10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

⌧                    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

◻                   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from        to

Commission file number: 001-33638

 

INTERNATIONAL TOWER HILL MINES LTD.

(Exact Name of Registrant as Specified in its Charter)

British Columbia, Canada	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2710 - 200 Granville Street
Vancouver, British Columbia, Canada, V6C 1S4 (Address of Principal Executive Offices)  V6C 1S4 (Zip code)

Registrant’s telephone number, including area code: (604) 683-6332

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol:	Name of each exchange on which registered:
Common Shares, no par value	THM	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes  ⌧   No  ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ⌧   No  ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	◻	Accelerated filer	◻
Non-accelerated filer	⌧	Smaller reporting company	⌧
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ◻ No  ⌧

As of July 30, 2021, the registrant had 194,908,184 common shares outstanding.

Table of Contents

		Page
Part I	FINANCIAL INFORMATION
Item 1	Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4	Controls and Procedures	23
Part II	OTHER INFORMATION
Item 1	Legal Proceedings	24
Item 1A	Risk Factors	24
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3	Defaults Upon Senior Securities	24
Item 4	Mine Safety Disclosures	24
Item 5	Other Information	24
Item 6	Exhibits	25
SIGNATURES		26

2

CAUTIONARY NOTE TO U.S. INVESTORS REGARDING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES AND PROVEN AND PROBABLE RESERVES

International Tower Hill Mines Ltd. (“we”, “us”, “our,” “ITH” or the “Company”) is a mineral exploration company engaged in the acquisition and exploration of mineral properties. As used in this Quarterly Report on Form 10-Q, the terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in the United States Securities and Exchange Commission (“SEC”) Industry Guide 7 (“SEC Industry Guide 7”). Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves, and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into reserves.

“Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian disclosure rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.

Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations if such disclosure includes the grade or quality and the quantity for each category of mineral resource and mineral reserve; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. Accordingly, information contained in this report and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

The term “mineralized material” as used in this Quarterly Report on Form 10-Q, although permissible under SEC Industry Guide 7, does not indicate “reserves” by SEC Industry Guide 7 standards. We cannot be certain that any part of the mineralized material will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves”. Investors are cautioned not to assume that all or any part of the mineralized material will ever be confirmed or converted into reserves or that mineralized material can be economically or legally extracted.

CAUTIONARY NOTE TO ALL INVESTORS CONCERNING ECONOMIC ASSESSMENTS THAT INCLUDE INFERRED RESOURCES

The Company currently holds or has the right to acquire interests in an advanced stage exploration project in Alaska referred to as the Livengood Gold Project (the “Livengood Gold Project”). Mineral resources that are not mineral reserves have no demonstrated economic viability. The preliminary assessments on the Livengood Gold Project are preliminary in nature and include “inferred mineral resources” that have a great amount of uncertainty as to their existence, and are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian disclosure rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies. There is no certainty that such inferred mineral resources at the Livengood Gold Project will ever be realized. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.

3

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 concerning anticipated results and developments in the operations of the Company in future periods, planned exploration activities, the adequacy of the Company’s financial resources and other events or conditions that may occur in the future. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “plans” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” (or the negative and grammatical variations of any of these terms) occur or be achieved. These forward-looking statements may include, but are not limited to, statements concerning:

● the Company’s future cash requirements, the Company’s ability to meet its financial obligations as they come due, and the Company’s ability to raise the necessary funds to continue operations on acceptable terms, if at all;

● the preparation, timing, costs, and any anticipated contents of an updated pre-feasibility study (“PFS”) for the Livengood Gold Project, including the ability to incorporate work done since the Company’s April 2017 NI 43-101 report and further de-risk and identify the optimal project configuration for the Livengood Gold Project;

● the potential to improve the block model or production schedule at the Livengood Gold Project;

● the potential for opportunities to improve recovery or further reduce costs at the Livengood Gold Project;

● the Company’s ability to potentially include the results of its optimization process in the PFS or any future financial analysis of the Livengood Gold Project and the estimated cost of such optimization process;

● the Company’s ability to carry forward and incorporate into future engineering studies of the Livengood Gold Project updated mine design, production schedule and recovery concepts identified during the optimization process;

● the Company’s potential to carry out an engineering phase that will evaluate and optimize the Livengood Gold Project configuration and capital and operating expenses, including determining the optimum scale for the Livengood Gold Project;

● the Company’s strategies and objectives, both generally and specifically in respect of the Livengood Gold Project;

● the Company’s belief that there are no known environmental issues that are anticipated to materially impact the Company’s ability to conduct mining operations at the Livengood Gold Project;

● the potential for the expansion of the estimated resources at the Livengood Gold Project;

● the potential for a production decision concerning, and any production at, the Livengood Gold Project;

● the sequence of decisions regarding the timing and costs of development programs with respect to, and the issuance of the necessary permits and authorizations required for, the Livengood Gold Project;

● the Company’s estimates of the quality and quantity of the resources at the Livengood Gold Project;

● the timing and cost of any future exploration programs at the Livengood Gold Project, and the timing of the receipt of results therefrom;

● the expected levels of overhead expenses; and

● future general business and economic conditions, including changes in the price of gold and the overall sentiment of the markets for public equity.

Such forward-looking statements reflect the Company’s current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others:

● the demand for, and level and volatility of the price of gold;

● conditions in the financial markets generally, the overall sentiment of the markets for public equity, interest rates and currency rates;

● general business and economic conditions, including the effect of the COVID-19 pandemic on such conditions;

● government regulation and proposed legislation (and changes thereto or interpretations thereof);

● defects in title to claims, or the ability to obtain surface rights, either of which could affect the Company’s property rights and claims;

● the Company’s ability to secure the necessary services and supplies on favorable terms in connection with its programs at the Livengood Gold Project and other activities;

4

● the Company’s ability to attract and retain key staff, particularly in connection with the permitting and development of any mine at the Livengood Gold Project;

● the accuracy of the Company’s resource estimates (including with respect to size and grade) and the geological, operational and price assumptions on which these are based;

● the timing of the ability to commence and complete planned work programs at the Livengood Gold Project;

● delays or unanticipated issues in updating the PFS for the Livengood Gold Project;

● the timing of the receipt of and the terms of the consents, permits and authorizations necessary to carry out exploration and development programs at the Livengood Gold Project and the Company’s ability to comply with such terms on a safe and cost-effective basis;

● the ongoing relations of the Company with the lessors of its property interests and applicable regulatory agencies;

● the metallurgy and recovery characteristics of samples from certain of the Company’s mineral properties and whether such characteristics are reflective of the deposit as a whole; and

● the continued development of and potential construction of any mine at the Livengood Gold Project property not requiring consents, approvals, authorizations or permits that are materially different from those identified by the Company.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including without limitation those discussed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2020, which are incorporated herein by reference, as well as other factors described elsewhere in the Company’s other reports filed with the SEC.

The Company’s forward-looking statements contained in this Quarterly Report on Form 10-Q are based on the beliefs, expectations and opinions of management as of the date of this report. The Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

5

PART 1

ITEM 1. FINANCIAL STATEMENTS

INTERNATIONAL TOWER HILL MINES LTD.

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

As at June 30, 2021 and December 31, 2020

(Expressed in US Dollars - Unaudited)

		June 30,		December 31,
	Note	2021		2020
ASSETS
Current
Cash and cash equivalents	1	$	10,617,438	$	13,049,293
Prepaid expenses and other			244,412		162,079
Total current assets			10,861,850		13,211,372
Property and equipment			7,463		7,832
Capitalized acquisition costs	4		55,375,124		55,375,124
Total assets		$	66,244,437	$	68,594,328
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	376,636	$	199,026
Accrued liabilities	5		302,833		293,965
Total liabilities			679,469		492,991
Shareholders’ equity
Share capital, no par value; unlimited number of authorized shares; 194,908,184 shares issued and outstanding at June 30, 2021 and December 31, 2020	6		288,032,132		288,032,132
Contributed surplus			35,929,885		35,454,805
Accumulated other comprehensive income			2,063,665		1,759,228
Deficit			(260,460,714)		(257,144,828)
Total shareholders’ equity			65,564,968		68,101,337
Total liabilities and shareholders’ equity		$	66,244,437	$	68,594,328

General Information and Nature of Operations (Note 1)

Commitments (Note 8)

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

6

INTERNATIONAL TOWER HILL MINES LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US Dollars - Unaudited)

		Three Months Ended				Six Months Ended
	Note	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Operating expenses
Consulting fees	6	$	421,664	$	340,576	$	481,665	$	380,995
Depreciation			342		442		369		885
Insurance			47,027		35,662		87,937		66,886
Investor relations	6		41,700		31,558		53,893		42,048
Mineral property exploration	4		1,125,316		536,603		1,665,070		652,023
Office			8,820		6,107		13,405		13,727
Other			4,826		5,190		8,084		9,082
Professional fees			50,019		37,040		96,660		89,160
Regulatory			32,983		19,083		133,006		80,256
Rent			33,688		33,939		67,644		67,872
Travel			4,480		3,599		6,988		5,761
Wages and benefits	6		263,162		230,203		426,412		384,733
Total operating expenses			(2,034,027)		(1,280,002)		(3,041,133)		(1,793,428)
Other income (expenses)
Gain/(loss) on foreign exchange			(157,829)		(225,095)		(298,516)		316,091
Interest income			3,842		13,341		13,763		50,666
Other income			10,000		5,292		10,000		5,292
Total other income (expenses)			(143,987)		(206,462)		(274,753)		372,049
Net loss for the period			(2,178,014)		(1,486,464)		(3,315,886)		(1,421,379)
Other comprehensive income (loss)
Exchange difference on translating foreign operations			161,045		230,652		304,437		(322,682)
Total other comprehensive income (loss) for the period			161,045		230,652		304,437		(322,682)
Comprehensive loss for the period		$	(2,016,969)	$	(1,255,812)	$	(3,011,449)	$	(1,744,061)
Basic and diluted loss per share		$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Weighted average number of shares outstanding – basic and diluted			194,908,184		187,573,671		194,908,184		187,573,671

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

7

INTERNATIONAL TOWER HILL MINES LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US Dollars - Unaudited)

	Six-Month Period Ended June 30, 2021
						Accumulated
						other
	Number of			Contributed		comprehensive
	shares	Share capital		surplus		income		Deficit		Total
Balance, December 31, 2020	194,908,184	$	288,032,132	$	35,454,805	$	1,759,228	$	(257,144,828)	$	68,101,337
Stock-based compensation-options	0		0		107,230		0		0		107,230
Stock-based compensation-DSUs	0		0		367,850		0		0		367,850
Exchange difference on translating foreign operations	0		0		0		304,437		0		304,437
Net loss	0		0		0		0		(3,315,886)		(3,315,886)
Balance, June 30, 2021	194,908,184	$	288,032,132	$	35,929,885	$	2,063,665	$	(260,460,714)	$	65,564,968

	Three-Month Period Ended June 30, 2021
						Accumulated
						other
	Number of			Contributed		comprehensive
	shares	Share capital		surplus		income		Deficit		Total
Balance, March 31, 2021	194,908,184	$	288,032,132	$	35,473,776	$	1,902,620	$	(258,282,700)	$	67,125,828
Stock-based compensation-options	0		0		88,259		0		0		88,259
Stock-based compensation-DSUs	0		0		367,850		0		0		367,850
Exchange difference on translating foreign operations	0		0		0		161,045		0		161,045
Net loss	0		0		0		0		(2,178,014)		(2,178,014)
Balance, June 30, 2021	194,908,184	$	288,032,132	$	35,929,885	$	2,063,665	$	(260,460,714)	$	65,564,968

8

	Six-Month Period Ended June 30, 2020
						Accumulated
						other
	Number of			Contributed		comprehensive
	shares	Share capital		surplus		income		Deficit		Total
Balance, December 31, 2019	187,573,671	$	278,213,801	$	35,069,274	$	1,574,011	$	(252,626,110)	$	62,230,976
Stock-based compensation-options	—		—		53,635		—		—		53,635
Stock-based compensation-DSUs	—		—		294,617		—		—		294,617
Exchange difference on translating foreign operations	—		—		—		(322,682)		—		(322,682)
Net loss	—		—		—		—		(1,421,379)		(1,421,379)
Balance, June 30, 2020	187,573,671	$	278,213,801	$	35,417,526	$	1,251,329	$	(254,047,489)	$	60,835,167

	Three-Month Period Ended June 30, 2020
						Accumulated
						other
	Number of			Contributed		comprehensive
	shares	Share capital		surplus		income		Deficit		Total
Balance, March 31, 2020	187,573,671	$	278,213,801	$	35,069,274	$	1,020,677	$	(252,561,025)	$	61,742,727
Stock-based compensation-options	—		—		53,635		—		—		53,635
Stock-based compensation-DSUs	—		—		294,617		—		—		294,617
Exchange difference on translating foreign operations	—		—		—		230,652		—		230,652
Net loss	—		—		—		—		(1,486,464)		(1,486,464)
Balance, June 30, 2020	187,573,671	$	278,213,801	$	35,417,526	$	1,251,329	$	(254,047,489)	$	60,835,167

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

9

INTERNATIONAL TOWER HILL MINES LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2021 and 2020

(Expressed in US Dollars - Unaudited)

	Six Months Ended
	June 30, 2021		June 30, 2020
Operating Activities
Loss for the period	$	(3,315,886)	$	(1,421,379)
Add items not affecting cash:
Depreciation		369		885
Stock-based compensation-options		107,230		53,635
Stock-based compensation-DSUs		367,850		294,617
Changes in non-cash items:
Accounts receivable		22,696		103,194
Prepaid expenses and other		(101,908)		(75,260)
Accounts payable and accrued liabilities		183,500		(87,358)
Cash used in operating activities		(2,736,149)		(1,131,666)
Effect of foreign exchange on cash		304,294		(315,828)
Change in cash and cash equivalents		(2,431,855)		(1,447,494)
Cash and cash equivalents, beginning of the period		13,049,293		6,937,621
Cash and cash equivalents, end of the period	$	10,617,438	$	5,490,127

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

10

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

1.    GENERAL INFORMATION AND NATURE OF OPERATIONS

International Tower Hill Mines Ltd. (“ITH” or the “Company”) is incorporated under the laws of British Columbia, Canada. The Company’s head office address is 2710 - 200 Granville Street, Vancouver, British Columbia, Canada.

