EX-99.3 4 exhibit99-3.htm EXHIBIT 99.3 New Pacific Metals Corp.: Exhibit 99.3 - Filed by newsfilecorp.com

 

CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 and 2020

(Expressed in US Dollars)

 

 

 


 

Deloitte LLP
939 Granville Street
Vancouver, BC V6Z1L3
Canada

Tel: 604-669-4466
Fax: 604-685-0395
www.deloitte.ca

 

Report of Independent Registered

Public Accounting Firm

To the Shareholders and the Board of Directors of New Pacific Metals Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of New Pacific Metals Corp. and subsidiaries (the "Company") as of June 30, 2021 and 2020 and July 1, 2019, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in equity, and cash flows, for each of the two years in the period ended June 30, 2021, and the related notes (collectively referred to as the "financial statements").  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020 and July 1, 2019, and its financial performance and its cash flows for each of the two years in the period ended June 30, 2021, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte LLP

Chartered Professional Accountants

Vancouver, Canada

September 16, 2021

We have served as the Company's auditor since 2004.

New Pacific Metals Corp.
Consolidated Statements of Financial Position
(Expressed in US dollars)

 

  Notes   June 30, 2021     June 30, 2020     July 1, 2019  
ASSETS           (restated)*     (restated)*  
Current Assets                    
   Cash   $ 46,441,482   $ 29,824,146   $ 21,280,631  
   Short-term investments 4   143,914     15,140,719     8,361,655  
   Receivables     343,608     303,488     198,364  
   Deposits and prepayments     523,141     163,500     108,787  
   Assets held for distribution 3   -     8,695,312     -  
      47,452,145     54,127,165     29,949,437  
Non-current Assets                    
   Reclamation deposits     -     -     11,519  
   Other tax receivable 5   2,216,392     2,100,430     1,375,956  
   Equity investments 6   496,526     4,111,822     3,905,320  
   Plant and equipment 8   1,118,639     1,127,034     1,001,606  
  Mineral property interests 9   75,535,422     69,745,800     58,696,480  
TOTAL ASSETS   $ 126,819,124   $ 131,212,251   $ 94,940,318  
                     
                     
LIABILITIES AND EQUITY                    
Current Liabilities                    
   Accounts payable and accrued liabilities 10 $ 1,044,189   $ 1,154,593   $ 1,238,944  
   Payable for mineral property acquisition     -     193,073     301,582  
   Due to a related party 11   50,378     62,182     68,151  
   Liabilities held for distribution 3   -     89,653     -  
      1,094,567     1,499,501     1,608,677  
Non-current liabilities                    
   Payable for mineral property acquisition     -     -     201,054  
Total Liabilities     1,094,567     1,499,501     1,809,731  
                     
Equity                    
   Share capital 12   149,629,543     145,904,310     114,621,944  
   Share-based payment reserve     16,564,197     16,813,906     15,265,578  
   Accumulated other comprehensive income     13,641,379     7,669,888     9,797,021  
   Deficit     (54,106,972 )   (40,633,984 )   (46,541,710 )
Total equity attributable to the equity holders of the Company     125,728,147     129,754,120     93,142,833  
                     
   Non-controlling interests 13   (3,590 )   (41,370 )   (12,246 )
Total Equity     125,724,557     129,712,750     93,130,587  
                     
TOTAL LIABILITIES AND EQUITY   $ 126,819,124   $ 131,212,251   $ 94,940,318  

*Restated for change in presentation currency (note 2(c))

Approved on behalf of the Board:

(Signed) David Kong                                             
Director

(Signed) Mark Cruise                                            
Director

See accompanying notes to the consolidated financial statements

Page | 1

New Pacific Metals Corp.
Consolidated Statements of (Loss) Income
 (Expressed in US dollars)

 

      Year Ended June 30,  
  Notes   2021     2020  
            (restated)*  
Operating expense              
   Project evaluation and corporate development   $ (822,864 ) $ (206,060 )
   Depreciation     (44,000 )   (11,995 )
   Filing and listing     (393,814 )   (128,142 )
   Investor relations     (337,714 )   (536,902 )
   Professional fees     (498,207 )   (303,031 )
   Salaries and benefits     (1,688,687 )   (1,324,699 )
   Office and administration     (678,529 )   (513,030 )
   Share-based compensation 12(b)   (1,482,170 )   (1,584,730 )
      (5,945,985 )   (4,608,589 )
               
Other (expense) income              
   Income from investments 7 $ 395,543   $ 1,311,921  
   Loss on disposal of plant and equipment 8   (1,944 )   -  
   Impairment recovery of mineral property interests 9   -     8,724,915  
   Foreign exchange (loss) gain     (1,021,628 )   465,021  
   Other expense     (360 )   -  
      (628,389 )   10,501,857  
               
Net (loss) income   $ (6,574,374 ) $ 5,893,268  
               
Attributable to:              
   Equity holders of the Company   $ (6,566,440 ) $ 5,907,726  
   Non-controlling interests 13   (7,934 )   (14,458 )
Net (loss) income   $ (6,574,374 ) $ 5,893,268  
               
(Loss) earnings per share attributable to the equity holders of the Company              
Basic (loss) earnings per share 12(d) $ (0.04 ) $ 0.04  
Diluted (loss) earnings per share 12(d) $ (0.04 ) $ 0.04  
Weighted average number of common shares - basic 12(d)   153,294,454     146,254,726  
Weighted average number of common shares - diluted 12(d)   153,294,454     150,688,553  

*Restated for change in presentation currency (note 2(c))

See accompanying notes to the consolidated financial statements

Page | 2

New Pacific Metals Corp.
Consolidated Statements of Comprehensive (Loss) Income
(Expressed in US dollars)

 

      Year Ended June 30,  
  Notes   2021     2020  
            (restated)*  
Net (loss) income   $ (6,574,374 ) $ 5,893,268  
Other comprehensive income (loss), net of taxes:              
Items that may subsequently be reclassified to net income or loss:              
   Currency translation adjustment, net of tax of $nil     6,017,205     (2,141,799 )
Other comprehensive income (loss), net of taxes   $ 6,017,205   $ (2,141,799 )
               
Attributable to:              
   Equity holders of the Company   $ 5,971,491   $ (2,127,133 )
   Non-controlling interests 13   45,714     (14,666 )
    $ 6,017,205   $ (2,141,799 )
Total comprehensive (loss) income, net of taxes   $ (557,169 ) $ 3,751,469  
               
Attributable to:              
   Equity holders of the Company   $ (594,949 ) $ 3,780,593  
   Non-controlling interests     37,780     (29,124 )
Total comprehensive (loss) income, net of taxes   $ (557,169 ) $ 3,751,469  

*Restated for change in presentation currency (note 2(c))

See accompanying notes to the consolidated financial statements

Page | 3

New Pacific Metals Corp.
Consolidated Statements of Cash Flows
 (Expressed in US dollars)

 

      Year Ended June 30,  
  Notes   2021     2020  
            (restated)*  
Operating activities              
   Net (loss) income   $ (6,574,374 ) $ 5,893,268  
   Add (deduct) items not affecting cash:     (395,543 )      
      Income from investments 7         (1,311,921 )
      Depreciation     44,000     11,995  
      Impairment recovery on mineral property interest 9   -     (8,724,915 )
      Loss on disposal of plant and equipment 8   1,944     -  
      Share-based compensation 12(b)   1,596,526     1,641,029  
      Unrealized foreign exchange loss (gain)     1,021,628     (465,021 )
   Changes in non-cash operating working capital 18   (558,356 )   (94,231 )
   Dividends and interests received     261,223     423,079  
Net cash used in operating activities     (4,602,952 )   (2,626,717 )
               
Investing activities              
   Mineral property interest              
      Capital expenditures     (4,314,465 )   (8,623,458 )
      Acquisition of mineral concession     -     (1,850,000 )
   Plant and equipment     (113,166 )      
      Additions           (229,605 )
      Proceeds on disposals 8   1,418     -  
   Short-term investments     -        
      Acquisition 4         (14,895,360 )
      Proceeds on disposals 4   15,596,974     7,589,328  
   Equity investments     -        
      Acquisition 6         (3,737,498 )
      Proceeds on disposals 6   4,345,636     4,566,635  
   Consideration received for transfer of TLG 3   2,201,350     -  
   Changes in other tax receivable     (115,960 )   (724,476 )
Net cash provided by (used in) investing activities     17,601,787     (17,904,434 )
               
Financing activities              
Proceeds from issuance of common shares     1,076,157     30,070,791  
Net cash provided by financing activities     1,076,157     30,070,791  
Effect of exchange rate changes on cash     2,542,344     (996,125 )
               
