0001213900-18-015766.txt : 20181114 0001213900-18-015766.hdr.sgml : 20181114 20181114155819 ACCESSION NUMBER: 0001213900-18-015766 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 60 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181114 DATE AS OF CHANGE: 20181114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Western Uranium & Vanadium Corp. CENTRAL INDEX KEY: 0001621906 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS METAL ORES [1090] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55626 FILM NUMBER: 181183401 BUSINESS ADDRESS: STREET 1: 330 BAY STREET, SUITE 1400 CITY: TORONTO STATE: A6 ZIP: M5H 2S8 BUSINESS PHONE: (970) 864-2125 MAIL ADDRESS: STREET 1: 330 BAY STREET, SUITE 1400 CITY: TORONTO STATE: A6 ZIP: M5H 2S8 FORMER COMPANY: FORMER CONFORMED NAME: Western Uranium Corp DATE OF NAME CHANGE: 20150220 FORMER COMPANY: FORMER CONFORMED NAME: HOMELAND URANIUM INC. DATE OF NAME CHANGE: 20141009 10-Q 1 f10q0918_westernuranium.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended September 30, 2018

 

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

 

For the transition period from ______________to ______________

 

Commission File Number 000-55626

 

WESTERN URANIUM & VANADIUM CORP.

(Exact Name of Registrant as Specified in Its Charter)

 

Ontario, Canada   98-1271843

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer
Identification Number)

 

330 Bay Street, Suite 1400

Toronto, Ontario, Canada

  M5H 2S8
(Address of Principal Executive Offices)   (Zip Code)

 

(970) 864-2125

(Registrant’s Telephone Number, Including Area Code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

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

 

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

 

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

 

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

 

As of November 13, 2018, 25,944,175 of the registrant’s no par value common shares were outstanding.

 

 

 

 

 

 

WESTERN URANIUM & VANADIUM CORP.

FORM 10-Q FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION 1
Item 1. Financial Statements 1
  Condensed Consolidated Balance Sheets (Unaudited) 1
  Condensed Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited) 2
  Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) 3
  Condensed Consolidated Statements of Cash Flows (Unaudited) 4
  Notes to the Condensed Consolidated Financial Statements (Unaudited) 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 4. Controls and Procedures 28
     
PART II – OTHER INFORMATION 29
Item 1. Legal Proceedings 29
Item 1A. Risk Factors 29
Item 4. Mine Safety Disclosures 29
Item 6. Exhibits 29
     
SIGNATURES 30

 

i

 

 

PART 1 - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

WESTERN URANIUM & VANADIUM CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Stated in $USD)

 

   September 30,
2018
   December 31,
2017
 
   (Unaudited)     
Assets        
Current assets:        
Cash  $1,180,318   $427,020 
Prepaid expenses   252,023    190,435 
Marketable securities   5,049    3,123 
Other current assets   91,217    64,763 
Total current assets   1,528,607    685,341 
           
Restricted cash   888,991    820,434 
Mineral properties   11,681,720    11,645,218 
Ablation intellectual property   9,488,051    9,488,051 
           
Total assets  $23,587,369   $22,639,044 
           
Liabilities and Shareholders’ Equity          
           
Liabilities          
Current liabilities:          
Accounts payable and accrued liabilities  $453,355   $602,016 
Current portion of notes payable   -    487,450 
Deferred revenue, current portion   44,620    40,000 
Total current liabilities   497,975    1,129,466 
           
Reclamation liability   221,557    196,821 
Deferred tax liability   2,708,887    2,708,887 
Deferred contingent consideration   361,219    390,350 
Deferred revenue, net of current portion   62,500    60,000 
           
Total liabilities   3,852,138    4,485,524 
           
Commitments          
           
Shareholders’ Equity          
Common stock, no par value, unlimited authorized shares, 25,913,874 and 20,510,806 shares issued as of September 30, 2018 and December 31, 2017, respectively and 25,913,568 and 20,510,500 shares outstanding as of September 30, 2018 and December 31, 2017, respectively   25,538,161    22,657,529 
Treasury shares, 306 and 306 shares held in treasury as of September 30, 2018 and December 31, 2017, respectively   -    - 
Accumulated deficit   (5,873,301)   (4,540,143)
Accumulated other comprehensive income   70,371    36,134 
Total shareholders’ equity   19,735,231    18,153,520 
Total liabilities and shareholders’ equity  $23,587,369   $22,639,044 

 

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

 

1

 

  

WESTERN URANIUM & VANADIUM CORP.

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

(Stated in $USD)

(Unaudited)

 

   Three months ended
September 30,
   For the Nine Months Ended September 30, 
   2018   2017   2018   2017 
Revenues                
Lease revenue  $11,155   $10,000   $33,465   $10,000 
                     
Expenses                    
Mining expenditures   23,898    48,181    117,427    127,435 
Professional fees   90,903    127,485    358,420    502,868 
General and administrative   322,812    96,723    703,109    480,236 
Consulting fees   43,984    63,757    153,934    265,888 
Total operating expenses   481,597    336,146    1,332,890    1,376,427 
                     
Operating loss   (470,442)   (326,146)   (1,299,425)   (1,366,427)
                     
Interest expense, net   7,863    10,911    33,733    49,655 
                     
Net loss   (478,305)   (337,057)   (1,333,158)   (1,416,082)
                     
Other comprehensive income                    
Foreign exchange gain   17,061    (2,360)   34,237    8,061 
                     
Comprehensive loss  $(461,244)  $(339,417)  $(1,298,921)  $(1,408,021)
                     
                     
Loss per share - basic and diluted  $(0.02)  $(0.02)  $(0.06)  $(0.07)
                     
Weighted average shares outstanding, basic and diluted   24,391,393    19,663,144    22,024,524    19,391,380 

 

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

 

2

 

 

WESTERN URANIUM & VANADIUM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF  CHANGES IN SHAREHOLDERS’ EQUITY

(Stated in $USD)

(Unaudited)

   

   Common Stock   Treasury Shares   Accumulated   Accumulated Other Comprehensive     
   Shares   Amount   Shares   Amount   Deficit   Income   Total 
                             
Balance as of January 1, 2018   20,510,500   $22,657,529    306   $-   $(4,540,143)  $36,134   $18,153,520 
Sale of 909,622 units on May 4, 2018 in private placement   909,622    457,608    -    -    -    -    457,608 
Sale of 2,525,526 units on July 27, 2018 in private placement   2,525,526    1,272,210    -    -    -    -    1,272,210 
Sale of 1,907,088 units on August 9, 2018 in private placement   1,907,088    973,513    -    -    -    -    973,513 
Issuance of 60,832 shares of common stock in exchange of accounts payable   60,832    32,251    -    -    -    -    32,251 
Stock based compensation - stock options   -    145,050    -    -    -    -    145,050 
Net loss   -    -    -    -    (1,333,158)   34,237    (1,298,921)
Balance as of September 30, 2018   25,913,568   $25,538,161    306   $-   $(5,873,301)  $70,371   $19,735,231 

 

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

 

3

 

 

WESTERN URANIUM & VANADIUM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in $USD)

(Unaudited)

  

   For the Nine Months Ended
September 30,
 
   2018   2017 
Cash Flows From Operating Activities:        
Net loss  $(1,333,158)  $(1,416,082)
Reconciliation of net loss to cash used in operating activities:          
Accretion of and additions to reclamation liability   24,736    6,588 
Amortization of debt discount on notes payable   12,550    16,639 
Stock based compensation   145,050    133,282 
Change in foreign exchange on marketable securities   (1,926)   (248)
Change in operating assets and liabilities:          
Prepaid expenses and other current assets   (156,599)   (144,507)
Accounts payable and accrued liabilities, net of shares issued for accounts payable   (116,410)   (39,789)
Deferred revenue   7,120    110,000 
Net cash used in operating activities   (1,418,637)   (1,334,117)
           
Cash Flows From Investing Activities:          
Purchase of property and equipment   (36,502)   - 
Net cash used in investing activities   (36,502)   - 
           
Cash Flows From Financing Activities:          
Payment of Nueco Note   -    (185,564)
Payment of EFHC Note   (500,000)   - 
Issuance of Common shares, net of offering costs   2,703,331    1,172,866 
Receipt of subscription receivable   -    28,429 
Net cash provided by (used in) financing activities   2,203,331    1,015,731 
           
Effect of foreign exchange rate on cash   5,106    28,249 
           
Net increase (decrease) in cash   753,298    (290,137)
           
Cash - beginning   427,020    791,814 
           
Cash - ending  $1,180,318   $501,677 
           
Supplemental disclosure of cash flow information:          
Cash paid during the period for:          
Interest  $-   $15,000 
           
Income taxes  $-   $- 
           
Non-cash financing activities:          
           
Shares issued for accounts payable and accrued expenses  $32,251   $83,338 

 

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

 

4

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 1 – Business

 

Nature of operations

 

Western Uranium & Vanadium Corp. (“Western” or the “Company”, formerly Western Uranium Corporation) was incorporated in December 2006 under the Ontario Business Corporations Act. On November 20, 2014, the Company completed a listing process on the Canadian Securities Exchange (“CSE”). As part of that process, the Company acquired 100% of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability company. The transaction constituted a reverse takeover (“RTO”) of Western by PRM. Subsequent to obtaining appropriate shareholder approvals, the Company reconstituted its Board of Directors and senior management team. Effective September 16, 2015, Western completed its acquisition of Black Range Minerals Limited (“Black Range”).

 

The Company has registered offices at 330 Bay Street, Suite 1400, Toronto, Ontario, Canada, M5H 2S8 and its common shares are listed on the CSE under the symbol “WUC.” On April 22, 2016, the Company’s shares of common stock began trading on the OTC Pink Open Market, and on May 23, 2016, the Company’s common stock was approved for the commencement of trading on the OTCQX Best Market. Its principal business activity is the acquisition and development of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United States”).

 

On June 28, 2016, the Company’s registration statement became effective and Western became a United States reporting issuer. Thereafter, the Company was approved for Depository Trust Company eligibility through the Depository Trust and Clearing Corporation, which facilitates electronic book-entry delivery, settlement and depository services for shares in the United States.

 

On June 29, 2018, the shareholders of the Company approved the name change of the Company from “Western Uranium Corporation” to “Western Uranium and Vanadium Corp.” The name change became effective in Ontario, Canada on October 1, 2018; thereafter on October 4, 2018 Western's shares started trading under the new name on the CSE and OTCQX and the Company announced the name change by news release.  

 

Note 2 – Liquidity and going concern

 

The Company has incurred continuing losses from its operations and as of September 30, 2018, the Company had an accumulated deficit of $5,873,301 and working capital of $1,030,632.

 

Since inception, the Company has met its liquidity requirements principally through the issuance of notes and the sale of its shares of common stock.

 

On May 4, 2018, the Company completed a private placement of 909,622 units at a price of CAD $0.68 (USD $0.53) per unit for gross proceeds of CAD $618,543 (USD $481,560). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On July 30, 2018, the Company completed a private placement of 2,525,526 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,717,358 (USD $1,319,096). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On August 9, 2018, the Company completed a private placement of 1,907,088 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,296,820 (USD $1,000,000). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

5

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

Note 2 – Liquidity and going concern, CONTINUED

 

The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings, to secure regulatory approval to fully utilize its ablation technology and to initiate the processing of ore to generate operating cash flows.

 

There are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern to sustain operations for at least one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

Note 3 – SUMMARY OF Significant Accounting Policies

 

Basis of Presentation and Principles of Consolidation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10–Q and Rule 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10–K for the fiscal year ended December 31, 2017, as filed with the SEC on April 2, 2018. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2018.

 

The accompanying condensed consolidated financial statements include the accounts of Western and its wholly-owned subsidiaries, Western Uranium Corporation (Utah), PRM, Black Range, Black Range Copper Inc., Ranger Resources Inc., Black Range Minerals Inc., Black Range Minerals Colorado LLC, Black Range Minerals Wyoming LLC, Haggerty Resources LLC, Ranger Alaska LLC, Black Range Minerals Utah LLC, Black Range Minerals Ablation Holdings Inc. and Black Range Development Utah LLC. All significant inter-company transactions and balances have been eliminated upon consolidation.

 

The Company has established the existence of mineralized materials for certain uranium and vanadium projects. The Company has not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (the “SEC”) under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for any of its uranium projects.

 

Use of Estimates

 

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include determining the fair value of transactions involving common stock, assessment of the useful life and evaluation for impairment of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, and the reclamation liability, valuation of stock-based compensation, valuation of available-for-sale securities and valuation of long-term debt. Other areas requiring estimates include allocations of expenditures, depletion and amortization of mineral rights and properties. Actual results could differ from those estimates.

 

6

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

Note 3 – SUMMARY OF Significant Accounting Policies, continued

 

Foreign Currency Translation

 

The reporting currency of the Company, including its subsidiaries, is the United States dollar. The financial statements of subsidiaries located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the parent (Western Uranium & Vanadium Corp. (Ontario)) is the Canadian dollar. Monetary assets and liabilities of these subsidiaries are translated at the exchange rates at the balance sheet date. Income and expense items are translated using average monthly exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive loss in the condensed consolidated balance sheets.

 

Revenue Recognition

 

The Company leases certain of its mineral properties for the exploration and production of oil and gas reserves. The Company accounts for lease revenue in accordance with ASC 840 “Leases”. Lease payments received in advance are deferred and recognized on a straight – line basis over the related lease term associated with the prepayment. Royalty payments are recognized as revenues when received.

 

Fair Values of Financial Instruments

 

The carrying amounts of cash, restricted cash, accounts payable, accrued liabilities, and notes payable approximate their fair value due to the short-term nature of these instruments. Marketable securities are adjusted to fair value at each balance sheet date based on quoted prices which are considered level 1 inputs. The reclamation deposits, which are reflected in restricted cash on the condensed consolidated balance sheets, are deposits mainly invested in certificates of deposit at major financial institutions and their fair values were estimated to approximate their carrying values. The Company’s operations and financing activities are conducted primarily in United States dollars and as a result, the Company is not subject to significant exposure to market risks from changes in foreign currency rates. The Company is exposed to credit risk through its cash and restricted cash, but mitigates this risk by keeping these deposits at major financial institutions.

 

ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

 

7

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

Note 3 – SUMMARY OF Significant Accounting Policies, continued

 

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

 

Fair Values of Financial Instruments

 

Level 1 Quoted prices in active markets for identical assets or liabilities.

 

Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

 

Level 3 Significant unobservable inputs that cannot be corroborated by market data.

 

The fair value of the Company’s financial instruments are as follows:

 

   Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)   Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)   Significant Unobservable Inputs (Level 3) 
Marketable securities as of September 30, 2018  $5,049   $      -   $      - 
                
Marketable securities as of December 31, 2017  $3,123   $-   $- 

 

Income Taxes

 

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

 

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

 

8

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

Note 3 – SUMMARY OF Significant Accounting Policies, continued

 

Income Taxes, continued

 

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of September 30, 2018 and December 31, 2017, no liability for unrecognized tax benefits was required to be reported.

 

The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the three and nine months ended September 30, 2018 and December 31, 2017. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

 

The Company has identified its federal tax return and its state tax returns in Colorado and Utah as its “major” tax jurisdictions, and such returns for the years 2014 through 2017 remain subject to examination.

 

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%. As December 31, 2017, the Company had made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, on December 31, 2017, the Company revalued its deferred tax assets.

 

Stock-Based Compensation

 

The Company follows ASC 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the more readily measurable of the fair value of the stock and the fair value of the service. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees and management, this is typically considered to be the vesting period of the award. For consultants the fair value of the award is recorded over the term of the service period, and unvested amounts are revalued at each reporting period over the service period. The Company estimates the expected forfeitures and updates the valuation accordingly.

 

9

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

Note 3 – SUMMARY OF Significant Accounting Policies, continued

 

Loss per Share

 

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of basic net loss per share for the three and nine months ended September 30, 2018 and 2017 excludes potentially dilutive securities. The computations of net loss per share for each period presented is the same for both basic and fully diluted.

