Philippine Metals Inc.

  • Date: 2016-02-29

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PHILIPPINE METALS INC. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2015 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW OF UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements of Philippine Metals Inc. as at December 31, 2015 and for the three and nine months ended December 31, 2015 and 2014 have been prepared by and are the responsibility of the Company’s management. The Company’s Audit Committee and Board of Directors have reviewed and approved these interim financial statements. In accordance with National Instrument 51 – 102, the Company discloses that its auditors have not reviewed the accompanying unaudited condensed consolidated interim financial statements for the nine months ended December 31, 2015.

PHILIPPINE METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION (unaudited) (Expressed in Canadian dollars) December 31, 2015

March 31, 2015

ASSETS Current assets Cash Restricted cash (Note 4) Receivables Prepaid expenses and advances

$

46,455 5,320 11,432 14,452

Non-current assets Equipment (Note 5) Deferred acquisition costs (Note 3) Exploration and evaluation assets (Note 5 and 6) TOTAL ASSETS

$

20,286 5,278 14,649 24,816

77,659

65,029

186,779

662 25,000 4

$

264,438

$

90,695

$

174,364 2,032 295,957

$

105,522 15,994 -

LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable and accrued liabilities Accounts payable to related parties (Note 7) Loans payable (Note 8)

472,353 Shareholders’ equity Capital Stock (Note 8) Equity reserves (Note 8) Deficit

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

121,516

12,543,182 190,408 (12,941,505)

12,543,182 241,136 (12,815,139)

(207,915)

(30,821)

$

264,438

$

90,695

Nature operations (Note 1)

Approved and authorized by the Board on February 29, 2016 “Craig Lindsay”

Director

“Marshall Farris”

Director

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

PHILIPPINE METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015 AND 2014 Three Month Three Month Nine Month Nine Month Period Ended Period Ended Period Ended Period Ended December 31, December 31, December 31, December 31, 2015 2014 2015 2014

GENERAL AND ADMINISTRATIVE EXPENSES Accounting and audit Administration fees Consulting fees Depreciation Insurance Legal Management fees (Note 7) Office and miscellaneous Rent and utilities Telephone Transaction costs Transfer agent and filing fees Travel and related costs

$

Operating expenses

OTHER ITEMS Foreign exchange loss Interest income Impairment of exploration and evaluation assets (Note 6)

Loss and comprehensive loss for the period

Basic and diluted loss per common share (Note 9) Weighted average number of common shares outstanding

$

7,000 18,351 1,562 625 873 1,500 353 3,160 -

$

12,791 28,332 2,687 240 2,475 1,011 53,787 4,696 6,299 527 19,672 1,574 7,575

$

27,862 $ 37,851 3,517 662 4,991 7,515 10,542 6,953 6,350 1,472 54,980 6,295 -

37,965 55,256 12,201 782 7,425 12,874 160,629 19,519 14,226 1,860 19,672 9,576 7,803

(33,424,)

(141,666)

(168,990)

(359,788)

(4,988) 53 -

(495) 490 (10,969)

(3,934) 118 (4,288)

(1,921) 2,096 (54,767)

(4,935)

(10,969)

(8,104)

(54,767)

(38,359)

(152,635)

(177,094)

(414,555)

(0.01) $

4,977,035

(0.03) $

4,977,035

(0.04) $

4,977,035

(0.08)

4,977,035

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

PHILIPPINE METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015 AND 2014 2015 CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period Items not affecting cash: Depreciation Impairment of exploration and evaluation assets Changes in non-cash working capital items: Decrease (increase) in receivables Decrease in related party receivables Decrease in prepaid expenses Increase in accounts payable and accrued liabilities Decrease in accounts payable to related parties

$

Net cash used in operating activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from loans Net cash provided by financing activities

CASH FLOWS FROM INVESTING ACTIVITIES Exploration and evaluation assets expenditures Restricted cash

2014

(177,094) $

(414,555)

662 4,288

782 54,942

3,217 6,600, 3,764 63,573 (8,693)

(13,097) 6,369 36,104 (2,162)

(103,683)

(331,617)

295,957

-

295,957

-

(166,063) (42)

(79,942) -

(166,105)

(79,984)

Increase (decrease) in cash during the period

26,169

(411,601)