Increase in cash     16,617,336     8,543,515  
               
Cash, beginning of the year     29,824,146     21,280,631  
               
Cash, end of the year   $ 46,441,482   $ 29,824,146  
               
Supplementary cash flow information 18            

*Restated for change in presentation currency (note 2(c))

See accompanying notes to the consolidated financial statements

Page | 4

New Pacific Metals Corp.
Consolidated Statements of Changes in Equity
(Expressed in US dollars)

 

      Share capital                       Total equity              
                  Share-      Accumulated          attributable            
      Number of           based      other            to the equity     Non-        
      common           payment     comprehensive            holders of     controlling        
  Notes   shares issued     Amount     reserve     income     Deficit     the Company     interests     Total equity  
Balance, July 1, 2019 (restated)*     142,432,812   $ 114,621,944   $ 15,265,578     49,797,021   $ (46,541,710 ) $ 93,142,833   $ (12,246 ) $ 93,130,587  
Options exercised     888,066     1,158,470     (390,886 )   -     -     767,584     -     767,584  
Restricted share units vested     136,400     470,929     (470,929 )               -     -     -  
Common shares issued through bought deal financing     8,550,500     29,303,208     -     -     -     29,303,208     -     29,303,208  
Share-based compensation     -     -     2,759,903     -     -     2,759,903     -     2,759,903  
Common shares issued to acquire mineral property interest     291,000     349,759     (349,759 )   -     -     -     -     -  
Net income     -     -     -     -     5,907,726     5,907,726     (14,458 )   5,893,268  
Currency translation adjustment     -     -     -     (2,127,133 )   -     (2,127,133 )   (14,666 )   (2,141,799 )
Balance, June 30, 2020 (restated)*     152,298,778   $ 145,904,310   $ 16,813,907   $ 7,669,888   $ (40,633,984 ) $ 129,754,121   $ (41,370 ) $ 129,712,751  
Options exercised 12(b)   1,396,935     1,623,221     (547,064 )   -     -     1,076,157     -     1,076,157  
Restricted share units vested     464,550     1,751,533     (1,751,533 )   -     -     -     -     -  
Share-based compensation 12(b)   -     -     2,399,366     -     -     2,399,366     -     2,399,366  
Common shares issued to acquire mineral property interest 12(c)   291,000     350,479     (350,479 )   -     -     -     -     -  
Spin-out distribution 3   -     -     -     -     (6,906,548 )   (6,906,548 )   -     (6,906,548 )
Net loss     -     -     -     -     (6,566,440 )   (6,566,440 )   (7,934 )   (6,574,374 )
Currency translation adjustment     -     -     -     5,971,491     -     5,971,491     45,714     6,017,205  
Balance, June 30, 2021     154,451,263   $ 149,629,543   $ 16,564,197   $ $13,641,379   $ (54,106,972 ) $ 125,728,147   $ (3,590 ) $ 125,724,557  

*Restated for change in presentation currency (note 2(c))

See accompanying notes to the consolidated financial statements

Page | 5

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

1. CORPORATE INFORMATION

New Pacific Metals Corp. along with its subsidiaries (collectively, the "Company" or "New Pacific") is a Canadian mining issuer engaged in exploring and developing mineral properties in Bolivia.  The Company is in the stage of exploring and advancing the development of its mineral properties and has not yet determined if they contain economically recoverable Mineral Reserves.  The underlying value and the recoverability of the amounts shown for mineral properties are entirely dependent upon the existence of recoverable Mineral Reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the mineral properties, and future profitable production or proceeds from the disposition of the mineral property interests.

The Company is publicly listed on the Toronto Stock Exchange ("TSX") under the symbol "NUAG" and on the NYSE American stock exchange ("NYSE-A") under the symbol "NEWP".  The head office, registered address and records office of the Company are located at 1066 Hastings Street, Suite 1750, Vancouver, British Columbia, Canada, V6E 3X1.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). The policies applied in these consolidated financial statements are based on IFRS in effect as of June 30, 2021.

These consolidated financial statements have been prepared on a going concern basis.

The consolidated financial statements of the Company as at and for the year ended June 30, 2021 were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") dated on September 15, 2021.

(b) Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly or partially owned subsidiaries.

Subsidiaries are consolidated from the date on which the Company obtains control up to the date of the disposition of control.  Control is achieved when the Company has power over the subsidiary, is exposed or has rights to variable returns from its involvement with the subsidiary; and has the ability to use its power to affect its returns.  For non-wholly-owned subsidiaries over which the Company has control, the net assets attributable to outside equity shareholders are presented as "non-controlling interests" in the equity section of the consolidated statements of financial position.  Net income or loss for the period that is attributable to the non-controlling interests is calculated based on the ownership of the non-controlling interest shareholders in the subsidiary.

Balances, transactions, income and expenses between the Company and its subsidiaries are eliminated on consolidation.

Page | 6

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Details of the Company's significant subsidiaries which are consolidated are as follows:

 

 

 

Proportion of ownership interest held

 

 

 

Country of

June 30,

June 30,

Mineral

Name of subsidiaries

Principal activity

incorporation

2021

2020

properties

New Pacific Offshore Inc.

Holding company

BVI (i)

100%

100%

 

SKN Nickel & Platinum Ltd.

Holding company

BVI

100%

100%

 

Glory Metals Investment Corp. Limited

Holding company

Hong Kong

100%

100%

 

New Pacific Investment Corp. Limited

Holding company

Hong Kong

100%

100%

 

New Pacific Andes Corp. Limited

Holding company

Hong Kong

100%

100%

 

Fortress Mining Inc.

Holding company

BVI

100%

100%

 

Minera Alcira S.A.

Mining company

Bolivia

100%

100%

Silver Sand

NPM Minerales S.A.

Mining company

Bolivia

100%

100%

 

Colquehuasi S.R.L.

Mining company

Bolivia

100%

100%

Silverstrike

Granville S.R.L.

Mining company

Bolivia

100%

N/A

Carangas

Qinghai Found Mining Co., Ltd.

Mining company

China

82%

82%

RZY

Whitehorse Gold Corp.

Mining company

Canada

0%

100%

 

Tagish Lake Gold Corp.

Mining company

Canada

0%

100%

TLG

(i) British Virgin Islands ("BVI")

 

 

 

 

 

(c) Foreign Currency Translation

The functional currency for each subsidiary of the Company is the currency of the primary economic environment in which the entity operates.  The functional currency of the head office, Canadian subsidiaries and all intermediate holding companies is the Canadian dollar ("CAD").  The functional currency of all Bolivian subsidiaries is the US dollar ("USD").  The functional currency of the Chinese subsidiary is the Chinese Renminbi ("RMB"). 

Foreign currency monetary assets and liabilities are translated into the functional currency using exchange rates prevailing at the balance sheet date.  Foreign currency non-monetary assets are translated using exchange rates prevailing at the transaction date.  Foreign exchange gains and losses are included in the determination of net income.

The Company decided to change the presentation currency of its consolidated financial statements from CAD to USD effective July 1, 2020.  This change in presentation currency was made to better reflect the Company's main business activities, which are mineral exploration operations in Bolivia with budgets and major payments denominated in USD.  Such change in presentation currency also made the Company's consolidated financial statements more consistent with industry peers listed on TSX and NYSE-A.  In order to satisfy the requirements of IAS 21 - The effects of changes in foreign exchange rates with respect to the change in presentation currency, the consolidated financial statements for the year ended June 30, 2020 have been restated from CAD to USD using the procedures outlined below:

- assets and liabilities of subsidiaries where functional currency is other than USD were translated to USD using exchange rates at June 30, 2020;

- income and expenses of subsidiaries where functional currency is other than USD were translated using average exchange rates during the year ended June 30, 2020;

- share capital and deficit were translated at the historical rates prevailing at the dates of transactions; and

- differences arising from the retranslation of the opening net assets at July 1, 2019 and the results for the year have been taken to the accumulated other comprehensive income.

Page | 7

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Effective July 1, 2020, the consolidated financial statements are presented in USD.  The financial position and results of the Company's entities are translated from functional currencies to USD as follows:

- assets and liabilities are translated using exchange rates prevailing at the balance sheet date;

- income and expenses are translated using average exchange rates prevailing during the period; and

- all resulting exchange gains and losses are included in other comprehensive income.