 

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

 

   For the Nine Months
Ended September 30,
 
   2018   2017 
Warrants to purchase shares of common stock   6,861,670    3,873,086 
Options to purchase shares of common stock   2,416,664    1,321,996 
Total potentially dilutive securities   9,278,334    5,195,082 

  

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements, other than those disclosed below or in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2018.

 

In August 2016 the FASB issued Topic ASU No. 2016-15 “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 clarifies diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted ASU 2016-15 on January 1, 2018 and it has not had a material impact on its condensed consolidated statements of cash flows.

 

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 amends the classification and presentation of changes in restricted cash or restricted cash equivalents in the statement of cash flows. The Company adopted ASU 2016-18 on January 1, 2018 and it has not had a material impact on its condensed consolidated statements of cash flows.

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update “ASU” No. 2014-09, Revenue from Contracts with Customers (Topic 606) which was subsequently amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, and ASU 2017-13. These ASUs outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In July 2015, the FASB deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. A full retrospective or modified retrospective approach is required. The Company has adopted ASU No. 2014-09 effective January 1, 2018.

 

The Company has elected to apply the modified retrospective method and there was no impact on the condensed consolidated financial statements. Accordingly, the new revenue standard has been applied prospectively in the Company’s condensed consolidated financial statements from January 1, 2018 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods.

 

The Company performed an analysis and determined that its revenues are not within the scope of ASC 606, and as such, the Company determined that its methods of recognizing revenues have not been impacted by the new guidance.

 

10

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 4 – MINERAL ASSETS, ABLATION INTELLECTUAL PROPERTY AND OTHER PROPERTY

The Company’s mining properties acquired on August 18, 2014 that the Company retains as of September 30, 2018, include: San Rafael Uranium Project located in Emery County, Utah; The Sunday Mine Complex located in western San Miguel County, Colorado; The Van 4 Mine located in western Montrose County, Colorado; The Sage Mine project located in San Juan County, Utah, and San Miguel County, Colorado. These mining properties include leased land in the states of Colorado and Utah. None of these mining properties were operational at the date of acquisition.

 

The Company’s mining properties acquired on September 16, 2015 that the Company retains as of September 30, 2018, include Hansen, North Hansen, High Park, Hansen Picnic Tree, and Taylor Ranch, located in Fremont and Teller Counties, Colorado. The Company also acquired the Keota project located in Weld County, Wyoming and the Ferris Haggerty project located in Carbon County Wyoming. These mining assets include both owned and leased land in the states of Utah, Colorado and Wyoming. All of the mining assets represent properties which have previously been mined to different degrees for uranium.

 

As the Company has not formally established proven or probable reserves on any of its properties, there is inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated.

 

On September 16, 2015, in connection with the Company’s acquisition of Black Range, the Company assumed an option and exploration agreement (the “Option and Exploration Agreement”) with STB Minerals, LLC, a Colorado limited liability company (“STB”). The Option and Exploration Agreement gives the Company the right to purchase 51% of the mineral rights of specific areas of the Hansen and Picnic Tree deposits (for which the Company already holds 49% of the rights). If the Company were to exercise its option under the Option and Exploration Agreement, it would require the Company to (a) make a cash payment of $2,500,000 immediately upon exercise; (b) issue shares of common stock to STB amounting to a value of $3,750,000 immediately upon exercise; and (c) issue shares of common stock to STB amounting to a value of $3,750,000 on the date that is 180 days following exercise. The Option and Exploration Agreement was scheduled to expire by its terms on July 28, 2017 if not exercised. 

 

The Option and Exploration Agreement provided an extension for an “event of force majeure”.  Under this clause, the Company would receive an extension of the period during which it could exercise its option if it experiences an unreasonable delay outside its control that prevents it from exercising the option.  On May 10, 2017, the Company provided to STB a notice that it was exercising the force majeure clause due to the delay by government regulators in licensing the Company’s ablation technology and permitting mining at the Hansen property. STB has contested the Company’s finding that an event of force majeure has occurred. Ongoing negotiations continued until September 21, 2017 when the Company and STB agreed to settle the matter through the pre-established arbitration mechanism. Prior to the commencement of arbitration, a settlement was agreed to on February 28, 2018 through the execution of an Amendment of Option and Exploration Agreement. As consideration, the Company paid STB a $20,000 extension payment and granted STB the right to seek a bona fide written offer over the remaining term, and agreed to the removal of the force majeure clause from the agreement. The Company received an extension until July 28, 2019 and a right of first refusal to match any bona fide written offer. Hence the Company already controls 49% of the resource property and retains an option to purchase the 51% of the resource property that the Company does not already control for the duration of the agreement. Further the Company believes the execution of this agreement is without financial implications, and as such, the Company has not made any adjustment to these condensed consolidated financials related to this matter.

 

11

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 4 – MINERAL ASSETS, ABLATION INTELLECTUAL PROPERTY AND OTHER PROPERTY, CONTINUED

 

A prior owner of the Van 4 Mine had been granted a first Temporary Cessation from reclamation of the mine by the Colorado Mined Land Reclamation Board (“MLRB”) which was set to expire June 23, 2017. Prior to its expiration, PRM formally requested an extension through a second Temporary Cessation. PRM subsequently participated in a public process which culminated in a hearing on July 26, 2017. Prior to the hearing, three non-profit organizations who pursue environmental and conservation objectives filed a brief objecting to the extension. The MLRB board members voted to grant a second five-year Temporary Cessation for the Van 4 Mine. Thereafter the three objecting parties filed a lawsuit on September 18, 2017. The MLRB was named as the defendant and PRM was named as a party to the case due to the Colorado law requirement that any lawsuit filed after a hearing include all of the parties to the proceeding. The plaintiff organizations were seeking for the court to set aside the board order granting a second five-year temporary cessation period to PRM for the Van 4 Mine. The Colorado state Attorney General was defending this action in the Denver Colorado District Court. On May 8, 2018, the Denver Colorado District Court ruled in favor of PRM, whereby the additional five-year temporary cessation period was granted.

 

The Company’s mineral properties and ablation intellectual property are:

 

   As of 
   September 30, 2018   December 31, 2017 
Mineral properties  $11,681,720   $11,645,218 
Ablation intellectual property  $9,488,051   $9,488,051 

 

Oil and Gas Lease and Easement

 

On July 18, 2017, an oil and gas lease became effective with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s property in Colorado. As consideration for entering into the lease, the Company received $120,000 during the third quarter of 2017. The lease will be in force for an initial term of three years and may be extended by the lessee at 150% of the initial rate. The lessee has also agreed to pay the Company a royalty of 18.75% of the lessee’s revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest. The Company is recognizing the initial payment incrementally over the term of the lease.

 

On February 26, 2018, the Company entered into a further agreement with the same entity as the oil and gas lease to provide them with an easement to an additional part of the Company’s property solely for the purposes of transporting the oil and gas extracted via a pipeline. As consideration for the easement, the Company received $36,960 during the first quarter of 2018. The Company is recognizing this payment incrementally over the eight year term of the easement.

 

During the three months ended September 30, 2018 and 2017, the Company recognized aggregate revenue of $11,155 and $10,000, and for the nine months ended September 30, 2018 and 2017 the Company recognized aggregate revenue of $33,465 and $10,000, respectively, under these oil and gas lease arrangements.

 

Right-of-way grant agreement

 

On July 1, 2018, the Company entered into a right of way agreement with a third party, whereby, the Company has granted “right of way” access to a portion of its mineral properties in exchange for an up front payment of $3,624. The Company is recognizing this payment incrementally over the term of the right-of-way agreement.

 

12

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 4 – MINERAL ASSETS, ABLATION INTELLECTUAL PROPERTY AND OTHER PROPERTY, CONTINUED

 

Reclamation Liabilities

 

The Company’s mines are subject to certain asset retirement obligations, which the Company has recorded as reclamation liabilities. The reclamation liabilities of the United States mines are subject to legal and regulatory requirements, and estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The reclamation liability represents the Company’s best estimate of the present value of future reclamation costs in connection with the mineral properties. The Company determined the gross reclamation liabilities of the mineral properties as of September 30, 2018 and December 31, 2017, to be approximately $888,991 and $820,434, respectively. During the three months ended September 30, 2018 and 2017, the accretion of the reclamation liabilities was $2,729 and $2,561, and for the nine months ended September 30, 2018 and 2017 was $7,942 and $6,588, respectively. The Company expects to begin incurring the reclamation liability after 2054 and accordingly, has discounted the gross liabilities over their remaining lives using a discount rate of 5.4% to net discounted aggregated values as of September 30, 2018 and December 31, 2017 of $221,557 and $196,821, respectively. The gross reclamation liabilities as of September 30, 2018 are secured by certificates of deposit in the amount of $888,991.

 

On April 11, 2018, the Company received notice from the Colorado Division of Reclamation, Mining and Safety (“CDRMS”) in regard to its reclamation liability. CDRMS has recalculated the Company’s estimated future reclamation liability, which would require the Company to increase its certificates of deposit that secure its reclamation liability by $68,517. The Company had until June 8, 2018 to comply with or appeal the determination. On August 7, 2018, the Company paid CDRMS $68,517 in additional reclamation bonds to satisfy their requirement.

 

Reclamation liability activity for the nine months ended September 30, 2018 and 2017 consists of:

 

   For the nine months ended September 30, 
   2018   2017 
Beginning balance  $196,821   $403,639 
Accretion   7,942    6,588 
Additions   16,794    - 
Ending Balance  $221,557   $410,227 

 

NOTE 5 – Accounts Payable and Accrued Liabilities

 

Accounts payable and accrued liabilities consisted of:

 

   As of 
   September 30, 2018   December 31, 2017 
Trade accounts payable  $291,595   $453,618 
Accrued liabilities   161,760    148,398 
   $453,355   $602,016 

 

13

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 6 – Notes Payable

 

EFHC Note

 

On August 18, 2014, in connection with the purchase of certain of the mineral properties, the Company entered into a note payable with Energy Fuels Holding Corporation (“EFHC”) (the “EFHC Note”) for $500,000. The EFHC Note bears interest at a rate of 3.0% per annum and is secured by a first priority interest in certain of the Company’s mineral properties. On the date of the purchase, the Company recorded the EFHC Note net of a discount for interest of $73,971 at a rate of 4% per annum, resulting in a total effective interest rate of 7% per annum. The discount is being amortized using the effective interest method over the life of the loan. All principal on the EFHC Note was due and payable on August 18, 2018 and interest on the EFHC Note was due and payable annually beginning August 18, 2015. Prior to the original August 18, 2018 maturity, the Company and EFHC modified the EFHC Note to extend the maturity date to September 4, 2018. On August 31, 2018, the Company paid the EFHC Note in full.

 

Notes Payable Summary

 

Notes payable consisted of:

 

   Principal   Discount   Balance, Net
of Discount
   Current   Non-Current 
September 30, 2018  $-   $-   $-   $-   $- 
                          
December 31, 2017  $500,000   $12,550   $487,450   $487,450   $- 

 

The Company’s total interest expense, net, consisted of:

 

   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2018   2017   2018   2017 
Interest expense, notes payable  $2,609   $3,781   $13,830   $13,381 
Amortization of discount on notes payable   2,801    4,833    12,550    29,889 
Accretion of reclamation liabilities   2,729    2,561    7,942    6,588 
Other interest expense   -    83    -    1,072 
Interest income   (276)   (347)   (589)   (1,275)
Interest expense, net  $7,863   $10,911   $33,733   $49,655 

 

14

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 7 – COMMITMENTS

 

Russell Fryer

 

On July 28, 2017, Russell Fryer was appointed the Company’s Executive Chairman. On November 13, 2017, the Company entered into a consulting agreement with an affiliate of Mr. Fryer. The agreement became effective on July 28, 2017 and, pursuant to its terms, expires on December 31, 2018. The agreement may be terminated by either party with 90 days’ notice. The agreement provides for compensation of $15,000 per month and an annual bonus at the discretion of the Board of Directors. Pursuant to the agreement, if a change of control occurs wherein the consideration in such change of control is more than USD $2.00 per share, the Company is required to pay a lump sum in the amount of $350,000. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018. On May 1, 2018, following the termination of this consulting contract, Mr. Fryer resigned as director and executive chairman of the Board of Directors.

 

Vanadium Joint Venture

 

On June 1, 2018, the Company signed a letter agreement with Battery Mineral Resource Nevada, Inc. (“BMR”) to form a joint venture for vanadium development at the Sage Mine.

 

Pursuant to the agreement, BMR will underwrite the cost of scoping, engineering and technical studies during the due diligence period to prepare for commencing pre-production work for resumption of production. Subsequent to the due diligence work program, BMR has the option to enter into a definitive joint venture agreement which will trigger an additional buy-in payment to the Company. Thereafter BMR and the Company will divide joint venture expenditures 50/50 and divide vanadium offtake 65/35 and uranium offtake 10/90. The higher percentage of vanadium offtake for BMR aligns with its rechargeable battery and energy storage mandate. The agreed deal structure compensates the Company for the differential in the offtake percentage. The agreement provides BMR an additional period to exercise a short-term option to purchase the entire Sage Mine Project. BMR also retains the right to not proceed beyond due diligence.

 

Since the agreement was signed during the first week of June, vanadium prices have risen from over $14 per pound to over $18 per pound.  Consequently, rather than pursuing a joint venture, BMR provided notification of their desire to exercise the purchase option. Both parties were working toward the completion of a definitive agreement for the Sage Mine Project. On September 13, 2018, the Company and BMR mutually terminated the letter agreement and ceased negotiations.

 

Supply Contract

 

In December 2015, the Company signed a uranium concentrates supply agreement with a major U.S. utility for delivery commencing in 2018 and continuing for a five year period through 2022. As the Company is not currently in production, a partial assignment agreement was put in place whereby the assignee accepted the Company’s right to the Year 1 delivery of 125,000 pounds of natural uranium concentrates. The delivery was made on May 1, 2018 and the assignee was paid the full consideration under the agreement. The Company did not recognize any gain or loss on this transaction.

 

15

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 8 – SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

 

Authorized Capital

 

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share rateably in all assets of the Company that are legally available for distribution. As of September 30, 2018 and December 31, 2017, an unlimited number of common shares were authorized for issuance.

 

Shares issued for Accounts Payable

 

On May 4, 2018, the Company issued 60,832 shares of its common stock in exchange for approximately $32,251 of its accounts payable outstanding with certain creditors.

 

Private Placement

 

On May 4, 2018, the Company completed a private placement of 909,622 units at a price of CAD $0.68 (USD $0.53) per unit for gross proceeds of CAD $618,543 (USD $466,402). The Company paid USD $8,794 in offering costs and received net proceeds of USD $457,608. Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On July 30, 2018, the Company completed a private placement of 2,525,526 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,717,358 (USD $1,319,096). The Company paid USD $46,886 in offering costs and received net proceeds of USD $1,272,210. Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On August 9, 2018, the Company completed a private placement of 1,907,088 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,296,820 (USD $1,000,000). The Company paid USD $26,487 in offering costs and received net proceeds of USD $973,513. Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

Incentive Stock Option Plan

 

The Company maintains an Incentive Stock Option Plan (the “Plan”) that permits the granting of stock options as incentive compensation. Shareholders of the Company approved the Plan on June 30, 2008 and amendments to the Plan on June 20, 2013, and the Board of Directors approved additional changes to the Plan on September 12, 2015.

 

The purpose of the Plan is to attract, retain and motivate directors, management, staff and consultants by providing them with the opportunity, through stock options, to acquire a proprietary interest in the Company and benefit from its growth.

 

The Plan provides that the aggregate number of common shares for which stock options may be granted will not exceed 10% of the issued and outstanding common shares at the time stock options are granted. As of September 30, 2018, a total of 25,913,568 common shares were outstanding, and at that date the maximum number of stock options eligible for issue under the Plan was 2,591,357.