International Tower Hill Mines Ltd. consists of ITH and its wholly-owned subsidiaries Tower Hill Mines, Inc. (“TH Alaska”) (an Alaska corporation), Tower Hill Mines (US) LLC (“TH US”) (a Colorado limited liability company), and Livengood Placers, Inc. (“LPI”) (a Nevada corporation). The Company is in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed. At June 30, 2021, the Company has a 100% interest in its Livengood Gold Project, an exploration-stage project in Alaska, U.S.A.

These unaudited condensed consolidated interim financial statements have been prepared on a going-concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.

As at June 30, 2021, the Company had cash and cash equivalents of $10,617,438 compared to $13,049,293 at December 31, 2020. The Company has no revenue generating operations from which it can internally generate funds.

The Company will require significant additional financing to continue its operations (including general and administrative expenses) in connection with advancing activities at the Livengood Gold Project and the development of any mine that may be determined to be built at the Livengood Gold Project.  There is no assurance that the Company will make a decision to build a mine at the Livengood Gold Project and, if so, that it will be able to obtain the additional financing required on acceptable terms, if at all. In addition, any significant delays in the issuance of required permits for the ongoing work at the Livengood Gold Project, or unexpected results in connection with the ongoing work, could result in the Company being required to raise additional funds to advance permitting efforts. The Company’s review of its financing options includes pursuing a future strategic alliance to assist in further development, permitting and future construction costs, although there can be no assurance that any such strategic alliance will, in fact, be realized.

Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able to secure any additional financing in the current or future equity markets. The amount of funds to be raised and the terms of any proposed equity financing that may be undertaken will be negotiated by management as opportunities to raise funds arise. Specific plans related to the use of proceeds will be devised once financing has been completed and management knows what funds will be available for these purposes.

COVID-19 Pandemic

In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak, including as a result of the emergence of variant strains of the virus and ongoing vaccination efforts, and its ultimate effects on the Company’s business, results of operations or ability to raise funds at this time, as of the date of this Quarterly Report on Form 10-Q, the COVID-19 pandemic has not had any material adverse effects on the Company.

11

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

2.    BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020 as filed in our Annual Report on Form 10-K. In the opinion of the Company’s management, these financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position at June 30, 2021 and the results of its operations for the six months then ended. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. These judgments, estimates and assumptions are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. While management believes the estimates to be reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

On August 5, 2021, the Board of Directors of the Company (the “Board”) approved these condensed consolidated interim financial statements.

Basis of consolidation

These condensed consolidated interim financial statements include the accounts of ITH and its wholly-owned subsidiaries TH Alaska, TH US, and LPI. All intercompany transactions and balances have been eliminated.

3.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these financial instruments.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows:

● 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.

There were no financial instruments measured at fair value.

4.    MINERAL PROPERTY

The Company had the following activity related to the mineral property:

Capitalized acquisition costs	Amount
Balance, December 31, 2020	$	55,375,124
Acquisition costs		—
Balance, June 30, 2021	$	55,375,124

12

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

The following table presents costs incurred for exploration and evaluation activities for the six months ended June 30, 2021 and 2020:

	June 30, 2021		June 30, 2020
Exploration costs:
Aircraft	$	8,400	$	—
Environmental		110,890		80,189
Equipment rental		29,923		23,363
Field costs		60,040		49,942
Geological/geophysical		969,428		54,906
Land maintenance and tenure		423,096		425,212
Legal		60,385		12,947
Transportation and travel		2,908		5,464
Total expenditures for the period	$	1,665,070	$	652,023

Livengood Gold Project Property

The Livengood property is located in the Tintina gold belt approximately 70 miles (113 kilometers) northwest of Fairbanks, Alaska. The property consists of land leased from the Alaska Mental Health Trust, a number of smaller private mineral leases, Alaska state mining claims purchased or located by the Company and patented ground held by the Company.

Details of the leases are as follows:

a) A lease of the Alaska Mental Health Trust mineral rights having a term beginning July 1, 2004 and extending 19 years until June 30, 2023, subject to further extensions beyond June 30, 2023 by either commercial production or payment of an advance minimum royalty equal to 125% of the amount paid in year 19 and diligent pursuit of development. The lease requires minimum work expenditures and advance minimum royalties (all of which minimum royalties are recoverable from production royalties) which escalate annually with inflation. A net smelter return (“NSR”) production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to the lessor with respect to the lands subject to this lease. In addition, an NSR production royalty of l% is payable to the lessor with respect to the unpatented federal mining claims subject to the lease described in b) below and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of gold) is payable to the lessor with respect to the lands acquired by the Company as a result of the purchase of LPI in December 2011. During the six months ended June 30, 2021 and from the inception of this lease, the Company has paid $342,688 and $3,993,856, respectively.

b) A lease of federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003 and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3% (depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for $1,000,000. During the six months ended June 30, 2021 and from the inception of this lease, the Company has paid $50,000 and $880,000, respectively.

13

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

c) A lease of patented lode mining claims having an initial term of ten years commencing January 18, 2007, and continuing for so long thereafter as advance minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date through January 18, 2017 and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of 3% is payable to the lessors. The Company may purchase all interests of the lessors in the leased property (including the production royalty) for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which $500,000 is payable in cash over four years following the closing of the purchase and the balance is payable by way of the 3% NSR production royalty. The Company paid $15,000 of royalties during the six months ended June 30, 2021, for a total of $265,000 from the inception of this lease. The Company has acquired a 40% interest in the mining claims subject to the lease, providing the Company with a 40% interest in the lease.

d) A lease of unpatented federal lode mining and federal unpatented placer claims having an initial term of ten years commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $15,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). The Company is required to pay the lessor the additional sum of $250,000 upon making a positive production decision, of which $125,000 is payable within 120 days of the decision and $125,000 is payable within a year of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the lessor. The Company may purchase all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000. The Company paid $15,000 of royalties during the six months ended June 30, 2021, for a total of $188,000 from the inception of this lease.

Title to mineral properties

The acquisition of title to mineral properties is a detailed and time-consuming process. The Company has taken steps to verify title to mineral properties in which it has an interest. Although the Company has taken every reasonable precaution to ensure that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured.

5.    ACCRUED LIABILITIES

The following table presents the accrued liabilities balances at June 30, 2021 and December 31, 2020.

	June 30, 2021		December 31, 2020
Accrued liabilities	$	266,070	$	227,459
Accrued salaries and benefits		36,763		66,506
Total accrued liabilities	$	302,833	$	293,965

Accrued liabilities at June 30, 2021 include accruals for general corporate costs and project costs of $39,191 and $226,879, respectively. Accrued liabilities at December 31, 2020 include accruals for general corporate costs and project costs of $51,151 and $176,308, respectively.

6.    SHARE CAPITAL

Authorized

The Company's authorized share capital consists of an unlimited number of common shares without par value. At December 31, 2020 and June 30, 2021, there were 194,908,184 shares issued and outstanding.

Share issuances

There were no share issuances during the six months ended June 30, 2021.

14

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

Stock options

The Company adopted an incentive stock option plan in 2006, as amended September 19, 2012 and reapproved by the Company’s shareholders on May 28, 2015, May 30, 2018, and May 25, 2021 (the “Stock Option Plan”). The essential elements of the Stock Option Plan provide that the aggregate number of common shares of the Company that may be issued pursuant to options granted under the Stock Option Plan and any other share-based compensation arrangements may not exceed 10% of the number of issued shares of the Company at the time of the granting of the options. Options granted under the Stock Option Plan will have a maximum term of ten years. The exercise price of options granted under the Stock Option Plan shall be fixed in compliance with the applicable provisions of the Toronto Stock Exchange ("TSX") Company Manual in force at the time of grant and, in any event, shall not be less than the closing price of the Company’s common shares on the TSX on the trading day immediately preceding the day on which the option is granted, or such other price as may be agreed to by the Company and accepted by the TSX. Options granted under the Stock Option Plan vest immediately, unless otherwise determined by the directors at the date of grant.

A summary of the options granted under the Stock Option Plan as of June 30, 2021 and December 31, 2020 is presented below:

	Six Months Ended					Year Ended
	June 30, 2021					December 31, 2020
		Weighted					Weighted
		Average		Aggregate			Average		Aggregate
	Number of	Exercise Price		Intrinsic Value		Number of	Exercise Price		Intrinsic Value
	Options	(C$)		(C$)		Options	(C$)		(C$)
Balance, beginning of the period	2,707,049	$	0.94			2,452,049	$	0.94
Granted	240,000	$	1.31			255,000		0.92
Balance, end of the period	2,947,049	$	0.97	$	975,808	2,707,049	$	0.94	$	2,287,262

The weighted average remaining life of options outstanding at June 30, 2021 was 2.5 years.

Stock options outstanding are as follows:

	June 30, 2021				December 31, 2020
	Exercise		Number of		Exercise		Number of
Expiry Date	Price (C$)		Options	Exercisable	Price (C$)		Options	Exercisable
February 25, 2022	$	1.11	510,000	510,000	$	1.11	510,000	510,000
February 25, 2022	$	0.73	270,000	270,000	$	0.73	270,000	270,000
March 10, 2022	$	1.11	120,000	120,000	$	1.11	120,000	120,000
March 16, 2023	$	1.00	580,000	580,000	$	1.00	580,000	580,000
March 16, 2023	$	0.50	130,000	130,000	$	0.50	130,000	130,000
June 9, 2023	$	1.00	30,000	30,000	$	1.00	30,000	30,000
March 21, 2024	$	0.61	374,817	374,817	$	0.61	374,817	374,817
February 1, 2025	$	1.35	250,000	250,000	$	1.35	250,000	250,000
August 8, 2025	$	0.85	187,232	187,232	$	0.85	187,232	187,232
May 27, 2026	$	0.92	255,000	170,000	$	0.92	255,000	85,000
May 25, 2027	$	1.31	240,000	80,000		—	—	—
			2,947,049	2,702,049			2,707,049	2,537,049

15

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

A summary of the non-vested options as of June 30, 2021 and changes during the six months ended June 30, 2021 is as follows:

		Weighted average
	Number of	grant-date fair value
Non-vested options:	options	(C$)
Outstanding at December 31, 2020	170,000	$	0.76
Granted	240,000	$	0.98
Vested	(165,000)	$	0.87
Outstanding at June 30, 2021	245,000	$	0.91

At June 30, 2021, there was unrecognized compensation expense of C$174,225 related to non-vested options outstanding. The cost is expected to be recognized over a weighted-average remaining period of approximately 1.3 years.

Deferred Share Unit Incentive Plan

On April 4, 2017, the Company adopted a Deferred Share Unit Plan (the “DSU Plan”). The DSU Plan was approved  by the Company's shareholders on May 24, 2017 and reapproved by the Company's shareholders on May 27, 2020 and May 25, 2021. The maximum aggregate number of common shares that may be issued under the DSU Plan and the Stock Option Plan is 10% of the number of issued and outstanding common shares (on a non-diluted basis).

During the six months ended June 30, 2021, the Company granted each of the members of the Board (other than those directors nominated for election by Paulson& Co. Inc.) 63,359 deferred share units (“DSUs”) with a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five days immediately preceding the grant) of C$1.31 per DSU, representing C$83,000 per director or C$415,000 in the aggregate.

The DSUs entitle the holders to receive common shares of the Company without the payment of any consideration. The DSUs vested immediately upon being granted but the common shares underlying the DSUs are not deliverable to the holder until the holder is no longer serving on the Board.

DSUs outstanding are as follows:

	Six Months Ended			Year Ended
	June 30, 2021			December 31, 2020
		Weighted Average			Weighted
	Number of	Exercise Price		Number of	Average Exercise
	Units	(C$)		Units	Price (C$)
Balance, beginning of the period	1,834,481	$	0.81	1,383,396	$	0.77
Issued	316,795	$	1.31	451,085	$	0.92
Balance, end of the period	2,151,276	$	0.88	1,834,481	$	0.81

Share-based payments

During the six-month period ended June 30, 2021, there were 240,000 stock options granted under the Stock Option Plan and 316,795 DSUs for common shares of the Company under the DSU Plan. Share-based payment compensation for the six months ended June 30, 2021 totaled $475,080 ($107,230 related to stock options and $367,850 related to DSUs). Of the total expense for the period ended June 30, 2021, $376,410 was included in consulting fees ($8,560 related to stock options and $367,850 related to DSUs), $6,578 was included in investor relations, and $92,092 was included in wages and benefits in the statement of operations and comprehensive loss.

16

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

During the six-month period ended June 30, 2020, there were 255,000 stock options granted under the Stock Option Plan and 451,085 DSUs for common shares of the Company under the DSU Plan. Share-based payment compensation for the six months ended June 30, 2020 totaled $348,252 ($53,635 related to stock options and $294,617 related to DSUs). Of the total expense for the period ended June 30, 2020, $300,927 was included in consulting fees ($6,310 related to stock options and $294,617 related to DSUs), $3,155 was included in investor relations, and $44,170 was included in wages and benefits in the statement of operations and comprehensive loss.