Cash, beginning of period

20,286

587,856

Net cash provided by (used in) investing activities

Cash, end of period

$

46,455

$

Supplemental disclosure with respect to cash flows (Note 12)

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

176,255

PHILIPPINE METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

Balance, March 31, 2014 Comprehensive loss for the period Balance, December 31, 2014 Cancellation of options Comprehensive loss for the period Balance, March 31, 2015 Expiration of options Comprehensive loss for the period Balance, December 31, 2015

Number of Shares

Share Capital

Equity Reserves

Deficit

5,539,535

12,543,182 $

835,611

(12,845,853)

532,940

(414,555)

(414,555)

5,539,535 $ 5,539,535 $ 5,539,535 $

12,543,182 $ 12,543,182 $ 12,543,182 $

835,611 (594,475) 241,136 (50,728) 190,408

Total equity

$ (13,260,408)

$

594,475 (149,206) $ (12,815,139) $ 50,728 (177,094) $ (12,941,505) $

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

118,385 (149,206) (30,821) (177,094) (207,915)

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

1.

NATURE OF OPERATIONS Philippine Metals Inc. (the “Company”) was incorporated on April 7, 1989 under the laws of the Province of Alberta. The Company’s head office and registered and records office address is Suite 1100 – 888 Dunsmuir St. Vancouver, BC V6C 3K4. On July 9, 2015, the Company completed the acquisition from Santa Fe Corporation (“Santa Fe”) of Compania Minera Coronado S.A. de C.V., which holds Santa Fe's 100% interest in the Cuatro Ciénegas Project, located in the state of Coahuila, Mexico (Note 3). At the date of these condensed consolidated interim financial statements, the Company has not been able to identify a known body of commercial grade ore on any of its exploration and evaluation assets. The ability of the Company to realize the costs it has incurred to date on these exploration and evaluation assets is dependent upon the Company being able to identify a commercial ore body, to finance its exploration costs and to resolve any environmental, regulatory or other constraints which may hinder the successful development of the exploration and evaluation assets. To date, the Company has not earned any revenues and is considered to be in the exploration stage. These condensed consolidated interim financial statements are prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. At December 31, 2015, the Company had working capital deficit of $218,298, has not yet achieved profitable operations and has an accumulated deficit of $12,941,505 since its inception. The Company expects to incur further losses in the development of its business, all of which cast substantial doubt on the Company’s ability to continue as a going concern. The Company will require additional financing in order to meet its ongoing levels of corporate overhead and discharge its liabilities as they come due. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future. Accordingly, these financial statements do not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern. If the going concern assumption was not used then the adjustments required to report the Company’s assets and liabilities on a liquidation basis could be material to these financial statements.

2.

BASIS OF PRESENTATION These condensed consolidated interim financial statements for the three and nine months ended December 31, 2015 have been prepared in accordance International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34 Interim Financial Reporting.

These condensed consolidated interim financial statements follow the same accounting policies and methods of application as the Company’s most recent annual financial statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as at and for the year ended March 31, 2015, which were prepared in accordance with IFRS as issued by the IASB.

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

3.

ACQUISITION OF

CORONADO S.A. DE C.V.

On April 22, 2015, the Company, Santa Fe Corporation (“Santa Fe”) and Santa Fe's wholly-owned subsidiaries, 0803198 B.C. Ltd. and 0803203 B.C. Ltd., entered into a purchase agreement (the “Purchase Agreement”) pursuant to which, on July 8, 2015, the Company completed the acquisition of all of the issued and outstanding shares of Compania Minera Coronado S.A. de C.V. (“Coronado”), which holds Santa Fe's 100% interest in the Cuatro Ciénegas Project (see Note 6) (the "Transaction”). Pursuant to the Purchase Agreement, the Company paid a total of $150,000 to Santa Fe to acquire all of the issued and outstanding shares of Coronado. The Company made a $25,000 upfront cash payment to Santa Fe on signing of a letter of intent executed in November 2014, which was recorded as deferred acquisition costs as at March 31, 2015. The Company incurred transaction costs totaling $54,980 in connection with the Transaction. From the perspective of the Company, the Transaction represents a business combination under IFRS 3 “Business Combinations”. Under the acquisition method, the identifiable assets and liabilities acquired or assumed are measured at fair value. The following table summarizes the recognizable assets and liabilities acquired and assumed by the Company from the Transaction. As at July 8, 2015 Assets Exploration and evaluation assets 150,000 Net assets acquired

$

150,000

Cash consideration paid

$

150,000

The fair value of the net assets acquired is the cash consideration paid by the Company for the shares of Coronado pursuant to the Transaction. As Coronado was inactive prior to the date of its acquisition and had no revenues or expenses, had the business combination been reported from as of the beginning of the fiscal year of April 1, 2015, the Company’s consolidated pro forma net loss for the nine month period ended December 31, 2015, is the same as actual.