 

On February 8, 2018, the Company granted options under the plan for the purchase of an aggregate of 100,000 shares of common stock to a director. The options have an exercise price of CAD $1.00 (US $0.77 as of September 30, 2018) and vest one half on the date of grant and one half on December 31, 2018. One half of the options expire on January 31, 2023 and the remaining options expire on December 31, 2023.

 

On September 24, 2018, the Company granted options under the plan for the purchase of an aggregate of 983,000 shares of common stock to several officers, directors, and consultants. The options have an exercise price of CAD $2.15 (US $1.67 as of September 30, 2018) and vest equally in three installments on the date of grant, on October 31, 2018, and on March 31, 2019. One third of the options expire on September 24, 2023, one third expire on October 31, 2023, and the remaining one third expire on March 31, 2024.

 

16

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

NOTE 8 – SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS, CONTINUED

 

Stock Options

 

   Number of Shares   Weighted Average Exercise
Price (USD)
   Weighted Average Contractual Life (years)   Weighted Average Grant Date Fair Value   Intrinsic
Value (USD)
 
Outstanding - January 1, 2018   1,846,996   $1.92        $0.42      
Granted   1,083,000   $1.58                
Expired, forfeited, or cancelled   (513,332)  $2.50                
Exercised   -    -                
Outstanding - September 30, 2018   2,416,664   $1.76    3.98   $0.48   $804,654 
Exercisable - September 30, 2018   1,711,331   $1.82    3.56   $0.47   $574,503 

  

The Company’s stock based compensation expense related to stock options for the three months ended September 30, 2018 and 2017 was $90,210 and $0 and for the nine months ended September 30, 2018 and 2017 was $145,050 and $133,282, respectively. As of September 30, 2018, the Company had $450,452 in unamortized stock option expense, which will be amortized over a period of 0.5 years.

 

The Company utilized the Black-Scholes option pricing model to determine the fair value of these stock options, using the assumptions as outlined below.

 

   February 8, 2018   September 24, 2018 
Stock Price   CAD $0.52   CAD $2.14 
Exercise Price   CAD $1.00   CAD $2.15 
Number of Options Granted   100,000    983,000 
Dividend Yield   0%   0%
Expected Volatility   49%   49%
Weighted Average Risk-Free Interest Rate   1.64%   2.94%
Expected life (in years)   2.50 - 3.00    2.50-3.00 

 

Warrants

 

   Number of Shares   Weighted Average Exercise Price (USD)   Weighted Average Contractual Life (years)   Intrinsic Value (USD) 
Outstanding, January 1, 2018   4,095,563   $2.27           
Issued   2,766,107   $0.89           
Outstanding - September 30, 2018   6,861,670   $1.57    2.55   $3,488,238 
Exercisable - September 30, 2018   6,861,670   $1.57    2.55   $3,488,238 

  

17

 

 

WESTERN URANIUM & VANADIUM CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in $USD)

(Unaudited)

 

Note 9 – Mining Expenditures

 

   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2018   2017   2018   2017 
Permits  $23,898   $2,334   $102,477   $7,637 
Maintenance   -    36,062    3,900    110,013 
Contract Labor   -    4,525    11,050    4,525 
Royalties   -   $5,260    -   $5,260 
   $23,898   $48,181   $117,427   $127,435 

 

NOTE 10 – Related Party Transactions (Including Key Management Compensation)

 

The Company has transacted with related parties pursuant to service arrangements in the ordinary course of business, as follows:

 

Pursuant to a consulting agreement, a United States limited liability company owned by a person who was a director, and on July 28, 2017, became the Company’s executive chairman, entered into a consulting agreement with the Company effective April 1, 2016 to provide financial, advisory, and consulting services, including representing the Company to a variety of stakeholders for a six month term ending on September 30, 2016. On October 1, 2016 the Company extended this agreement through January 31, 2017. Professional fees for the three months ended September 30, 2018 and 2017 were $0 and $35,292, respectively, and $73,680 and $95,292 for the nine months ended September 30, 2018 and 2017, respectively, related to this agreement. As of September 30, 2018 and December 31, 2017, the Company had $0 and $0, respectively, included in accounts payable and accrued liabilities payable to this entity.

 

On April 1, 2017, the Company entered into a new consulting agreement with a United States limited liability company owned by a person who was a director. The consulting agreement is to provide assistance with capital raising activities and other financial, advisory, and consulting services for the period April 1, 2017 through June 30, 2017. At June 30, 2017 and the last day of each month thereafter, the agreement may be extended by the Company on a month-to-month basis with seven days’ notice. The agreement has a monthly fee of $15,000. Pursuant to the consulting agreement, if the Company completes a merger with a third party introduced by this director whereby more than 50% of the Company’s then outstanding shares are transferred to that third party, the Company is required to pay a lump sum in an amount of $350,000 to this entity. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018, upon which date the agreement was terminated. On May 1, 2018, upon termination of the agreement, this director resigned his positions as director and as executive chairman.

 

Prior to the acquisition of Black Range, Mr. George Glasier, the Company’s CEO, who is also a director, transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay AUD $500,000 (USD $361,219) to Seller within 60 days of the first commercial application of the ablation technology. Western assumed this contingent payment obligation in connection with the acquisition of Black Range. At the date of the acquisition of Black Range, this contingent obligation was determined to be probable. Since the deferred contingent consideration obligation is probable and the amount estimable, the Company recorded the deferred contingent consideration as an assumed liability in the amount of $361,219 and $390,350 as of September 30, 2018 and December 31, 2017, respectively.

 

NOTE 11 – SUBSEQUENT EVENTS

 

Warrant Exercises

 

Subsequent to September 30, 2018, the Company received CAD $44,796 (USD $34,135) and issued 30,607 shares of common stock resulting from the exercise of warrants to purchase 30,607 shares of common stock. 

 

18

 

 

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

The information disclosed in this quarterly report, and the information incorporated by reference herein, include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

  

The forward-looking statements contained or incorporated by reference in this quarterly report are based on our current expectations and beliefs concerning future developments and their potential effects on us and speak only as of the date of each such statement. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in this Item 2 of Part I of this quarterly report and in Item 1A of Part II of this quarterly report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

The following discussion should be read in conjunction with our condensed consolidated interim financial statements and footnotes thereto contained in this quarterly report.

 

Overview

 

General

 

Western Uranium & Vanadium Corp. (“Western” or the “Company”, formerly Western Uranium Corporation) was incorporated in December 2006 under the Ontario Business Corporations Act. On November 20, 2014, the Company completed a listing process on the Canadian Securities Exchange (“CSE”). As part of that process, the Company acquired 100% of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability company. The transaction constituted a reverse takeover (“RTO”) of Western by PRM. Subsequent to obtaining appropriate shareholder approvals, the Company reconstituted its Board of Directors and senior management team. Effective September 16, 2015, Western completed its acquisition of Black Range Minerals Limited (“Black Range”).

 

On August 18, 2014, the Company closed on the purchase of certain mining properties in Colorado and Utah from Energy Fuels Holding Corp. Assets purchased included both owned and leased lands in Utah and Colorado and all represent properties that have been previously mined for uranium to varying degrees in the past. The acquisition included the purchase of the Sunday Mine Complex. The Sunday Mine Complex is located in western San Miguel County, Colorado. The complex consists of the following five individual mines: the Sunday mine, the Carnation mine, the Saint Jude mine, the West Sunday mine and the Topaz mine. The operation of each of these mines requires a separate permit and all such permits have been obtained by Western and are currently valid. In addition, each of the mines has good access to a paved highway, electric power to existing declines, office/storage/shop and change buildings, and extensive underground haulage development with several vent shafts complete with exhaust fans. These properties were formerly secured by a first priority interest collateralizing a $500,000 promissory note which was paid in full on August 31, 2018 and thus the properties are now held free and clear of encumbrances. The Sunday Mine Complex is where the Company anticipates it would initiate production and Ablation operations, since the complex is ready to be mined.

 

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On September 16, 2015, Western completed its acquisition of Black Range, an Australian company that was listed on the Australian Securities Exchange until the acquisition was completed. The acquisition terms were pursuant to a definitive Merger Implementation Agreement entered into between Western and Black Range. Pursuant to the agreement, Western acquired all of the issued shares of Black Range by way of Scheme of Arrangement (“the Scheme”) under the Australian Corporation Act 2001 (Cth) (the “Black Range Transaction”), with Black Range shareholders being issued common shares of Western on a 1 for 750 basis. On August 25, 2015, the Scheme was approved by the shareholders of Black Range and on September 4, 2015, Black Range received approval by the Federal Court of Australia. In addition, Western issued to certain employees, directors and consultants options to purchase Western common shares. Such stock options were intended to replace Black Range stock options outstanding prior to the Black Range Transaction on the same 1 for 750 basis.

 

The Company has registered offices at 330 Bay Street, Suite 1400, Toronto, Ontario, Canada, M5H 2S8 and its common shares are listed on the CSE under the symbol “WUC” and are traded on the OTCQX Best Market under the symbol “WSTRF”. Its principal business activity is the acquisition and development of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United States”).

 

On June 29, 2018, the shareholders of the Company approved the name change of the Company from “Western Uranium Corporation” to “Western Uranium & Vanadium Corp.” The name change became effective in Ontario, Canada on October 1, 2018; thereafter on October 4, 2018 Western's shares started trading under the new name on the CSE and OTCQX and the Company announced the name change by news release.

 

Recent Developments

 

May 2018 Private Placement

 

On May 4, 2018, the Company completed a private placement of 909,622 units at a price of CAD $0.68 (USD $0.53) per unit for gross proceeds of CAD $618,543 (USD $481,560). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

July 2018 Private Placement

 

On July 30, 2018, the Company completed a private placement of 2,525,526 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,717,358 (USD $1,319,096). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

August 2018 Private Placement

 

On August 9, 2018, the Company completed a private placement of 1,907,088 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,296,820 (USD $1,000,000). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

Shares issued in exchange for accounts payable

 

On May 4, 2018, the Company issued 60,832 shares of its common stock to two vendors of the Company in satisfaction of an aggregate of CAD $41,366 (USD $32,251) of accounts payable.

 

Ablation Licensing

 

During 2016, Western submitted documentation to the CDPHE for a determination ruling regarding the type of license which may be required for the application of Ablation at the Sunday Mine Complex within the state of Colorado. During May and June of 2016, CDPHE held four public meetings in several cities in Colorado as part of the process. On July 22, 2016 CDPHE closed the comment period. In connection with this matter, the CDPHE consulted with the United States Nuclear Regulatory Commission (“NRC”). In response, the CDPHE received an advisory opinion dated October 16, 2016, which did not contain support for the NRC’s opinion and with which Western’s regulatory counsel does not agree. NRC’s advisory opinion recommends that Ablation should be regulated as a milling operation, but did recognize that there may be exemptions to certain milling regulatory requirements due to the benign nature of the non-uranium bearing sands produced after Ablation is completed on uranium-bearing ores. On December 1, 2016, CDPHE issued a decision letter that enables the use of Ablation on uranium at the Sunday Mine Complex in the state of Colorado under uranium milling license regulations and which also recognized the appropriateness of exemptions to certain milling regulatory requirements. Further, the Company’s attorneys are not fully in agreement with aspects of the decision letter from the CDPHE, thus the Company expects to pursue additional regulatory clarifications which the Company’s management believes would make the application of Ablation to uranium potentially more economically advantageous. Western plans to continue to advance Ablation by seeking a further regulatory determination from the CDPHE and/or the NRC. During 2017 and 2018, the Company’s regulatory counsel prepared significant documentation in preparation for a prospective submission.

 

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The Company is exploring the application of Ablation to other minerals, which may not be subject to the same regulatory requirements applicable to uranium.

 

Pinon Ridge Mill

 

In November 2016, the Company entered into a letter of intent with Pinon Ridge Corporation for use of its Ablation technology at the uranium recovery facilities at the Pinon Ridge Mill site. The letter of intent provides for the processing of all of Western’s ore produced by its mines in the region at the mill site to produce U308 and vanadium utilizing both the application of Ablation mining technology and traditional milling techniques, at a cost to be determined in a definitive agreement. The Pinon Ridge Mill license is held by Pinon Ridge Resources Corporation, a wholly owned subsidiary of Pinon Ridge Corporation, which is owned by Mr. George Glasier, our Chief Executive Officer and a director, Mr. Andrew Wilder, a director, and Mr. Russell Fryer, a former executive chairman and director. The letter of intent is subject to the signing of a definitive agreement between the parties the original deadline as extended has passed but both parties will recommit to constituting a relationship in 2018.

 

On April 26, 2018, the radioactive materials license held by Pinon Ridge Resources Corporation for the Pinon Ridge Mill was revoked, thus delaying development efforts. Colorado’s radiation regulators advised Pinon Ridge Resources Corporation that pursuing reapplication would be its best alternative. Pinon Ridge Resources Corporation continues to evaluate next steps and the costs and delays likely to be imposed by a coalition of environmental groups further contesting the issuance of the radioactive materials license.

 

Western’s plan to utilize the Pinon Ridge Mill is subject to Pinon Ridge Resources Corporation’s ability and willingness to continue to pursue and obtain a radioactive materials license for the mill, making this a long-term processing alternative. Western does not currently have a toll milling agreement from one of the three licensed conventional mills in the United States, of which Energy Fuels’ White Mesa Mill is the only mill that is currently operational. Thus, Western’s ability to bring its properties into production may be delayed to the extent that the Company is not able to acquire a toll milling agreement or establish a substitute processing capacity which is economic. It is Western’s view that current discussions emanating from the global vanadium supply deficit with multiple potential customers and joint venture partners will likely result in a substitute processing arrangement for high-grade ore produced from the Sunday Mine Complex.

 

Mining Deposit Option and Exploration Agreement

 

On September 16, 2015, in connection with the Company’s acquisition of Black Range, the Company assumed an option and exploration agreement (the “Option and Exploration Agreement”) with STB Minerals, LLC, a Colorado limited liability company (“STB”). The Option and Exploration Agreement gives the Company the right to purchase 51% of the mineral rights under the Hansen project (for which the Company already holds 49% of the rights). If the Company were to exercise its option under the Option and Exploration Agreement, it would require the Company to (a) make a cash payment of $2,500,000 immediately upon exercise; (b) issue shares of common stock to STB amounting to a value of $3,750,000 immediately upon exercise; and (c) issue shares of common stock to STB amounting to a value of $3,750,000 on the date that is 180 days following exercise. The Option and Exploration Agreement was scheduled to expire by its terms on July 28, 2017 if not exercised.

 

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The Option and Exploration Agreement provided an extension for an “event of force majeure”. Under this clause, the Company would receive an extension of the period during which it could exercise its option if it experiences an unreasonable delay outside its control that prevents it from exercising the option. On May 10, 2017, the Company provided to STB a notice that it was exercising the force majeure clause due to the delay by government regulators in licensing the Company’s ablation technology and permitting mining at the Hansen property. STB has contested the Company’s finding that an event of force majeure has occurred. Ongoing negotiations continued until September 21, 2017 when the Company and STB agreed to settle the matter through the pre-established arbitration mechanism. Prior to the commencement of arbitration, a settlement was agreed to on February 28, 2018 through the execution of an Amendment of Option and Exploration Agreement. As consideration, the Company paid STB a $20,000 extension payment and granted STB the right to seek a bona fide written offer over the remaining term, and agreed to the removal of the force majeure clause from the agreement. The Company received an extension until July 28, 2019 and a right of first refusal to match any bona fide written offer. Hence the Company already controls 49% of the resource property and retains an option to purchase the 51% of the resource property that the Company does not already own for the duration of the agreement. Further the Company believes the execution of this agreement is without financial implications, and as such, the Company has not made any adjustment to these consolidated financials related to this matter.