Consolidated Statements of Financial Position

    June 30, 2020     July 1, 2019  
    As reported,     Restated,     As reported,     Restated,  
    CAD$     USD$     CAD$     USD$  
Cash $ 40,644,346   $ 29,824,146   $ 27,849,961   $ 21,280,631  
Other Current assets   33,120,154     24,303,019     11,344,868     8,668,806  
Non-Current assets   105,051,558     77,085,086     85,053,566     64,990,881  
Total assets $ 178,816,058   $ 131,212,251   $ 124,248,395   $ 94,940,318  
                         
Current liabilities $ 2,043,514   $ 1,499,501   $ 2,105,272   $ 1,608,677  
Non-current liabilities   -     -     263,120     201,054  
Total liabilities $ 2,043,514   $ 1,499,501   $ 2,368,392   $ 1,809,731  
                         
Share Capital $ 191,563,628   $ 145,904,310   $ 150,005,738   $ 114,621,944  
Share-based payment reserve   22,057,385     16,813,906     19,978,062     15,265,578  
Accumulated other comprehensive income   6,599,738     7,669,888     3,264,901     9,797,021  
Retained earnings   (43,398,714 )   (40,633,984 )   (51,331,013 )   (46,541,710 )
Non-controlling interests   (49,493 )   (41,370 )   (37,685 )   (12,246 )
Total shareholder's equity $ 176,772,544   $ 129,712,750   $ 121,880,003   $ 93,130,587  
Total liabilities and shareholder's equity $ 178,816,058   $ 131,212,251   $ 124,248,395   $ 94,940,318  

Consolidated Statement of Income and Comprehensive Income            
       
    Year ended June 30, 2020  
    As reported,     Restated,  
    CAD$     USD$  
Operating expense $ (6,187,954 ) $ (4,608,589 )
Other income   14,100,841     10,501,857  
Net income $ 7,912,887   $ 5,893,268  
Other comprehensive income (loss), net of taxes   3,342,441     (2,141,799 )
Total comprehensive income, net of taxes $ 11,255,328   $ 3,751,469  
             
Earnings per share - Basic and diluted $ 0.05   $ 0.04  

The Company treats inter-company loan balances, which are not intended to be repaid in the foreseeable future, as part of its net investment.  When a foreign entity is sold, the historical exchange differences plus the foreign exchange impact that arises on the transaction are recognized in the consolidated statement of (loss) income as part of the gain or loss on sale.

(d) Plant and Equipment

Plant and equipment are initially recorded at cost, including all directly attributable costs to bring the assets to the location and condition necessary for it to be capable of operating in the manner intended by management. Plant and equipment are subsequently measured at cost less accumulated depreciation and applicable impairment losses.  Depreciation is computed using the straight-line method based on the nature and estimated useful lives as follows:

Page | 8

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Land Not depreciated
Buildings 20 Years
Machinery 5 Years
Motor vehicles 5 Years
Office equipment and furniture 5 Years
Computer software 5 Years

Subsequent costs that meet the asset recognition criteria are capitalized while costs incurred that do not extend the economic useful life of an asset are considered repair and maintenance, which are accounted for as an expense recognized during the period.  The Company conducts an annual assessment of the residual balances, useful lives, and depreciation methods being used for plant and equipment and any changes are applied prospectively.

Assets under construction are capitalized as construction-in-progress.  The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use.  Construction-in-progress assets are not depreciated until they are completed and available for use.

(e) Mineral Property Interests

The cost of acquiring mineral rights and properties either as an individual asset purchase or as part of a business combination is capitalized and represents the property's fair value at the date of acquisition.  Fair value is determined by estimating the value of the property's reserves, resources and exploration potential. 

Exploration and evaluation costs, incurred associated with specific mineral rights and properties prior to demonstrable technical feasibility and commercial viability of extracting a mineral resource, are capitalized. 

The Company determines that a property is in the development stage when it has completed a positive economic analysis of the mineral deposit.  Costs incurred in the development stage prior to commercial production are capitalized and included in the carrying amount of the related property in the period incurred.  Proceeds from sales during this period, if any, are offset against costs capitalized.

(f) Impairment of Long-lived Assets

Long-lived assets, including mineral property interests, plant and equipment are reviewed and tested for impairment when indicators of impairment are considered to exist.  Impairment assessments are conducted at the level of cash-generating units ("CGU") or at the individual asset level, whichever is the lowest level for which identifiable cash inflows are largely independent of the cash flows of other assets.  An impairment loss is recognized for any excess of carrying amount of a CGU over its recoverable amount, which is the greater of its fair value less costs to sell and value in use.  For mineral properties and processing facilities, the recoverable amount is estimated as the discounted future net cash inflows expected to be derived from expected future production, metal prices, and net proceeds from the disposition of assets on retirement, less operating and capital costs.  Impairment losses are recognized in the period they are incurred.

For exploration and evaluation assets, indication of impairment includes but is not limited to expiration of the right to explore, substantive expenditures in the specific area are neither budgeted nor planned, and exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources.

Page | 9

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Impairment losses are reversed if there is evidence the loss no longer exists or has decreased.  This reversal is recognized in net income in the period the reversal occurs limited by the carrying value that would have been determined, net of any depreciation, had no impairment charge been recognized in prior years.

(g) Share-based Payments

The Company grants share-based awards, including restricted share units ("RSUs") and stock options to directors, officers, employees, and consultants.

For share-based awards, the fair value is charged to the consolidated statements of income and credited to equity, on a straight-line basis over the vesting period, after adjusting for the estimated number of awards that are expected to vest. The fair value of share units is determined based on quoted market price of the Company's common shares at the date of grant. The fair value of the stock options granted to employees, officers, and directors is determined at the date of grant using the Black-Scholes option pricing model with market related input. The fair value of stock options granted to consultants is measured at the fair value of the services delivered unless that fair value cannot be estimated reliably, which then is determined using the Black-Scholes option pricing model. Stock options with graded vesting schedules are accounted for as separate grants with different vesting periods and fair values.

At each statement of financial position date prior to vesting, the cumulative expense representing the extent to which the vesting period has expired and management's best estimate of the awards that are ultimately expected to vest is computed (after adjusting for non-market performance conditions). The movement in cumulative expense is recognized in the consolidated statements of income with a corresponding entry within equity. The amount recognized as expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met.

(h) Income Taxes

Current tax for each taxable entity is based on the local taxable income at the local substantively enacted statutory tax rate at the balance sheet date and includes adjustments to taxes payable or recoverable in respect to previous periods.

Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax is recognized using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes.  Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses, can be utilized, except:

- where the deferred tax asset or liability relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Page | 10

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.  Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profit will be available to allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been substantively enacted by the end of the reporting period.

Deferred tax relating to items recognized outside profit or loss is recognized in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(i) Earnings (loss) per Share

Earnings (loss) per share is computed by dividing net income (loss) attributable to equity holders of the Company by the weighted average number of common shares outstanding for the period.  Diluted earnings per share reflect the potential dilution that could occur if additional common shares are assumed to be issued under securities that entitle their holders to obtain common shares in the future.  For RSUs, the full outstanding numbers as at the end of the period are included in the calculation of diluted earnings per share.  For stock options, the number of additional shares for inclusion in diluted earnings per share calculations is determined when the exercise price is less than the average market price of the Company's common shares; the stock options are assumed to be exercised and the proceeds are used to repurchase common shares at the average market price for the period.  The incremental number of common shares issued under stock options and repurchased from proceeds is included in the calculation of diluted earnings per share.  When loss per share is presented in the period, the Company's calculation of diluted loss per share excludes any incremental shares from the assumed calculation of RSUs and stock options as they would be anti-dilutive. 

(j) Financial Instruments

Initial recognition:

On initial recognition, all financial assets and financial liabilities are recorded at fair value adjusted for directly attributable transaction costs except for financial assets and liabilities classified as fair value through profit or loss ("FVTPL"), in which case transaction costs are expensed as incurred. 

Subsequent measurement of financial assets:

Subsequent measurement of financial assets depends on the classification of such assets.

I. Non-equity instruments:

IFRS 9 includes a single model that has only two classification categories for financial instruments other than equity instruments: amortized cost and fair value.  To qualify for amortized cost accounting, the instrument must meet two criteria:

Page | 11

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

i. The objective of the business model is to hold the financial asset for the collection of the cash flows; and

ii. All contractual cash flows represent only principal and interest on that principal.

All other instruments are mandatorily measured at fair value. 

II. Equity instruments:

At initial recognition, for equity instruments other than held for trading, the Company may make an irrevocable election to designate it as either FVTPL or fair value through other comprehensive income ("FVTOCI"). 

Financial assets classified as amortized cost are measured using the effective interest method.  Amortized cost is calculated by taking into account any discount or premiums on acquisition and fees that are an integral part of the effective interest method.  Amortization from the effective interest method is included in finance income.

