PROMISSORY NOTES

12 Months Ended

Apr. 30, 2020

Debt Disclosure [Abstract]

PROMISSORY NOTES

5.       PROMISSORY NOTES:

	April 30, 2020 $	April 30, 2019 $
Third promissory notes	23,493,003	20,908,690
Fifth promissory notes	2,793,833	1,776,847
Sixth promissory notes	1,302,781	-
Total promissory notes	27,589,617	22,685,537

The Company has Third Promissory Notes, Fifth Promissory Notes and Sixth Promissory Notes due to a company controlled by a director of the Company (the “Lender”). The Third Promissory Notes were due on March 31, 2019. On March 27, 2019, an amending agreement was entered into extending the maturity date of the Promissory Notes from March 31, 2019 to June 30, 2019 for no consideration. On June 28, 2019, the Company entered into an amending agreement with the Lender extending the maturity date to October 31, 2019 for no consideration. The Fifth Promissory Notes were due on December 31, 2019. On October 25, 2019, the Company entered into an amending agreement with the Lender extending the maturity date for both notes, for no consideration, to the earlier of (i) June 30, 2020 and (ii) 60 days after a pre-feasibility study has been filed on SEDAR. The Sixth Promissory Notes have the same maturity date. Subsequent to April 30, 2020, the promissory notes were extended to December 15, 2020 for no consideration.

In accordance with the guidance of ASC 470-50 and ASC 470-60, the Company determined that the March 27, 2019, June 28, 2019 and October 25, 2019 extension agreements qualified as troubled debt restructurings. However, as the Company did not transfer assets or grant an equity interest to the Lender and since the carrying amount of the promissory notes at the time of the restructurings did not exceed the total future cash payments specified by the new terms, there was no accounting impact of the troubled debt modifications.

Certain conditions may result in early repayment including immediate repayment in the event a person currently not related to the Company acquires more than 40% of the outstanding common shares of the Company.

Third Promissory Notes

The Third Promissory Notes bear interest at the rate of 12% per annum and during the year ended April 30, 2020, the Company recorded interest of $2,720,332 (2019 - $2,409,966), of which $nil was capitalized to mineral property interest (2019 - $207,266) and $2,720,332 was expensed (2019 - $2,202,700). Interest is payable semi-annually as calculated on May 31^st and November 30^th of each year. Interest is to be paid either in cash, in common shares or deemed an advance of principal at the option of the Lender. A 5% late payment penalty may apply if payment is not paid within ten days after the due date. During the year ended April 30, 2020, the Lender elected to have interest payable from December 1, 2018 to November 30, 2019 of $2,584,313 deemed as advances.

The aggregate finance fees (bonus shares and bonus warrants) are recorded against the promissory notes balance and are being amortized to the Statement of Loss over the life of the promissory notes using the effective interest method. The accretion expense in respect of the debt discount recorded on the issuance of bonus shares and warrants totalled $nil for the year ended April 30, 2020 (2019 - $227,968). The unamortized debt discount as at April 30, 2020 is $nil (2019 – $nil).

Fourth Promissory Notes

On March 13, 2017, the Company entered into a loan agreement with an arm’s-length lender pursuant to which CAD$250,000 ($186,846) was advanced to the Company (the “Fourth Promissory Notes”). The loan bore interest at a rate of 12% per annum and was due on or before December 31, 2018. On January 22, 2019, the Company issued 1,882,503 common shares at the fair value of $155,229 as full settlement of CAD$283,699 ($212,989) of principal and accrued interest, resulting in a gain on debt settlement of $57,760.

During the year ended April 30, 2019, the Company recorded interest of $16,233. The aggregate finance fees were recorded against the Fourth Promissory Notes balance and were being amortized to the Statement of Loss over the life of the Fourth Promissory Notes using the effective interest method. The accretion expense in respect of the debt discount totalled $7,322 for the year ended April 30, 2019.

Fifth Promissory Notes

On September 11, 2018, the Company entered into a Loan Agreement with the Lender pursuant to which up to $2,500,000 will be advanced to the Company in tranches (the “Fifth Promissory Notes”). As at April 30, 2020, the Company had received $2,500,000 (April 30, 2019 - $1,820,000) in advances pursuant to the Fifth Promissory Notes.

The Fifth Promissory Notes bear interest at the rate of 14% per annum and during the year ended April 30, 2020, the Company recorded interest of $354,031 (2019 - $102,686). Interest is payable semi-annually as calculated on May 31^st and November 30^th of each year. Interest is to be paid either in cash, in common shares or deemed an advance of principal at the option of the Lender. A 5% late payment penalty may apply if payment is not paid within ten days after the due date. During the year ended April 30, 2020, the Lender elected to have interest payable from December 1, 2018 to November 30, 2019 of $276,638 deemed as advances.

The Company and the Lender agreed that the Lender is to receive bonus shares equal to 6% of each loan tranche advanced under the Fifth Promissory Notes divided by the Company’s common share market price up to a maximum of 1,054,097 bonus shares. During the year ended April 30, 2020, the Company issued 1,054,097 bonus shares to the Lender at the fair value of $106,858. The fair value of the bonus shares was determined by reference to the trading price of the Company’s common shares on the date the advances were received.

The aggregate finance fees (bonus shares) are recorded against the promissory notes balance and are being amortized to the Statement of Loss over the life of the promissory notes using the effective interest method. The accretion expense in respect of the debt discount recorded on the issuance of bonus shares totalled $60,348 for the year ended April 30, 2020 (2019 - $46,511). The unamortized debt discount as at April 30, 2020 is $nil (2019 – $60,348).

Sixth Promissory Notes

On October 25, 2019, the Company entered into a Loan Agreement with the Lender pursuant to which up to $700,000 will be advanced to the Company in tranches (the “Sixth Promissory Notes”). On January 20, 2020, the Company entered into an amending agreement whereby the Lender agreed to advance an additional $600,000 under the same terms as the Sixth Promissory Notes. As at April 30, 2020, the Company had received $1,300,000 in advances pursuant to the Sixth Promissory Notes. Subsequent to April 30, 2020, the Company entered into an amending agreement whereby the Lender agreed to advance an additional $1,200,000 in advances pursuant to the Sixth Promissory Notes.

The Sixth Promissory Notes bear interest at the rate of 14% per annum and during the year ended April 30, 2020, the Company recorded interest of $52,461 (2019 - $nil). Interest is payable semi-annually as calculated on May 31^st and November 30^th of each year. Interest is to be paid either in cash, in common shares or deemed an advance of principal at the option of the Lender. A 5% late payment penalty may apply if payment is not paid within ten days after the due date. During the year ended April 30, 2020, the Lender elected to have interest payable from November 1, 2019 to November 30, 2019 of $2,781 deemed as advances.

The Third Promissory Notes, the Fifth Promissory Notes and the Sixth Promissory Notes are collateralized by the Company’s Helmer-Bovill Property.

The following table outlines the estimated cash payments required, by calendar year, in order to repay the principal balance of the Third Promissory Notes, the Fifth Promissory Notes and the Sixth Promissory Notes:

2020 $	2021 $	2022 $	2023 $	2024 $	Total $
27,589,617	-	-	-	-	27,589,617