	YTD June 30, 2021
Expected life of options		6 years
Risk-free interest rate		0.99%
Annualized volatility		81.22%
Dividend rate		0.00%
Exercise price (C$)	$	1.31

7.    SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in a single reportable segment, being the exploration and development of mineral properties. The following tables present selected financial information by geographic location:

	Canada		United States		Total
June 30, 2021
Capitalized acquisition costs	$	—	$	55,375,124	$	55,375,124
Property and equipment		7,463		—		7,463
Current assets		10,414,630		447,220		10,861,850
Total assets	$	10,422,093	$	55,822,344	$	66,244,437
December 31, 2020
Capitalized acquisition costs	$	—	$	55,375,124	$	55,375,124
Property and equipment		7,832		—		7,832
Current assets		12,862,068		349,304		13,211,372
Total assets	$	12,869,900	$	55,724,428	$	68,594,328

Three months ended	June 30, 2021		June 30, 2020
Net loss for the period – Canada	$	(808,616)	$	(701,159)
Net loss for the period – United States		(1,369,398)		(785,305)
Net loss for the period	$	(2,178,014)	$	(1,486,464)

Six months ended	June 30, 2021		June 30, 2020
Net loss for the period – Canada	$	(1,175,564)	$	(287,621)
Net loss for the period – United States		(2,140,322)		(1,133,758)
Net loss for the period	$	(3,315,886)	$	(1,421,379)

17

INTERNATIONAL TOWER HILL MINES LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2021 and 2020

(Expressed in US dollars – Unaudited)

8.     COMMITMENTS

The following table discloses the Company’s contractual obligations as of June 30, 2021, including anticipated mineral property payments. Under the terms of the Company’s mineral property purchase agreements, mineral leases and unpatented mineral claims, the Company is required to make certain scheduled acquisition payments, incur certain levels of expenditures, make lease or advance royalty payments, make payments to government authorities and incur assessment work expenditures (as summarized in the table below) in order to maintain and preserve the Company’s interests in the related mineral properties. If the Company is unable or unwilling to make any such payments or incur any such expenditure, it is likely that the Company would lose or forfeit its rights to acquire or hold the related mineral properties. The following table assumes that the Company retains the rights to all of its current mineral properties, but does not exercise any lease purchase or royalty buyout options:

	Payments Due by Year
	2021		2022		2023		2024		2025		2026 and beyond		Total
Mineral Property Leases(1)	$	0	$	426,972	$	513,715	$	519,136	$	524,625	$	530,183	$	2,514,631
Mining Claim Government Fees		132,460		132,460		132,460		132,460		132,460		132,460		794,760
Total	$	132,460	$	559,432	$	646,175	$	651,596	$	657,085	$	662,643	$	3,309,391

1. Does not include required work expenditures, as it is assumed that the required expenditure level is significantly below the level of work that will actually be carried out by the Company. Does not include potential royalties that may be payable (other than annual minimum royalty payments). See Note 4.

18

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020. All currency amounts are stated in U.S. dollars unless noted otherwise.

Current Business Activities

General

International Tower Hill Mines Ltd. consists of ITH and its wholly-owned subsidiaries Tower Hill Mines, Inc. (“TH Alaska”) (an Alaska corporation), Tower Hill Mines (US) LLC (“TH US”) (a Colorado limited liability company), and Livengood Placers, Inc. (“LPI”) (a Nevada corporation). The Company is in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed. At June 30, 2021, the Company has a 100% interest in its Livengood Gold Project, an exploration-stage project in Alaska, U.S.A.

In response to improved gold prices and changing worldwide macroeconomic conditions that were supportive of accelerating work on the Livengood Gold Project, on May 7, 2020, the Board directed management to prepare an updated pre-feasibility study (“PFS”) for the Livengood Gold Project.

Recent Developments

On January 12, 2021, the Company announced that the Board had approved a 2021 budget of $5.6 million and endorsed the associated 2021 work program to advance the Livengood Gold Project. The key element of the 2021 work program is the completion of the updated PFS for the Livengood Gold Project that is planned for release in October 2021. The work program will also advance the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization needed to support future permitting, as well as advance community engagement.

In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak, including as a result of the emergence of variant strains of the virus and ongoing vaccination efforts, and its ultimate effects on the Company’s business, results of operations or ability to raise funds at this time, as of the date of this Quarterly Report on Form 10-Q, the COVID-19 pandemic has not had any material adverse effects on the Company.

Results of Operations

Summary of Quarterly Results

Description	June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Net income (loss)	$	(2,178,014)	$	(1,137,872)	$	(1,995,576)	$	(1,101,763)
Basic and diluted net gain (loss) per common share	$	(0.01)	$	(0.01)	$	(0.01)	$	(0.01)

	June 30, 2020		March 31, 2020		December 31,2019		September 30, 2019
Net income (loss)	$	(1,486,464)	$	65,085	$	(760,035)	$	(858,406)
Basic and diluted net gain (loss) per common share	$	(0.01)	$	0.00	$	(0.00)	$	(0.01)

Three Months Ended June 30, 2021 compared to Three Months Ended June 30, 2020

The Company had a net loss of $2,178,014 for the three months ended June 30, 2021, compared to a net loss of $1,486,464 for the three months ended June 30, 2020.

19

Mineral property expenditures were $1,125,316 for the three months ended June 30, 2021 compared to $536,603 for the three months ended June 30, 2020. The increase of $588,713 is primarily due to work completed toward the updated PFS for the Livengood Gold Project of  $548,085, timing variance of baseline environmental costs of $24,188, and land-related legal costs of $16,440 during the three months ended June 30, 2021.

Excluding share-based costs of $374,178 and $300,927 for the three months ended June 30, 2021 and June 30, 2020, respectively, consulting costs were $47,486 for the three months ended June 30, 2021 compared to $39,649 for the three months ended June 30, 2020. The increase of $7,837 is primarily due to increased  investor relations support services.

Regulatory costs were $32,983 for the three months ended June 30, 2021 compared to $19,083 for the three months ended June 30, 2020. The increase of $13,900 is primarily due to increased costs of $7,540 related to the annual general shareholders meeting and additional TSX listing fees of $6,360.

Professional fees were $50,019 for the three months ended June 30, 2021 compared to $37,040 for the three months ended June 30, 2020. The increase of $12,979 is primarily due to increased legal costs.

Insurance costs were $47,027 for the three months ended June 30, 2021 compared to $35,662 for the three months ended June 30, 2020. The increase of $11,365 is primarily due to premium increases.

Excluding share-based costs of $5,462 and $3,155 for the three months ended June 30, 2021 and June 30, 2020, respectively, investor relations costs were $36,238 for the three months ended June 30, 2021 compared to $28,403 for the three months ended June 30, 2020. The increase of $7,835 is primarily due to investor relations conferences and services.

Share-based payment charges

Share-based payment charges for the three-month periods ended June 30, 2021 and 2020 were allocated as follows:

Expense category:	June 30, 2021		June 30, 2020
Consulting	$	374,178	$	300,927
Investor relations		5,462		3,155
Wages and benefits		76,469		44,170
Total	$	456,109	$	348,252

Share-based payment charges were $456,109 during the three months ended June 30, 2021 compared to $348,252 during the three months ended June 30, 2020. The increase of $107,857 is mainly the result of the DSUs issued on May 25, 2021 being expensed at a closing price of C$1.40 as compared to the DSUs issued on May 27, 2020 being expensed at a closing price of C$0.90 ($73,233) and the stock options for common shares of the Company issued to its employees and consultants issued on May 27, 2020 and May 25, 2021 vesting over a period of two years, with only one-third being exercisable upon grant ($34,624).

Other items amounted to total other expense of $143,987 during the three-month period ended June 30, 2021, compared to total other expense of $206,462 during the three-month period ended June 30, 2020. As a result of the impact of exchange rates on certain of the Company’s U.S. dollar cash balances, the Company had a foreign exchange loss of $157,829 during the three-month period ended June 30, 2021, compared to a loss of $225,095 during the three-month period ended June 30, 2020. The average exchange rate during the three-month period ended June 30, 2021 was C$1 to US$0.8144 compared to C$1 to US$0.7221 during the three-month period ended June 30, 2020. Interest income was $3,842 for the three-month period ended June 30, 2021, compared to $13,341 for the three-month period ended June 30, 2020. The decrease of $9,499 is primarily due to short-term investment certificates being re-invested upon maturity at a lower interest rate.

Six Months Ended June 30, 2021 compared to Six Months Ended June 30, 2020

The Company had a net loss of $3,315,886 for the six months ended June 30, 2021, compared to a net loss of $1,421,379 for the six months ended June 30, 2020.

Mineral property expenditures were $1,665,070 for the six months ended June 30, 2021 compared to $652,023 for the six months ended June 30, 2020. The increase of $1,013,047 is primarily due to work completed toward the updated PFS for the Livengood Gold Project

20

of  $914,521, timing variance of baseline environmental costs of $51,088, and land-related legal costs of $47,438 during the six months ended June 30, 2021.

Excluding share-based costs of $376,410 and $300,927 for the six months ended June 30, 2021 and June 30, 2020, respectively, consulting costs were $105,255 for the six months ended June 30, 2021 compared to $80,068 for the six months ended June 30, 2020. The increase of $25,187 is primarily due to increased investor relations support services.

Regulatory costs were $133,006 for the six months ended June 30, 2021 compared to $80,256 for the six months ended June 30, 2020. The increase of $52,750 is primarily due to increased costs for TSX listing fees and filing fees due to the Company’s increased market valuation.

Insurance costs were $87,937 for the six months ended June 30, 2021 compared to $66,886 for the six months ended June 30, 2020. The increase of $21,051 is primarily due to premium increases.

Excluding share-based costs of $6,578 and $3,155 for the six months ended June 30, 2021 and June 30, 2020, respectively, investor relations costs were $47,315 for the six months ended June 30, 2021 compared to $38,893 for the six months ended June 30, 2020. The increase of $8,422 is primarily due to investor relations conferences and increased services.

Share-based payment charges

Share-based payment charges for the six-month periods ended June 30, 2021 and 2020 were allocated as follows:

Expense category:	June 30, 2021		June 30, 2020
Consulting	$	376,410	$	300,927
Investor relations		6,578		3,155
Wages and benefits		92,092		44,170
Total	$	475,080	$	348,252

Share-based payment charges were $475,080 during the six months ended June 30, 2021 compared to $348,252 during the six months ended June 30, 2020. The increase of $126,828 is mainly the result of the DSUs issued on May 25, 2021 being expensed at a closing price of C$1.40 as compared to the DSUs issued on May 27, 2020 being expensed at a closing price of C$0.90 ($73,233) and the stock options for common shares of the Company issued to its employees and consultants on May 27, 2020 and May 25, 2021 vesting over a period of two years, with only one-third being exercisable upon grant ($53,595).

Other items amounted to expense of $274,753 during the six-month period ended June 30, 2021 compared to income of $372,049 during the six-month period ended June 30, 2020. As a result of the impact of exchange rates on certain of the Company’s U.S. dollar cash balances, the Company had a foreign exchange loss of $298,516 during the six-month period ended June 30, 2021 compared to a gain of $316,091 during the six-month period ended June 30, 2020. The average exchange rate during the six-month period ended June 30, 2021 was C$1 to US$0.8023 compared to C$1 to US$0.7332 during the six-month period ended June 30, 2020. Interest income was $13,763 for the six-month period ended June 30, 2021 compared to $50,666 for the six-month period ended June 30, 2020.  The decrease of $36,903 is primarily due to short-term investment certificates being re-invested upon maturity at a lower interest rate.

Liquidity Risk and Capital Resources

The Company has no revenue generating operations from which it can internally generate funds. To date, the Company has predominantly financed its ongoing operations through the sale of its equity securities by way of public offerings and private placements and the subsequent exercise of share purchase and broker warrants and options issued in connection with such private placements.

As at June 30, 2021, the Company had cash and cash equivalents of $10,617,438 compared to $13,049,293 at December 31, 2020. The decrease of approximately $2.4 million resulted mainly from the expenditures on operating activities of $2.7 million partially offset by a positive foreign currency transaction impact of $0.3 million.

The Company had no cash flows from financing activities during the six-month periods ended June 30, 2021 and 2020.

The Company had no cash flows from investing activities during the six-month periods ended June 30, 2021 and 2020.

21

As at June 30, 2021, the Company had working capital of $10,182,381 compared to working capital of $12,718,381 at December 31, 2020. The Company expects that it will operate at a loss for the foreseeable future, but believes the current cash and cash equivalents will be sufficient for it to complete its PFS and anticipated 2021 work plan at the Livengood Gold Project and satisfy its currently anticipated general and administrative costs through at least the next 12 months.

The Company will require significant additional financing to continue its operations (including general and administrative expenses) in connection with advancing activities at the Livengood Gold Project and the development of any mine that may be determined to be built at the Livengood Gold Project, and there is no assurance that the Company will be able to obtain the additional financing required on acceptable terms, if at all. In addition, any significant delays in the issuance of required permits for the ongoing work at the Livengood Gold Project, or unexpected results in connection with the ongoing work, could result in the Company being required to raise additional funds to advance permitting efforts. The Company’s review of its financing options includes pursuing a future strategic alliance to assist in further development, permitting and future construction costs, although there can be no assurance that any such strategic alliance will, in fact, be realized.

Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able to secure any additional financing in the current or future equity markets. See “Risk Factors – We will require additional financing to fund exploration and, if warranted, development and production. Failure to obtain additional financing could have a material adverse effect on our financial condition and results of operation and could cast uncertainty on our ability to continue as a going concern” included in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Other than cash held by its subsidiaries for their immediate operating needs in the United States, all of the Company’s cash reserves are on deposit with a major Canadian chartered bank. The Company does not believe that the credit, liquidity or market risks with respect thereto have increased as a result of the current market conditions.

Contractual Obligations and Commitments

The following table discloses the Company’s contractual obligations as of June 30, 2021, including anticipated mineral property payments and work commitments. Under the terms of the Company’s mineral property purchase agreements, mineral leases and unpatented mineral claims, the Company is required to make certain scheduled acquisition payments, incur certain levels of expenditures, make lease or advance royalty payments, make payments to government authorities and incur assessment work expenditures (as summarized in the table below) in order to maintain and preserve the Company’s interests in the related mineral properties. If the Company is unable or unwilling to make any such payments or incur any such expenditure, it is likely that the Company would lose or forfeit its rights to acquire or hold the related mineral properties. The following table assumes that the Company retains the rights to all of its current mineral properties, but does not exercise any lease purchase or royalty buyout options:

	Payments Due by Year
	2021		2022		2023		2024		2025		2026 and beyond		Total
Mineral Property Leases(1)	$	0	$	426,972	$	513,715	$	519,136	$	524,625	$	530,183	$	2,514,631
Mining Claim Government Fees		132,460		132,460		132,460		132,460		132,460		132,460		794,760
Total	$	132,460	$	559,432	$	646,175	$	651,596	$	657,085	$	662,643	$	3,309,391

1. Does not include required work expenditures, as it is assumed that the required expenditure level is significantly below the level of work that will actually be carried out by the Company. Does not include potential royalties that may be payable (other than annual minimum royalty payments).

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Environmental Regulations

The operations of the Company may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.

