0.38    1,125,000    -    -    -    1,125,000 
June 10, 2027  $0.33    3,640,000    -    -    -    3,640,000 
October 4, 2027  $0.30    755,000    -    -    -    755,000 
December 16, 2027  $0.33    855,000    -    -    -    855,000 
February 14, 2028  $0.30    -    600,000    -    -    600,000 
April 3, 2028  $0.26    -    1,975,000    -    -    1,975,000 
Options outstanding and exercisable        12,530,000    2,575,000    -    (2,775,000)   12,330,000 
Weighted average                               
  exercise price       $0.49   $0.27    -   $0.74   $0.39 

 

Total share-based payments expenses as a result of options granted and vested during the period ended June 30, 2023 was $372,500 (2022 - $1,149,550).

 

The fair value of the options granted during the period ended June 30, 2023 was estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:

 

Risk-free interest rate  3.00%
Expected life  5.00 years
Expected volatility  58.59%
Expected dividend yield  Nil
Weighted average fair value per option  $0.14

 

 13 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

11.Related party transactions and balances

 

(a)Compensation of key management personnel

 

Key management includes members of the Board, the Chair, the President and Chief Executive Officer, the Chief Financial Officer, the Executive Vice President, and the Vice President, Project Development. The net aggregate compensation paid or payable to key management for services after recovery from Azucar Minerals Ltd. (Azucar) and Almadex (Note 11 (b)) is as follows:

 

   Three months ended June 30,   Six months ended June 30, 
   2023   2022   2023   2022 
                 
Professional fees  $15,000   $15,000   $30,000   $30,000 
Salaries and benefits (1)   74,175    113,663    148,350    222,525 
Share-based payments   259,000    647,900    355,000    950,150 
Director’s fees   36,250    36,250    72,500    72,500 
   $384,425   $812,813   $605,850   $1,275,175 

 

(b)Administrative Services Agreements

 

The Company recovers a portion of rent, office and license expenses from Azucar pursuant to an Administrative Services Agreement dated May 15, 2015 and First Amending Agreement dated December 16, 2015 between the Company and Azucar.

 

The Company also recovers a portion of rent, office and license expenses from Almadex pursuant to an Administrative Services Agreement dated March 29, 2018 between the Company and Almadex.

 

During the three months ended June 30, 2023, the Company received $18,868 (2022 - $37,705) from Azucar for administrative services fees included in other income and received $258,353 (2022 - $182,741) from Almadex for administrative services fees included in other income.

 

During the six months ended June 30, 2023, the Company received $37,541 (2022 - $74,483) from Azucar for administrative services fees included in other income and received $514,173 (2022 - $361,312) from Almadex for administrative services fees included in other income.

 

At June 30, 2023, included in accounts receivable is $7,235 (December 31, 2022 - $64,006) due from Azucar and $104,930 (December 31, 2022 - $117,044) due from Almadex in relation to expense recoveries.

 

Under the Administrative Services Agreements, the Company is the sole and exclusive manager of Azucar and Almadex that provides general management services, office space, executive personnel, human resources, geological technical support, accounting and financial services at cost with no mark-up or additional direct charge. The three companies are considered related parties though common officers.

 

(c)Other related party transactions

 

At June 30, 2023, the Company accrued $89,869 (December 31, 2022 - $80,727) payable to Almadex for exploration and drilling services in Mexico.

 

 14 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

11.Related party transactions and balances (Continued)

 

(c)Other related party transactions (Continued)

 

During the three and six months ended June 30, 2023, the Company employed the Chair’s daughter for a salary of $10,325 and $20,650 less statutory deductions (2022 - $10,325 and $20,650) for marketing and administrative services provided to the Company.

 

12.Net loss per share

 

Basic and diluted net loss per share

 

The calculation of basic net loss per share for the three months ended June 30, 2023 was based on the loss attributable to common shareholders of $782,425 (2022 - $926,375) and a weighted average number of common shares outstanding of 137,221,408 (2022 – 137,221,408).

 

The calculation of basic net loss per share for the six months ended June 30, 2023 was based on the loss attributable to common shareholders of $1,332,690 (2022 - $2,066,293) and a weighted average number of common shares outstanding of 137,221,408 (2022 – 137,221,408).

 

The calculation of diluted net loss per share for the three and six months ended June 30, 2023 and 2022 did not include the effect of stock options and warrants, as they were considered to be anti-dilutive.

 

13.Supplemental cash flow information

 

As at June 30, 2023, $100,450 of exploration and evaluation asset costs are included in trade and other payables (December 31, 2022 - $90,850).