4.

RESTRICTED CASH The Company has a corporate credit card for one of its subsidiary’s officers, with a credit limit of $5,000. As collateral for the credit card, the Company has a one-year term deposit of $5,000 earning annual interest at the Canadian prime rate. As at December 31, 2015, the credit card had a balance of $Nil (2014 - $Nil).

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

5.

EQUIPMENT

Cost Balance, March 31, 2015 Additions Disposals Balance, December 31, 2015 Accumulated depreciation Balance, March 31, 2015 Additions Disposals Balance, December 31, 2014 Carrying amounts As at March 31, 2015 As at December 31, 2015

6.

Computer equipment $

Office furniture & equipment $

Exploration software $

32,850 -

12,587 -

10,116 -

32,850

12,587

10,116

(32,232) (518) -

(12,587) -

(32,850)

(12,587)

Exploration equipment $

Total $

2,807 -

71,085 -

12,725

2,807

71,085

(10,116) -

(12,721) (4) -

(2,667) (140) -

(70,423) (662) -

(10,116)

(12,725)

(2,807)

(71,085)

4

140

662

518

-

-

-

-

-

12,725 -

Transportation equipment $

-

-

-

EXPLORATION AND EVALUATION ASSETS Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many exploration and evaluation assets. The Company has investigated title to all of its exploration and evaluation assets, and, to the best of its knowledge, title to all of its properties, except as described below, are properly registered and in good standing. However, there can be no guarantee of title and the exploration and evaluation assets may otherwise be subject to prior claims, agreements, or transfers and rights of ownership may be affected by undetected defects. The properties in which the Company has earned or committed to earn an interest are located in the Philippines. Mexico On July 8, 2015, the Company acquired the Cuatro Ciénegas Project, a highly prospective copper project that consists of six concessions totaling approximately 3,408 hectares located in the state of Coahuila, Mexico see (Note 3). The Ciénegas Project is owned by the Company’s Mexican subsidiary, Coronado, which holds a 100% interest, subject to a 3.5% net smelter royalty. Philippines The Company entered into a letter of intent (“LOI”) dated November 18, 2007 with Metex Mineral Resources Corporation (“Metex”) wherein Metex will assign, subject to the provisions of the LOI, all its rights, title, and interests in certain mining tenements/tenement applications in the Philippines (namely the Taurus, Malitao and Dilong properties) to the Company.

-

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

6.

EXPLORATION AND EVALUATION ASSETS (cont’d…) For the nine months ended December 31, 2015: Cuatro Ciénegas

Acquisition costs, March 31, 2015

$

-

Additions during the period

150,000

Acquisition costs, December 31, 2015

150,000

Deferred exploration costs, March 31, 2015 Additions during the period: Camp costs Communications Community relations Consulting Licenses & permits, concession taxes Mapping & sampling Travel and related

Impairment provision Deferred exploration costs, December 31, 2015 Total exploration and evaluation assets, December 31, 2015

Taurus $

-

Dilong 1

$

-

Malitao 1 $

1

Suhi 1

$

1

Total 1 -

1

$

4 150,000

1

150,004

-

-

-

-

36,775 -

206 66 121 2,662 3 -

-

575 -

655 -

206 66 121 3,892 36,775 3 -

36,775

3,058

-

575

655

41,063

(3,058)

-

(575)

(655)

(4,288)

-

-

-

-

36,775

36,775

$ 186,775 $

1

$

1 $

1

$

-

1 $ 186,779

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

6.