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Certain U.S. Federal Income Tax Considerations for U.S. Holders

The Company has been a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes in recent years and expects to continue to be a PFIC in the future. Current and prospective U.S. shareholders should consult their tax advisors as to the tax consequences of PFIC classification and the U.S. federal tax treatment of PFICs. Additional information on this matter is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, under “Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Certain U.S. Federal Income Tax Considerations for U.S. Holders.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of June 30, 2021, an evaluation was carried out under the supervision of and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of June 30, 2021, the Company’s disclosure controls and procedures were effective in ensuring that information required to be disclosed in reports filed or submitted to the Securities and Exchange Commission under the Exchange Act: (i) is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, in a manner that allows for timely decisions regarding required disclosures.

The effectiveness of our or any system of disclosure controls and procedures, however well designed and operated, can provide only reasonable assurance that the objectives of the system will be met and is subject to certain limitations, including the exercise of judgement in designing, implementing and evaluating controls and procedures and the assumptions used in identifying the likelihood of future events.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Not applicable.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Risk Factors.”

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”). During the three-month period ended June 30, 2021, the Company and its subsidiaries were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

Exhibit  Number	Description
3.1*	Amended and Restated Articles of the Company, as amended on June 21, 2021.
31.1*	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Interim Balance Sheets at June 30, 2021 and December 31, 2020, (ii) the Condensed Consolidated Interim Statements of Operations and Comprehensive Loss for the Three and Six Months ended June 30, 2021 and 2020, (iii) the Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020, (iv) the Condensed Consolidated Interim Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020, and (v) the Notes to the Condensed Consolidated Interim Financial Statements.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*   Filed herewith.

+   Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

International Tower Hill Mines Ltd.

By:	/s/ Karl L. Hanneman
	Karl L. Hanneman
	Chief Executive Officer
	(Principal Executive Officer)
Date: August 6, 2021

By:	/s/ David Cross
	David Cross
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date: August 6, 2021

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EX-3.1

Exhibit 3.1

Incorporation number: BC0175795

INTERNATIONAL TOWER HILL MINES LTD.

(the “Corporation”)

AMENDED AND RESTATED ARTICLES

1. Interpretation

2. Shares and Share Certificates

3. Issue of Shares

4. Share Registers

5. Share Transfers

6. Transmission of Shares

7. Purchase of Shares

8. Borrowing Powers

9. Alterations

10. Meetings of Shareholders

11. Proceedings at Meetings of Shareholders

12. Votes of Shareholders

13. Directors

14. Election and Removal of Directors

15. Alternate Directors

16. Powers and Duties of Directors

17. Disclosure of Interest of Directors

18. Proceedings of Directors

19. Executive and Other Committees

20. Officers

21. Indemnification

22. Dividends and Reserves

23. Documents, Records and Reports

24. Notices

25. Seal

26. Prohibitions

1. Interpretation

1.1 Definitions

In these Articles, unless the context otherwise requires:

(1) “board of directors”, “directors” and “board” mean the directors or sole director of the Corporation for the time being;

(2) “Business Corporations Act” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

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(3) “legal personal representative” means the personal or other legal representative of the shareholder;

(4) “registered address” of a shareholder means the shareholder’s address as recorded in the central securities register;

(5) “seal” means the seal of the Corporation, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

2. Shares and Share Certificates

2.1 Authorized Share Structure

The authorized share structure of the Corporation consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Corporation.

2.2 Form of Share Certificate

Each share certificate issued by the Corporation must comply with, and be signed as required by, the Business Corporations Act.

2.3 Shareholder Entitled to Certificate or Acknowledgment

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Corporation is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

2.4 Delivery by Mail

Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Corporation nor any director, officer or agent of the Corporation is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

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2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

(1) order the share certificate or acknowledgment, as the case may be, to be cancelled; and

(2) issue a replacement share certificate or acknowledgment, as the case may be.

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive:

(1) proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and

(2) any indemnity the directors consider adequate.

2.7 Splitting Share Certificates

If a shareholder surrenders a share certificate to the Corporation with a written request that the Corporation issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Corporation must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.8 Certificate Fee

There must be paid to the Corporation, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act, determined by the directors.

2.9 Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Corporation as holding any share upon any trust, and the Corporation is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

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3. Issue of Shares

3.1 Directors Authorized

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Corporation, the Corporation may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Corporation, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2 Commissions and Discounts

The Corporation may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Corporation from the Corporation or any other person or procuring or agreeing to procure purchasers for shares of the Corporation.

3.3 Brokerage

The Corporation may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4 Conditions of Issue

Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

(1) consideration is provided to the Corporation for the issue of the share by one or more of the following:

(a) past services performed for the Corporation;

(b) property;

(c) money; and

(2) the value of the consideration received by the Corporation equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants and Rights

Subject to the Business Corporations Act, the Corporation may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Corporation from time to time.

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4. Share Registers

4.1 Central Securities Register

As required by and subject to the Business Corporations Act, the Corporation must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2 Closing Register

The Corporation must not at any time close its central securities register.

5. Share Transfers

5.1 Registering Transfers

A transfer of a share of the Corporation must not be registered unless:

(1) a duly signed instrument of transfer in respect of the share has been received by the Corporation;

(2) if a share certificate has been issued by the Corporation in respect of the share to be transferred, that share certificate has been surrendered to the Corporation; and

(3) if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Corporation in respect of the share to be transferred, that acknowledgment has been surrendered to the Corporation.

5.2 Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Corporation must be either in the form, if any, on the back of the Corporation’s share certificates or in any other form that may be approved by the directors from time to time.

5.3 Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Corporation in respect of the transfer.

5.4 Signing of Instrument of Transfer

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a

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complete and sufficient authority to the Corporation and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:

(1) in the name of the person named as transferee in that instrument of transfer; or

(2) if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5 Enquiry as to Title Not Required

Neither the Corporation nor any director, officer or agent of the Corporation is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

5.6 Transfer Fee

There must be paid to the Corporation, in relation to the registration of any transfer, the amount, if any, determined by the directors.

6. Transmission of Shares

6.1 Legal Personal Representative Recognized on Death

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Corporation as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

6.2 Rights of Legal Personal Representative

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Corporation.

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7. Purchase of Shares

7.1 Corporation Authorized to Purchase Shares

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Corporation may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2 Purchase When Insolvent

The Corporation must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1) the Corporation is insolvent; or

(2) making the payment or providing the consideration would render the Corporation insolvent.

7.3 Sale and Voting of Purchased Shares

If the Corporation retains a share redeemed, purchased or otherwise acquired by it, the Corporation may sell, gift or otherwise dispose of the share, but, while such share is held by the Corporation, it:

(1) is not entitled to vote the share at a meeting of its shareholders;

(2) must not pay a dividend in respect of the share; and

(3) must not make any other distribution in respect of the share.

8. Borrowing Powers

The Corporation, if authorized by the directors, may:

(1) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(2) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Corporation or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(4) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Corporation.

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9. Alterations

9.1 Alteration of Authorized Share Structure

(1) Subject to Article 9.3 and the Business Corporations Act, the directors may, by resolution:

(a) create one or more series of shares and if no such shares of such a series are issued, to also attach special rights and restrictions to such series or to alter any such special rights and restrictions;

(b) subdivide all or any of its unissued, or fully paid issued, shares with par value into shares of smaller par value;

(c) subdivide all or any of its unissued, or fully paid issued, shares without par value;

(d) consolidate all or any of its unissued, or fully paid issued, shares with par value into shares of larger par value;

(e) consolidate all or any of its unissued, or fully paid issued, shares without par value;

(f) eliminate any class or series of shares if none of the shares of that class or series of shares are allotted or issued;

(g) change all or any of its unissued, or fully paid issued, shares with par value into shares without par value;

(h) change all or any of its unissued shares without par value into shares with par value; or

(i) alter the identifying name of any of its shares.

(2) Subject to Article 9.3 and the Business Corporations Act, the Corporation may by special resolution:

(a) increase, reduce or eliminate the maximum number of shares that the Corporation is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Corporation is authorized to issue out of any class or series of shares for which no maximum is established; or

(b) otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.2 Special Rights and Restrictions

Subject to Article 9.3 and the Business Corporations Act, the Corporation may by special resolution:

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(1) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2) vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

9.3 No Interference with Class or Series Rights without Consent

A right or special right attached to issued shares must not be prejudiced or interfered with under the Business Corporations Act or under the Notice of Articles or these Articles unless the shareholders holding shares of the class or series of shares to which the right or special right is attached consent by a special separate resolution of those shareholders.

9.4 Change of Name

The Corporation may by directors’ resolution authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

9.5 Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Corporation may by special resolution alter these Articles.

10. Meetings of Shareholders

10.1 Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Corporation must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2 Resolution Instead of Annual General Meeting

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Corporation’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3 Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

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10.4 Notice for Meetings of Shareholders

The Corporation must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Corporation, unless these Articles otherwise provide, at least the following number of days before the meeting:

(1) if and for so long as the Corporation is a public Corporation, 21 days;

(2) otherwise, 10 days.

10.5 Record Date for Notice

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(1) if and for so long as the Corporation is a public Corporation, 21 days;

(2) otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.6 Record Date for Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7 Failure to Give Notice and Waiver of Notice

The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.8 Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

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(1) state the general nature of the special business; and

(2) if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

(a) at the Corporation’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

(b) during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

11. Proceedings at Meetings of Shareholders

11.1 Special Business

At a meeting of shareholders, the following business is special business:

(1) at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(2) at an annual general meeting, all business is special business except for the following:

(a) business relating to the conduct of or voting at the meeting;

(b) consideration of any financial statements of the Corporation presented to the meeting;

(c) consideration of any reports of the directors or auditor;

(d) the setting or changing of the number of directors;

(e) the election or appointment of directors;

(f) the appointment of an auditor;

(g) the setting of the remuneration of an auditor;

(h) business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

(i) any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

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11.2 Special Majority

The majority of votes required for the Corporation to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

11.3 Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

11.4 One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1) the quorum is one person who is, or who represents by proxy, that shareholder, and

(2) that shareholder, present in person or by proxy, may constitute the meeting.

11.5 Other Persons May Attend

The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Corporation, the auditor of the Corporation and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.6 Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.7 Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1) in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

(2) in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

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11.8 Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.9 Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1) the chair of the board, if any; or

(2) if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

11.10 Selection of Alternate Chair

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.11 Adjournments

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.12 Notice of Adjourned Meeting

It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.13 Decisions by Show of Hands or Poll

Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

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11.14 Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.15 Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16 Casting Vote

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

11.17 Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1) the poll must be taken:

(a) at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

(b) in the manner, at the time and at the place that the chair of the meeting directs;

(2) the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(3) the demand for the poll may be withdrawn by the person who demanded it.

11.18 Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.19 Chair Must Resolve Dispute

In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

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11.20 Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.21 Demand for Poll

No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.22 Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23 Retention of Ballots and Proxies

The Corporation must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Corporation may destroy such ballots and proxies.

12. Votes of Shareholders

12.1 Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1) on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(2) on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2 Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3 Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

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(1) any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(2) if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4 Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5 Representative of a Corporate Shareholder

If a corporation, that is not a subsidiary of the Corporation, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Corporation, and:

(1) for that purpose, the instrument appointing a representative must:

(a) be received at the registered office of the Corporation or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(b) be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

(2) if a representative is appointed under this Article 12.5:

(a) the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

(b) the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Corporation by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6 Proxy Provisions Do Not Apply to All Companies

If and for so long as the Corporation is a public Corporation or a pre-existing reporting Corporation which has the Statutory Reporting Corporation Provisions as part of its Articles or to which the Statutory Reporting Corporation Provisions apply, 12.7 to 12.15 apply only insofar as they are not

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inconsistent with any securities legislation in any province or territory of Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Corporation and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities commissions or similar authorities appointed under that legislation.

12.7 Appointment of Proxy Holders

Every shareholder of the Corporation, including a corporation that is a shareholder but not a subsidiary of the Corporation, entitled to vote at a meeting of shareholders of the Corporation may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8 Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.9 When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1) the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

(2) the Corporation has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

(3) the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10 Deposit of Proxy

A proxy for a meeting of shareholders must:

(1) be received at the registered office of the Corporation or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2) unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

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A proxy may be sent to the Corporation by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11 Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1) at the registered office of the Corporation, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2) by the chair of the meeting, before the vote is taken.

12.12 Form of Proxy

A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[name of Corporation]

(the “Corporation”)

The undersigned, being a shareholder of the Corporation, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Corporation to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder):

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder—printed]

12.13 Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

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(1) received at the registered office of the Corporation at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2) provided, at the meeting, to the chair of the meeting.

12.14 Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

(1) if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;

(2) if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15 Production of Evidence of Authority to Vote

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

13. Directors

13.1 First Directors; Number of Directors

The first directors are the persons designated as directors of the Corporation in the Notice of Articles that applies to the Corporation when it is recognized under the Business Corporations Act. The number of directors, excluding additional directors appointed under Article 14.8, is set at:

(1) subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Corporation’s first directors;

(2) if the Corporation is a public Corporation, the greater of three and the most recently set of:

(a) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b) the number of directors set under Article 14.4;

(3) if the Corporation is not a public Corporation, the most recently set of:

(a) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b) the number of directors set under Article 14.4.

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13.2 Change in Number of Directors

If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a):

(1) the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;

(2) if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3 Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4 Qualifications of Directors

A director is not required to hold a share in the capital of the Corporation as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.5 Remuneration of Directors

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Corporation as such, who is also a director.

13.6 Reimbursement of Expenses of Directors

The Corporation must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Corporation.

13.7 Special Remuneration for Directors

If any director performs any professional or other services for the Corporation that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Corporation’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

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13.8 Gratuity, Pension or Allowance on Retirement of Director

Unless otherwise determined by ordinary resolution, the directors on behalf of the Corporation may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Corporation or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

14. Election and Removal of Directors

14.1 Election at Annual General Meeting

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

(1) the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

(2) all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2 Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1) that individual consents to be a director in the manner provided for in the Business Corporations Act;

(2) that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

(3) with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

14.3 Failure to Elect or Appoint Directors

If:

(1) the Corporation fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or

(2) the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

(3) the date on which his or her successor is elected or appointed; and

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(4) the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.4 Places of Retiring Directors Not Filled

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Corporation is deemed to be set at the number of directors actually elected or continued in office.