Financial assets classified as FVTPL are measured at fair value with changes in fair values recognized in profit or loss.  Equity investments designated as FVTOCI are measured at fair value with changes in fair values recognized in other comprehensive income ("OCI"). Dividends from that investment are recorded in profit or loss when the Company's right to receive payment of the dividend is established unless they represent a recovery of part of the cost of the investment.

Impairment of financial assets carried at amortized cost:

The Company assesses at the end of each reporting period whether there is objective evidence that financial assets or group of financial assets measured at amortized cost are impaired.  Impairment losses and reversal of impairment losses, if any, are recognized in profit or loss in the period they are incurred. 

Subsequent measurement of financial liabilities:

Financial liabilities classified as amortized cost are measured using the effective interest method.  Amortized cost is calculated by taking into account any discount or premiums on acquisition and fees that are an integral part of the effective interest method.  Amortization using the effective interest method is included in finance costs.

The Company classifies its financial instruments as follows:

- Financial assets classified as FVTPL: cash, short-term investments - bonds, and equity investments;

- Financial assets classified as amortized cost: receivables and short-term investments - guaranteed investment certificates; and

- Financial liabilities classified as amortized cost: trade and other payables, provisions and due to related parties.

Bonds:

The Company acquired bonds issued by other companies from various industries through the open market.  These bonds are held to receive coupon interest payments and to realize potential gains.  The bonds may also be disposed on demand through the open market should the Company require funds for other operational or investment needs.  Bonds are classified as FVTPL and are measured at fair value on initial recognition and subsequent measurement.

Equity investments:

Equity investments represent equity interests of other publicly-traded or privately-held companies that the Company has acquired through the open market or through private placements.  These equity interests consist of common shares and warrants.  Equity investments are classified as FVTPL and are measured at fair value on initial recognition and subsequent measurement.  The fair value of warrants was determined using the Black-Scholes pricing model as at the acquisition date as well as at each period end.

Page | 12

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Derecognition of financial assets and financial liabilities:

A financial asset is derecognized when:

- The rights to receive cash flows from the asset have expired; or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Gains and losses on derecognition of financial assets and liabilities classified as amortized cost are recognized in profit or loss when the instrument is derecognized or impaired, as well as through the amortization process.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.  When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability.  In this case, a new liability is recognized, and the difference in the respective carrying amounts is recognized in the consolidated statement of income.

Offsetting of financial instruments:

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position if and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle liabilities simultaneously.

Fair value of financial instruments:

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without deduction for transaction costs.  For financial instruments that are not traded in active markets, the fair value is determined using appropriate valuation techniques, such as using a recent arm's length market transaction between knowledgeable and willing parties, discounted cash flow analysis, reference to the current fair value of another instrument that is substantially the same, or other valuation models.

(k) Significant Judgments and Estimation Uncertainties

Many amounts included in the consolidated financial statements require management to make judgments and/or estimates.  These judgments and estimates are continuously evaluated and are based on management's experience and knowledge of relevant facts and circumstances.  Actual results may differ from the amounts included in the consolidated statement of financial position.

Areas of significant judgment include:

- Capitalization of expenditures with respect to exploration, evaluation and development costs to be included in mineral rights and properties.

- Determination of functional currency.

- Recognition, measurement and impairment or impairment reversal assessment for mineral rights and properties.

- Accounting assessment and classification for equity investments and short-term investments.

- Determination of asset acquisition or business combination.

Page | 13

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Areas of significant estimates include:

- The estimated fair values of CGUs for impairment or impairment reversal tests, including estimates of future costs to produce proven and probable reserves, future commodity prices, discount rates, probabilities of expected cash flows from disposal and salvage value of plant and equipment.

- Valuation input and forfeiture rates used in calculation of share-based compensation.

- Valuation of securities that do not have a quoted market price.

The Company estimates its ore reserves and mineral resources based on information compiled by qualified persons as defined in accordance with National Instrument 43-101.

(l) Accounting Standards Issued But Not Yet Effective

Amendment to IAS 16 - Property, Plant and Equipment.  The amendments to IAS 16 prohibit deducting from the cost of property, plant and equipment the proceeds from selling items produced while bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by management. Instead, a company will recognize such sales proceeds and related cost in profit or loss.

This amendment is effective January 1, 2022 with early adoption permitted. The Company is in the process of assessing the impact of the application of this amendment on the consolidated financial statements.

3. WHITEHORSE GOLD CORP. SPIN-OUT TRANSACTION

During Fiscal 2020, the Company established Whitehorse Gold Corp. ("Whitehorse Gold") to acquire the Tagish Lake Gold Project ("TLG Project") located in Yukon Territory, Canada from the Company for consideration of $2,201,350 (CAD$3,000,000) via a promissory note plus 20,000,000 Whitehorse Gold common shares ("spin-out shares") as a result of a strategic review on the TLG Project (see note 9).

On November 18, 2020, the Company received the consideration of $2,201,350 and distributed all of the spin-out shares held by it to the Company's shareholders on a pro rata basis by way of a plan of arrangement under the Business Corporations Act (British Columbia).  The spin-out shares were valued at $6,906,548 upon distribution.  Assets and liabilities of Whitehorse Gold and the TLG Project were classified as held for distribution as at June 30, 2020 in the amount of $8,695,312 and $89,653, respectively.

4. SHORT-TERM INVESTMENTS

Short-term investments consist of the following:

    June 30, 2021     June 30, 2020     July 1, 2019  
Guaranteed Investment Certificates $ -   $ 14,677,890   $ -  
Bonds   143,914     462,829     8,361,655  
  $ 143,914   $ 15,140,719   $ 8,361,655  

The Company acquired guaranteed investment certificates ("GICs") through major Canadian financial institutions.  These GICs were held to receive interest payments until maturity.  The Company accounts for the GICs at amortized cost at each reporting date.

The Company acquired bonds issued by other companies from various industries through the open market.  These bonds were held to receive coupon interest payments and to realize potential gains.  The bonds may also be disposed on demand through the open market should the Company require funds for operational or investment needs.  The Company accounts for the bonds at fair value at each reporting date.

Page | 14

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

The continuity of GICs is summarized as follows:

    Amount  
Balance, July 1, 2019 $ -  
   Acquisition   14,895,360  
   Interest earned   2,255  
   Foreign currency translation impact   (219,725 )
Balance, June 30, 2020 $ 14,677,890  
   Interest earned   69,206  
   Interest received   (70,964 )
   Disposition   (15,596,974 )
   Foreign currency translation impact   920,842  
Balance, June 30, 2021 $ -  

The continuity of bonds is summarized as follows:

    Amount  
Balance, July 1, 2019 $ 8,361,655  
   Interest earned   269,275  
   Loss on fair value change   (279,768 )
   Coupon payment   (299,005 )
   Disposition   (7,589,328 )
Balance, June 30, 2020 $ 462,829  
   Loss on fair value change   (318,915 )
Balance, June 30, 2021 $ 143,914  

5. OTHER TAX RECEIVABLE

Other tax receivable is composed of value-added tax ("VAT") imposed by the Bolivian government.  The Company had VAT outputs through its exploration costs and general expenses incurred in Bolivia.  These VAT outputs are deductible against future VAT inputs that will be generated through sales. 

6. EQUITY INVESTMENTS

Equity investments represent equity interests of other publicly-traded or privately-held companies that the Company has acquired through the open market or through private placements.  These equity interests consist of common shares, preferred shares and warrants.  Equity investments are classified as FVTPL and are measured at fair value on initial recognition and subsequent measurement.  The fair value of warrants was determined using the Black-Scholes pricing model as at the acquisition date as well as at each period end.

