part of financial statement 12. Supplemental disclosure with respect to cash flows
(continued):
During the nine months ended March 31, 2012, significant non-cash investing and financing activities included:
• $129,591 of amortization expense capitalized to exploration and evaluation assets;
• Exploration and evaluation asset expenditures of $1,034,583 accrued in accounts payable;
• $14,351 of provisions incurred included in exploration and evaluation assets; and
• Reclassifying $1,634,073 from share-based payment reserve to common shares on the exercise of stock options and warrants.
13. Proposed transaction with IMC:
During the year ended June 30, 2012, the Company and its 100%-owned tungsten/molybdenum South Korean subsidiary, Sangdong Mining Corporation ("Sangdong"), have entered into agreements for a strategic arrangement with IMC International Metalworking Companies B.V. ("IMC") and certain of IMC’s affiliates.
The closing of the transaction is subject to customary closing conditions, including the satisfactory conclusion of due diligence by IMC, the receipt of applicable regulatory approvals and other matters set forth in full in the relevant agreements. The basis of the strategic arrangement is as follows:
• IMC advanced an aggregate of $5,000,000 to Sangdong (subsequently increased to $10,000,000) (note 10), pursuant to a loan agreement, as amended, for purposes of project advancement pending the closing of the transaction;
•
IMC agreed to acquire a 25% interest in Sangdong, the Company’s 100%-owned subsidiary, for cash consideration totalling $35,000,000;
• The Company and IMC have agreed to establish a Korean company ("APT Co."), which will be beneficially owned 45% by the Company and 55% by IMC. The parties will invest up to CDN$15,750,000 and $19,250,000, respectively, into APT Co. to build a facility in Korea for the processing of tungsten concentrate to be purchased from Sangdong. IMC has agreed to make available to the Company a loan for the Company’s portion of the investment;
• APT Co. has agreed to acquire no less than 90%, and up to 100%, of Sangdong’s tungsten concentrate production pursuant to an off-take agreement, which will be guaranteed by IMC; and
• IMC has agreed to acquire no less than 90%, and up to 100%, of APT Co.’s available production pursuant to a separate off-take agreement.
The Company has executed all of the transaction agreements with IMC described above.
On September 20, 2012, the Company announced that it received confirmation from IMC that it is satisfied with the results of its due diligence of the Sangdong project, as required by the transaction agreements executed on February 26, 2012, and will be working toward closing its investment in the Sangdong project, subject to the remaining conditions precedent to the transaction.
There can be no assurance that all of the other conditions to the transaction will be satisfied and the transaction completed.