EXPLORATION AND EVALUATION ASSETS (cont’d…) For the year ended March 31, 2015:

Taurus Acquisition costs, March 31, 2014

$

Additions during the year

1

$

-

Acquisition costs, March 31, 2015

1

Impairment provision Deferred exploration costs, March 31, 2015

1

Suhi $

-

1

Total $

1

-

4 -

1

-

4

-

-

2,201 154 281 8,416 27,048 496 1,428

5,513 1,365

10,127 403 4,514

7,029 -

2,201 154 281 31,085 27,451 496 7,307

40,024

6,878

15,044

7,029

68,975

(40,024)

(6,878)

(15,044)

(7,029)

(68,975)

-

$

$

1

-

Additions during the year: Camp costs Communications Community relations Consulting Field personnel Licenses and permits Mapping and sampling Travel and related

Malitao

1

Deferred exploration costs, March 31, 2014

Total exploration and evaluation assets, March 31, 2015

Dilong

-

1

$

-

1

$

-

1

$

-

1

$

4

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

6.

EXPLORATION AND EVAULATION ASSETS (cont’d…) Taurus and Suhi properties (the “Taurus Project”) During the year ended March 31, 2012, the Company determined that the Taurus Project was impaired. Since that time, the Company has written off all related deferred acquisition and exploration costs incurred to operations to a nominal amount of $1. At December 31, 2015, the Company wrote off all related deferred exploration costs incurred during the period then ended. During the year ended March 31, 2015, the Company received notification from the Department of Environmental and Natural Resources (“DENR”) requesting payment of the renewal fees in respect of the Taurus exploration permit, which was paid during the year. The Company has not yet received its formal exploration permit renewal. On October 27, 2015, the Company provided formal and final notification to Citygroup Philippines Corporation (“Citygroup”) and Canaan Richfield Inc. (“CRI”) that following offers being made to return to them the Taurus and Suhi exploration permits and tenement rights, respectively, the Company would allow the exploration permits to expire unless Citygroup and CRI cooperated to effect the transfers of the properties in a timely manner. The Company is unable to determine if there are any further costs associated with the return of the properties and has not accrued any related amounts in the financial statements during the current period. Malitao property Pursuant to the LOI, Metex has agreed to supersede the terms and conditions under a Memorandum of Agreement with Al Magan Mining Exploration Corp. (“AMMEC”) in respect of an Exploration Permit Application in the Province of Apayao (“Malitao EXPA”) and entered into an agreement with AMMEC and the Company. Under the new agreement dated July 14, 2008, AMMEC agreed to sell, transfer, assign and convey the legal title and all rights and privileges conferred under the Malitao EXPA. The Malitao exploration permit application (“EXPA”) has not yet been approved by the DENR and an exploration permit has not been granted. In fiscal 2011, Olpaten Resources Corporation (“Olpaten”) filed an adverse claim against the Company in regards to its Malitao EXPA. The matter remains before the relevant body of the DENR awaiting resolution. At March 31, 2013, on the basis that there has been limited progress toward a resolution of the adverse claim filed by Olpaten, the Company wrote off all acquisition costs and deferred exploration costs related to the property to a nominal amount of $1. The Company has continued to write off all related deferred exploration costs and at December 31, 2015, the Company wrote off all deferred exploration costs incurred during the period then ended. Dilong property In February 2011, the Company received notification from DENR that its Dilong EXPA had been cancelled. The Company has filed with the MGB office the appropriate objection notice to have the application re-instated. At this time, the likelihood of the outcome is uncertain and there has been no progress toward a re-instatement of the Dilong EXPA. At March 31, 2013, on the basis that there has been limited progress toward a resolution of the cancellation of the Dilong EXPA, Company wrote off all acquisition costs and deferred exploration costs related to the property to a nominal amount of $1. Since that time the Company has continued to write off all related deferred exploration cost and at December 31, 2015, the Company wrote off all deferred exploration costs incurred during the year then ended. Escrowed Shares As at December 31, 2015, there were 562,500 shares issued to Metex as consideration for the Malitao and Dilong EXPAs held in escrow to be released to Metex upon approval by the DENR of the EXPAs.

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

7.