 

Van 4 Mine Temporary Cessation Order

 

A prior owner of the Van 4 Mine had been granted a first Temporary Cessation from reclamation of the mine by the Colorado Mined Land Reclamation Board (“MLRB”) which was set to expire June 23, 2017. Prior to its expiration, PRM formally requested an extension through a second Temporary Cessation. PRM subsequently participated in a public process which culminated in a hearing on July 26, 2017. Prior to the hearing, three non-profit organizations who pursue environmental and conservation objectives filed a brief objecting to the extension. The MLRB board members voted to grant a second five-year Temporary Cessation for the Van 4 Mine. Thereafter the three objecting parties filed a lawsuit on September 18, 2017. The MLRB was named as the defendant and PRM was named as a party to the case due to the Colorado law requirement that any lawsuit filed after a hearing include all of the parties to the proceeding. The plaintiff organizations were seeking for the court to set aside the board order granting a second five-year temporary cessation period to PRM for the Van 4 Mine. The Colorado state Attorney General was defending this action in the Denver Colorado District Court. On May 8, 2018, the Denver Colorado District Court ruled in favor of PRM, whereby the additional five-year temporary cessation period was granted.

 

Resignation of Director

 

On January 28, 2018, the Company provided 90-day notice to Mr. Russell Fryer and Baobab Asset Management that it would be terminating its consulting contract. On May 1, 2018, following the termination of this consulting contract, Mr. Fryer resigned as director and executive chairman of the Board of Directors.

 

Appointment of Director

 

On February 8, 2018, the Company appointed Mr. Bryan Murphy as a director. On May 1, 2018, Mr. Murphy was appointed chairman of the Board of Directors.

 

Extension of EFHC Note

 

Prior to the August 18, 2018 maturity, the Company and EFHC modified the EFHC Note to extend the maturity date to September 4, 2018. On August 31, 2018, the Company paid the EFHC Note in full.

 

Reopening of the Sunday Mine Complex

 

On October 25, 2018, the Company announced its intention to re-open the Sunday Mine Complex. Western is commencing this program with the goals of upgrading the vanadium resource and monetizing these already significant vanadium resource holdings. Western is accelerating production planning at the Sunday Mine Complex because of vanadium commodity price appreciation over the past six months. This new initiative also supports Western’s discussions with multiple potential customers and joint venture partners who are requesting ore samples. It is Western’s view that these discussions will likely result in an agreement sufficient to commence production at the Sunday Mine Complex.

 

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Results of Operations

 

   For the Three Months Ended
September 30,
   For the Nine Months Ended
September 30,
 
   2018   2017   2018   2017 
Revenue                
Lease revenue  $ 11,155   $ 10,000   $ 33,465   $ 10,000 
                     
Expenses                    
Mining expenditures   23,898    48,181    117,427    127,435 
Professional fees   90,903    127,485    358,420    502,868 
General and administrative   322,812    96,723    703,109    480,236 
Consulting fees   43,984    63,757    153,934    265,888 
Total operating expenses   481,597    336,146    1,332,890    1,376,427 
                     
Operating loss   (470,442)   (326,146)   (1,299,425)   (1,366,427)
                     
Interest expense, net   7,863    10,911    33,733    49,655 
                     
Net loss   (478,305)   (337,057)   (1,333,158)   (1,416,082)
                     
Other Comprehensive loss                    
Foreign exchange gain   17,061    (2,360)   34,237    8,061 
                     
Comprehensive Loss  $(461,244)  $(339,417)  $(1,298,921)  $(1,408,021)
                     
Net loss per share - basic and diluted  $(0.02)  $(0.02)  $(0.06)  $(0.07)

 

Three Months Ended September 30, 2018 as Compared to the Three Months Ended September 30, 2017

 

Summary

 

Our condensed consolidated net loss for the three months ended September 30, 2018 and 2017 was $478,305 and $337,057 or $0.02 and $0.02 per share, respectively. The principal components of these quarter over quarter changes are discussed below.

 

Our comprehensive loss for the three months ended September 30, 2018 and 2017 was $461,244 and $339,417, respectively.

 

Revenue

 

Our revenue for the three months ended September 30, 2018 and 2017 was $11,155 and $10,000, respectively. The revenue in 2018 resulted from lease revenue pursuant to a July 18, 2017 lease agreement and February 2, 2018 easement. The counterparties are from the oil and gas industry.

 

Mining Expenditures

 

Mining expenditures for the three months ended September 30, 2018 were $23,898 as compared to $48,181 for the three months ended September 30, 2017. The decrease in mining expenditures of $24,283, or 50% was principally attributable to differences in timing of the realization and recognition of mineral resource payments.

  

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Professional Fees

 

Professional fees for the three months ended September 30, 2018 were $90,903 as compared to $127,485 for the three months ended September 30, 2017. The decrease in professional fees of $36,582, or 29% was principally due to a decrease in investor relations fee of $29,491 and legal services of $25,365. The decrease in investor relations professional fees was due to cost reductions implemented in the previous quarter.

 

General and Administrative

 

General and administrative expenses for the three months ended September 30, 2018 were $322,812 as compared to $96,723 for the three months ended September 30, 2017. The increase in general and administrative expense of $226,089, or 234% is due to an increase of $89,370 in stock-based compensations $53,340 in payroll resulting from consultant compensation being moved onto payroll, $32,460 in investor relations and conference costs and $14,729 in increased board of directors expenses. The increase in stock-based compensation results from the issuance of stock options during September 2018. During 2017, the stock options were granted in October.

 

Consulting Fees

 

Consulting fees for the three months ended September 30, 2018 were $43,984 as compared to $63,757 for the three months ended September 30, 2017. The decrease in consulting fees of $19,773, or 31% was principally related to a decrease in consultant utilization and consultant compensation being moved onto payroll.

 

Interest Expense, net

 

Interest expense, net, for the three months ended September 30, 2018 was $7,863 as compared to $10,911 for the three months ended September 30, 2017. The decrease of interest expense, net, of $3,048, or 28% was attributable to the Company paying off promissory notes during 2017 and 2018.

 

Foreign Exchange

 

Foreign exchange gain (loss) for the three months ended September 30, 2018 was $17,061 as compared to $(2,360) for the three months ended September 30, 2017. The increase of the foreign exchange gain of $19,421, or 823% is primarily due to the U.S. Dollar weakening against the Canadian Dollar during the current quarter while holding cash balances in Canadian Dollars.

 

Nine Months Ended September 30, 2018 as Compared to the Nine Months Ended September 30, 2017

 

Summary

 

Our condensed consolidated net loss for the nine months ended September 30, 2018 and 2017 was $1,333,158 and $1,416,082 or $0.06 and $0.07 per share, respectively. The principal components of these period over period changes are discussed below.

 

Our comprehensive loss for the nine months ended September 30, 2018 and 2017 was $1,298,921 and $1,408,021, respectively.

 

Revenue

 

Our revenue for the nine months ended September 30, 2018 and 2017 was $33,465 and $10,000, respectively. The revenue in 2018 resulted from lease revenue pursuant to a July 18, 2017 lease agreement and February 2, 2018 easement. The counterparties are from the oil and gas industry.

 

Mining Expenditures

 

Mining expenditures for the nine months ended September 30, 2018 were $117,427 as compared to $127,435 for the nine ended September 30, 2017. The decrease in mining expenditures of $10,008, or 8% was principally attributable to resource specific project undertaken in the third quarter of 2017.

 

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Professional Fees

 

Professional fees for the nine months ended September 30, 2018 were $358,420 as compared to $502,868 for the nine months ended September 30, 2017. The decrease in professional fees of $144,448, or 29% was principally due to the Company’s cost cutting initiatives which resulted in decreases in regulatory compliance costs and included an audit fee decrease of $17,628, a legal fee decrease of $52,873, and an accounting fee decrease of $38,023.

 

General and Administrative

 

General and administrative expenses for the nine months ended September 30, 2018 were $703,109 as compared to $480,236 for the nine months ended September 30, 2017. The increase in general and administrative expense of $222,873, or 46% is due to an increase in payroll of $105,295 resulting from consultant compensation being moved onto payroll, $40,184 in investor relations and conference costs, and $25,498 in increased board of directors expenses.

 

Consulting Fees

 

Consulting fees for the nine months ended September 30, 2018 were $153,934 as compared to $265,888 for the nine months ended September 30, 2017. The decrease in consulting fees of $111,954, or 42% was principally related to the decrease in consultant utilization and consultant compensation being moved onto payroll.

 

Interest Expense, net

 

Interest expense, net, for the nine months ended September 30, 2018 was $33,733 as compared to $49,655 for the nine months ended September 30, 2017. The decrease of interest expense, net, of $15,922, or 32% was attributable to the Company paying off its promissory notes during 2017 and 2018.

 

Foreign Exchange

 

Foreign exchange gain (loss) for the nine months ended September 30, 2018 was $34,237 as compared to $8,061 for the nine months ended September 30, 2017. The increase of the foreign exchange gain of $26,176, or 325% is primarily due to the U.S. Dollar strengthening against the Canadian Dollar.

 

Liquidity and Capital Resources

 

The Company’s cash balance as of September 30, 2018 was $1,180,318. The Company’s cash position is highly dependent on its ability to raise capital through the issuance of debt and equity and its management of expenditures for mining development and for fulfillment of its public company reporting responsibilities. The Company expects to require additional capital in order to continue the development of Ablation. Management believes that in order to finance the development of the mining properties and Ablation, the Company will be required to raise additional capital by way of debt and/or equity. This outlook is based on the Company’s current financial position and is subject to change if opportunities become available based on current exploration program results and/or external opportunities.

 

Net cash used in operating activities

 

Net cash used in operating activities was $1,418,637 for the nine months ended September 30, 2018, as compared with $1,334,117 for the nine months ended September 30, 2017. Of the $1,418,637 in net cash used in operating activities, $1,333,158 is derived from our net loss. During the nine months ended September 30, 2018, $116,410 represented a decrease in accounts payable and accrued liabilities, $156,599 represented an increase in prepaid expenses, $24,736 represented an increase in the reclamation liability, $7,120 represented an increase in deferred revenue and $145,050 represented non-cash stock based compensation. The reclamation liability increase was primarily due to an increase in reclamation requirements by the state of Colorado.

 

Net cash used in investing activities

 

During the nine months ended September 30, 2018, the Company purchased $36,502 in property and equipment. This capital expenditure represents the initiation of expenditures needed to re-open the Sunday Mine Complex. There was no cash used in investing activities during the nine months ended September 30, 2017.

 

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Net cash provided by financing activities

 

Net cash provided by financing activities for the nine months ended September 30, 2018 was $2,203,331 as compared to $1,015,731 for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, the net cash provided by financing activities consisted of $2,703,331 from the proceeds received in our private placements offset by $500,000 used to repay the EFHC promissory note, which was issued for the acquisitions of our original Colorado and Utah properties.

 

Reclamation Liability

 

The Company’s mines are subject to certain asset retirement obligations, which the Company has recorded as reclamation liabilities. The reclamation liabilities of the United States mines are subject to legal and regulatory requirements, and estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The reclamation liability represents the Company’s best estimate of the present value of future reclamation costs in connection with the mineral properties. The Company determined the gross reclamation liabilities of the mineral properties as of September 30, 2018 and December 31, 2017, to be approximately $888,991 and $820,434, respectively. During the three months ended September 30, 2018 and 2017, the accretion of the reclamation liabilities was $2,729 and $2,561, and for the nine months ended September 30, 2018 and 2017 was $7,942 and $6,588, respectively. The Company expects to begin incurring the reclamation liability after 2054 and accordingly, has discounted the gross liabilities over their remaining lives using a discount rate of 5.4% to net discounted aggregated values as of September 30, 2018 and December 31, 2017 of $221,557 and $196,821, respectively. The gross reclamation liabilities as of September 30, 2018 are secured by certificates of deposit in the amount of $888,991.

 

Oil and Gas Lease

 

On July 18, 2017, an oil and gas lease became effective with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s property in Colorado. As consideration for entering into the lease, the Company received $120,000 during the third quarter of 2017. The lease will be in force for an initial term of three years and may be extended by the lessee at 150% of the initial rate. The lessee has also agreed to pay the Company a royalty of 18.75% of the lessee’s revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest.

 

On February 26, 2018, the Company entered into a further agreement with the same entity as the oil and gas lease to give them an easement to an additional part of the Company’s property solely for the purposes of transporting the oil and gas via a pipeline. As consideration for the easement, the Company received $36,960.

 

Related Party Transactions

 

The Company has transacted with related parties pursuant to service arrangements in the ordinary course of business, as follows:

 

Pursuant to a consulting agreement, a United States limited liability company owned by a person who was a director, and on July 28, 2017, became the Company’s executive chairman, entered into a consulting agreement with the Company effective April 1, 2016 to provide financial, advisory, and consulting services, including representing the Company to a variety of stakeholders for a six month term ending on September 30, 2016. On October 1, 2016 the Company extended this agreement through January 31, 2017. Professional fees for the three months ended September 30, 2018 and 2017 were $0 and $35,292, respectively, and $73,680 and $95,292 for the nine months ended September 30, 2018 and 2017, respectively, related to this agreement. As of September 30, 2018 and December 31, 2017, the Company had $0 and $0, respectively, included in accounts payable and accrued liabilities payable to this entity.

 

On April 1, 2017, the Company entered into a new consulting agreement with a United States limited liability company owned by a person who was a director. The consulting agreement is to provide assistance with capital raising activities and other financial, advisory, and consulting services for the period April 1, 2017 through June 30, 2017. At June 30, 2017 and the last day of each month thereafter, the agreement may be extended by the Company on a month-to-month basis with seven days’ notice. The agreement has a monthly fee of $15,000. Pursuant to the consulting agreement, if the Company completes a merger with a third party introduced by this director whereby more than 50% of the Company’s then outstanding shares are transferred to that third party, the Company is required to pay a lump sum in an amount of $350,000 to this entity. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018, upon which date the agreement was terminated. On May 1, 2018, upon termination of the agreement, this director resigned his positions as director and as executive chairman.

 

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Prior to the acquisition of Black Range, Mr. George Glasier, the Company’s CEO, who is also a director, transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay AUD $500,000 (USD $361,219) to Seller within 60 days of the first commercial application of the ablation technology. Western assumed this contingent payment obligation in connection with the acquisition of Black Range. At the date of the acquisition of Black Range, this contingent obligation was determined to be probable. Since the deferred contingent consideration obligation is probable and the amount estimable, the Company recorded the deferred contingent consideration as an assumed liability in the amount of $361,219 and $390,350 as of September 30, 2018 and December 31, 2017, respectively.

 

Going Concern

 

The Company has incurred continuing losses from its operations and as of September 30, 2018 the Company had an accumulated deficit of $5,873,301 and a working capital of $1,030,632.

 

Since inception, the Company has met its liquidity requirements principally through the issuance of notes and the sale of its shares of common stock.

 

The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings, to secure regulatory approval to fully utilize its ablation technology and to initiate the processing of ore to generate operating cash flows.

 

There are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern to sustain operations for at least one year from the issuance of the accompanying financial statements. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

Off Balance Sheet Arrangements

 

As of September 30, 2018, there were no off-balance sheet transactions. The Company has not entered into any specialized financial agreements to minimize its investment risk, currency risk or commodity risk.

 

Critical Accounting Estimates and Policies

 

The preparation of these condensed consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of expenses during the reporting period.

 

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, include, but are not limited to, the following: fair value of transactions involving shares of common stock, assessment of the useful life and evaluation for impairment of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, the reclamation liability, valuation of stock-based compensation, valuation of available-for-sale securities and valuation of long-term debt, HST and asset retirement obligations. Other areas requiring estimates include allocations of expenditures, depletion and amortization of mineral rights and properties.

 

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Item 4.Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on their evaluation of our disclosure controls and procedures, our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were not effective as of September 30, 2018, to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.

 

Description of Material Weakness

 

Management has concluded that the Company’s disclosure controls and procedures were not effective as of September 30, 2018, due to the lack of segregation of duties and the failure to report disclosures on a timely basis.

 

Remediation of Material Weakness

 

Management has developed a plan and related timeline for the Company to design a set of control procedures and the related required documentation thereof in order to address this material weakness. However, until the Company has the proper staff in place, it likely will not be able to remediate its material weaknesses.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the current fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

In the opinion of management, we are not involved in any claims, legal actions or regulatory proceedings as of September 30, 2018, the ultimate disposition of which would have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

 

Item 1A. Risk Factors

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed under “Risk Factors” in our Form 10-K as filed with the Securities and Exchange Commission on April 2, 2018. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report.

