SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2024

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 12 SHAREHOLDERS’ EQUITY

Flow-Through Shares Issuance

On December 14, 2023, the Company issued 1,903,000 flow-through common shares for gross proceeds of $16.1 million. The issuance consisted of the CEE offering of 788,000 common shares priced at $9.27 per share and the CDE offering of 1,115,000 common shares priced at $7.86 per share. Total proceeds were allocated between the sale of tax benefits and the sale of common shares. Total issuance costs of $1.0 million were accounted for as a reduction to the value of common shares issued. Net proceeds of $15.1 million were allocated between the sale of tax benefits in the amount of $1.7 million and the sale of common shares in the amount of $13.4 million.

On June 14, 2024, the Company issued 1,533,000 flow-through common shares for gross proceeds of $21.8 million. The issuance consisted of the CEE offering of 643,000 common shares priced at $15.45 per share and the CDE offering of 890,000 common shares priced at $13.40 per share. Proceeds are expected to be used for the ongoing exploration and development of the Fox Complex. Total proceeds were allocated between the sale of tax benefits and the sale of common shares. Total issuance costs of $1.4 million were accounted for as a reduction in the value of the common shares. Net proceeds of $20.4 million were allocated between the sale of tax benefits in the amount of $6.0 million and sale of common shares in the amount of $14.4 million.

The Company is required to spend these flow-through share proceeds on flow-through eligible expenditures, as defined by subsection 66.1(5) and 66.1(6) of the Income Tax Act (Canada). As of September 30, 2024, the Company incurred a total of $6.9 million in eligible CEE and a total of $6.7 million in eligible CDE (December 31, 2023 - $nil). The Company expects to fulfill its remaining CEE and CDE commitments from the December 2023 issuance by the end of 2024. CEE and CDE commitments from the June 2024 issuance are expected to be fulfilled by the end of 2025.

Shares Issued in Timberline Acquisition

On August 19, 2024, the Company acquired Timberline Resource Corporation (“Timberline”). Pursuant to the Agreement and Plan of Merger, the Company issued 1,839,306 common shares with a fair value of $18.3 million and 205,349 warrants valued at $0.9 million. The fair value of instruments was included in the cost of acquired assets, as described in Note 17.

The number of common shares to be issued was determined by multiplying the number of Timberline shares outstanding by the exchange ratio of 0.01. The Company recorded $17.7 million in equity for the common shares issued, determined as total proceeds of $18.3 million less issuance costs of $0.6 million.

Outstanding Timberline warrants were assumed by the Company on the date of the acquisition. Each of the warrants assumed entitles the holder to purchase one share of the Company at the agreed-upon exercise price, as converted using the exchange ratio. Of the 205,349 warrants issued, 37,500 expired on October 15, 2024; 72,849 expire on August 31, 2026; and 95,000 expire on December 31, 2027. Exercise prices for each series are $12.00, $8.00, and $6.00, respectively.