Page | 15

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

The equity investments are summarized as follows:

    June 30, 2021     June 30, 2020     July 1, 2019  
Common or preferred shares                  
                         Public companies $ 461,635   $ 3,519,196   $ 3,395,708  
                         Private companies   -     -     250,000  
Warrants                  
                         Public companies   34,891     592,626     259,612  
  $ 496,526   $ 4,111,822   $ 3,905,320  

 The fair values of the warrants were estimated using the Black Scholes options pricing model with the following assumptions:

    June 30, 2021     June 30, 2020     July 1, 2019  
Risk free interest rate   0.97%     0.36%     1.39%  
Expected volatility   114%     122%     130%  
Expected life of warrants in years   0.19     1.20     2.19  

The continuity of equity investments is summarized as follows:

          Accumulated mark-to-  
          market gain included  
    Fair value     in net income  
Balance, July 1, 2019 $ 3,905,320   $ 2,319,464  
Acquisition   3,737,498     -  
Proceeds on disposal   (4,566,635 )   -  
Change in fair value   1,196,084     1,196,084  
Foreign exchange impact   (160,445 )   -  
Balance, June 30, 2020 $ 4,111,822   $ 3,515,548  
Proceeds on disposal   (4,345,636 )   -  
Change in fair value   455,597     455,597  
Foreign exchange impact   274,743     -  
Balance, June 30, 2021 $ 496,526   $ 3,971,145  

7. INCOME FROM INVESTMENTS

Income from investments consist of:

    Year Ended June 30,  
    2021     2020  
Fair value change on equity investments $ 455,597   $ 1,196,085  
Fair value change on bonds   (318,915 )   (10,493 )
Dividend income   110,293     103,968  
Interest income   148,568     22,361  
Income from investments $ 395,543   $ 1,311,921  

 

Page | 16

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

8. PLANT AND EQUIPMENT

                      Office              
    Land and                 equipment and     Computer        
Cost   building     Machinery     Motor vehicles     furniture     software     Total  
Balance, July 1, 2019 $ 1,310,639   $ 1,055,450   $ 268,155   $ 175,262   $ 96,475   $ 2,905,981  
Additions   -     39,275     30,011     57,769     102,552     229,607  
Reclassified to assets held for distribution   -     -     -     -     (10,187 )   (10,187 )
Foreign currency translation impact   (27,019 )   (35,688 )   (2,601 )   (4,657 )   (5,340 )   (75,305 )
Balance, June 30, 2020 $ 1,283,620   $ 1,059,037   $ 295,565   $ 228,374   $ 183,500   $ 3,050,096  
Additions   -     2,232     -     110,935     -     113,167  
Disposals   (653,620 )   (859,519 )   (54,146 )   (37,327 )   (31 )   (1,604,643 )
Foreign currency translation impact   -     497     1,163     13,259     18,266     33,185  
Balance, June 30, 2021 $ 630,000   $ 202,247   $ 242,582   $ 315,241   $ 201,735   $ 1,591,805  
                                     
Accumulated depreciation and amortization                                    
Balance, July 1, 2019 $ (680,640 ) $ (878,165 ) $ (107,922 ) $ (141,209 ) $ (96,439 ) $ (1,904,375 )
Depreciation and amortization   -     (22,795 )   (40,305 )   (26,136 )   (1,446 )   (90,682 )
Reclassified to assets held for distribution   -     -     -     -     34     34  
Foreign currency translation impact   27,020     33,953     2,413     4,728     3,847     71,961  
Balance, June 30, 2020 $ (653,620 ) $ (867,007 ) $ (145,814 ) $ (162,617 ) $ (94,004 ) $ (1,923,062 )
Depreciation and amortization   -     (24,538 )   (45,820 )   (38,080 )   (23,769 )   (132,207 )
Disposals   653,620     819,698     54,556     73,376     31     1,601,281  
Foreign currency translation impact   -     (224 )   (506 )   (8,270 )   (10,178 )   (19,178 )
Balance, June 30, 2021 $ -   $ (72,071 ) $ (137,584 ) $ (135,591 ) $ (127,920 ) $ (473,166 )
                                     
Carrying amount                                    
Balance, June 30, 2020 $ 630,000   $ 192,030   $ 149,751   $ 65,757   $ 89,496   $ 1,127,034  
Balance, June 30, 2021 $ 630,000   $ 130,176   $ 104,998   $ 179,650   $ 73,815   $ 1,118,639  

During the year ended June 30, 2021, certain plant and equipment were disposed for proceeds of $1,418 (year ended June 30, 2020, $nil) and loss of $1,944 (year ended June 30, 2020, $nil).

9. MINERAL PROPERTY INTERESTS

(a) Silver Sand Project

On July 20, 2017, the Company acquired the Silver Sand Project.  The Project is located in the Colavi District of the Potosí Department, in Southwestern Bolivia, 25 kilometres ("km") northwest of Potosí City, the department capital.  The Project covers an area of approximately 5.42 km2 at an elevation of 4,072 metres ("m") above sea level. 

The Company has carried out extensive exploration and resource definition drill programs on the project since its acquisition in 2017.  From 2017 to 2019, the Company completed a total of 97,619 m of drilling in 386 diamond core drillholes.  Subsequent to June 30, 2021, the Company announced that it commenced a planned 38,000 m drill program on the project in 2021. 

Advanced studies have commenced on the project, and the Company selected CSA Global Consultants Canada Ltd. (an ERM Group company), Knight Piésold Consultores S.A., and Wood plc to lead the Preliminary Economic Assessment, environmental baseline study, and social baseline studies, respectively.

For the year ended June 30, 2021, total expenditures of $3,357,104 (year ended June 30, 2020 - $9,482,197) were capitalized under the project.

In July 2018, the Company entered into an agreement with third party private vendors to acquire their 100% interest in the Autorización Transitoria Especiales ("ATE") located to the north of the Silver Sand Project by cash payments of $1,000,000 and the issuance of 832,000 common shares to the vendors (see note 12(c)).  During Fiscal 2019 and Fiscal 2020, cash payments of $800,000 were paid and 541,000 common shares were issued to the vendors.  During the year ended June 30, 2021, the final payment of $200,000 cash and 291,000 common shares were paid and issued to the vendors, respectively. 

Page | 17

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

(b) Carangas Project

In April 2021, the Company signed an agreement with a private Bolivian company to acquire a 98% joint venture interest in the Carangas silver project. 

The Carangas Project is located approximately 180 km southwest of the city of Oruro and within 50 km from Bolivia's border with Chile.  The joint venture partner is owned 100% by Bolivian nationals and holds title to the two exploration licenses (covering an area of 6.25 km2) that comprise the Carangas Project. Under the agreement, the Company is required to cover 100% of the future expenditures on exploration, mining, development, and production activities for the project.  The agreement has a term of 30 years and is renewable for an additional 15 years. 

On June 29, 2021, the Company announced the commencement of a 5,000 m initial discovery drill program on the project in 2021.

For the year ended June 30, 2021, total expenditures of $250,427 (year ended June 30, 2020 - $nil) were capitalized under the project.

(c) Silverstrike Project

In December 2019, the Company acquired a 98% joint venture interest in the Silverstrike Project from a private Bolivian corporation by making a one-time cash payment of $1,350,000. 

The Silverstrike Project covers an area of approximately 13 km2 and is located approximately 140 km southwest of the city of La Paz, Bolivia. The project shares many similarities with the Silver Sand Project pre-discovery drilling, namely: sandstone hosted structurally controlled silver-polymetallic mineralization centered on a historic mining district - the Berenguela District, presence of felsic Tertiary intrusive rocks with corresponding multiple silver rich occurrences associated with sercitic alteration.  The area is largely underexplored with limited modern exploration applied. 

For the year ended June 30, 2021, total expenditures of $1,293,907 (year ended June 30, 2020 - $476,728) were capitalized under the project.

(d) TLG Project

The TLG Project, covering an area of approximately 170 km2, is located in Yukon Territory, Canada, and consists of 1,051 mining claims hosting three identified gold and gold-silver mineral deposits: Skukum Creek, Goddell Gully and Mount Skukum.  In Q4, fiscal 2020, given the significant changes with favourable effects on the TLG Project, the Company recognized an impairment recovery of $8,724,915 on the TLG project, being its fair value less costs of disposal ("FVLCD") for the year ended June 30, 2020. The fair value was determined using a market approach based on the pricing parameters implied by the market value of selected comparable transactions involving the sale of similar companies or mineral properties. Specifically, the comparable in-situ resource multiples (Enterprise Value ("EV") per ounce of contained gold ("EV/R&R")) observed in comparable transactions has been used to estimate the fair value. 

Page | 18

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

On November 18, 2020, the Whitehorse Gold spin-out transaction was completed and, as a result, the Company no longer holds an interest in the TLG Project (see note 3).

For the year ended June 30, 2021, total expenditures of $312,593 (year ended June 30, 2020 - $78,242) were capitalized to assets held for distribution under the TLG Project prior to its disposal.

The project's carrying value of $8,985,913 was disposed upon the completion of the Whitehorse Gold spin-out transaction, resulting in no gain or loss.   

(e) RZY Project

The RZY Project, located in Qinghai, China is an early stage silver-lead-zinc exploration project.  The RZY Project is located approximately 237 km from the city of Yushu Tibetan Autonomous Prefecture.  In 2016, the Qinghai Government issued a moratorium which suspended exploration for 26 mining projects in the region, including the RZY Project, and classified the region as a National Nature Reserve Area.   