14.5 Directors May Fill Casual Vacancies

Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6 Remaining Directors Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Corporation has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

14.7 Shareholders May Fill Vacancies

If the Corporation has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8 Additional Directors

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

(1) one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

(2) in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

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14.9 Ceasing to be a Director

A director ceases to be a director when:

(1) the term of office of the director expires;

(2) the director dies;

(3) the director resigns as a director by notice in writing provided to the Corporation or a lawyer for the Corporation; or

(4) the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10 Removal of Director by Shareholders

The Corporation may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11 Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a Corporation and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

14.12 Nomination of Directors

(1) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board may be made at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:

(a) by or at the direction of the board, including pursuant to a notice of meeting;

(b) by or at the direction or request of one or more shareholders pursuant to a “proposal” made in accordance with Division 7 of Part 5 of the Business Corporations Act, or a requisition of the shareholders made in accordance with section 167 of the Business Corporations Act; or

(c) by any person (a “Nominating Shareholder”):

(i) who, at the close of business on the date of the giving by the Nominating Shareholder of the notice provided for below in this Article 14.12 and at the close of business on the record date for notice of such meeting, is entered in the

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securities register of the Company as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting, and

(ii) who complies with the notice procedures set forth below in this Article 14.12.

(2) In addition to any other requirements under applicable laws, for a nomination to be made by Nominating Shareholder, the Nominating Shareholder must have given notice thereof that is both timely (in accordance with paragraph 3 below) and in proper written form (in accordance with paragraph 4 below) to the Secretary of the Company at the principal executive offices of the Company.

(3) To be timely, a Nominating Shareholder’s notice to the Secretary of the Company must be made:

(a) in the case of an annual meeting of shareholders, not less than thirty (30) nor more than sixty-five (65) days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than fifty (50) days after the date (the “Notice Date”) on which the first public announcement of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the tenth (10th) day following the Notice Date; and

(b) in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made.

The time periods for the giving of a Nominating Shareholder’s notice set forth above shall in all cases be determined based on the original date of the applicable annual meeting or special meeting of shareholders, and in no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of such notice.

(4) To be in proper written form, a Nominating Shareholder’s notice to the Secretary of the Company must set forth:

(a) as to each person whom the Nominating Shareholder proposes to nominate for election as a director:

(i) the name, age, business address and residential address of the person,

(ii) the present principal occupation, business or employment of the person within the preceding five years, as well as the name and principal business of any company in which such employment is carried on,

(iii) the citizenship of such person,

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(iv) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice, and

(v) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below); and

(b) as to the Nominating Shareholder giving the notice, full particulars regarding any proxy, contract, agreement, arrangement or understanding pursuant to which such Nominating Shareholder has a right to vote or direct the voting of any shares of the Company and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below).

The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder's understanding of the independence, or lack thereof, of such proposed nominee.

(5) No person shall be eligible for election as a director unless nominated in accordance with the provisions of this Article 14.12; provided, however, that nothing in this Article 14.12 shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of any matter that is properly before such meeting pursuant to the provisions of the Business Corporations Act or the discretion of the Chairman of the meeting. The Chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

(6) For purposes of this Article 14.12:

(a) “Applicable Securities Laws” means:

(i) the applicable securities legislation of each relevant province and territory of Canada in which the Company is a reporting issuer, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada in which the Company is a reporting issuer, and

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(ii) the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, including, without limitation, Regulation 14A; and

(b) “public announcement” means disclosure in a press release reported by a national news service in Canada or the United States, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com or publicly filed with the US Securities and Exchange Commission.

(7) Notwithstanding any other provision of this Article 14.12, notice given to the Secretary of the Company pursuant to this Article 14.12 may only be given by personal delivery or facsimile transmission, and shall be deemed to have been given and made only at the time it is served by personal delivery to the Secretary at the address of the principal executive offices of the Company or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received); provided that if such delivery or facsimile communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the next following day that is a business day.

(8) Notwithstanding the foregoing, the Board may, in its sole distraction, waive any requirement in this Article 14.12.

15. Alternate Directors

15.1 Appointment of Alternate Director

Any director (an “appointor”) may by notice in writing received by the Corporation appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Corporation.

15.2 Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3 Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

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(1) will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(2) has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(3) will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;

(4) has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

15.4 Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5 Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6 Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Corporation, revoke the appointment of an alternate director appointed by him or her.

15.7 Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

(1) his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;

(2) the alternate director dies;

(3) the alternate director resigns as an alternate director by notice in writing provided to the Corporation or a lawyer for the Corporation;

(4) the alternate director ceases to be qualified to act as a director; or

(5) his or her appointor revokes the appointment of the alternate director.

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15.8 Remuneration and Expenses of Alternate Director

The Corporation may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Corporation such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

16. Powers and Duties of Directors

16.1 Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Corporation and have the authority to exercise all such powers of the Corporation as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Corporation.

16.2 Appointment of Attorney of Corporation

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Corporation for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

17. Disclosure of Interest of Directors

17.1 Obligation to Account for Profits

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Corporation has entered or proposes to enter is liable to account to the Corporation for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

17.2 Restrictions on Voting by Reason of Interest

A director who holds a disclosable interest in a contract or transaction into which the Corporation has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

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17.3 Interested Director Counted in Quorum

A director who holds a disclosable interest in a contract or transaction into which the Corporation has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

17.4 Disclosure of Conflict of Interest or Property

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

17.5 Director Holding Other Office in the Corporation

A director may hold any office or place of profit with the Corporation, other than the office of auditor of the Corporation, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

17.6 No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Corporation either with regard to the holding of any office or place of profit the director holds with the Corporation or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Corporation in which a director is in any way interested is liable to be voided for that reason.

17.7 Professional Services by Director or Officer

Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Corporation, except as auditor of the Corporation, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

17.8 Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Corporation may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Corporation for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

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18. Proceedings of Directors

18.1 Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors or the Chief Executive Officer of the Corporation may from time to time determine.

18.2 Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3 Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1) the chair of the board, if any;

(2) in the absence of the chair of the board, the president, if any, if the president is a director; or

(3) any other director chosen by the directors if:

(a) neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

(b) neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

(c) the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4 Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

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18.5 Calling of Meetings

A director may, and the secretary or an assistant secretary of the Corporation, if any, on the request of a director must, call a meeting of the directors at any time.

18.6 Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7 When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1) the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(2) the director or alternate director, as the case may be, has waived notice of the meeting.

18.8 Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

18.9 Waiver of Notice of Meetings

Any director or alternate director may send to the Corporation a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Corporation, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

18.10 Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is a majority of the directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

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18.11 Validity of Acts Where Appointment Defective

Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

18.12 Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors may be passed without a meeting:

(1) in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

(2) in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing.

A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

19. Executive and Other Committees

19.1 Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

(1) the power to fill vacancies in the board of directors;

(2) the power to remove a director;

(3) the power to change the membership of, or fill vacancies in, any committee of the directors; and

(4) such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

19.2 Appointment and Powers of Other Committees

The directors may, by resolution:

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(1) appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(2) delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

(a) the power to fill vacancies in the board of directors;

(b) the power to remove a director;

(c) the power to change the membership of, or fill vacancies in, any committee of the directors; and

(d) the power to appoint or remove officers appointed by the directors; and

(3) make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

19.3 Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1) conform to any rules that may from time to time be imposed on it by the directors; and

(2) report every act or thing done in exercise of those powers at such times as the directors may require.

19.4 Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

(1) revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;

(2) terminate the appointment of, or change the membership of, the committee; and

(3) fill vacancies in the committee.

19.5 Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1) the committee may meet and adjourn as it thinks proper;

(2) the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time

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set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(3) a majority of the members of the committee constitutes a quorum of the committee; and

(4) questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

20. Officers

20.1 Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

20.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

(1) determine the functions and duties of the officer;

(2) entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(3) revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3 Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one position as an officer of the Corporation. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

20.4 Remuneration and Terms of Appointment

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Corporation, a pension or gratuity.

21. Indemnification

21.1 Definitions

In this Article 21:

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(1) “eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(2) “eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Corporation (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Corporation:

(a) is or may be joined as a party; or

(b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3) “expenses” has the meaning set out in the Business Corporations Act.

21.2 Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act, the Corporation must indemnify a director, former director or alternate director of the Corporation and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Corporation must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Corporation on the terms of the indemnity contained in this Article 21.2.

21.3 Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act, the Corporation may indemnify any person.

21.4 Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Corporation to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5 Corporation May Purchase Insurance

The Corporation may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

(1) is or was a director, alternate director, officer, employee or agent of the Corporation;

(2) is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Corporation;

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(3) at the request of the Corporation, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

(4) at the request of the Corporation, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity; against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

22. Dividends

22.1 Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2 Declaration of Dividends

Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

22.3 No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

22.4 Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

22.5 Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Corporation, or in any one or more of those ways.

22.6 Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(1) set the value for distribution of specific assets;

(2) determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

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(3) vest any such specific assets in trustees for the persons entitled to the dividend.

22.7 When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

22.8 Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

22.9 Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

22.10 Dividend Bears No Interest

No dividend bears interest against the Corporation.

22.11 Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

22.12 Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

22.13 Capitalization of Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Corporation and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Corporation as a dividend representing the surplus or any part of the surplus.

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23. Accounting Records

23.1 Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Corporation and to comply with the Business Corporations Act.

23.2 Inspection of Accounting Records

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Corporation is entitled to inspect or obtain a copy of any accounting records of the Corporation.

24. Notices

24.1 Method of Giving Notice

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1) mail addressed to the person at the applicable address for that person as follows:

(a) for a record mailed to a shareholder, the shareholder’s registered address;

(b) for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Corporation or the mailing address provided by the recipient for the sending of that record or records of that class;

(c) in any other case, the mailing address of the intended recipient;

(2) delivery at the applicable address for that person as follows, addressed to the person:

(a) for a record delivered to a shareholder, the shareholder’s registered address;

(b) for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Corporation or the delivery address provided by the recipient for the sending of that record or records of that class;

(c) in any other case, the delivery address of the intended recipient;

(3) sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(4) sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

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(5) physical delivery to the intended recipient.

24.2 Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3 Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Corporation or of any other corporation acting in that behalf for the Corporation stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

24.4 Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Corporation to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

24.5 Notice to Trustees

A notice, statement, report or other record may be provided by the Corporation to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(1) mailing the record, addressed to them:

(a) by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and

(b) at the address, if any, supplied to the Corporation for that purpose by the persons claiming to be so entitled; or

(2) if an address referred to in paragraph (1)(b) has not been supplied to the Corporation, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

25. Seal

25.1 Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Corporation’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1) any two directors;

(2) any officer, together with any director;

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(3) if the Corporation only has one director, that director; or

(4) any one or more directors or officers or persons as may be determined by the directors.

25.2 Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Corporation or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3 Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Corporation as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Corporation, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Corporation are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

26. Prohibitions

26.1 Definitions

In this Article 26:

(1) “designated security” means:

(a) a voting security of the Corporation;

(b) a security of the Corporation that is not a debt security and that carries a residual right to participate in the earnings of the Corporation or, on the liquidation or winding up of the Corporation, in its assets; or

(c) a security of the Corporation convertible, directly or indirectly, into a security described in paragraph (a) or (b);

(2) “security” has the meaning assigned in the Securities Act (British Columbia);

(3) “voting security” means a security of the Corporation that:

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(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.

26.2 Application

Article 26.3 does not apply to the Corporation if and for so long as it is a public Corporation or a pre-existing reporting Corporation which has the Statutory Reporting Corporation Provisions as part of its Articles or to which the Statutory Reporting Corporation Provisions apply.

26.3 Consent Required for Transfer of Shares or Designated Securities

No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

Full Name and Signature of Director	Date of Signing
(signed) “Karl Hanneman”	May 28, 2021
Karl Hanneman

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Karl L. Hanneman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of International Tower Hill Mines Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 6, 2021	By:	/s/ Karl L. Hanneman
		Karl L. Hanneman
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, David Cross, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of International Tower Hill Mines Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 6, 2021	By:	/s/ David Cross
		David Cross
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of International Tower Hill Mines Ltd. (the "Company"), for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Karl L. Hanneman, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 6, 2021	By:	/s/ Karl L. Hanneman
		Karl L. Hanneman
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of International Tower Hill Mines Ltd. (the "Company"), for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David Cross, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 6, 2021	By:	/s/ David Cross
		David Cross
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Document and Entity Information	6 Months Ended
	Jun. 30, 2021 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-33638
Entity Incorporation, State or Country Code	A1
Entity Address, City or Town	CA
Entity Address, State or Province	BC
Entity Address, Address Line One	2710 - 200 Granville Street
Entity Address, Address Line Two	Vancouver
Entity Address, Postal Zip Code	V6C 1S4
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	INTERNATIONAL TOWER HILL MINES LTD.
Entity Central Index Key	0001134115
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Title of 12(b) Security	Common Shares, no par value
Trading Symbol	THM
Security Exchange Name	NYSEAMER
Entity Common Stock, Shares Outstanding	194,908,184
City Area Code	604
Local Phone Number	683-6332
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false

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CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current
Cash and cash equivalents	$ 10,617,438	$ 13,049,293
Prepaid expenses and other	244,412	162,079
Total current assets	10,861,850	13,211,372
Property and equipment	7,463	7,832
Capitalized acquisition costs	55,375,124	55,375,124
Total assets	66,244,437	68,594,328
Current liabilities
Accounts payable	376,636	199,026
Accrued liabilities	302,833	293,965
Total liabilities	679,469	492,991
Shareholders' equity
Share capital, no par value; unlimited number of authorized shares; 194,908,184 shares issued and outstanding at June 30, 2021 and December 31, 2020	288,032,132	288,032,132
Contributed surplus	35,929,885	35,454,805
Accumulated other comprehensive income	2,063,665	1,759,228
Deficit	(260,460,714)	(257,144,828)
Total shareholders' equity	65,564,968	68,101,337
Total liabilities and shareholders' equity	$ 66,244,437	$ 68,594,328

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CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (parenthetical) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized, Unlimited	Unlimited	Unlimited
Common Stock, Shares, Issued	194,908,184	194,908,184
Common Stock, Shares, Outstanding	194,908,184	194,908,184