 

Item 4.Mine Safety Disclosures

 

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States, and that is subject to regulation by the Federal Mine Safety and Health Administration under the Mine Safety and Health Act of 1977 (“Mine Safety Act”), are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. As Western does not operate any coal or other mines, no such disclosure is required.

 

Item 6. Exhibits

 

Exhibit No.   Description      
     
31.1   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

29

 

 

SIGNATURES

 

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

 

  WESTERN URANIUM & VANADIUM CORP.
     
Date: November 14, 2018 By: /s/ George Glasier
    George Glasier  
   

Chief Executive Officer

(Principal executive officer)

   
Date: November 14, 2018 By: /s/ Robert Klein
    Robert Klein  
   

Chief Financial Officer

(Principal financial and accounting officer)  

 

30

 

EX-31.1 2 f10q0918ex31-1_westernuran.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

I, George Glasier, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Western Uranium & Vanadium Corp.;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Date: November 14, 2018

 

  By: /s/ George Glasier
  Name: George Glasier
  Title: Chief Executive Officer and President
(Principal Executive Officer)

 

EX-31.2 3 f10q0918ex31-2_westernuran.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

I, Robert Klein, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Western Uranium & Vanadium Corp.;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Date: November 14, 2018

 

  By: /s/ Robert Klein
  Name: Robert Klein
  Title: Chief Financial Officer
(Principal Financial and Accounting Officer)

 

EX-32 4 f10q0918ex32_westernuran.htm CERTIFICATION

Exhibit 32

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Western Uranium & Vanadium Corp. (the “Company”) for the quarter ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

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

 

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

 

Date: November 14, 2018    
  By: /s/ George Glasier
  Name: George Glasier
  Title: Chief Executive Officer and President
    (Principal Executive Officer)
     
Date: November 14, 2018    
  By: /s/ Robert Klein
  Name: Robert Klein
  Title: Chief Financial Officer
    (Principal Financial Officer and
    Principal Accounting Officer)

 

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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2018
Nov. 13, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name Western Uranium & Vanadium Corp.  
Entity Central Index Key 0001621906  
Amendment Flag false  
Trading Symbol WUC  
Current Fiscal Year End Date --12-31  
Document Type 10-Q  
Document Period End Date Sep. 30, 2018  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2018  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Common Stock, Shares Outstanding   25,944,175
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Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Current assets:    
Cash $ 1,180,318 $ 427,020
Prepaid expenses 252,023 190,435
Marketable securities 5,049 3,123
Other current assets 91,217 64,763
Total current assets 1,528,607 685,341
Restricted cash 888,991 820,434
Mineral properties 11,681,720 11,645,218
Ablation intellectual property 9,488,051 9,488,051
Total assets 23,587,369 22,639,044
Current liabilities:    
Accounts payable and accrued liabilities 453,355 602,016
Current portion of notes payable 487,450
Deferred revenue, current portion 44,620 40,000
Total current liabilities 497,975 1,129,466
Reclamation liability 221,557 196,821
Deferred tax liability 2,708,887 2,708,887
Deferred contingent consideration 361,219 390,350
Deferred revenue, net of current portion 62,500 60,000
Total liabilities 3,852,138 4,485,524
Commitments
Shareholders' Equity    
Common stock, no par value, unlimited authorized shares, 25,913,874 and 20,510,806 shares issued as of September 30, 2018 and December 31, 2017, respectively and 25,913,568 and 20,510,500 shares outstanding as of September 30, 2018 and December 31, 2017, respectively 25,538,161 22,657,529
Treasury shares, 306 and 306 shares held in treasury as of September 30, 2018 and December 31, 2017, respectively
Accumulated deficit (5,873,301) (4,540,143)
Accumulated other comprehensive income 70,371 36,134
Total shareholders' equity 19,735,231 18,153,520
Total liabilities and shareholders' equity $ 23,587,369 $ 22,639,044
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Common stock, par value
Common stock, shares authorized Unlimited Unlimited
Common stock, shares issued 25,913,874 20,510,806
Common stock, shares outstanding 25,913,568 20,510,500
Treasury shares held in treasury 306 306
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Revenues        
Lease revenue $ 11,155 $ 10,000 $ 33,465 $ 10,000
Expenses        
Mining expenditures 23,898 48,181 117,427 127,435
Professional fees 90,903 127,485 358,420 502,868
General and administrative 322,812 96,723 703,109 480,236
Consulting fees 43,984 63,757 153,934 265,888
Total operating expenses 481,597 336,146 1,332,890 1,376,427
Operating loss (470,442) (326,146) (1,299,425) (1,366,427)
Interest expense, net 7,863 10,911 33,733 49,655
Net loss (478,305) (337,057) (1,333,158) (1,416,082)
Other comprehensive income        
Foreign exchange gain 17,061 (2,360) 34,237 8,061
Comprehensive loss $ (461,244) $ (339,417) $ (1,298,921) $ (1,408,021)
Loss per share - basic and diluted $ (0.02) $ (0.02) $ (0.06) $ (0.07)
Weighted average shares outstanding, basic and diluted 24,391,393 19,663,144 22,024,524 19,391,380
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($)
Total
Common Stock
Treasury Shares
Accumulated Deficit
Accumulated Other Comprehensive Income
Beginning balance at Dec. 31, 2017 $ 18,153,520 $ 22,657,529 $ (4,540,143) $ 36,134
Beginning balance, shares at Dec. 31, 2017   20,510,500 306    
Sale of 909,622 units on May 4, 2018 in private placement 457,608 $ 457,608
Sale of 909,622 units on May 4, 2018 in private placement, shares   909,622    
Sale of 2,525,526 units on July 27, 2018 in private placement 1,272,210 $ 1,272,210
Sale of 2,525,526 units on July 27, 2018 in private placement, shares   2,525,526    
Sale of 1,907,088 units on August 9, 2018 in private placement 973,513 $ 973,513
Sale of 1,907,088 units on August 9, 2018 in private placement, shares   1,907,088      
Issuance of 60,832 shares of common stock in exchange of accounts payable 32,251 $ 32,251
Issuance of 60,832 shares of common stock in exchange of accounts payable, shares   60,832    
Stock based compensation - stock options 145,050 $ 145,050
Net loss (1,333,158) (1,333,158) 34,237
Ending balance at Sep. 30, 2018 $ 19,735,231 $ 25,538,161 $ (5,873,301) $ 70,371
Ending balance, shares at Sep. 30, 2018   25,913,568 306    
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - Private Placement [Member] - shares
1 Months Ended 9 Months Ended
Aug. 09, 2018
May 04, 2018
Jul. 27, 2018
Sep. 30, 2018
Subsidiary, Sale of Stock [Line Items]        
Sale of units in private placement   909,622    
Issuance of shares of common stock in exchange of accounts payable       60,832
Sale of units in private placement one     2,525,526  
Sale of units in private placement two 1,907,088      
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash Flows From Operating Activities:    
Net loss $ (1,333,158) $ (1,416,082)
Reconciliation of net loss to cash used in operating activities:    
Accretion of and additions to reclamation liability 24,736 6,588
Amortization of debt discount on notes payable 12,550 16,639
Stock based compensation 145,050 133,282
Change in foreign exchange on marketable securities (1,926) (248)
Change in operating assets and liabilities:    
Prepaid expenses and other current assets (156,599) (144,507)
Accounts payable and accrued liabilities, net of shares issued for accounts payable (116,410) (39,789)
Deferred revenue 7,120 110,000
Net cash used in operating activities (1,418,637) (1,334,117)
Cash Flows From Investing Activities:    
Purchase of property and equipment (36,502)
Net cash used in investing activities (36,502)
Cash Flows From Financing Activities:    
Payment of Nueco Note (185,564)
Payment of EFHC Note (500,000)
Issuance of Common shares, net of offering costs 2,703,331 1,172,866
Receipt of subscription receivable 28,429
Net cash provided by (used in) financing activities 2,203,331 1,015,731
Effect of foreign exchange rate on cash 5,106 28,249
Net increase (decrease) in cash 753,298 (290,137)
Cash - beginning 427,020 791,814
Cash - ending 1,180,318 501,677
Cash paid during the period for:    
Interest 15,000
Income taxes
Non-cash financing activities:    
Shares issued for accounts payable and accrued expenses $ 32,251 $ 83,338
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Business
9 Months Ended
Sep. 30, 2018
Business [Abstract]  
BUSINESS

NOTE 1 – BUSINESS

 

Nature of operations

 

Western Uranium & Vanadium Corp. (“Western” or the “Company”, formerly Western Uranium Corporation) was incorporated in December 2006 under the Ontario Business Corporations Act. On November 20, 2014, the Company completed a listing process on the Canadian Securities Exchange (“CSE”). As part of that process, the Company acquired 100% of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability company. The transaction constituted a reverse takeover (“RTO”) of Western by PRM. Subsequent to obtaining appropriate shareholder approvals, the Company reconstituted its Board of Directors and senior management team. Effective September 16, 2015, Western completed its acquisition of Black Range Minerals Limited (“Black Range”).

 

The Company has registered offices at 330 Bay Street, Suite 1400, Toronto, Ontario, Canada, M5H 2S8 and its common shares are listed on the CSE under the symbol “WUC.” On April 22, 2016, the Company’s shares of common stock began trading on the OTC Pink Open Market, and on May 23, 2016, the Company’s common stock was approved for the commencement of trading on the OTCQX Best Market. Its principal business activity is the acquisition and development of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United States”).

 

On June 28, 2016, the Company’s registration statement became effective and Western became a United States reporting issuer. Thereafter, the Company was approved for Depository Trust Company eligibility through the Depository Trust and Clearing Corporation, which facilitates electronic book-entry delivery, settlement and depository services for shares in the United States.

 

On June 29, 2018, the shareholders of the Company approved the name change of the Company from “Western Uranium Corporation” to “Western Uranium and Vanadium Corp.” The name change became effective in Ontario, Canada on October 1, 2018; thereafter on October 4, 2018 Western's shares started trading under the new name on the CSE and OTCQX and the Company announced the name change by news release.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Liquidity and Going Concern
9 Months Ended
Sep. 30, 2018
Liquidity and Going Concern [Abstract]  
LIQUIDITY AND GOING CONCERN

NOTE 2 – LIQUIDITY AND GOING CONCERN

 

The Company has incurred continuing losses from its operations and as of September 30, 2018, the Company had an accumulated deficit of $5,873,301 and working capital of $1,030,632.

 

Since inception, the Company has met its liquidity requirements principally through the issuance of notes and the sale of its shares of common stock.

 

On May 4, 2018, the Company completed a private placement of 909,622 units at a price of CAD $0.68 (USD $0.53) per unit for gross proceeds of CAD $618,543 (USD $481,560). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On July 30, 2018, the Company completed a private placement of 2,525,526 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,717,358 (USD $1,319,096). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On August 9, 2018, the Company completed a private placement of 1,907,088 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,296,820 (USD $1,000,000). Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings, to secure regulatory approval to fully utilize its ablation technology and to initiate the processing of ore to generate operating cash flows.

 

There are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern to sustain operations for at least one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principles of Consolidation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10–Q and Rule 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10–K for the fiscal year ended December 31, 2017, as filed with the SEC on April 2, 2018. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2018.

 

The accompanying condensed consolidated financial statements include the accounts of Western and its wholly-owned subsidiaries, Western Uranium Corporation (Utah), PRM, Black Range, Black Range Copper Inc., Ranger Resources Inc., Black Range Minerals Inc., Black Range Minerals Colorado LLC, Black Range Minerals Wyoming LLC, Haggerty Resources LLC, Ranger Alaska LLC, Black Range Minerals Utah LLC, Black Range Minerals Ablation Holdings Inc. and Black Range Development Utah LLC. All significant inter-company transactions and balances have been eliminated upon consolidation.

 

The Company has established the existence of mineralized materials for certain uranium and vanadium projects. The Company has not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (the “SEC”) under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for any of its uranium projects.

 

Use of Estimates

 

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include determining the fair value of transactions involving common stock, assessment of the useful life and evaluation for impairment of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, and the reclamation liability, valuation of stock-based compensation, valuation of available-for-sale securities and valuation of long-term debt. Other areas requiring estimates include allocations of expenditures, depletion and amortization of mineral rights and properties. Actual results could differ from those estimates.

 

Foreign Currency Translation

 

The reporting currency of the Company, including its subsidiaries, is the United States dollar. The financial statements of subsidiaries located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the parent (Western Uranium & Vanadium Corp. (Ontario)) is the Canadian dollar. Monetary assets and liabilities of these subsidiaries are translated at the exchange rates at the balance sheet date. Income and expense items are translated using average monthly exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive loss in the condensed consolidated balance sheets.

 

Revenue Recognition

 

The Company leases certain of its mineral properties for the exploration and production of oil and gas reserves. The Company accounts for lease revenue in accordance with ASC 840 “Leases”. Lease payments received in advance are deferred and recognized on a straight – line basis over the related lease term associated with the prepayment. Royalty payments are recognized as revenues when received.

 

Fair Values of Financial Instruments

 

The carrying amounts of cash, restricted cash, accounts payable, accrued liabilities, and notes payable approximate their fair value due to the short-term nature of these instruments. Marketable securities are adjusted to fair value at each balance sheet date based on quoted prices which are considered level 1 inputs. The reclamation deposits, which are reflected in restricted cash on the condensed consolidated balance sheets, are deposits mainly invested in certificates of deposit at major financial institutions and their fair values were estimated to approximate their carrying values. The Company’s operations and financing activities are conducted primarily in United States dollars and as a result, the Company is not subject to significant exposure to market risks from changes in foreign currency rates. The Company is exposed to credit risk through its cash and restricted cash, but mitigates this risk by keeping these deposits at major financial institutions.

 

ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

 

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

 

Fair Values of Financial Instruments

 

Level 1 Quoted prices in active markets for identical assets or liabilities.

 

Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

 

Level 3 Significant unobservable inputs that cannot be corroborated by market data.

 

The fair value of the Company’s financial instruments are as follows:

 

  Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)  Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)  Significant Unobservable Inputs (Level 3) 
Marketable securities as of September 30, 2018 $5,049  $      -  $      - 
             
Marketable securities as of December 31, 2017 $3,123  $-  $- 

 

Income Taxes

 

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

 

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

 

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of September 30, 2018 and December 31, 2017, no liability for unrecognized tax benefits was required to be reported.

 

The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the three and nine months ended September 30, 2018 and December 31, 2017. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

 

The Company has identified its federal tax return and its state tax returns in Colorado and Utah as its “major” tax jurisdictions, and such returns for the years 2014 through 2017 remain subject to examination.

 

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%. As December 31, 2017, the Company had made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, on December 31, 2017, the Company revalued its deferred tax assets.

 

Stock-Based Compensation

 

The Company follows ASC 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the more readily measurable of the fair value of the stock and the fair value of the service. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees and management, this is typically considered to be the vesting period of the award. For consultants the fair value of the award is recorded over the term of the service period, and unvested amounts are revalued at each reporting period over the service period. The Company estimates the expected forfeitures and updates the valuation accordingly.

 

Loss per Share

 

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of basic net loss per share for the three and nine months ended September 30, 2018 and 2017 excludes potentially dilutive securities. The computations of net loss per share for each period presented is the same for both basic and fully diluted.

 

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

 

  For the Nine Months 
Ended September 30,
 
  2018  2017 
Warrants to purchase shares of common stock  6,861,670   3,873,086 
Options to purchase shares of common stock  2,416,664   1,321,996 
Total potentially dilutive securities  9,278,334   5,195,082 

  

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements, other than those disclosed below or in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2018.

 

In August 2016 the FASB issued Topic ASU No. 2016-15 “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 clarifies diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted ASU 2016-15 on January 1, 2018 and it has not had a material impact on its condensed consolidated statements of cash flows.