During Fiscal 2020, the Company's subsidiary, Qinghai Found Mining Co., Ltd. ("Qinghai Found"), reached a compensation agreement with the Qinghai Government for the RZY Project.  Pursuant to the agreement, Qinghai Found will surrender its title to the RZY Project to the Qinghai Government after completing certain reclamation works for one-time cash compensation of $2.7 million (RMB ¥20 million).  As of June 30, 2021, the process was under review and subject to approval by the Qinghai Government.

The continuity schedule of mineral property acquisition costs and deferred exploration and development costs is summarized as follows:

Cost   Silver Sand     Silverstrike     Carangas     Tagish Lake     RZY Project     Total  
Balance, July 1, 2019 $ 55,995,583   $ -   $ -   $ -   $ 2,700,897   $ 58,696,480  
Capitalized exploration expenditures                                    
   Reporting and assessment   447,953     727     -     -     -     448,680  
   Drilling and assaying   4,856,789     1,666     -     -     -     4,858,455  
   Project management and support   3,386,249     436,473     -     -     -     3,822,722  
   Camp service   492,674     37,862     -     -     -     530,536  
   Camp construction   24,135     -     -     -     -     24,135  
   Permitting   38,250     -     -     78,242     -     116,492  
   Acquisition of Silverstrike Project   -     1,350,000     -     -     -     1,350,000  
   Acquisition of mineral concessions   216,147     -     -     -     -     216,147  
   Other   20,000     -     -     -     -     20,000  
   Impairment recovery   -     -     -     8,724,915     -     8,724,915  
   Reclassified to assets held for distribution   -     -     -     (8,673,320 )   -     (8,673,320 )
  Foreign currency impact   (176,786 )   (5,538 )   -     (129,837 )   (77,281 )   (389,442 )
Balance, June 30, 2020 $ 65,300,994   $ 1,821,190   $ -   $ -   $ 2,623,616   $ 69,745,800  
Capitalized exploration expenditures                                    
   Reporting and assessment   482,355     4,119     -     47,538     -     534,012  
   Drilling and assaying   78,201     169,102     21,952     -     -     269,255  
   Project management and support   2,505,338     996,005     178,753     -     -     3,680,096  
   Camp service   225,016     113,666     49,569     -     -     388,251  
   Camp construction   53,199     -     -     215,238     -     268,437  
   Permitting   12,995     11,015     153     49,817     -     73,980  
   Disposal upon spin-out distribution   -     -     -     (312,593 )         (312,593 )
   Foreign currency impact   587,402     48,207     4,823     -     247,752     888,184  
Balance, June 30, 2021 $ 69,245,500   $ 3,163,304   $ 255,250   $ -   $ 2,871,368   $ 75,535,422  

 

Page | 19

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

10. TRADE AND OTHER PAYABLES

Trade and other payables consist of:

    June 30, 2021     June 30, 2020     July 1, 2019  
Trade payable $ 626,683   $ 450,779   $ 1,078,041  
Accrued liabilities   417,506     703,814     160,903  
  $ 1,044,189   $ 1,154,593   $ 1,238,944  

11. RELATED PARTY TRANSACTIONS

Related party transactions are made on terms agreed upon by the related parties.  The balances with related parties are unsecured, non-interest bearing, and due on demand.  Related party transactions not disclosed elsewhere in the consolidated financial statements are as follows:

Due to a related party   June 30, 2021     June 30, 2020     July 1, 2019  
Silvercorp Metals Inc. $ 50,378   $ 62,182   $ 68,151  

(a) Silvercorp Metals Inc. ("Silvercorp") has two directors and one officer in common with the Company.  Silvercorp and the Company share office space and Silvercorp provides various general and administrative services to the Company.  The Company expects to continue making payments to Silvercorp in the normal course of business.  Expenses in general and administrative services rendered and incurred by Silvercorp on behalf of the Company for the year ended June 30, 2021 were $616,030 (year ended June 30, 2020 - $586,138).

(b) Compensation of key management personnel

The remuneration of directors and other members of key management personnel for the years ended June 30, 2021 and 2020 are as follows:

    Year ended June 30,  
    2021     2020  
Director's cash compensation $ 290,463   $ 55,858  
Director's share-based compensation   604,970     446,652  
Key management's cash compensation   859,394     940,323  
Key management's share-based compensation   1,709,004     2,205,258  
  $ 3,463,831   $ 3,648,091  

Other than as disclosed above, the Company does not have any ongoing contractual or other commitments resulting from transactions with related parties.

12. SHARE CAPITAL

(a)  Share Capital - authorized share capital

The Company's authorized share capital consists of an unlimited number of common shares without par value.

Page | 20

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

(b)  Share-based compensation

The Company has a share-based compensation plan (the "Plan") under which the Company may issue stock options and restricted share units ("RSUs").  The maximum number of common shares to be reserved for issuance on any share-based compensation under the Plan is a rolling 10% of the issued and outstanding common shares from time to time.   

For the year ended June 30, 2021, a total of $1,482,170 (year ended June 30, 2020 - $1,584,730) was recorded as share-based compensation expense. 

For the year ended June 30, 2021, a total of $114,356 (year ended June 30, 2020 - $56,299) was included in the project evaluation and corporate development expense.

For the year ended June 30, 2021, a total of $802,839 (year ended June 30, 2020 - $1,118,873) was capitalized under mineral property interests.

(i) Stock Options

The continuity schedule of stock options, as at June 30, 2021, is as follows:

          Weighted average  
    Number of options     exercise price (CAD$)  
Balance, July 1, 2019   5,905,000     1.36  
Options exercised   (888,066 )   1.16  
Options cancelled   (354,167 )   1.91  
Balance, June 30, 2020   4,662,767     1.36  
Options exercised   (1,396,935 )   0.98  
Options cancelled   (150,000 )   0.82  
Balance, June 30, 2021   3,115,832     1.56  

Option pricing model requires the input of subjective assumptions including the expected volatility.  Changes in the assumptions can materially affect the fair value estimate and therefore, the existing models do not necessarily provide a reliable estimate of the fair value of the Company's stock options.  The Company's expected volatility is based on the historical volatility of the Company's share price on the TSX.

For the year ended June 30, 2021, a total of 1,396,935 (year ended June 30, 2020 - 888,066) stock options with weighted average share price at the date of exercise of $5.34 (year ended June 30, 2020 - $3.77) were exercised. 

The following table summarizes information about stock options outstanding as at June 30, 2021:

 

 

Number of options

Weighted

Number of options

Weighted

 

Exercise

outstanding as at

average remaining

exercisable as at

average

 

prices (CAD$)

2021-06-30 

 contractual life (years)

2021-06-30 

 exercise price (CAD$)

$

0.55

495,000

0.34

495,000

$0.55

 

1.15

930,000

1.08

930,000

$1.15

 

1.57

200,000

1.44

200,000

$1.57

 

2.15

1,490,832

2.65

889,169

$2.15

 

0.55 - 2.15

3,115,832

1.74

2,514,169

$1.42

 

Page | 21

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

Subsequent to June 30, 2021, a total of 553,331 options with exercise prices of CAD$1.15 and CAD$2.15 were exercised for proceeds of $692,770 and a total of 41,667 options with an exercise price of $2.15 were cancelled.

(ii) RSUs

The continuity schedule of RSUs, as at June 30, 2021, is as follows:

          Weighted average  
          grant date closing  
    Number of shares     price per share (CAD$)  
Balance, July 1, 2019   -   $ -  
Granted   1,064,600     4.70  
Cancelled   (3,000 )   4.70  
Distributed   (136,400 )   4.70  
Balance, June 30, 2020   925,200   $ 4.70  
Granted   360,500     6.46  
Cancelled   (26,250 )   4.80  
Distributed   (464,550 )   4.72  
Balance, June 30, 2021   794,900   $ 5.48  

Subsequent to June 30, 2021, a total of 59,650 RSUs were distributed and a total of 25,000 RSUs were cancelled.

During the year ended June 30, 2021, a total of 360,500 RSUs were granted to directors, officers, employees, and consultants of the Company at grant date closing price of CAD$6.46 per share subject to a vesting schedule over a three-year term with 1/6 of the RSUs vesting every six months from the date of grant. 

(c) Common Shares issued for mineral property interests

As partial consideration for the acquisition of ATEs located to the north of the Silver Sand Property (see note 9(a)), the Company agreed to issue a total of 832,000 common shares to the vendors valued at $1,000,000 in the year ended June 30, 2019.  During the year ended June 30, 2021, 291,000 common shares valued at $350,479 (year ended June 30, 2020 - 291,000 common shares valued at $349,759) were issued and recorded under share capital.

