The Company’s activities expose it to a variety of financial risks: market risks (including interest rate risk, foreign currency risk and other price risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s performance.

Due to its activities the Company is exposed to a variety of financial risks, which include direct exposure to market risks (which includes commodity price risk, foreign exchange risk and interest rate risk), credit risk and liquidity risk.

Management designs strategies for managing some of these risks, which are summarized below. The Company’s executive management ensures that its financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies approved by the Board of Directors and risk appetite.

Market risk is the risk that changes in market factors, such as foreign exchange rates, interest rates or other price risk, will affect the value of the Company’s financial instruments. The Company is exposed to the following market risks:

The Company undertakes certain transactions denominated in Canadian dollars and since August 31, 2021, in Chilean Pesos, including certain operating expenses. Financial instruments that impact the Company’s net income due to currency fluctuations include cash, amounts receivable and accounts payable and accrued liabilities denominated in Canadian dollars and in Chilean Pesos. Based on the Company’s Canadian dollar or Chilean Peso denominated monetary assets and monetary liabilities as at December 31, 2021, a 5% increase (decrease) of the value of the Canadian dollar and the Chilean Peso relative to the United States dollar would not have a material impact on net income (loss).

In addition, the fair value of the Deferred Payment’s Conversion option is affected by the Canadian dollar exchange rate. A 5% increase in the foreign exchange rate would result in a decrease in income before income taxes of $163,000.

Interest rate risk refers to the risk that the value of a financial instrument or cash-flows associated with the instrument will fluctuate due to changes in market interest rates.

The Company’s interest rate risk on financial assets is primarily related to cash, which bear interest at variable rates. However, as these investments come to maturity within a short period of time, the impact would likely be not significant. Other financial assets are not exposed to interest rate risk because they bear interest at fixed rates.

Amounts drawn under the Facility are exposed to interest rate risk as they bear interest at a variable interest rate. Based on the drawn balance as at December 31, 2021, the impact on net financial expenses of a 0.5% increase in interest rates would result in a decrease in income before income taxes of $349,000 over a twelve-month horizon.

The Company’s exposure to interest rate risk fluctuation on the fair value of the Conversion option is not significant and a 0.5% change in interest rates would result in an immaterial impact.

The Company is exposed to other price risk arising from the impact of changes in the price of the Company’s common shares on the fair value on the Conversion option on the Deferred Payment. A decrease (increase) of 5% in the Company’s common share price used in the Black-Scholes option pricing model would decrease (increase) income before income taxes by $358,000.

Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument, leading to a financial loss. Credit risk arises from cash and trade receivables. To mitigate exposure to credit risk on financial assets, the Company has established policies to limit the concentration of credit risk and to ensure counterparties demonstrate minimum acceptable credit worthiness. The Company closely monitors its financial assets and as such does not have any significant concentration of credit risk. The Company reduces its credit risk by investing predominantly its cash with Canadian recognized financial institutions and Canadian chartered banks.

Liquidity risk is the risk of loss from not having access to sufficient funds to meet both expected and unexpected cash demands. The Company manages the liquidity risk by continuously monitoring actual and projected cash flows, taking into account the requirements related to its investment in stream and royalty interests and matching the maturity profile of financial assets and liabilities. The Company ensures that there are sufficient funds to meet its short-term business requirements on the basis of expected cash flows, taking into account its anticipated cash flows from operations, its holdings of cash, the amount available under the Facility and other equity financing opportunities such as the Company's ATM equity program.

As at December 31, 2021, the Company had cash of $12,377,000 and working capital of $812,000. The Company also manages liquidity risk through the management of its capital structure. As at December 31, 2021, the Company had access to undrawn borrowings of $56.25 million under the Facility, excluding the option to increase the Facility by $25 million as described in Note 14. In addition, the ATM equity program provides the Company with the opportunity to sell up to $50 million in common shares from treasury at the Company's sole discretion and at the prevailing market price. Subsequently to December 31, 2021, the Company closed a public offering on a bought deal basis for aggregate gross proceeds of CA$42.5 million ($34 million) (Note 25).

The Board of Directors reviews and approves any material transaction out of the ordinary course of business, including proposals on mergers, acquisitions or other major investment or divestitures.

The following table summarizes the timing associated with the Company’s remaining contractual payments relating to its financial liabilities as at December 31, 2021. The table reflects the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay (assuming that the Company is in compliance with all of its obligations). The table includes both interest and principal cash flows.


			As at December 31, 2021
	Carrying amount	Maturity	Estimated payment date
			2022	2023	2024	2025
Financial liabilities	$		$	$	$	$
Accounts payable and accrued liabilities	6,057	Within 90 days	6,057	—	—	—
Deferred Payment Liability – debt host	9,712	May 2022	10,000	—	—	—
Interest on Deferred Payment Liability	—	Up to May 2022	121	—	—	—
Deferred Payment Liability – Conversion option	1,588	Up to May 2022	—	—	—	—
Facility	68,750	Up to September 2025	—	—	—	68,750
Interest on Facility	—	Up to September 2025	1,664	1,664	1,668	1,167
	86,107		17,842	1,664	1,668	69,917

The balances in foreign currencies are determined using the daily exchange rate prevailing on December 31, 2021 and the interest on the Facility is based on the actual interest rate as at December 31, 2021.