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Operating expenses
Consulting fees	$ 421,664	$ 340,576	$ 481,665	$ 380,995
Depreciation	342	442	369	885
Insurance	47,027	35,662	87,937	66,886
Investor relations	41,700	31,558	53,893	42,048
Mineral property exploration	1,125,316	536,603	1,665,070	652,023
Office	8,820	6,107	13,405	13,727
Other	4,826	5,190	8,084	9,082
Professional fees	50,019	37,040	96,660	89,160
Regulatory	32,983	19,083	133,006	80,256
Rent	33,688	33,939	67,644	67,872
Travel	4,480	3,599	6,988	5,761
Wages and benefits	263,162	230,203	426,412	384,733
Total operating expenses	(2,034,027)	(1,280,002)	(3,041,133)	(1,793,428)
Other income (expenses)
Gain/(loss) on foreign exchange	(157,829)	(225,095)	(298,516)	316,091
Interest income	3,842	13,341	13,763	50,666
Other income	10,000	5,292	10,000	5,292
Total other income (expenses)	(143,987)	(206,462)	(274,753)	372,049
Net income (loss) for the period	(2,178,014)	(1,486,464)	(3,315,886)	(1,421,379)
Other comprehensive income (loss)
Exchange difference on translating foreign operations	161,045	230,652	304,437	(322,682)
Total other comprehensive income (loss) for the period	161,045	230,652	304,437	(322,682)
Comprehensive loss for the period	$ (2,016,969)	$ (1,255,812)	$ (3,011,449)	$ (1,744,061)
Basic and diluted loss per share	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.01)
Weighted average number of shares outstanding - basic and diluted	194,908,184	187,573,671	194,908,184	187,573,671

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	Common stock [Member]	Contributed surplus [Member]	Accumulated other comprehensive income [Member]	Deficit [Member]	Total
Balance at Dec. 31, 2019	$ 278,213,801	$ 35,069,274	$ 1,574,011	$ (252,626,110)	$ 62,230,976
Balance (in shares) at Dec. 31, 2019	187,573,671
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation-options	$ 0	53,635	0	0	53,635
Stock-based compensation-DSUs	0	294,617	0	0	294,617
Exchange difference on translating foreign operations	0	0	(322,682)	0	(322,682)
Net income (loss)	0	0	0	(1,421,379)	(1,421,379)
Balance at Jun. 30, 2020	$ 278,213,801	35,417,526	1,251,329	(254,047,489)	60,835,167
Balance (in shares) at Jun. 30, 2020	187,573,671
Balance at Mar. 31, 2020	$ 278,213,801	35,069,274	1,020,677	(252,561,025)	61,742,727
Balance (in shares) at Mar. 31, 2020	187,573,671
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation-options		53,635			53,635
Stock-based compensation-DSUs		294,617			294,617
Exchange difference on translating foreign operations			230,652		230,652
Net income (loss)				(1,486,464)	(1,486,464)
Balance at Jun. 30, 2020	$ 278,213,801	35,417,526	1,251,329	(254,047,489)	60,835,167
Balance (in shares) at Jun. 30, 2020	187,573,671
Balance at Dec. 31, 2020	$ 288,032,132	35,454,805	1,759,228	(257,144,828)	$ 68,101,337
Balance (in shares) at Dec. 31, 2020	194,908,184				194,908,184
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation-options	$ 0	107,230	0	0	$ 107,230
Stock-based compensation-DSUs	0	367,850	0	0	367,850
Exchange difference on translating foreign operations	0	0	304,437	0	304,437
Net income (loss)	0	0	0	(3,315,886)	(3,315,886)
Balance at Jun. 30, 2021	$ 288,032,132	35,929,885	2,063,665	(260,460,714)	$ 65,564,968
Balance (in shares) at Jun. 30, 2021	194,908,184				194,908,184
Balance at Mar. 31, 2021	$ 288,032,132	35,473,776	1,902,620	(258,282,700)	$ 67,125,828
Balance (in shares) at Mar. 31, 2021	194,908,184
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation-options	$ 0	88,259	0	0	88,259
Stock-based compensation-DSUs	0	367,850	0	0	367,850
Exchange difference on translating foreign operations	0	0	161,045	0	161,045
Net income (loss)	0	0	0	(2,178,014)	(2,178,014)
Balance at Jun. 30, 2021	$ 288,032,132	$ 35,929,885	$ 2,063,665	$ (260,460,714)	$ 65,564,968
Balance (in shares) at Jun. 30, 2021	194,908,184				194,908,184

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating Activities
Loss for the period	$ (3,315,886)	$ (1,421,379)
Add items not affecting cash:
Depreciation	369	885
Stock-based compensation-options	107,230	53,635
Stock-based compensation-DSUs	367,850	294,617
Changes in non-cash items:
Accounts receivable	22,696	103,194
Prepaid expenses and other	(101,908)	(75,260)
Accounts payable and accrued liabilities	183,500	(87,358)
Cash used in operating activities	(2,736,149)	(1,131,666)
Effect of foreign exchange on cash	304,294	(315,828)
Change in cash and cash equivalents	(2,431,855)	(1,447,494)
Cash and cash equivalents, beginning of the period	13,049,293	6,937,621
Cash and cash equivalents, end of the period	$ 10,617,438	$ 5,490,127

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GENERAL INFORMATION, NATURE OF OPERATIONS

6 Months Ended

Jun. 30, 2021

GENERAL INFORMATION, NATURE OF OPERATIONS

GENERAL INFORMATION, NATURE OF OPERATIONS

1.    GENERAL INFORMATION AND NATURE OF OPERATIONS

International Tower Hill Mines Ltd. (“ITH” or the “Company”) is incorporated under the laws of British Columbia, Canada. The Company’s head office address is 2710 - 200 Granville Street, Vancouver, British Columbia, Canada.

International Tower Hill Mines Ltd. consists of ITH and its wholly-owned subsidiaries Tower Hill Mines, Inc. (“TH Alaska”) (an Alaska corporation), Tower Hill Mines (US) LLC (“TH US”) (a Colorado limited liability company), and Livengood Placers, Inc. (“LPI”) (a Nevada corporation). The Company is in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed. At June 30, 2021, the Company has a 100% interest in its Livengood Gold Project, an exploration-stage project in Alaska, U.S.A.

These unaudited condensed consolidated interim financial statements have been prepared on a going-concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.

As at June 30, 2021, the Company had cash and cash equivalents of $10,617,438 compared to $13,049,293 at December 31, 2020. The Company has no revenue generating operations from which it can internally generate funds.

The Company will require significant additional financing to continue its operations (including general and administrative expenses) in connection with advancing activities at the Livengood Gold Project and the development of any mine that may be determined to be built at the Livengood Gold Project.  There is no assurance that the Company will make a decision to build a mine at the Livengood Gold Project and, if so, that it will be able to obtain the additional financing required on acceptable terms, if at all. In addition, any significant delays in the issuance of required permits for the ongoing work at the Livengood Gold Project, or unexpected results in connection with the ongoing work, could result in the Company being required to raise additional funds to advance permitting efforts. The Company’s review of its financing options includes pursuing a future strategic alliance to assist in further development, permitting and future construction costs, although there can be no assurance that any such strategic alliance will, in fact, be realized.

Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able to secure any additional financing in the current or future equity markets. The amount of funds to be raised and the terms of any proposed equity financing that may be undertaken will be negotiated by management as opportunities to raise funds arise. Specific plans related to the use of proceeds will be devised once financing has been completed and management knows what funds will be available for these purposes.

COVID-19 Pandemic

In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak, including as a result of the emergence of variant strains of the virus and ongoing vaccination efforts, and its ultimate effects on the Company’s business, results of operations or ability to raise funds at this time, as of the date of this Quarterly Report on Form 10-Q, the COVID-19 pandemic has not had any material adverse effects on the Company.

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2021

BASIS OF PRESENTATION

BASIS OF PRESENTATION

2.    BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020 as filed in our Annual Report on Form 10-K. In the opinion of the Company’s management, these financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position at June 30, 2021 and the results of its operations for the six months then ended. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. These judgments, estimates and assumptions are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. While management believes the estimates to be reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

On August 5, 2021, the Board of Directors of the Company (the “Board”) approved these condensed consolidated interim financial statements.

Basis of consolidation

These condensed consolidated interim financial statements include the accounts of ITH and its wholly-owned subsidiaries TH Alaska, TH US, and LPI. All intercompany transactions and balances have been eliminated.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2021

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

3.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these financial instruments.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows:

● 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.

There were no financial instruments measured at fair value.

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MINERAL PROPERTY

6 Months Ended

Jun. 30, 2021

MINERAL PROPERTY

MINERAL PROPERTY

4.    MINERAL PROPERTY

The Company had the following activity related to the mineral property:

Capitalized acquisition costs	Amount
Balance, December 31, 2020	$	55,375,124
Acquisition costs		—
Balance, June 30, 2021	$	55,375,124

The following table presents costs incurred for exploration and evaluation activities for the six months ended June 30, 2021 and 2020:

	June 30, 2021		June 30, 2020
Exploration costs:
Aircraft	$	8,400	$	—
Environmental		110,890		80,189
Equipment rental		29,923		23,363
Field costs		60,040		49,942
Geological/geophysical		969,428		54,906
Land maintenance and tenure		423,096		425,212
Legal		60,385		12,947
Transportation and travel		2,908		5,464
Total expenditures for the period	$	1,665,070	$	652,023

Livengood Gold Project Property

The Livengood property is located in the Tintina gold belt approximately 70 miles (113 kilometers) northwest of Fairbanks, Alaska. The property consists of land leased from the Alaska Mental Health Trust, a number of smaller private mineral leases, Alaska state mining claims purchased or located by the Company and patented ground held by the Company.

Details of the leases are as follows:

a) A lease of the Alaska Mental Health Trust mineral rights having a term beginning July 1, 2004 and extending 19 years until June 30, 2023, subject to further extensions beyond June 30, 2023 by either commercial production or payment of an advance minimum royalty equal to 125% of the amount paid in year 19 and diligent pursuit of development. The lease requires minimum work expenditures and advance minimum royalties (all of which minimum royalties are recoverable from production royalties) which escalate annually with inflation. A net smelter return (“NSR”) production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to the lessor with respect to the lands subject to this lease. In addition, an NSR production royalty of l% is payable to the lessor with respect to the unpatented federal mining claims subject to the lease described in b) below and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of gold) is payable to the lessor with respect to the lands acquired by the Company as a result of the purchase of LPI in December 2011. During the six months ended June 30, 2021 and from the inception of this lease, the Company has paid $342,688 and $3,993,856, respectively.

b) A lease of federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003 and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3% (depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for $1,000,000. During the six months ended June 30, 2021 and from the inception of this lease, the Company has paid $50,000 and $880,000, respectively.

c) A lease of patented lode mining claims having an initial term of ten years commencing January 18, 2007, and continuing for so long thereafter as advance minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date through January 18, 2017 and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of 3% is payable to the lessors. The Company may purchase all interests of the lessors in the leased property (including the production royalty) for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which $500,000 is payable in cash over four years following the closing of the purchase and the balance is payable by way of the 3% NSR production royalty. The Company paid $15,000 of royalties during the six months ended June 30, 2021, for a total of $265,000 from the inception of this lease. The Company has acquired a 40% interest in the mining claims subject to the lease, providing the Company with a 40% interest in the lease.

d) A lease of unpatented federal lode mining and federal unpatented placer claims having an initial term of ten years commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $15,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). The Company is required to pay the lessor the additional sum of $250,000 upon making a positive production decision, of which $125,000 is payable within 120 days of the decision and $125,000 is payable within a year of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the lessor. The Company may purchase all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000. The Company paid $15,000 of royalties during the six months ended June 30, 2021, for a total of $188,000 from the inception of this lease.

Title to mineral properties

The acquisition of title to mineral properties is a detailed and time-consuming process. The Company has taken steps to verify title to mineral properties in which it has an interest. Although the Company has taken every reasonable precaution to ensure that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured.

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ACCRUED LIABILITIES

6 Months Ended

Jun. 30, 2021

ACCRUED LIABILITIES

ACCRUED LIABILITIES

5.    ACCRUED LIABILITIES

The following table presents the accrued liabilities balances at June 30, 2021 and December 31, 2020.

	June 30, 2021		December 31, 2020
Accrued liabilities	$	266,070	$	227,459
Accrued salaries and benefits		36,763		66,506
Total accrued liabilities	$	302,833	$	293,965

Accrued liabilities at June 30, 2021 include accruals for general corporate costs and project costs of $39,191 and $226,879, respectively. Accrued liabilities at December 31, 2020 include accruals for general corporate costs and project costs of $51,151 and $176,308, respectively.

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SHARE CAPITAL

6 Months Ended

Jun. 30, 2021

SHARE CAPITAL

SHARE CAPITAL

6.    SHARE CAPITAL

Authorized

The Company's authorized share capital consists of an unlimited number of common shares without par value. At December 31, 2020 and June 30, 2021, there were 194,908,184 shares issued and outstanding.

Share issuances

There were no share issuances during the six months ended June 30, 2021.

Stock options

The Company adopted an incentive stock option plan in 2006, as amended September 19, 2012 and reapproved by the Company’s shareholders on May 28, 2015, May 30, 2018, and May 25, 2021 (the “Stock Option Plan”). The essential elements of the Stock Option Plan provide that the aggregate number of common shares of the Company that may be issued pursuant to options granted under the Stock Option Plan and any other share-based compensation arrangements may not exceed 10% of the number of issued shares of the Company at the time of the granting of the options. Options granted under the Stock Option Plan will have a maximum term of ten years. The exercise price of options granted under the Stock Option Plan shall be fixed in compliance with the applicable provisions of the Toronto Stock Exchange ("TSX") Company Manual in force at the time of grant and, in any event, shall not be less than the closing price of the Company’s common shares on the TSX on the trading day immediately preceding the day on which the option is granted, or such other price as may be agreed to by the Company and accepted by the TSX. Options granted under the Stock Option Plan vest immediately, unless otherwise determined by the directors at the date of grant.

A summary of the options granted under the Stock Option Plan as of June 30, 2021 and December 31, 2020 is presented below:

	Six Months Ended					Year Ended
	June 30, 2021					December 31, 2020
		Weighted					Weighted
		Average		Aggregate			Average		Aggregate
	Number of	Exercise Price		Intrinsic Value		Number of	Exercise Price		Intrinsic Value
	Options	(C$)		(C$)		Options	(C$)		(C$)
Balance, beginning of the period	2,707,049	$	0.94			2,452,049	$	0.94
Granted	240,000	$	1.31			255,000		0.92
Balance, end of the period	2,947,049	$	0.97	$	975,808	2,707,049	$	0.94	$	2,287,262

The weighted average remaining life of options outstanding at June 30, 2021 was 2.5 years.

