On July 30, 2018, the Company entered into a binding loan agreement and promissory note with William Matlack (the “Lender”). Under the loan agreement, the Lender loaned the Company $300,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on January 20, 2020, but may be repaid early without penalty. Amounts drawn under the loan agreement will be used for exploration expenditures, annual property holding costs, and working capital requirements of the Company.

Pursuant to the terms of the loan agreement, the Company issued to the Lender 3,265,500 non-transferrable common share purchase Series E Warrants of the Company. The exercise price of the warrants is $0.09, and the warrants contain a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Company’s outstanding common shares. The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $110,900, based upon a total fair value as calculated by a Black-Scholes option-pricing model using the assumptions noted in the following table:

	Warrants Issued July 30, 2018
Expected volatility	132.4%
Stock price on date of loan	$0.09
Expected dividends	0
Expected term (in years)	1.5
Risk-free rate	2.66%
Expected forfeiture rate	0%

The relative fair value of the warrants was recorded as a discount of the note, with $7,332 amortized to interest expense in the fiscal year ended September 30, 2018.