Pathetic...From NOTE 7 EXPLORATION AND EVALUATION ASSETS:
As of September 30, 2024, the Company assessed the recoverability of its exploration and evaluation assets based on the values implied by both the NexGold Transaction and sale of Tilt Cove (note 21). Management concluded that the carrying values of both Goldboro and Tilt Cove were unlikely to be recovered. As a result of this impairment indicator, an impairment assessment was performed on a recoverable amount based on fair value less costs of disposal, which was determined to be higher than value-in-use. The Company considered the value of the transactions in determining the fair value less costs of disposal. The fair value less costs to sell was determined to be $43,047,558 for Goldboro and $3,064,630 for Tilt Cove. As a result, the Company recognized an impairment charge of $11,830,000 and $1,580,000 on its Goldboro and Tilt Cove exploration and evaluation assets, respectively, for the three months ended September 30, 2024. The impairments charges are in addition to those recognized during the six months ended June 30, 2024.
During the six months ended June 30, 2024, as the Company continued to evaluate strategic alternatives, including among other options, a joint venture transaction, a sale of the Company, or the Goldboro Project, and given the prolonged decline in market capitalization of the Company, management concluded that the carrying values of both Goldboro and Tilt Cove were unlikely to be recovered and an impairment indicator was identified on its exploration and evaluation assets. An impairment assessment was performed based on a recoverable amount valued at fair value less costs of disposal, which was determined to be higher than value-in-use. The Company used multiple valuation techniques and considered various market metrics for comparable junior mining companies with development-stage assets and the Company’s market capitalization in determining the fair value less costs of disposal, which indicated a range of values. The point in that range that was most representative of fair value was determined to be $53,367,554 for Goldboro and $4,644,630 for Tilt Cove. As a result, the Company recognized a total impairment charge of $25,000,000 on its exploration and evaluation assets. Management’s estimate of recoverability is based on inputs which have a significant effect on fair value that are not observable from market data and is therefore classified within Level 3 in the fair value hierarchy. Key assumptions include an average enterprise value of US$43 per gold equivalent ounce of mineral reserve and US$12 per gold equivalent ounce of mineral resource and a foreign exchange rate of 1.37 CAD to 1.00 US.