 

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 amends the classification and presentation of changes in restricted cash or restricted cash equivalents in the statement of cash flows. The Company adopted ASU 2016-18 on January 1, 2018 and it has not had a material impact on its condensed consolidated statements of cash flows.

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update “ASU” No. 2014-09, Revenue from Contracts with Customers (Topic 606) which was subsequently amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, and ASU 2017-13. These ASUs outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In July 2015, the FASB deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. A full retrospective or modified retrospective approach is required. The Company has adopted ASU No. 2014-09 effective January 1, 2018.

 

The Company has elected to apply the modified retrospective method and there was no impact on the condensed consolidated financial statements. Accordingly, the new revenue standard has been applied prospectively in the Company’s condensed consolidated financial statements from January 1, 2018 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods.

 

The Company performed an analysis and determined that its revenues are not within the scope of ASC 606, and as such, the Company determined that its methods of recognizing revenues have not been impacted by the new guidance.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Assets, Ablation Intellectual Property and Other Property
9 Months Ended
Sep. 30, 2018
Mineral Assets, Ablation Intellectual Property and Other Property [Abstract]  
MINERAL ASSETS, ABLATION INTELLECTUAL PROPERTY AND OTHER PROPERTY

NOTE 4 – MINERAL ASSETS, ABLATION INTELLECTUAL PROPERTY AND OTHER PROPERTY

The Company’s mining properties acquired on August 18, 2014 that the Company retains as of September 30, 2018, include: San Rafael Uranium Project located in Emery County, Utah; The Sunday Mine Complex located in western San Miguel County, Colorado; The Van 4 Mine located in western Montrose County, Colorado; The Sage Mine project located in San Juan County, Utah, and San Miguel County, Colorado. These mining properties include leased land in the states of Colorado and Utah. None of these mining properties were operational at the date of acquisition.

 

The Company’s mining properties acquired on September 16, 2015 that the Company retains as of September 30, 2018, include Hansen, North Hansen, High Park, Hansen Picnic Tree, and Taylor Ranch, located in Fremont and Teller Counties, Colorado. The Company also acquired the Keota project located in Weld County, Wyoming and the Ferris Haggerty project located in Carbon County Wyoming. These mining assets include both owned and leased land in the states of Utah, Colorado and Wyoming. All of the mining assets represent properties which have previously been mined to different degrees for uranium.

 

As the Company has not formally established proven or probable reserves on any of its properties, there is inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated.

 

On September 16, 2015, in connection with the Company’s acquisition of Black Range, the Company assumed an option and exploration agreement (the “Option and Exploration Agreement”) with STB Minerals, LLC, a Colorado limited liability company (“STB”). The Option and Exploration Agreement gives the Company the right to purchase 51% of the mineral rights of specific areas of the Hansen and Picnic Tree deposits (for which the Company already holds 49% of the rights). If the Company were to exercise its option under the Option and Exploration Agreement, it would require the Company to (a) make a cash payment of $2,500,000 immediately upon exercise; (b) issue shares of common stock to STB amounting to a value of $3,750,000 immediately upon exercise; and (c) issue shares of common stock to STB amounting to a value of $3,750,000 on the date that is 180 days following exercise. The Option and Exploration Agreement was scheduled to expire by its terms on July 28, 2017 if not exercised. 

 

The Option and Exploration Agreement provided an extension for an “event of force majeure”.  Under this clause, the Company would receive an extension of the period during which it could exercise its option if it experiences an unreasonable delay outside its control that prevents it from exercising the option.  On May 10, 2017, the Company provided to STB a notice that it was exercising the force majeure clause due to the delay by government regulators in licensing the Company’s ablation technology and permitting mining at the Hansen property. STB has contested the Company’s finding that an event of force majeure has occurred. Ongoing negotiations continued until September 21, 2017 when the Company and STB agreed to settle the matter through the pre-established arbitration mechanism. Prior to the commencement of arbitration, a settlement was agreed to on February 28, 2018 through the execution of an Amendment of Option and Exploration Agreement. As consideration, the Company paid STB a $20,000 extension payment and granted STB the right to seek a bona fide written offer over the remaining term, and agreed to the removal of the force majeure clause from the agreement. The Company received an extension until July 28, 2019 and a right of first refusal to match any bona fide written offer. Hence the Company already controls 49% of the resource property and retains an option to purchase the 51% of the resource property that the Company does not already control for the duration of the agreement. Further the Company believes the execution of this agreement is without financial implications, and as such, the Company has not made any adjustment to these condensed consolidated financials related to this matter.

 

A prior owner of the Van 4 Mine had been granted a first Temporary Cessation from reclamation of the mine by the Colorado Mined Land Reclamation Board (“MLRB”) which was set to expire June 23, 2017. Prior to its expiration, PRM formally requested an extension through a second Temporary Cessation. PRM subsequently participated in a public process which culminated in a hearing on July 26, 2017. Prior to the hearing, three non-profit organizations who pursue environmental and conservation objectives filed a brief objecting to the extension. The MLRB board members voted to grant a second five-year Temporary Cessation for the Van 4 Mine. Thereafter the three objecting parties filed a lawsuit on September 18, 2017. The MLRB was named as the defendant and PRM was named as a party to the case due to the Colorado law requirement that any lawsuit filed after a hearing include all of the parties to the proceeding. The plaintiff organizations were seeking for the court to set aside the board order granting a second five-year temporary cessation period to PRM for the Van 4 Mine. The Colorado state Attorney General was defending this action in the Denver Colorado District Court. On May 8, 2018, the Denver Colorado District Court ruled in favor of PRM, whereby the additional five-year temporary cessation period was granted.

 

The Company’s mineral properties and ablation intellectual property are:

 

    As of  
    September 30, 2018     December 31, 2017  
Mineral properties   $ 11,681,720     $ 11,645,218  
Ablation intellectual property   $ 9,488,051     $ 9,488,051  

 

Oil and Gas Lease and Easement

 

On July 18, 2017, an oil and gas lease became effective with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s property in Colorado. As consideration for entering into the lease, the Company received $120,000 during the third quarter of 2017. The lease will be in force for an initial term of three years and may be extended by the lessee at 150% of the initial rate. The lessee has also agreed to pay the Company a royalty of 18.75% of the lessee’s revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest. The Company is recognizing the initial payment incrementally over the term of the lease.

 

On February 26, 2018, the Company entered into a further agreement with the same entity as the oil and gas lease to provide them with an easement to an additional part of the Company’s property solely for the purposes of transporting the oil and gas extracted via a pipeline. As consideration for the easement, the Company received $36,960 during the first quarter of 2018. The Company is recognizing this payment incrementally over the eight year term of the easement.

 

During the three months ended September 30, 2018 and 2017, the Company recognized aggregate revenue of $11,155 and $10,000, and for the nine months ended September 30, 2018 and 2017 the Company recognized aggregate revenue of $33,465 and $10,000, respectively, under these oil and gas lease arrangements.

 

Right-of-way grant agreement

 

On July 1, 2018, the Company entered into a right of way agreement with a third party, whereby, the Company has granted “right of way” access to a portion of its mineral properties in exchange for an up front payment of $3,624. The Company is recognizing this payment incrementally over the term of the right-of-way agreement.

 

Reclamation Liabilities

 

The Company’s mines are subject to certain asset retirement obligations, which the Company has recorded as reclamation liabilities. The reclamation liabilities of the United States mines are subject to legal and regulatory requirements, and estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The reclamation liability represents the Company’s best estimate of the present value of future reclamation costs in connection with the mineral properties. The Company determined the gross reclamation liabilities of the mineral properties as of September 30, 2018 and December 31, 2017, to be approximately $888,991 and $820,434, respectively. During the three months ended September 30, 2018 and 2017, the accretion of the reclamation liabilities was $2,729 and $2,561, and for the nine months ended September 30, 2018 and 2017 was $7,942 and $6,588, respectively. The Company expects to begin incurring the reclamation liability after 2054 and accordingly, has discounted the gross liabilities over their remaining lives using a discount rate of 5.4% to net discounted aggregated values as of September 30, 2018 and December 31, 2017 of $221,557 and $196,821, respectively. The gross reclamation liabilities as of September 30, 2018 are secured by certificates of deposit in the amount of $888,991.

 

On April 11, 2018, the Company received notice from the Colorado Division of Reclamation, Mining and Safety (“CDRMS”) in regard to its reclamation liability. CDRMS has recalculated the Company’s estimated future reclamation liability, which would require the Company to increase its certificates of deposit that secure its reclamation liability by $68,517. The Company had until June 8, 2018 to comply with or appeal the determination. On August 7, 2018, the Company paid CDRMS $68,517 in additional reclamation bonds to satisfy their requirement.

 

Reclamation liability activity for the nine months ended September 30, 2018 and 2017 consists of:

 

    For the nine months ended September 30,  
    2018     2017  
Beginning balance   $ 196,821     $ 403,639  
Accretion     7,942       6,588  
Additions     16,794       -  
Ending Balance   $ 221,557     $ 410,227  
XML 22 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Liabilities
9 Months Ended
Sep. 30, 2018
Accounts Payable and Accrued Liabilities [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

Accounts payable and accrued liabilities consisted of:

 

  As of 
  September 30, 2018  December 31, 2017 
Trade accounts payable $291,595  $453,618 
Accrued liabilities  161,760   148,398 
  $453,355  $602,016
XML 23 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable
9 Months Ended
Sep. 30, 2018
Notes Payable [Abstract]  
NOTES PAYABLE

NOTE 6 – NOTES PAYABLE

 

EFHC Note

 

On August 18, 2014, in connection with the purchase of certain of the mineral properties, the Company entered into a note payable with Energy Fuels Holding Corporation (“EFHC”) (the “EFHC Note”) for $500,000. The EFHC Note bears interest at a rate of 3.0% per annum and is secured by a first priority interest in certain of the Company’s mineral properties. On the date of the purchase, the Company recorded the EFHC Note net of a discount for interest of $73,971 at a rate of 4% per annum, resulting in a total effective interest rate of 7% per annum. The discount is being amortized using the effective interest method over the life of the loan. All principal on the EFHC Note was due and payable on August 18, 2018 and interest on the EFHC Note was due and payable annually beginning August 18, 2015. Prior to the original August 18, 2018 maturity, the Company and EFHC modified the EFHC Note to extend the maturity date to September 4, 2018. On August 31, 2018, the Company paid the EFHC Note in full.

 

Notes Payable Summary

 

Notes payable consisted of:

 

  Principal  Discount  Balance, Net
of Discount
  Current  Non-Current 
September 30, 2018 $-  $-  $-  $-  $- 
                     
December 31, 2017 $500,000  $12,550  $487,450  $487,450  $- 

 

The Company’s total interest expense, net, consisted of:

 

  For the Three Months Ended September 30,  For the Nine Months Ended September 30, 
  2018  2017  2018  2017 
Interest expense, notes payable $2,609  $3,781  $13,830  $13,381 
Amortization of discount on notes payable  2,801   4,833   12,550   29,889 
Accretion of reclamation liabilities  2,729   2,561   7,942   6,588 
Other interest expense  -   83   -   1,072 
Interest income  (276)  (347)  (589)  (1,275)
Interest expense, net $7,863  $10,911  $33,733  $49,655 
XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments
9 Months Ended
Sep. 30, 2018
Commitments [Abstract]  
COMMITMENTS

NOTE 7 – COMMITMENTS

 

Russell Fryer

 

On July 28, 2017, Russell Fryer was appointed the Company’s Executive Chairman. On November 13, 2017, the Company entered into a consulting agreement with an affiliate of Mr. Fryer. The agreement became effective on July 28, 2017 and, pursuant to its terms, expires on December 31, 2018. The agreement may be terminated by either party with 90 days’ notice. The agreement provides for compensation of $15,000 per month and an annual bonus at the discretion of the Board of Directors. Pursuant to the agreement, if a change of control occurs wherein the consideration in such change of control is more than USD $2.00 per share, the Company is required to pay a lump sum in the amount of $350,000. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018. On May 1, 2018, following the termination of this consulting contract, Mr. Fryer resigned as director and executive chairman of the Board of Directors.

 

Vanadium Joint Venture

 

On June 1, 2018, the Company signed a letter agreement with Battery Mineral Resource Nevada, Inc. (“BMR”) to form a joint venture for vanadium development at the Sage Mine.

 

Pursuant to the agreement, BMR will underwrite the cost of scoping, engineering and technical studies during the due diligence period to prepare for commencing pre-production work for resumption of production. Subsequent to the due diligence work program, BMR has the option to enter into a definitive joint venture agreement which will trigger an additional buy-in payment to the Company. Thereafter BMR and the Company will divide joint venture expenditures 50/50 and divide vanadium offtake 65/35 and uranium offtake 10/90. The higher percentage of vanadium offtake for BMR aligns with its rechargeable battery and energy storage mandate. The agreed deal structure compensates the Company for the differential in the offtake percentage. The agreement provides BMR an additional period to exercise a short-term option to purchase the entire Sage Mine Project. BMR also retains the right to not proceed beyond due diligence.

 

Since the agreement was signed during the first week of June, vanadium prices have risen from over $14 per pound to over $18 per pound.  Consequently, rather than pursuing a joint venture, BMR provided notification of their desire to exercise the purchase option. Both parties were working toward the completion of a definitive agreement for the Sage Mine Project. On September 13, 2018, the Company and BMR mutually terminated the letter agreement and ceased negotiations.

 

Supply Contract

 

In December 2015, the Company signed a uranium concentrates supply agreement with a major U.S. utility for delivery commencing in 2018 and continuing for a five year period through 2022. As the Company is not currently in production, a partial assignment agreement was put in place whereby the assignee accepted the Company’s right to the Year 1 delivery of 125,000 pounds of natural uranium concentrates. The delivery was made on May 1, 2018 and the assignee was paid the full consideration under the agreement. The Company did not recognize any gain or loss on this transaction.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital and Other Equity Instruments
9 Months Ended
Sep. 30, 2018
Share Capital and Other Equity Instruments [Abstract]  
SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

NOTE 8 – SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

 

Authorized Capital

 

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share rateably in all assets of the Company that are legally available for distribution. As of September 30, 2018 and December 31, 2017, an unlimited number of common shares were authorized for issuance.

 

Shares issued for Accounts Payable

 

On May 4, 2018, the Company issued 60,832 shares of its common stock in exchange for approximately $32,251 of its accounts payable outstanding with certain creditors.

 

Private Placement

 

On May 4, 2018, the Company completed a private placement of 909,622 units at a price of CAD $0.68 (USD $0.53) per unit for gross proceeds of CAD $618,543 (USD $466,402). The Company paid USD $8,794 in offering costs and received net proceeds of USD $457,608. Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On July 30, 2018, the Company completed a private placement of 2,525,526 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,717,358 (USD $1,319,096). The Company paid USD $46,886 in offering costs and received net proceeds of USD $1,272,210. Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

On August 9, 2018, the Company completed a private placement of 1,907,088 units at a price of CAD $0.68 (USD $0.52) per unit for gross proceeds of CAD $1,296,820 (USD $1,000,000). The Company paid USD $26,487 in offering costs and received net proceeds of USD $973,513. Each unit consisted of one share of common stock and a warrant to purchase one-half of one share of common stock. Each warrant is exercisable at a price of CAD $1.15 and expires two years from the date of issuance.

 

Incentive Stock Option Plan

 

The Company maintains an Incentive Stock Option Plan (the “Plan”) that permits the granting of stock options as incentive compensation. Shareholders of the Company approved the Plan on June 30, 2008 and amendments to the Plan on June 20, 2013, and the Board of Directors approved additional changes to the Plan on September 12, 2015.

 

The purpose of the Plan is to attract, retain and motivate directors, management, staff and consultants by providing them with the opportunity, through stock options, to acquire a proprietary interest in the Company and benefit from its growth.

 

The Plan provides that the aggregate number of common shares for which stock options may be granted will not exceed 10% of the issued and outstanding common shares at the time stock options are granted. As of September 30, 2018, a total of 25,913,568 common shares were outstanding, and at that date the maximum number of stock options eligible for issue under the Plan was 2,591,357.