Stock options outstanding are as follows:

	June 30, 2021				December 31, 2020
	Exercise		Number of		Exercise		Number of
Expiry Date	Price (C$)		Options	Exercisable	Price (C$)		Options	Exercisable
February 25, 2022	$	1.11	510,000	510,000	$	1.11	510,000	510,000
February 25, 2022	$	0.73	270,000	270,000	$	0.73	270,000	270,000
March 10, 2022	$	1.11	120,000	120,000	$	1.11	120,000	120,000
March 16, 2023	$	1.00	580,000	580,000	$	1.00	580,000	580,000
March 16, 2023	$	0.50	130,000	130,000	$	0.50	130,000	130,000
June 9, 2023	$	1.00	30,000	30,000	$	1.00	30,000	30,000
March 21, 2024	$	0.61	374,817	374,817	$	0.61	374,817	374,817
February 1, 2025	$	1.35	250,000	250,000	$	1.35	250,000	250,000
August 8, 2025	$	0.85	187,232	187,232	$	0.85	187,232	187,232
May 27, 2026	$	0.92	255,000	170,000	$	0.92	255,000	85,000
May 25, 2027	$	1.31	240,000	80,000		—	—	—
			2,947,049	2,702,049			2,707,049	2,537,049

A summary of the non-vested options as of June 30, 2021 and changes during the six months ended June 30, 2021 is as follows:

		Weighted average
	Number of	grant-date fair value
Non-vested options:	options	(C$)
Outstanding at December 31, 2020	170,000	$	0.76
Granted	240,000	$	0.98
Vested	(165,000)	$	0.87
Outstanding at June 30, 2021	245,000	$	0.91

At June 30, 2021, there was unrecognized compensation expense of C$174,225 related to non-vested options outstanding. The cost is expected to be recognized over a weighted-average remaining period of approximately 1.3 years.

Deferred Share Unit Incentive Plan

On April 4, 2017, the Company adopted a Deferred Share Unit Plan (the “DSU Plan”). The DSU Plan was approved  by the Company's shareholders on May 24, 2017 and reapproved by the Company's shareholders on May 27, 2020 and May 25, 2021. The maximum aggregate number of common shares that may be issued under the DSU Plan and the Stock Option Plan is 10% of the number of issued and outstanding common shares (on a non-diluted basis).

During the six months ended June 30, 2021, the Company granted each of the members of the Board (other than those directors nominated for election by Paulson& Co. Inc.) 63,359 deferred share units (“DSUs”) with a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five days immediately preceding the grant) of C$1.31 per DSU, representing C$83,000 per director or C$415,000 in the aggregate.

The DSUs entitle the holders to receive common shares of the Company without the payment of any consideration. The DSUs vested immediately upon being granted but the common shares underlying the DSUs are not deliverable to the holder until the holder is no longer serving on the Board.

DSUs outstanding are as follows:

	Six Months Ended			Year Ended
	June 30, 2021			December 31, 2020
		Weighted Average			Weighted
	Number of	Exercise Price		Number of	Average Exercise
	Units	(C$)		Units	Price (C$)
Balance, beginning of the period	1,834,481	$	0.81	1,383,396	$	0.77
Issued	316,795	$	1.31	451,085	$	0.92
Balance, end of the period	2,151,276	$	0.88	1,834,481	$	0.81

Share-based payments

During the six-month period ended June 30, 2021, there were 240,000 stock options granted under the Stock Option Plan and 316,795 DSUs for common shares of the Company under the DSU Plan. Share-based payment compensation for the six months ended June 30, 2021 totaled $475,080 ($107,230 related to stock options and $367,850 related to DSUs). Of the total expense for the period ended June 30, 2021, $376,410 was included in consulting fees ($8,560 related to stock options and $367,850 related to DSUs), $6,578 was included in investor relations, and $92,092 was included in wages and benefits in the statement of operations and comprehensive loss.

During the six-month period ended June 30, 2020, there were 255,000 stock options granted under the Stock Option Plan and 451,085 DSUs for common shares of the Company under the DSU Plan. Share-based payment compensation for the six months ended June 30, 2020 totaled $348,252 ($53,635 related to stock options and $294,617 related to DSUs). Of the total expense for the period ended June 30, 2020, $300,927 was included in consulting fees ($6,310 related to stock options and $294,617 related to DSUs), $3,155 was included in investor relations, and $44,170 was included in wages and benefits in the statement of operations and comprehensive loss.

	YTD June 30, 2021
Expected life of options		6 years
Risk-free interest rate		0.99%
Annualized volatility		81.22%
Dividend rate		0.00%
Exercise price (C$)	$	1.31

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SEGMENT AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 2021

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHIC INFORMATION

7.    SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in a single reportable segment, being the exploration and development of mineral properties. The following tables present selected financial information by geographic location:

	Canada		United States		Total
June 30, 2021
Capitalized acquisition costs	$	—	$	55,375,124	$	55,375,124
Property and equipment		7,463		—		7,463
Current assets		10,414,630		447,220		10,861,850
Total assets	$	10,422,093	$	55,822,344	$	66,244,437
December 31, 2020
Capitalized acquisition costs	$	—	$	55,375,124	$	55,375,124
Property and equipment		7,832		—		7,832
Current assets		12,862,068		349,304		13,211,372
Total assets	$	12,869,900	$	55,724,428	$	68,594,328

Three months ended	June 30, 2021		June 30, 2020
Net loss for the period – Canada	$	(808,616)	$	(701,159)
Net loss for the period – United States		(1,369,398)		(785,305)
Net loss for the period	$	(2,178,014)	$	(1,486,464)

Six months ended	June 30, 2021		June 30, 2020
Net loss for the period – Canada	$	(1,175,564)	$	(287,621)
Net loss for the period – United States		(2,140,322)		(1,133,758)
Net loss for the period	$	(3,315,886)	$	(1,421,379)

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COMMITMENTS

6 Months Ended

Jun. 30, 2021

COMMITMENTS

COMMITMENTS

8.     COMMITMENTS

The following table discloses the Company’s contractual obligations as of June 30, 2021, including anticipated mineral property payments. Under the terms of the Company’s mineral property purchase agreements, mineral leases and unpatented mineral claims, the Company is required to make certain scheduled acquisition payments, incur certain levels of expenditures, make lease or advance royalty payments, make payments to government authorities and incur assessment work expenditures (as summarized in the table below) in order to maintain and preserve the Company’s interests in the related mineral properties. If the Company is unable or unwilling to make any such payments or incur any such expenditure, it is likely that the Company would lose or forfeit its rights to acquire or hold the related mineral properties. The following table assumes that the Company retains the rights to all of its current mineral properties, but does not exercise any lease purchase or royalty buyout options:

	Payments Due by Year
	2021		2022		2023		2024		2025		2026 and beyond		Total
Mineral Property Leases(1)	$	0	$	426,972	$	513,715	$	519,136	$	524,625	$	530,183	$	2,514,631
Mining Claim Government Fees		132,460		132,460		132,460		132,460		132,460		132,460		794,760
Total	$	132,460	$	559,432	$	646,175	$	651,596	$	657,085	$	662,643	$	3,309,391

1. Does not include required work expenditures, as it is assumed that the required expenditure level is significantly below the level of work that will actually be carried out by the Company. Does not include potential royalties that may be payable (other than annual minimum royalty payments). See Note 4.

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MINERAL PROPERTY (Tables)

6 Months Ended

Jun. 30, 2021

MINERAL PROPERTY

Schedule of activity related to the mineral property

The Company had the following activity related to the mineral property:

Capitalized acquisition costs	Amount
Balance, December 31, 2020	$	55,375,124
Acquisition costs		—
Balance, June 30, 2021	$	55,375,124

Schedule of costs incurred for exploration and evaluation activities

The following table presents costs incurred for exploration and evaluation activities for the six months ended June 30, 2021 and 2020:

	June 30, 2021		June 30, 2020
Exploration costs:
Aircraft	$	8,400	$	—
Environmental		110,890		80,189
Equipment rental		29,923		23,363
Field costs		60,040		49,942
Geological/geophysical		969,428		54,906
Land maintenance and tenure		423,096		425,212
Legal		60,385		12,947
Transportation and travel		2,908		5,464
Total expenditures for the period	$	1,665,070	$	652,023

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ACCRUED LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2021

ACCRUED LIABILITIES

Schedule of accrued liabilities

The following table presents the accrued liabilities balances at June 30, 2021 and December 31, 2020.

	June 30, 2021		December 31, 2020
Accrued liabilities	$	266,070	$	227,459
Accrued salaries and benefits		36,763		66,506
Total accrued liabilities	$	302,833	$	293,965

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SHARE CAPITAL (Tables)

6 Months Ended

Jun. 30, 2021

SHARE CAPITAL

Schedule of stock option granted

A summary of the options granted under the Stock Option Plan as of June 30, 2021 and December 31, 2020 is presented below:

	Six Months Ended					Year Ended
	June 30, 2021					December 31, 2020
		Weighted					Weighted
		Average		Aggregate			Average		Aggregate
	Number of	Exercise Price		Intrinsic Value		Number of	Exercise Price		Intrinsic Value
	Options	(C$)		(C$)		Options	(C$)		(C$)
Balance, beginning of the period	2,707,049	$	0.94			2,452,049	$	0.94
Granted	240,000	$	1.31			255,000		0.92
Balance, end of the period	2,947,049	$	0.97	$	975,808	2,707,049	$	0.94	$	2,287,262

Schedule of stock options outstanding

Stock options outstanding are as follows:

	June 30, 2021				December 31, 2020
	Exercise		Number of		Exercise		Number of
Expiry Date	Price (C$)		Options	Exercisable	Price (C$)		Options	Exercisable
February 25, 2022	$	1.11	510,000	510,000	$	1.11	510,000	510,000
February 25, 2022	$	0.73	270,000	270,000	$	0.73	270,000	270,000
March 10, 2022	$	1.11	120,000	120,000	$	1.11	120,000	120,000
March 16, 2023	$	1.00	580,000	580,000	$	1.00	580,000	580,000
March 16, 2023	$	0.50	130,000	130,000	$	0.50	130,000	130,000
June 9, 2023	$	1.00	30,000	30,000	$	1.00	30,000	30,000
March 21, 2024	$	0.61	374,817	374,817	$	0.61	374,817	374,817
February 1, 2025	$	1.35	250,000	250,000	$	1.35	250,000	250,000
August 8, 2025	$	0.85	187,232	187,232	$	0.85	187,232	187,232
May 27, 2026	$	0.92	255,000	170,000	$	0.92	255,000	85,000
May 25, 2027	$	1.31	240,000	80,000		—	—	—
			2,947,049	2,702,049			2,707,049	2,537,049

Schedule of non-vested share activity

A summary of the non-vested options as of June 30, 2021 and changes during the six months ended June 30, 2021 is as follows:

		Weighted average
	Number of	grant-date fair value
Non-vested options:	options	(C$)
Outstanding at December 31, 2020	170,000	$	0.76
Granted	240,000	$	0.98
Vested	(165,000)	$	0.87
Outstanding at June 30, 2021	245,000	$	0.91

Schedule of deferred share units outstanding

DSUs outstanding are as follows:

	Six Months Ended			Year Ended
	June 30, 2021			December 31, 2020
		Weighted Average			Weighted
	Number of	Exercise Price		Number of	Average Exercise
	Units	(C$)		Units	Price (C$)
Balance, beginning of the period	1,834,481	$	0.81	1,383,396	$	0.77
Issued	316,795	$	1.31	451,085	$	0.92
Balance, end of the period	2,151,276	$	0.88	1,834,481	$	0.81

Schedule of fair value assumption

	YTD June 30, 2021
Expected life of options		6 years
Risk-free interest rate		0.99%
Annualized volatility		81.22%
Dividend rate		0.00%
Exercise price (C$)	$	1.31

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SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

6 Months Ended

Jun. 30, 2021

SEGMENT AND GEOGRAPHIC INFORMATION

Schedule of financial information by geographic location

The Company operates in a single reportable segment, being the exploration and development of mineral properties. The following tables present selected financial information by geographic location:

	Canada		United States		Total
June 30, 2021
Capitalized acquisition costs	$	—	$	55,375,124	$	55,375,124
Property and equipment		7,463		—		7,463
Current assets		10,414,630		447,220		10,861,850
Total assets	$	10,422,093	$	55,822,344	$	66,244,437
December 31, 2020
Capitalized acquisition costs	$	—	$	55,375,124	$	55,375,124
Property and equipment		7,832		—		7,832
Current assets		12,862,068		349,304		13,211,372
Total assets	$	12,869,900	$	55,724,428	$	68,594,328

Three months ended	June 30, 2021		June 30, 2020
Net loss for the period – Canada	$	(808,616)	$	(701,159)
Net loss for the period – United States		(1,369,398)		(785,305)
Net loss for the period	$	(2,178,014)	$	(1,486,464)

Six months ended	June 30, 2021		June 30, 2020
Net loss for the period – Canada	$	(1,175,564)	$	(287,621)
Net loss for the period – United States		(2,140,322)		(1,133,758)
Net loss for the period	$	(3,315,886)	$	(1,421,379)

XML

COMMITMENTS (Tables)

6 Months Ended

Jun. 30, 2021

COMMITMENTS

Schedule of Contractual obligations including anticipated mineral property payments

	Payments Due by Year
	2021		2022		2023		2024		2025		2026 and beyond		Total
Mineral Property Leases(1)	$	0	$	426,972	$	513,715	$	519,136	$	524,625	$	530,183	$	2,514,631
Mining Claim Government Fees		132,460		132,460		132,460		132,460		132,460		132,460		794,760
Total	$	132,460	$	559,432	$	646,175	$	651,596	$	657,085	$	662,643	$	3,309,391

1. Does not include required work expenditures, as it is assumed that the required expenditure level is significantly below the level of work that will actually be carried out by the Company. Does not include potential royalties that may be payable (other than annual minimum royalty payments). See Note 4.