(d) (Loss) earning per share

    For the years ended June 30,  
    2021     2020  
    Loss     Shares     Per-Share     Income     Shares     Per-Share  
    (Numerator)     (Denominator)     Amount     (Numerator)     (Denominator)     Amount  
Net (loss) income attributable to equity holders of the Company $ (6,566,440 )             $ 5,907,726              
Basic (loss) earnings per share   (6,566,440 )   153,294,454   $ (0.04 )   5,907,726     146,254,726    $ 0.04  
Effect of dilutive securities:                                    
   Stock options and RSUs         -                 4,433,827        
Diluted (loss) earnings per share $ (6,566,440 )   153,294,454   $ (0.04 ) $ 5,907,726     150,688,553   $ 0.04  

Anti-dilutive options that are not included in the diluted (loss) earnings per share calculation were nil for the year ended June 30, 2021 (year ended June 30, 2020 - nil).

Page | 22

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

13. NON-CONTROLLING INTEREST

    Qinghai Found  
Balance, July 1, 2019 $ (12,246 )
Share of net loss   (14,458 )
Share of other comprehensive loss   (14,666 )
Balance, June 30, 2020 $ (41,370 )
Share of net loss   (7,934 )
Share of other comprehensive income   45,714  
Balance, June 30, 2021 $ (3,590 )

As at June 30, 2021 and June 30, 2020, the non-controlling interest in the Company's subsidiary Qinghai Found was 18%.

14. FINANCIAL INSTRUMENTS

The Company manages its exposure to financial risks, including liquidity risk, foreign exchange rate risk, interest rate risk, credit risk, and equity price risk in accordance with its risk management framework. The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and reviews the Company's policies on an ongoing basis.

(a) Fair Value

The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of inputs used in making the measurements as defined in IFRS 13 - Fair Value Measurement ("IFRS 13").

Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity.

Page | 23

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

The following table sets forth the Company's financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy as at June 30, 2021 and June 30, 2020 that are not otherwise disclosed.  As required by IFRS 13, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

    Fair value as at June 30, 2021  
Recurring measurements   Level 1     Level 2     Level 3     Total  
Financial Assets                        
      Cash $ 46,441,482   $ -   $ -   $ 46,441,482  
      Short-term investments - bonds   143,914     -     -     143,914  
      Common or preferred shares   461,635     -     -     461,635  
      Warrants   -     34,891     -     34,891  

 

    Fair value as at June 30, 2020  
Recurring measurements   Level 1     Level 2     Level 3     Total  
Financial Assets                        
     Cash $ 29,824,146   $ -   $ -   $ 29,824,146  
      Short-term investments - bonds   462,829     -     -     462,829  
      Common or preferred shares   3,519,196     -     -     3,519,196  
      Warrants   -     592,626     -     592,626  

 

    Fair value as at July 1, 2019  
Recurring measurements   Level 1     Level 2     Level 3     Total  
Financial Assets                        
      Cash $ 21,280,631   $ -   $ -   $ 21,280,631  
      Short-term investments - bonds   8,361,655     -     -     8,361,655  
      Common or preferred shares   3,395,708     -     250,000     3,645,708  
      Warrants   -     259,612     -     259,612  

Fair value of other financial instruments excluded from the table above approximates their carrying amount as of June 30, 2021, June 30, 2020 and July 1, 2019, respectively.

There were no transfers into or out of Level 3 during the year ended June 30, 2021.   

(b) Liquidity Risk

The Company has a history of losses and no operating revenues from its operations.  Liquidity risk is the risk that the Company will not be able to meet its short term business requirements.  As at June 30, 2021, the Company had a working capital position of $46,357,578 and sufficient cash resources to meet the Company's short-term financial liabilities and its planned exploration expenditures on various projects in Bolivia for, but not limited to, the next 12 months.

Page | 24

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments.  The following summarizes the remaining contractual maturities of the Company's financial liabilities:

    June 30, 2021     June 30, 2020     July 1, 2019  
    Due within a year     Total     Total     Total  
Trade and other payables $ 1,044,189   $ 1,044,189   $ 1,154,593   $ 1,238,944  
Due to a related party   50,378     50,378     62,182     68,151  
Payable for mineral property acquisition   -     -     193,073     301,582  
  $ 1,094,567   $ 1,094,567   $ 1,409,848   $ 1,608,677  

(c) Foreign Exchange Risk

The Company is exposed to foreign exchange risk when it undertakes transactions and holds assets and liabilities denominated in foreign currencies other than its functional currencies.  The functional currency of the head office, Canadian subsidiaries and all intermediate holding companies is CAD.  The functional currency of all Bolivian subsidiaries is USD.  The functional currency of the Chinese subsidiary is RMB.  The Company currently does not engage in foreign exchange currency hedging.  The Company's exposure to foreign exchange risk that could affect net income is summarized as follows:

Financial assets denominated in foreign currencies other than relevant functional currency   June 30, 2021     June 30, 2020     July 1, 2019  
United States dollars $ 11,079,194   $ 11,158,435   $ 13,460,154  
Bolivianos   285,267     297,147     146,102  
Chinese RMB   -     160,123     146,439  
Total $ 11,364,461   $ 11,615,705   $ 13,752,695  
                   
Financial liabilities denominated in foreign currencies other than relevant functional currency                  
United States dollars $ -   $ 432,922   $ 1,016,643  
Bolivianos   333,405     -     -  
Chinese RMB   -     101,060     3,254  
Total $ 333,405   $ 533,982   $ 1,019,897  

As at June 30, 2021, with other variables unchanged, a 1% strengthening (weakening) of the USD against the CAD would have increased (decreased) net income by approximately $111,000.

As at June 30, 2021, with other variables unchanged, a 1% strengthening (weakening) of the Bolivianos against the USD would have increased (decreased) net income by approximately $500.

(d) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.  The Company holds a portion of cash in bank accounts that earn variable interest rates.  Due to the short-term nature of these financial instruments, fluctuations in market rates do not have significant impact on the fair values of the financial instruments as of June 30, 2021.  The Company, from time to time, also owns GICs and bonds that earn interest payments at fixed rates to maturity.  Fluctuation in market interest rates usually will have an impact on bond's fair value.  An increase in market interest rates will generally reduce bond's fair value while a decrease in market interest rates will generally increase it.  The Company monitors market interest rate fluctuations closely and adjusts the investment portfolio accordingly. 

Page | 25

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

(e) Credit Risk

Credit risk is the risk of financial loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations.  The Company's exposure to credit risk is primarily associated with cash, bonds, and receivables.  The carrying amount of financial assets included on the statement of financial position represents the maximum credit exposure.

The Company has deposits of cash that meet minimum requirements for quality and liquidity as stipulated by the Board.  Management believes the risk of loss to be remote, as the majority of its cash are held with major financial institutions.  Bonds by nature are exposed to more credit risk than cash.  The Company manages its risk associated with bonds by only investing in large globally recognized corporations from diversified industries.  As at June 30, 2021, the Company had a receivables balance of $343,608 (June 30, 2020 - $303,488).  There were no material amounts in receivables which were past due on June 30, 2021 (June 30, 2020 - $nil).

(f) Equity Price Risk

The Company holds certain marketable securities that will fluctuate in value as a result of trading on global financial markets.  Based upon the Company's portfolio at June 30, 2021, a 10% increase (decrease) in the market price of the securities held, ignoring any foreign exchange effects would have resulted in an increase (decrease) to net income of approximately $50,000.

15. CAPITAL MANAGEMENT

The objectives of the capital management policy are to safeguard the Company's ability to support exploration and operating requirements on an ongoing basis, continue the investment in high quality assets along with safeguarding the value of its mineral properties, and support any expansionary plans.

The capital of the Company consists of the items included in equity less cash and bonds.  Risk and capital management are primarily the responsibility of the Company's corporate finance function and is monitored by the Board. The Company manages the capital structure and makes adjustments depending on economic conditions. Significant risks are monitored and actions are taken, when necessary, according to the Company's approved policies.

In addition, the current COVID-19 pandemic has caused significant disruption to global economic conditions which may adversely impact the Company's results.