RELATED PARTY TRANSACTIONS During the nine month period ended December 31, the Company carried out the following transactions with related parties: a)

Purchase of services:

Rent to a company controlled by an officer and director of the Company Legal services fees to law firms in which the Company’s and its subsidiary’s corporate secretaries are partners b)

2015 $ 4,600

2014 $ 3,600

10,562

10,562

Key management compensation Key management includes the President, CEO and CFO and, until August 31, 2015, the former President and the formerTreasurer of the Company’s Philippine subsidiary. The compensation paid or payable to key management or companies controlled by them for director and/or management services is shown below:

Fees reported as management fees of $10,543 (2014 - $160,629) and consulting fees of $1,558 (2014 - $21,122) A company controlled by a director and officer of the Company’s subsidiary relating to accounting and administrative services c)

2015 $

2014 $

12,101

181,751

12,000

27,000

Accounts payable to and prepaid services (from) related parties:

Key management or companies controlled by them for management and consulting services and related out-of-pocket expenses Law firms in which the Company’s and its subsidiary’s corporate secretaries are partners for legal services A company controlled by a director and officer of the Company’s subsidiary for a deposit relating to administrative and accounting services Prepaid to a company controlled by a director and office of the Company’s subsidiary for a deposit relating to administrative and accounting services

December 31, 2015 $

March 31, 2015 $

2,032

9,954

2,032

6,040 15,994

-

(6,000) (600)

-

Amounts due to related parties are due to officers and companies controlled by directors and officers, are unsecured, are non-interest bearing and have no specific terms of repayment.

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

8.

SHARE CAPITAL AND EQUITY RESERVES Common shares The Company is authorized to issue an unlimited number of common voting shares with no par value. There were no commons shares issued during the nine month period ended December 31, 2015 or the nine month period ended December 31, 2014. Preference shares The Company is authorized to issue an unlimited number of preference shares. Private placement On April 20, 2015, the Company amended the terms of the previously announced financing related to the Molycomex transaction and announced that it was undertaking an offering of up to 7,000,000 common shares of the Company through a non-brokered private placement at a price of $0.05 per share, for gross proceeds of up to $350,000. Proceeds from this financing will be used to repay proceeds from loans used to complete the Cuatro Ciénegas Project acquisition (Note 3) and for general working capital purposes. During the nine month period ended December 31, 2015, the Company received unsecured non-interest bearing loans of $295,957 that pursuant to the receipt of executed subscription agreements will be converted to equity upon closing of the private placement. In addition, accounts payable to unrelated parties in connection with Transaction costs of approximately $54,000 settled on behalf of the Company, will be converted to equity upon closing of the private placement. The closing of the private placement is pending receipt of the approval of the TSX Venture Exchange. Stock Options The Company has an incentive stock option plan under which it is authorized to grant options to executive officers and directors, employees and consultants equal to up to 1,107,906 common shares of the Company. The terms upon which any options issued under the plan are subject to vesting provisions determined by the board of directors. The term of any options granted may not exceed 10 years and their exercise price will be determined by the board of directors pursuant to the policies of the TSX Venture Exchange. Weighted Average Exercise Price

Number of Options Outstanding at March 31, 2015 Granted Exercised Cancelled Expired Outstanding at December 31, 2015

66,875 21,250

$ $ $ $ $

1.96 3.60

45,625

$

1.20

PHILIPPINE METALS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED DECEMBER 31, 2015

8.

SHARE CAPITAL AND EQUITY RESERVES (cont’d...) The following stock options were outstanding on December 31, 2015: Number of options 45,625

Exercise Price $ 1.20

Expiry Date January 6, 2017

Warrants The Company had no warrants outstanding at December 31, 2015 and 2014.

9.

LOSS PER SHARE The calculation of basic and diluted loss per share for the three and nine month periods ended December 31, 2015 was based on the loss attributable to common shareholders of $38,359 (2014 - $152,635) and $177,094 (2014 - $414,555), respectively, and a weighted average number of common shares outstanding of 4,977,035 (2014 – 4,977,035). Diluted loss per share did not include the effect of stock options of 45,625 (2014 – 285,625).

10.

FAIR VALUE MEASUREMENTS The fair values of the Company’s accounts receivable, accounts payable and accrued liabilities, accounts payable to related parties and loans payable approximate their carrying values due to the short-term nature of these instruments. The fair values of cash and restricted cash are based on level 1 inputs of the fair value hierarchy.

11.

SEGMENTED INFORMATION The Company has one reportable operating segment, being the acquisition and exploration of mineral properties.

12.

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS Significant non-cash transactions for the nine-month period ended December 31, 2015, included: a) the Company applied $25,000 of deferred acquisition costs to the Transaction; and b) the Company allocated $50,728 from equity reserves to deficit for previously recognized share-based payments of options that expired on December 6, 2015. There were no significant non-cash transactions for the nine-month period ended December 31, 2014.