 

On February 8, 2018, the Company granted options under the plan for the purchase of an aggregate of 100,000 shares of common stock to a director. The options have an exercise price of CAD $1.00 (US $0.77 as of September 30, 2018) and vest one half on the date of grant and one half on December 31, 2018. One half of the options expire on January 31, 2023 and the remaining options expire on December 31, 2023.

 

On September 24, 2018, the Company granted options under the plan for the purchase of an aggregate of 983,000 shares of common stock to several officers, directors, and consultants. The options have an exercise price of CAD $2.15 (US $1.67 as of September 30, 2018) and vest equally in three installments on the date of grant, on October 31, 2018, and on March 31, 2019. One third of the options expire on September 24, 2023, one third expire on October 31, 2023, and the remaining one third expire on March 31, 2024.

 

Stock Options

 

  Number of Shares  Weighted Average Exercise
Price (USD)
  Weighted Average Contractual Life (years)  Weighted Average Grant Date Fair Value  Intrinsic
Value (USD)
 
Outstanding - January 1, 2018  1,846,996  $1.92      $0.42     
Granted  1,083,000  $1.58             
Expired, forfeited, or cancelled  (513,332) $2.50             
Exercised  -   -             
Outstanding - September 30, 2018  2,416,664  $1.76   3.98  $0.48  $804,654 
Exercisable - September 30, 2018  1,711,331  $1.82   3.56  $0.47  $574,503 

  

The Company’s stock based compensation expense related to stock options for the three months ended September 30, 2018 and 2017 was $90,210 and $0 and for the nine months ended September 30, 2018 and 2017 was $145,050 and $133,282, respectively. As of September 30, 2018, the Company had $450,452 in unamortized stock option expense, which will be amortized over a period of 0.5 years.

 

The Company utilized the Black-Scholes option pricing model to determine the fair value of these stock options, using the assumptions as outlined below.

 

  February 8, 2018  September 24, 2018 
Stock Price  CAD $0.52  CAD $2.14 
Exercise Price  CAD $1.00  CAD $2.15 
Number of Options Granted  100,000   983,000 
Dividend Yield  0%  0%
Expected Volatility  49%  49%
Weighted Average Risk-Free Interest Rate  1.64%  2.94%
Expected life (in years)  2.50 - 3.00   2.50-3.00 

 

Warrants

 

  Number of Shares  Weighted Average Exercise Price (USD)  Weighted Average Contractual Life (years)  Intrinsic Value (USD) 
Outstanding, January 1, 2018  4,095,563  $2.27         
Issued  2,766,107  $0.89         
Outstanding - September 30, 2018  6,861,670  $1.57   2.55  $3,488,238 
Exercisable - September 30, 2018  6,861,670  $1.57   2.55  $3,488,238
XML 26 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mining Expenditures
9 Months Ended
Sep. 30, 2018
Mining Expenditures [Abstract]  
MINING EXPENDITURES

NOTE 9 – MINING EXPENDITURES

 

  For the Three Months Ended September 30,  For the Nine Months Ended September 30, 
  2018  2017  2018  2017 
Permits $23,898  $2,334  $102,477  $7,637 
Maintenance  -   36,062   3,900   110,013 
Contract Labor  -   4,525   11,050   4,525 
Royalties  -  $5,260   -  $5,260 
  $23,898  $48,181  $117,427  $127,435 
XML 27 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Including Key Management Compensation)
9 Months Ended
Sep. 30, 2018
Related Party Transactions (Including Key Management Compensation) [Abstract]  
RELATED PARTY TRANSACTIONS (INCLUDING KEY MANAGEMENT COMPENSATION)

NOTE 10 – RELATED PARTY TRANSACTIONS (INCLUDING KEY MANAGEMENT COMPENSATION)

 

The Company has transacted with related parties pursuant to service arrangements in the ordinary course of business, as follows:

 

Pursuant to a consulting agreement, a United States limited liability company owned by a person who was a director, and on July 28, 2017, became the Company’s executive chairman, entered into a consulting agreement with the Company effective April 1, 2016 to provide financial, advisory, and consulting services, including representing the Company to a variety of stakeholders for a six month term ending on September 30, 2016. On October 1, 2016 the Company extended this agreement through January 31, 2017. Professional fees for the three months ended September 30, 2018 and 2017 were $0 and $35,292, respectively, and $73,680 and $95,292 for the nine months ended September 30, 2018 and 2017, respectively, related to this agreement. As of September 30, 2018 and December 31, 2017, the Company had $0 and $0, respectively, included in accounts payable and accrued liabilities payable to this entity.

 

On April 1, 2017, the Company entered into a new consulting agreement with a United States limited liability company owned by a person who was a director. The consulting agreement is to provide assistance with capital raising activities and other financial, advisory, and consulting services for the period April 1, 2017 through June 30, 2017. At June 30, 2017 and the last day of each month thereafter, the agreement may be extended by the Company on a month-to-month basis with seven days’ notice. The agreement has a monthly fee of $15,000. Pursuant to the consulting agreement, if the Company completes a merger with a third party introduced by this director whereby more than 50% of the Company’s then outstanding shares are transferred to that third party, the Company is required to pay a lump sum in an amount of $350,000 to this entity. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018, upon which date the agreement was terminated. On May 1, 2018, upon termination of the agreement, this director resigned his positions as director and as executive chairman.

 

Prior to the acquisition of Black Range, Mr. George Glasier, the Company’s CEO, who is also a director, transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay AUD $500,000 (USD $361,219) to Seller within 60 days of the first commercial application of the ablation technology. Western assumed this contingent payment obligation in connection with the acquisition of Black Range. At the date of the acquisition of Black Range, this contingent obligation was determined to be probable. Since the deferred contingent consideration obligation is probable and the amount estimable, the Company recorded the deferred contingent consideration as an assumed liability in the amount of $361,219 and $390,350 as of September 30, 2018 and December 31, 2017, respectively.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events
9 Months Ended
Sep. 30, 2018
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

 

Warrant Exercises

 

Subsequent to September 30, 2018, the Company received CAD $44,796 (USD $34,135) and issued 30,607 shares of common stock resulting from the exercise of warrants to purchase 30,607 shares of common stock. 

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10–Q and Rule 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10–K for the fiscal year ended December 31, 2017, as filed with the SEC on April 2, 2018. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2018.

 

The accompanying condensed consolidated financial statements include the accounts of Western and its wholly-owned subsidiaries, Western Uranium Corporation (Utah), PRM, Black Range, Black Range Copper Inc., Ranger Resources Inc., Black Range Minerals Inc., Black Range Minerals Colorado LLC, Black Range Minerals Wyoming LLC, Haggerty Resources LLC, Ranger Alaska LLC, Black Range Minerals Utah LLC, Black Range Minerals Ablation Holdings Inc. and Black Range Development Utah LLC. All significant inter-company transactions and balances have been eliminated upon consolidation.

 

The Company has established the existence of mineralized materials for certain uranium and vanadium projects. The Company has not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (the “SEC”) under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for any of its uranium projects.

Use of Estimates

Use of Estimates

 

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include determining the fair value of transactions involving common stock, assessment of the useful life and evaluation for impairment of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, and the reclamation liability, valuation of stock-based compensation, valuation of available-for-sale securities and valuation of long-term debt. Other areas requiring estimates include allocations of expenditures, depletion and amortization of mineral rights and properties. Actual results could differ from those estimates.

Foreign Currency Translation

Foreign Currency Translation

 

The reporting currency of the Company, including its subsidiaries, is the United States dollar. The financial statements of subsidiaries located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the parent (Western Uranium & Vanadium Corp. (Ontario)) is the Canadian dollar. Monetary assets and liabilities of these subsidiaries are translated at the exchange rates at the balance sheet date. Income and expense items are translated using average monthly exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive loss in the condensed consolidated balance sheets.

Revenue Recognition

Revenue Recognition

 

The Company leases certain of its mineral properties for the exploration and production of oil and gas reserves. The Company accounts for lease revenue in accordance with ASC 840 “Leases”. Lease payments received in advance are deferred and recognized on a straight – line basis over the related lease term associated with the prepayment. Royalty payments are recognized as revenues when received.

Fair Values of Financial Instruments

Fair Values of Financial Instruments

 

The carrying amounts of cash, restricted cash, accounts payable, accrued liabilities, and notes payable approximate their fair value due to the short-term nature of these instruments. Marketable securities are adjusted to fair value at each balance sheet date based on quoted prices which are considered level 1 inputs. The reclamation deposits, which are reflected in restricted cash on the condensed consolidated balance sheets, are deposits mainly invested in certificates of deposit at major financial institutions and their fair values were estimated to approximate their carrying values. The Company’s operations and financing activities are conducted primarily in United States dollars and as a result, the Company is not subject to significant exposure to market risks from changes in foreign currency rates. The Company is exposed to credit risk through its cash and restricted cash, but mitigates this risk by keeping these deposits at major financial institutions.

 

ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

 

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

 

Fair Values of Financial Instruments

 

Level 1 Quoted prices in active markets for identical assets or liabilities.

 

Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

 

Level 3 Significant unobservable inputs that cannot be corroborated by market data.

 

The fair value of the Company’s financial instruments are as follows:

 

  Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)  Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)  Significant Unobservable Inputs (Level 3) 
Marketable securities as of September 30, 2018 $5,049  $      -  $      - 
             
Marketable securities as of December 31, 2017 $3,123  $-  $-
Income taxes

Income Taxes

 

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

 

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

 

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of September 30, 2018 and December 31, 2017, no liability for unrecognized tax benefits was required to be reported.

 

The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the three and nine months ended September 30, 2018 and December 31, 2017. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

 

The Company has identified its federal tax return and its state tax returns in Colorado and Utah as its “major” tax jurisdictions, and such returns for the years 2014 through 2017 remain subject to examination.

 

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%. As December 31, 2017, the Company had made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, on December 31, 2017, the Company revalued its deferred tax assets.

Stock-Based Compensation

Stock-Based Compensation

 

The Company follows ASC 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the more readily measurable of the fair value of the stock and the fair value of the service. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees and management, this is typically considered to be the vesting period of the award. For consultants the fair value of the award is recorded over the term of the service period, and unvested amounts are revalued at each reporting period over the service period. The Company estimates the expected forfeitures and updates the valuation accordingly.

Loss per Share

Loss per Share

 

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of basic net loss per share for the three and nine months ended September 30, 2018 and 2017 excludes potentially dilutive securities. The computations of net loss per share for each period presented is the same for both basic and fully diluted.

 

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

 

  For the Nine Months 
Ended September 30,
 
  2018  2017 
Warrants to purchase shares of common stock  6,861,670   3,873,086 
Options to purchase shares of common stock  2,416,664   1,321,996 
Total potentially dilutive securities  9,278,334   5,195,082
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements, other than those disclosed below or in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2018.

 

In August 2016 the FASB issued Topic ASU No. 2016-15 “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 clarifies diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted ASU 2016-15 on January 1, 2018 and it has not had a material impact on its condensed consolidated statements of cash flows.

 

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 amends the classification and presentation of changes in restricted cash or restricted cash equivalents in the statement of cash flows. The Company adopted ASU 2016-18 on January 1, 2018 and it has not had a material impact on its condensed consolidated statements of cash flows.

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update “ASU” No. 2014-09, Revenue from Contracts with Customers (Topic 606) which was subsequently amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, and ASU 2017-13. These ASUs outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In July 2015, the FASB deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. A full retrospective or modified retrospective approach is required. The Company has adopted ASU No. 2014-09 effective January 1, 2018.

 

The Company has elected to apply the modified retrospective method and there was no impact on the condensed consolidated financial statements. Accordingly, the new revenue standard has been applied prospectively in the Company’s condensed consolidated financial statements from January 1, 2018 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods.

 

The Company performed an analysis and determined that its revenues are not within the scope of ASC 606, and as such, the Company determined that its methods of recognizing revenues have not been impacted by the new guidance.

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies [Abstract]  
Schedule of fair values of financial instruments

  Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)  Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)  Significant Unobservable Inputs (Level 3) 
Marketable securities as of September 30, 2018 $5,049  $      -  $      - 
             
Marketable securities as of December 31, 2017 $3,123  $-  $-
Schedule of anti-dilutive securities excluded from computation of earnings per share
  For the Nine Months 
Ended September 30,
 
  2018  2017 
Warrants to purchase shares of common stock  6,861,670   3,873,086 
Options to purchase shares of common stock  2,416,664   1,321,996 
Total potentially dilutive securities  9,278,334   5,195,082 
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Assets, Ablation Intellectual Property and Other Property (Tables)
9 Months Ended
Sep. 30, 2018
Mineral Assets, Ablation Intellectual Property and Other Property [Abstract]  
Schedule of mineral properties and ablation intellectual property

  As of 
  September 30, 2018  December 31, 2017 
Mineral properties $11,681,720  $11,645,218 
Ablation intellectual property $9,488,051  $9,488,051 
Schedule on reclamation liability activity

  For the nine months ended September 30, 
  2018  2017 
Beginning balance $196,821  $403,639 
Accretion  7,942   6,588 
Additions  16,794   - 
Ending Balance $221,557  $410,227 
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Liabilities (Tables)
9 Months Ended
Sep. 30, 2018
Accounts Payable and Accrued Liabilities [Abstract]  
Schedule of accounts payable and accrued liabilities

 
  As of 
  September 30, 2018  December 31, 2017 
Trade accounts payable $291,595  $453,618 
Accrued liabilities  161,760   148,398 
  $453,355  $602,016
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Tables)
9 Months Ended
Sep. 30, 2018
Notes Payable [Abstract]  
Schedule of notes payable

  Principal  Discount  Balance, Net
of Discount
  Current  Non-Current 
September 30, 2018 $-  $-  $-  $-  $- 
                     
December 31, 2017 $500,000  $12,550  $487,450  $487,450  $- 
Schedule of total interest expense, net

  For the Three Months Ended September 30,  For the Nine Months Ended September 30, 
  2018  2017  2018  2017 
Interest expense, notes payable $2,609  $3,781  $13,830  $13,381 
Amortization of discount on notes payable  2,801   4,833   12,550   29,889 
Accretion of reclamation liabilities  2,729   2,561   7,942   6,588 
Other interest expense  -   83   -   1,072 
Interest income  (276)  (347)  (589)  (1,275)
Interest expense, net $7,863  $10,911  $33,733  $49,655 
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital and Other Equity Instruments (Tables)
9 Months Ended
Sep. 30, 2018
Share Capital and Other Equity Instruments [Abstract]  
Schedule of company's stock option granted activity
  Number of Shares  Weighted Average Exercise
Price (USD)
  Weighted Average Contractual Life (years)  Weighted Average Grant Date Fair Value  Intrinsic
Value (USD)
 