Page | 26

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

16. INCOME TAXES

The provision for income taxes differs from the amount computed by applying the cumulative Canadian federal and provincial income tax rates to the loss before income tax provision due to the following:

    Years ended June 30,  
    2021     2020  
Canadian statutory tax rate   27.00%     27.00%  
             
(Loss) income before income taxes $ (6,574,374 ) $ 5,893,268  
             
Income tax (recovery) expense computed at Canadian statutory rates   (1,775,081 )   1,591,182  
Foreign tax rates different from statutory rate   218,388     (324,652 )
Permanent items and other   3,633,845     614,589  
Change in unrecognized deferred tax assets   (2,078,112 )   (1,881,119 )
Adjustments in respect of prior years   960     -  
  $ -   $ -  

Deferred tax assets are recognized to the extent that the realization of the related tax benefit through future taxable profit is probable.  The ability to realize the tax benefits is dependent upon numerous factors, including the future profitability of operations in the jurisdiction in which the tax benefit arise.  Deductible temporary differences and unused tax losses for which no deferred tax assets have been recognized are attributable to the following:

    June 30, 2021     June 30, 2020     July 31, 2019  
Non-capital loss carry forward $ 9,184,009   $ 11,844,993   $ 11,096,051  
Capital loss carry forward   23,435,600     -     -  
Plant and equipment   155,152     2,289,041     2,371,361  
Mineral property interests   3,519,176     16,767,840     26,374,381  
Equity investments   572,253     535,456     -  
Share issuance cost   1,624,469     -     -  
Investment tax credit   -     1,191,951     1,241,225  
  $ 38,490,659   $ 32,629,281   $ 41,083,018  

As of June 30, 2021, the Company has the following net operating losses, expiring various years to 2041 and available to offset future taxable income in Canada, Bolivia and China, respectively:

    Canada     Bolivia     China  
2025   -     -     38,535  
2027   -     -     48,331  
2028   -     -     87,248  
2029   -     -     85,919  
2037   -     44,849     -  
2038   -     22,571     -  
2039   -     115,876     -  
2040   -     -     -  
2041   7,976,944     763,736     -  
  $ 7,976,944   $ 947,032   $ 260,033  

As at June 30, 2021, the Company had capital loss carry forward of $23,435,600 that can be carried indefinitely in Canada (June 30, 2020 - $nil).

Page | 27

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

17. SEGMENTED INFORMATION

As at and for the year ended June 30, 2021, the Company operates in three (as at and for the year ended June 30, 2020 - four) reportable operating segments, one being the corporate segment; the other two being the exploration and development segments focused on safeguarding the value of its mineral properties in Bolivia and China (as at and for the year ended June 30, 2020 - one being the corporate segment; the other three being the exploration and development segments in Bolivia, Canada, and China).  These reporting segments are components of the Company where separate financial information is available that is evaluated regularly by the Company's Chief Executive Officer, the chief operating decision maker ("CODM"). The CODM no longer reviews the Canada reportable segment as a result of the Whitehorse Gold spin-out transaction (see note 3 and 9(d)). 

(a) Segment information for assets and liabilities are as follows:

      June 30, 2021  
      Corporate     Exploration and Development     Total  
      Canada and BVI     Bolivia     China        
                           
Cash   $ 46,259,720   $ 158,539   $ 23,223   $ 46,441,482  
Short-term investments     143,914     -     -     143,914  
Equity investments     496,526     -     -     496,526  
Plant and equipment     115,340     988,503     14,796     1,118,639  
Mineral property interests     -     72,664,054     2,871,368     75,535,422  
Other assets     461,135     2,427,576     194,430     3,083,141  
Total Assets   $ 47,476,635   $ 76,238,672   $ 3,103,817   $ 126,819,124  
                           
Total Liabilities   $ (573,163 ) $ (333,405 ) $ (187,999 ) $ (1,094,567 )

 

      June 30, 2020  
      Corporate     Exploration and Development     Total  
      Canada and BVI     Bolivia     Canada     China        
                                 
Cash   $ 29,357,060   $ 132,379   $ 308,086   $ 26,621   $ 29,824,146  
Short-term investments     15,140,719     -     -     -     15,140,719  
Equity investments     4,111,822     -     -     -     4,111,822  
Plant and equipment     137,935     972,430     -     16,669     1,127,034  
Mineral property interests     -     67,122,184     -     2,623,616     69,745,800  
Assets held for distribution     -     -     8,695,312     -     8,695,312  
Other assets     118,793     2,308,957     -     139,668     2,567,418  
Total Assets   $ 48,866,329   $ 70,535,950   $ 9,003,398   $ 2,806,574   $ 131,212,251  
                                 
Total Liabilities   $ (875,866 ) $ (432,923 ) $ (89,652 ) $ (101,060 ) $ (1,499,501 )

 

      July 1, 2019  
      Corporate     Exploration and Development        
      Canada and BVI     Bolivia     Canada     China     Total  
                                 
Cash   $ 20,915,897   $ 293,675   $ 22,837   $ 48,222   $ 21,280,631  
Short-term investments     8,361,655     -           -     8,361,655  
Equity investments     3,905,320     -           -     3,905,320  
Plant and equipment     24,997     959,449           17,160     1,001,606  
Mineral property interests     -     55,995,582           2,700,898     58,696,480  
Other assets     50,537     1,528,016     11,614     104,459     1,694,626  
Total Assets   $ 33,258,406   $ 58,776,722   $ 34,451   $ 2,870,739   $ 94,940,318  
                                 
Total Liabilities   $ (704,371 ) $ (1,016,642) $   $ (85,464 ) $ (3,254 ) $ (1,809,731 )

 

Page | 28

New Pacific Metals Corp.
Notes to the Consolidated Financial Statements
(Expressed in US dollars)

(b) Segment information for operating results are as follows:

    Year ended June 30, 2021  
    Corporate     Exploration and Development     Total  
    Canada and BVI     Bolivia     China        
                         
Project evaluation and corporate development $ (295,315 ) $ (527,549 ) $ -   $ (822,864 )
Salaries and benefits   (1,465,709 )   (188,340 )   (34,638 )   (1,688,687 )
Share-based compensation   (1,482,170 )   -     -     (1,482,170 )
Other operating expenses   (1,897,162 )   (47,846 )   (7,256 )   (1,952,264 )
Total operating expense   (5,140,356 )   (763,735 )   (41,894 )   (5,945,985 )
                         
Income from investments   395,421     -     122     395,543  
Loss on disposal of plant and equipment   -     -     (1,944 )   (1,944 )
Foreign exchange loss   (1,021,628 )   -     -     (1,021,628 )
Other expense   -     -     (360 )   (360 )
Net loss $ (5,766,563 ) $ (763,735 ) $ (44,076 ) $ (6,574,374 )
                         
Attributed to:                        
Equity holders of the Company $ (5,766,563 ) $ (763,735 ) $ (36,142 ) $ (6,566,440 )
Non-controlling interests   -     -     (7,934 )   (7,934 )
Net loss $ (5,766,563 ) $ (763,735 ) $ (44,076 ) $ (6,574,374 )

 

    Year ended June 30, 2020  
    Corporate     Exploration and Development     Total  
    Canada      Bolivia     Canada     China        
                               
Project evaluation and corporate development $ (90,184 ) $ (115,876 ) $ -   $ -   $ (206,060 )
Salaries and benefits   (1,200,781 )   -     (73,539 )   (50,379 )   (1,324,699 )
Share-based compensation   (1,584,730 )   -     -     -     (1,584,730 )
Other operating expenses   (1,429,865 )   -     (33,037 )   (30,198 )   (1,493,100 )
Total operating expense   (4,305,560 )   (115,876 )   (106,576 )   (80,577 )   (4,608,589 )
                               
Income from investments   1,311,764     -     -     157     1,311,921  
Impairment recovery of mineral property interests   -     -     8,724,915     -     8,724,915  
Foreign exchange gain   464,896     -     22     103     465,021  
Other income (expense)   22,343     -     (22,343 )   -     -  
Net (loss) income $ (2,506,557 ) $ (115,876 ) $ 8,596,018   $ (80,317 ) $ 5,893,268  
                               
Attributed to:                              
Equity holders of the Company $ (2,506,557 ) $ (115,876 ) $ 8,596,018   $ (65,859 ) $ 5,907,726  
Non-controlling interests   -     -     -     (14,458 ) $ (14,458 )
Net (loss) income $ (2,506,557 ) $ (115,876 ) $ 8,596,018   $ (80,317 ) $ 5,893,268  

18. SUPPLEMENTARY CASH FLOW INFORMATION

Changes in non-cash operating working capital:   Year Ended June 30,  
    2021     2020  
   Receivables $ (22,615 ) $ (110,087 )
   Deposits and prepayments   (340,059 )   (56,776 )
   Accounts payable and accrued liabilities   (178,289 )   75,944  
   Due to a related party   (17,393 )   (3,312 )
  $ (558,356 ) $ (94,231 )

 

Page | 29