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GENERAL INFORMATION, NATURE OF OPERATIONS (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
General Information Nature And Continuance Of Operations [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 10,617,438	$ 13,049,293
Livengood Property Purchase Obligation [Member]
General Information Nature And Continuance Of Operations [Line Items]
Noncontrolling interest ownership percentage by parent	100.00%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details)	Jun. 30, 2021 USD ($)
Financial assets:
Assets measured at fair value	$ 0

XML

MINERAL PROPERTY (Details)	6 Months Ended
	Jun. 30, 2021 USD ($)
MINERAL PROPERTY
Balance, at the beginning of the period	$ 55,375,124
Acquisition costs	0
Balance, at the end of the period	$ 55,375,124

XML

MINERAL PROPERTY - Costs incurred for exploration and evaluation activities (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Exploration costs:
Aircraft	$ 8,400	$ 0
Environmental	110,890	80,189
Equipment rental	29,923	23,363
Field costs	60,040	49,942
Geological/geophysical	969,428	54,906
Land maintenance and tenure	423,096	425,212
Legal	60,385	12,947
Transportation and travel	2,908	5,464
Total expenditures for the period	$ 1,665,070	$ 652,023

XML

MINERAL PROPERTY - Additional Information (Details) - Livengood Property [Member] - USD ($)	6 Months Ended
	Jun. 30, 2021	Jan. 18, 2017	Mar. 28, 2007	Jan. 18, 2007	Apr. 21, 2003
Alaska Mental Health Trust Mineral Rights [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Mining properties lease operating expense	$ 3,993,856
Advance royalties	$ 342,688
Minimum Royalty Payment Percentage	125.00%
Lessor, Operating Lease, Renewal Term	19 years
Lessor, Operating Lease, Term of Contract	19 years
Alaska Mental Health Trust Mineral Rights [Member] | Maximum [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Minimum royalty percentage	5.00%
Alaska Mental Health Trust Mineral Rights [Member] | Maximum [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Minimum royalty percentage	1.00%
Alaska Mental Health Trust Mineral Rights [Member] | Minimum [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Minimum royalty percentage	2.50%
Alaska Mental Health Trust Mineral Rights [Member] | Minimum [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Minimum royalty percentage	0.50%
Federal Unpatented Lode Mining Claims [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Mining properties lease operating expense	$ 880,000
Advance royalties	$ 50,000
Lessor, Operating Lease, Term of Contract					10 years
Federal Unpatented Lode Mining Claims [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Portion of royalty to be purchased by the entity	1.00%
Payments for Royalties	$ 1,000,000
Federal Unpatented Lode Mining Claims [Member] | Maximum [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Minimum royalty percentage	3.00%
Federal Unpatented Lode Mining Claims [Member] | Minimum [Member] | Advance Royalties [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Advance royalties	$ 50,000
Federal Unpatented Lode Mining Claims [Member] | Minimum [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Minimum royalty percentage	2.00%
Patented Lode Claims [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Mining properties lease operating expense	$ 265,000
Advance royalties	$ 15,000
Percentage Of Mining Claims Acquired Subject to Lease	40.00%
Percentage of Leasehold Interest	40.00%
Lessor, Operating Lease, Term of Contract				10 years
Patented Lode Claims [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Portion Of Cash Payments Payable To Acquire Royalty Interests In Mining Properties	$ 500,000
Net Smelter Return Base For Payments To Acquire Royalty Interests In Mining Properties	3.00%
Minimum royalty percentage	3.00%
Payments for Royalties	$ 1,000,000
Patented Lode Claims [Member] | Minimum [Member] | Advance Royalties [Member] | On or Before Each Anniversary [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Advance royalties		$ 20,000
Patented Lode Claims [Member] | Minimum [Member] | Advance Royalties [Member] | On or Before Each Subsequent Anniversary [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Advance royalties	25,000
Unpatented Federal Lode Mining And Federal Unpatented Placer Claims [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Mining properties lease operating expense	188,000
Advance royalties	15,000
Lessor, Operating Lease, Term of Contract			10 years
Unpatented Federal Lode Mining And Federal Unpatented Placer Claims [Member] | On or Before Each Anniversary [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Advance royalties	15,000
Unpatented Federal Lode Mining And Federal Unpatented Placer Claims [Member] | Production Royalty [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Balance Portion Of Payments To Acquire Royalty Interests In Mining Properties Payable By Way Of Net Smelter Return	125,000
Amount Payable To Lessor On Positive Production Decision	250,000
Portion Of Amount Payable To Lessor On Positive Production Decision Within Prescribed Period Of Decision	$ 125,000
Minimum royalty percentage	2.00%
Payments for Royalties	$ 1,000,000
Unpatented Federal Lode Mining And Federal Unpatented Placer Claims [Member] | Maximum [Member]
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
Prescribed Period From Decision On Positive Production For Payment Of First Half Amount Payable To Lessor	120 days

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ACCRUED LIABILITIES (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
ACCRUED LIABILITIES
Accrued liabilities	$ 266,070	$ 227,459
Accrued salaries and benefits	36,763	66,506
Total accrued liabilities	$ 302,833	$ 293,965

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ACCRUED LIABILITIES - Additional Information (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
ACCRUED LIABILITIES
Accrued general corporate cost current	$ 39,191	$ 51,151
Accrued project cost current	$ 226,879	$ 176,308

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SHARE CAPITAL - Stock Option Plan (Details) - Employee Stock Option [Member] - CAD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Number of Options
Balance, beginning of the period	2,707,049	2,452,049	2,452,049
Granted	240,000	255,000	255,000
Balance, end of the period	2,947,049		2,707,049
Weighted Average Exercise Price
Balance, beginning of the period	$ 0.94	$ 0.94	$ 0.94
Granted	1.31		0.92
Balance, end of the period	$ 0.97		$ 0.94
Aggregate Intrinsic Value
Balance, end of the period	$ 975,808		$ 2,287,262

XML

SHARE CAPITAL - Stock options outstanding (Details) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Options (in shares)	2,947,049	2,707,049
Exercisable (in shares)	2,702,049	2,537,049
Exercise Price February 25, 2022 $ 1.11
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 1.11	$ 1.11
Number of Options (in shares)	510,000	510,000
Exercisable (in shares)	510,000	510,000
Exercise Price February 25, 2022 $ 0.73
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 0.73	$ 0.73
Number of Options (in shares)	270,000	270,000
Exercisable (in shares)	270,000	270,000
Exercise Price March 10, 2022 $ 1.11
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 1.11	$ 1.11
Number of Options (in shares)	120,000	120,000
Exercisable (in shares)	120,000	120,000
Exercise Price March 16, 2023 $ 1.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 1.00	$ 1.00
Number of Options (in shares)	580,000	580,000
Exercisable (in shares)	580,000	580,000
Exercise Price March 16, 2023 $ 0.50
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 0.50	$ 0.50
Number of Options (in shares)	130,000	130,000
Exercisable (in shares)	130,000	130,000
Exercise Price June 9, 2023 $ 1.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 1.00	$ 1.00
Number of Options (in shares)	30,000	30,000
Exercisable (in shares)	30,000	30,000
Exercise Price March 21, 2024 $ 0.61
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 0.61	$ 0.61
Number of Options (in shares)	374,817	374,817
Exercisable (in shares)	374,817	374,817
Exercise Price February 1, 2025 $ 1.35
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 1.35	$ 1.35
Number of Options (in shares)	250,000	250,000
Exercisable (in shares)	250,000	250,000
Exercise Price August 8, 2025 $ 0.85
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 0.85	$ 0.85
Number of Options (in shares)	187,232	187,232
Exercisable (in shares)	187,232	187,232
Exercise Price May 27, 2026 $ 0.92
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 0.92	$ 0.92
Number of Options (in shares)	255,000	255,000
Exercisable (in shares)	170,000	85,000
Exercise Price May 25, 2017 $1.31
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in Canadian dollars per share)	$ 1.31
Number of Options (in shares)	240,000
Exercisable (in shares)	80,000

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SHARE CAPITAL - Non-vested options (Details)	6 Months Ended
	Jun. 30, 2021 $ / shares shares
Number of options
Balance, beginning of the year (in shares) | shares	170,000
Granted (in shares) | shares	240,000
Vested (in shares) | shares	(165,000)
Balance, end of the year (in shares) | shares	245,000
Weighted average grant-date fair value
Balance, beginning of the year (in Canadian dollars per share) | $ / shares	$ 0.76
Granted (in Canadian dollars per share) | $ / shares	0.98
Vested (in Canadian dollars per share) | $ / shares	0.87
Balance, end of the year (in Canadian dollars per share) | $ / shares	$ 0.91

XML

SHARE CAPITAL - DSUs outstanding (Details) - Deferred Share Unit Incentive Plan [Member] - $ / shares	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Balance, beginning of the period	1,834,481	1,383,396	1,383,396
Issued	316,795	451,085	451,085
Balance, end of the period	2,151,276		1,834,481
Balance, beginning of the period	$ 0.81	$ 0.77	$ 0.77
Issued	1.31		0.92
Balance, end of the period	$ 0.88		$ 0.81

XML

SHARE CAPITAL - Weighted average assumptions (Details)	6 Months Ended
	Jun. 30, 2021 $ / shares
SHARE CAPITAL
Expected life of options	6 years
Risk-free interest rate	0.99%
Expected volatility	81.22%
Dividend rate	0.00%
Exercise price (C$)	$ 1.31

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SHARE CAPITAL - Additional Information (Details)	6 Months Ended			12 Months Ended
	Jun. 30, 2021 USD ($) shares	Jun. 30, 2021 CAD ($) $ / shares shares	Jun. 30, 2020 USD ($) shares	Dec. 31, 2020 $ / shares shares	Jun. 30, 2021 $ / shares
Stockholders Equity [Line Items]
Common Stock, Shares, Issued | shares		194,908,184		194,908,184
Common Stock, Shares, Outstanding | shares		194,908,184		194,908,184
Common Stock, Shares Authorized, Unlimited	Unlimited	Unlimited		Unlimited
Allocated share-based compensation expense	$ 475,080		$ 348,252
Exercise price (C$) | $ / shares					$ 1.31
Weighted average remaining outstanding (in years)	2 years 6 months	2 years 6 months
Share Based Compensation Arrangement By Share Based Payment Award Percentage Of Shares Authorized		10.00%
Share-based Compensation Under Deferred Share Unit Incentive Plan	$ 367,850		$ 294,617
Unrecognized compensation expense		$ 174,225
Weighted-average remaining period	1 year 3 months 18 days	1 year 3 months 18 days
Employee Stock Option [Member]
Stockholders Equity [Line Items]
Stock option granted | shares	240,000	240,000	255,000	255,000
Allocated share-based compensation expense	$ 107,230		$ 53,635
Plan 2006 [Member]
Stockholders Equity [Line Items]
Share based compensation arrangement by share based payment award shares authorized percentage		10.00%
Deferred Share Unit Incentive Plan [Member]
Stockholders Equity [Line Items]
Allocated share-based compensation expense	$ 367,850		$ 294,617
Stock option granted in under DSU plan | shares	316,795	316,795	451,085	451,085
Weighted average granted value per share | $ / shares		$ 1.31		$ 0.92
Deferred Share Unit Incentive Plan [Member] | Non-Paulson Directors [Member]
Stockholders Equity [Line Items]
Share Based Compensation Arrangement By Share Based Payment Towards Equity Instruments Other Than Options Grants In Period Aggregate Weighted Average Grant Date Fair Value		$ 415,000
Number of shares obligation | shares	63,359	63,359
Share Based Compensation Arrangement By Share Based Payment, Towards Equity Instruments Other Than Options, Grants In Period, Aggregate Weighted Average Grant Date Fair Value, Per Director		$ 83,000
Weighted average granted value per share | $ / shares		$ 1.31
Consulting Fees Expenses [Member]
Stockholders Equity [Line Items]
Allocated share-based compensation expense	$ 376,410		$ 300,927
Consulting Fees Expenses [Member] | Employee Stock Option [Member]
Stockholders Equity [Line Items]
Allocated share-based compensation expense	8,560		6,310
Consulting Fees Expenses [Member] | Deferred Share Unit Incentive Plan [Member]
Stockholders Equity [Line Items]
Allocated share-based compensation expense	367,850		294,617
Wages And Benefits Expenses [Member]
Stockholders Equity [Line Items]
Allocated share-based compensation expense	92,092		44,170
Investor Relations Expenses [Member]
Stockholders Equity [Line Items]
Allocated share-based compensation expense	$ 6,578		$ 3,155

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SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Financial Information by Geographic Location (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Capitalized acquisition costs	$ 55,375,124		$ 55,375,124		$ 55,375,124
Property and equipment	7,463		7,463		7,832
Current assets	10,861,850		10,861,850		13,211,372
Total assets	66,244,437		66,244,437		68,594,328
Net income (loss) for the period	(2,178,014)	$ (1,486,464)	(3,315,886)	$ (1,421,379)
Canada
Segment Reporting Information [Line Items]
Capitalized acquisition costs	0		0		0
Property and equipment	7,463		7,463		7,832
Current assets	10,414,630		10,414,630		12,862,068
Total assets	10,422,093		10,422,093		12,869,900
Net income (loss) for the period	(808,616)	(701,159)	(1,175,564)	(287,621)
United States
Segment Reporting Information [Line Items]
Capitalized acquisition costs	55,375,124		55,375,124		55,375,124
Property and equipment	0		0		0
Current assets	447,220		447,220		349,304
Total assets	55,822,344		55,822,344		$ 55,724,428
Net income (loss) for the period	$ (1,369,398)	$ (785,305)	$ (2,140,322)	$ (1,133,758)

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COMMITMENTS (Details)	Jun. 30, 2021 USD ($)
Recorded Unconditional Purchase Obligation [Line Items]
2021	$ 132,460
2022	559,432
2023	646,175
2024	651,596
2025	657,085
2026 and beyond	662,643
Total	3,309,391
Mineral Property Leases [Member]
Recorded Unconditional Purchase Obligation [Line Items]
2021	0
2022	426,972
2023	513,715
2024	519,136
2025	524,625
2026 and beyond	530,183
Total	2,514,631
Mining Claim Government Fees [Member]
Recorded Unconditional Purchase Obligation [Line Items]
2021	132,460
2022	132,460
2023	132,460
2024	132,460
2025	132,460
2026 and beyond	132,460
Total	$ 794,760