Outstanding - January 1, 2018  1,846,996  $1.92      $0.42     
Granted  1,083,000  $1.58             
Expired, forfeited, or cancelled  (513,332) $2.50             
Exercised  -   -             
Outstanding - September 30, 2018  2,416,664  $1.76   3.98  $0.48  $804,654 
Exercisable - September 30, 2018  1,711,331  $1.82   3.56  $0.47  $574,503
Schedule of fair value of these stock options, using the assumptions
  February 8, 2018  September 24, 2018 
Stock Price  CAD $0.52  CAD $2.14 
Exercise Price  CAD $1.00  CAD $2.15 
Number of Options Granted  100,000   983,000 
Dividend Yield  0%  0%
Expected Volatility  49%  49%
Weighted Average Risk-Free Interest Rate  1.64%  2.94%
Expected life (in years)  2.50 - 3.00   2.50-3.00 
Schedule of warrants outstanding
  Number of Shares  Weighted Average Exercise Price (USD)  Weighted Average Contractual Life (years)  Intrinsic Value (USD) 
Outstanding, January 1, 2018  4,095,563  $2.27         
Issued  2,766,107  $0.89         
Outstanding - September 30, 2018  6,861,670  $1.57   2.55  $3,488,238 
Exercisable - September 30, 2018  6,861,670  $1.57   2.55  $3,488,238 
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mining Expenditures (Tables)
9 Months Ended
Sep. 30, 2018
Mining Expenditures [Abstract]  
Schedule of mining expenditures
  For the Three Months Ended September 30,  For the Nine Months Ended September 30, 
  2018  2017  2018  2017 
Permits $23,898  $2,334  $102,477  $7,637 
Maintenance  -   36,062   3,900   110,013 
Contract Labor  -   4,525   11,050   4,525 
Royalties  -  $5,260   -  $5,260 
  $23,898  $48,181  $117,427  $127,435 
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Business (Details)
Nov. 20, 2014
Business (Textual)  
Ownership percentage 100.00%
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Liquidity and Going Concern (Details)
1 Months Ended
Aug. 09, 2018
USD ($)
$ / shares
shares
Aug. 09, 2018
CAD ($)
shares
May 04, 2018
USD ($)
$ / shares
shares
May 04, 2018
CAD ($)
shares
Jul. 30, 2018
USD ($)
$ / shares
shares
Jul. 30, 2018
CAD ($)
shares
Sep. 30, 2018
USD ($)
Aug. 09, 2018
$ / shares
Jul. 30, 2018
$ / shares
May 04, 2018
$ / shares
Dec. 31, 2017
USD ($)
Liquidity and Going Concern (Textual)                      
Accumulated deficit             $ (5,873,301)       $ (4,540,143)
Working capital             $ 1,030,632        
Private Placement [Member]                      
Liquidity and Going Concern (Textual)                      
Common stock issued, shares | shares 1,907,088 1,907,088 909,622 909,622 2,525,526 2,525,526          
Gross proceeds amount $ 1,000,000 $ 1,296,820 $ 481,650 $ 618,543 $ 1,319,096 $ 1,717,358          
Price per share | (per share) $ 0.52   $ 0.53   $ 0.52     $ 0.68 $ 0.68 $ 0.68  
Warrant exercisable price | $ / shares               $ 1.15 $ 1.15 $ 1.15  
Date of issuance 2 years 2 years 2 years 2 years 2 years 2 years          
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities $ 5,049 $ 3,123
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 5,049 3,123
Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities
Significant Unobservable Inputs (Level 3) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details 1) - shares
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive securities 9,278,334 5,195,082
Warrants to purchase shares of common stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive securities 6,861,670 3,873,086
Options to purchase shares of common stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive securities 2,416,664 1,321,996
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details Textual)
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies (Textual)  
Percent of likely to be realized upon settlement, description Greater than 50 percent.
Minimum [Member]  
Summary of Significant Accounting Policies (Textual)  
U.S. federal corporate tax rate 21.00%
Maximum [Member]  
Summary of Significant Accounting Policies (Textual)  
U.S. federal corporate tax rate 35.00%
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Assets, Ablation Intellectual Property and Other Property (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Mineral Assets, Ablation Intellectual Property and Other Property [Abstract]    
Mineral properties $ 11,681,720 $ 11,645,218
Ablation intellectual property $ 9,488,051 $ 9,488,051
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Assets, Ablation Intellectual Property and Other Property (Details 1) - USD ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Mineral Assets, Ablation Intellectual Property and Other Property [Abstract]    
Beginning balance $ 196,821 $ 403,639
Accretion 7,942 6,588
Additions 16,794
Ending Balance $ 221,557 $ 410,227
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Assets, Ablation Intellectual Property and Other Property (Details Textual)
1 Months Ended 3 Months Ended 9 Months Ended
May 10, 2017
USD ($)
Jul. 18, 2017
a
Sep. 16, 2015
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Aug. 07, 2018
USD ($)
Apr. 11, 2018
USD ($)
Dec. 31, 2017
USD ($)
Mineral Assets, Ablation Intellectual Property and Other Property (Textual)                    
Reclamation liability mineral properties       $ 888,991   $ 888,991       $ 820,434
Accretion of reclamation liability       2,729 $ 2,561 $ 7,942 $ 6,588      
Reclamation liability, description           The Company expects to begin incurring the reclamation liability after 2054.        
Discount rate           5.40%        
Net discounted value       221,557   $ 221,557       $ 196,821
Certificates of deposit       $ 888,991   $ 888,991        
Business acquisition, Description     The Option and Exploration Agreement gives the Company the right to purchase 51% of the mineral rights of specific areas of the Hansen and Picnic Tree deposits (for which the Company already holds 49% of the rights). If the Company were to exercise its option under the Option and Exploration Agreement, it would require the Company to (a) make a cash payment of $2,500,000 immediately upon exercise; (b) issue shares of common stock to STB amounting to a value of $3,750,000 immediately upon exercise; and (c) issue shares of common stock to STB amounting to a value of $3,750,000 on the date that is 180 days following exercise. The Option and Exploration Agreement was scheduled to expire by its terms on July 28, 2017 if not exercised.              
Oil and gas lease permit area in acres | a   160                
Initial term of lease   3 years   8 years   8 years        
Recognized revenue       $ 36,960            
Production revenue percentage of lease, description Hence the Company already controls 49% of the resource property and retains an option to purchase the 51% of the resource property that the Company does not already control for the duration of the agreement. The lessee has also agreed to pay the Company a royalty of 18.75% of the lessee's revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest.                
Initial lease term, description   The lease will be in force for an initial term of three years and may be extended by the lessee at 150% of the initial rate.                
Consideration paid $ 20,000                  
Aggregate revenue       $ 11,155 $ 10,000 $ 33,465 $ 10,000      
Reclamation liability                 $ 68,517  
Additional reclamation bonds               $ 68,517    
Upfront Payment           $ 3,624        
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Liabilities (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Accounts Payable and Accrued Liabilities [Abstract]    
Trade accounts payable $ 291,595 $ 453,618
Accrued liabilities 161,760 148,398
Total accounts payable and accrued liabilities $ 453,355 $ 602,016
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Debt Instrument [Line Items]    
Principal $ 500,000
Discount 12,550
Balance, Net of Discount 487,450
Current 487,450
Non-Current
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Details 1) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Notes Payable [Abstract]        
Interest expense, notes payable $ 2,609 $ 3,781 $ 13,830 $ 13,381
Amortization of discount on notes payable 2,801 4,833 12,550 29,889
Accretion of reclamation liabilities 2,729 2,561 7,942 6,588
Other interest expense 83 1,072
Interest income (276) (347) (589) (1,275)
Interest expense, net $ 7,863 $ 10,911 $ 33,733 $ 49,655
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Details Textual) - USD ($)
1 Months Ended
Aug. 18, 2014
Sep. 30, 2018
Dec. 31, 2017
Notes Payable (Textual)      
Discount for interest   $ 12,550
EFHC [Member]      
Notes Payable (Textual)      
Note payable $ 500,000    
Note bears interest rate 3.00%    
Discount for interest $ 73,971    
Discount for interest rate percentage 4.00%    
Effective interest rate 7.00%    
Maturity date of notes payable Aug. 18, 2015    
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments (Details) - Russell Fryer [Member]
Nov. 13, 2017
USD ($)
Commitments (Textual)  
Compensation $ 15,000
Expiry date Dec. 31, 2018
Commitments, description Pursuant to the agreement, if a change of control occurs wherein the consideration in such change of control is more than USD $2.00 per share, the Company is required to pay a lump sum in the amount of $350,000.
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital and Other Equity Instruments (Details) - Stock Options [Member]
9 Months Ended
Sep. 30, 2018
USD ($)
$ / shares
shares
Number of Shares  
Outstanding - January 1, 2018 | shares 1,846,996
Granted | shares 1,083,000
Expired, forfeited, or cancelled | shares (513,332)
Exercised | shares
Outstanding - September 30, 2018 | shares 2,416,664
Exercisable - September 30, 2018 | shares 1,711,331
Weighted Average Exercise Price (USD)  
Outstanding - January 1, 2018 $ 1.92
Granted 1.58
Expired, forfeited, or cancelled 2.50
Exercised
Outstanding - September 30, 2018 1.76
Exercisable - September 30, 2018 $ 1.82
Weighted Average Contractual Life (years)  
Outstanding - September 30, 2018 3 years 11 months 23 days
Exercisable - september 30, 2018 3 years 6 months 21 days
Weighted Average Grant Date Fair Value  
Outstanding - September 30, 2018 $ 0.42
Outstanding December 31, 2017 0.48
Exercisable - September 30, 2018 $ 0.47
Intrinsic Value (USD)  
Outstanding - September 30, 2018 | $ $ 3,488,238
Exercisable - September 30, 2018 | $ $ 3,488,238
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital and Other Equity Instruments (Details 1) - Stock Option [Member] - $ / shares
1 Months Ended
Feb. 08, 2018
Sep. 24, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock Price $ 0.52 $ 2.14
Exercise Price $ 1.00 $ 2.15
Number of Options Granted 100,000 983,000
Dividend Yield 0.00% 0.00%
Expected Volatility 49.00% 49.00%
Weighted Average Risk-Free Interest Rate 1.64% 2.94%
Maximum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected life (in years) 3 years 3 years
Minimum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected life (in years) 2 years 6 months 2 years 6 months
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital and Other Equity Instruments (Details 2) - Warrants [Member]
9 Months Ended
Sep. 30, 2018
USD ($)
$ / shares
shares
Number of Shares  
Outstanding - January 1, 2018 | shares 4,095,563
Granted | shares 2,766,107
Outstanding - September 30, 2018 | shares 6,861,670
Exercisable - September 30, 2018 | shares 6,861,670
Weighted Average Exercise Price (USD)  
Outstanding - January 1, 2018 | $ / shares $ 2.27
Granted | $ / shares 0.89
Outstanding - September 30, 2018 | $ / shares 1.57
Exercisable - September 30, 2018 | $ / shares $ 1.57
Weighted Average Contractual Life (years)  
Outstanding - September 30, 2018 2 years 6 months 18 days
Exercisable - september 30, 2018 2 years 6 months 18 days
Intrinsic Value (USD)  
Outstanding - September 30, 2018 | $ $ 3,488,238
Exercisable - September 30, 2018 | $ $ 3,488,238
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital and Other Equity Instruments (Details Textual)
1 Months Ended 3 Months Ended 9 Months Ended
Aug. 09, 2018
USD ($)
$ / shares
shares
Aug. 09, 2018
CAD ($)
shares
May 04, 2018
USD ($)
$ / shares
shares
May 04, 2018
CAD ($)
shares
Feb. 08, 2018
$ / shares
shares
Sep. 24, 2018
$ / shares
shares
Jul. 30, 2018
USD ($)
$ / shares
shares
Jul. 30, 2018
CAD ($)
shares
Sep. 30, 2018
USD ($)
shares
Sep. 30, 2017
USD ($)
Sep. 30, 2018
USD ($)
shares
Sep. 30, 2017
USD ($)
Aug. 09, 2018
$ / shares
Jul. 30, 2018
$ / shares
May 04, 2018
$ / shares
Dec. 31, 2017
shares
Share Capital and Other Equity Instruments (Textual)                                
Common stock, shares outstanding | shares                 25,913,568   25,913,568         20,510,500
Stock based compensation expense                 $ 90,210 $ 0 $ 145,050 $ 133,282        
Unamortized stock option expense                     $ 450,452          
Amortized period                     6 months          
Offering costs                     $ 8,794          
Net proceeds received                     $ 2,703,331 $ 1,172,866        
Accounts Payable [Member]                                
Share Capital and Other Equity Instruments (Textual)                                
Accounts payable outstanding     $ 32,251                          
Shares issued | shares     60,832                          
Incentive Stock Option Plan [Member]                                
Share Capital and Other Equity Instruments (Textual)                                
Common stock, shares outstanding | shares                 25,913,568   25,913,568          
Percentage of issued and outstanding of common shares                     10.00%          
Maximum number of shares eligible for issue, shares | shares                     2,591,357          
Private Placements [Member]                                
Share Capital and Other Equity Instruments (Textual)                                
Common stock issued, shares | shares 1,907,088 1,907,088 909,622 909,622     2,525,526 2,525,526                
Common stock issued $ 1,000,000 $ 1,296,820 $ 481,650 $ 618,543     $ 1,319,096 $ 1,717,358                
Price per share | (per share) $ 0.52   $ 0.53       $ 0.52           $ 0.68 $ 0.68 $ 0.68  
Warrant exercisable price | $ / shares                         $ 1.15 $ 1.15 $ 1.15  
Date of issuance 2 years 2 years 2 years 2 years     2 years 2 years                
Private placement units | shares     909,622 909,622                        
Gross proceeds of private placement $ 1,000,000 $ 1,296,820 $ 618,543 $ 466,402                        
Offering costs 26,487           $ 46,886                  
Accounts payable outstanding $ 973,513                              
Net proceeds received             $ 1,272,210                  
Stock Options [Member]                                
Share Capital and Other Equity Instruments (Textual)                                
Aggregate shares of common stock granted | shares         100,000 983,000                    
Options exercise price | $ / shares         $ 1.00 $ 2.15                    
Vesting period, description           The options have an exercise price of CAD $2.15 (US $1.67 as of September 30, 2018) and vest equally in three installments on the date of grant, on October 31, 2018, and on March 31, 2019. One third of the options expire on September 24, 2023, one third expire on October 31, 2023, and the remaining one third expire on March 31, 2024.         Vest one half on the date of grant and one half on December 31, 2018. One half of the options expire on January 31, 2023 and the remaining options expire on December 31, 2023.          
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mining Expenditures (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Mining Expenditures [Abstract]        
Permits $ 23,898 $ 2,334 $ 102,477 $ 7,637
Maintenance 36,062 3,900 110,013
Contract Labor 4,525 11,050 4,525
Royalties 5,260 5,260
Total mining expenditures $ 23,898 $ 48,181 $ 117,427 $ 127,435
XML 54 R44.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Including Key Management Compensation) (Details)
shares in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2018
USD ($)
shares
Sep. 30, 2018
AUD ($)
shares
Sep. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Related Party Transactions (Including Key Management Compensation) (Textual)            
Professional fees $ 90,903 $ 127,485 $ 358,420   $ 502,868  
Accounts payable and accrued liabilities 0   $ 0     $ 0
Related party transaction, description     The agreement has a monthly fee of $15,000. Pursuant to the consulting agreement, if the Company completes a merger with a third party introduced by this director whereby more than 50% of the Company's then outstanding shares are transferred to that third party, the Company is required to pay a lump sum in an amount of $350,000 to this entity. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018, upon which date the agreement was terminated. On May 1, 2018, upon termination of the agreement, this director resigned his positions as director and as executive chairman. The agreement has a monthly fee of $15,000. Pursuant to the consulting agreement, if the Company completes a merger with a third party introduced by this director whereby more than 50% of the Company's then outstanding shares are transferred to that third party, the Company is required to pay a lump sum in an amount of $350,000 to this entity. On January 29, 2018, the Company provided the requisite 90-day notification to terminate the consulting agreement, effective April 30, 2018, upon which date the agreement was terminated. On May 1, 2018, upon termination of the agreement, this director resigned his positions as director and as executive chairman.    
Deferred contingent consideration as an assumed liability 361,219   $ 361,219     $ 390,350
Consulting agreement [Member]            
Related Party Transactions (Including Key Management Compensation) (Textual)            
Professional fees $ 0 $ 35,292 73,680   $ 95,292  
Black Range [Member]            
Related Party Transactions (Including Key Management Compensation) (Textual)            
Acquisition of issued of common stock     $ 361,219 $ 500,000    
Acquisition of issued of common stock shares | shares     25 25    
XML 55 R45.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events (Details) - 9 months ended Sep. 30, 2018 - Warrant Exercises [Member]
USD ($)
shares
CAD ($)
shares
Subsequent Events (Textual)    
Company received amount of warrant exercises $ 34,135 $ 44,796
Issued shares of common stock 30,607 30,607
Warrants to purchase shares of common stock 30,607 30,607
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