 

Supplemental information regarding the split between cash and cash equivalents is as follows:

 

   June 30,
2023		   December 31,
2022		 
         
Cash  $1,432,149   $1,542,956 
Term Deposits   3,486,000    5,115,120 
   $4,918,149   $6,658,076 

 

14.Financial instruments

 

The fair values of the Company’s cash and cash equivalents, accounts receivable and trade and other payables approximate their carrying values because of the short-term nature of these instruments.

 

Except for warrant liability and derivative financial liabilities, the Company does not carry any financial instruments at FVTPL.

 

The Company is exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk and commodity and equity price risk.

 

 15 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

14.Financial instruments (Continued)

 

(a)Currency risk

 

The Company’s property interests in Mexico make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian dollar, the US dollar and the Mexican peso. The Company does not invest in foreign currency contracts to mitigate the risks.

 

As at June 30, 2023, the Company is exposed to foreign exchange risk through the following monetary assets and liabilities denominated in currencies other than the functional currency of the applicable subsidiary:

 

All amounts in Canadian dollars  US dollar   Mexican peso 
Cash and cash equivalents  $2,781,715   $254,174 
Accounts receivable and prepaid expenses   -    2,271 
Gold in trust   1,000,459    - 
Total assets  $3,782,174   $256,445 
           
Trade and other payables  $28,174   $129,641 
Gold loan payable   4,100,055    - 
Derivative financial liabilities   224,937    - 
Total liabilities  $4,353,166   $129,641 
           
Net assets  $(570,992)  $126,804 

 

A 10% change in the US dollar exchange rate relative to the Canadian dollar would change the Company’s net loss by $60,000.

 

A 10% change in the Mexican peso relative to the Canadian dollar would change the Company’s net loss by $10,000.

 

(b)Credit risk

 

The Company’s cash and cash equivalents are held in large financial institutions, located in both Canada and Mexico. Cash equivalents mature at less than ninety days during the twelve months following the statement of financial position date. The Company’s accounts receivable consist of amounts due from related parties which are subsequently collected.

 

To mitigate exposure to credit risk on cash and cash equivalents, the Company has established policies to limit the concentration of credit risk with any given banking institution where the funds are held, to ensure counterparties demonstrate minimum acceptable credit risk worthiness and ensure liquidity of available funds.

 

As at June 30, 2023, the Company’s maximum exposure to credit risk is the carrying value of its cash and cash equivalents, and accounts receivable.

 

 16 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

14.Financial instruments (Continued)

 

(c)Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Liquidity risk is considered low as the Company has sufficient cash and cash equivalent to meet its current liabilities.

 

Trade and other payables are due within twelve months of the statement of financial position date.

 

(d)Interest rate risk

 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to varying interest rates on cash and cash equivalents. The Company has no debt bearing variable interest rate.

 

A 1% change in the interest rate would change the Company’s net loss by $50,000.

 

(e)Commodity and equity price risk

 

The ability of the Company to explore its exploration and evaluation assets and the future profitability of the Company are directly related to the market price of gold and other precious metals. The Company monitors gold prices to determine the appropriate course of action to be taken by the Company. Equity price risk is defined as the potential adverse impact on the Company’s performance due to movements in individual equity prices or general movements in the level of the stock market.

 

(f)Classification of financial instruments

 

IFRS 13 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:

 

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

 

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.

 

   Level 1   Level 2   Level 3   Total 
    $    $    $    $ 
Derivative financial liabilities   -    224,937    -    224,937 
Warrant liability   -    591    -    591 

 

 17 

Almaden Minerals Ltd.

Notes to the condensed consolidated interim financial statements

For the three and six months ended June 30, 2023

Unaudited - Expressed in Canadian dollars

 

15.Management of capital

 

The Company considers its capital to consist of components of equity. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

 

The Company considers its capital to consist of components of equity. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

 

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares and, acquire or dispose of assets.

 

In order to maximize ongoing exploration efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with short term maturities, selected with regards to the expected timing of expenditures from continuing operations.

 

The Company expects its current capital resources will be sufficient to carry its exploration plans and operations for the foreseeable future. There were no changes to the Company’s approach to the management of capital during the period. The Company has no externally imposed capital requirements.

 

16.Segmented information

 

The Company operates in one reportable operating segment, being the acquisition and exploration of mineral resource properties.

 

The Company’s non-current assets are located in the following geographic locations:

 

   June 30,
2023		  

December 31,

2022

 
Canada  $416,466   $472,435 
United States   6,568,840    6,568,840 
Mexico   63,796,918    63,116,991 
   $70,782,224   $70,158,266 

 

17.Subsequent event

 

On July 10, 2023, the Company granted officers, directors and consultants an aggregate of 2,520,000 stock options in accordance with the terms of the Company’s stock option plan, each of which is exercisable into one common share at an exercise price of $0.16 per share until July 10, 2028.

 

 

 

 

 

 

18