1.
|
NATURE OF BUSINESS AND BASIS OF PRESENTATION AND LIQUIDITY:
|
I-Minerals Inc. (the “Company”) was incorporated under the laws of
British Columbia, Canada, in 1984. The Company is listed for trading on the TSX Venture Exchange under the symbol
“IMA” and the OTCQB marketplace under the symbol “IMAHF”.
The Company’s principal business is the development of the
Helmer-Bovill industrial mineral property (“the Property”) located in Latah County, Idaho. Since inception, the
Company has been in the exploration and evaluation stage but moved into the development stage in fiscal 2018. In
fiscal 2019, the Company reverted back to the evaluation stage as management determined that the Feasibility Study on
the property should be considered non-current. The Helmer-Bovill property is comprised of eleven mineral leases
that host potentially economic deposits of feldspar, quartz and kaolinitic clays, primarily kaolinite and
halloysite.
Basis of Presentation and Liquidity
The accompanying unaudited condensed interim consolidated financial
statements have been prepared by the Company in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”) for interim financial information as well as Article 10 of Regulation S-X on the basis
that the Company will continue as a going concern, which assumes that the Company will be able to meet its obligations
and continue its operations for the next year. Realization values may be substantially different from carrying
values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying
values and classification of assets and liabilities should the Company be unable to continue as a going concern.
At January 31, 2020, the Company had not yet achieved profitable operations, had an accumulated deficit of $46,987,362
since inception and expects to incur further losses in the development of its business, all of which casts substantial
doubt upon the Company’s ability to continue as a going concern and, therefore, that it may be unable to realize its
assets and discharge its liabilities in the normal course of business.
The financial statements do not include all of the information and
footnotes required by accounting principles generally accepted in the United States of America for complete financial
statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals)
considered necessary for a fair presentation of the interim financial statements have been included. Operating
results for the nine months ended January 31, 2020 are not necessarily indicative of the results that may be expected
for the full year ending April 30, 2020. All amounts presented are in US dollars except where otherwise
indicated. For further information refer to the financial statements and footnotes thereto for the year ended
April 30, 2019 included in the Company’s Annual Report on Form 10-K filed on July 29, 2019.
The Company’s ability to continue as a going concern is dependent
upon its ability to obtain the necessary financing to develop the Property and to meet its obligations and repay its
liabilities arising from normal business operations when they come due. Although the Company has been successful
in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the
future or that such financing will be on terms advantageous to the Company. The Company has been receiving funds
from a company controlled by a director of the Company through promissory notes (Notes 5 and 10). Management has
no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds
by equity financing and/or promissory notes; however there is no assurance of additional funding being available.
The Company has historically satisfied its capital needs primarily by issuing equity securities and/or promissory
notes. Management plans to continue to provide for its capital needs by issuing equity securities and/or
promissory notes.
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
Financial Instruments and Fair Value Measures
The book value of cash, receivables, accounts payable and accrued
liabilities approximate their fair values due to the immediate or short-term maturity of those instruments. The
fair value hierarchy under US GAAP is based on three levels of inputs, of which the first two are considered observable
and the last unobservable, that may be used to measure fair value which are the following:
8
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
Level 1 - quoted prices (unadjusted)
in active markets for identical assets or liabilities;
Level 2 - observable inputs other
than Level I, quoted prices for similar assets or liabilities in active prices whose inputs are observable or whose
significant value drivers are observable; and
Level 3 - assets and liabilities
whose significant value drivers are unobservable by little or no market activity and that are significant to the fair
value of the assets or liabilities.
The Company’s promissory notes are based
on Level 2 inputs in the ASC 820 fair value hierarchy. The Company calculated the fair value of these instruments by
discounting future cash flows using rates representative of current borrowing rates. January 31, 2020, the promissory
notes had a fair value of $26,631,363 (April 30, 2019 – $22,602,379).
The Company had certain Level 3 liabilities required to be recorded
at fair value on a recurring basis in accordance with US GAAP as at January 31, 2020 and April 30, 2019. As at
January 31, 2020, the Company’s Level 3 liabilities consisted of share purchase options granted to non-employees.
The resulting Level 3 liabilities have no active market and are
required to be measured at their fair value each reporting period based on information that is unobservable.
A summary of the Company’s Level 3 liabilities for the nine months
ended January 31, 2020 and 2019 is as follows:
|
|
2019
$
|
2019
$
|
|
|
|
|
|
Warrants
|
|
|
|
|
|
|
|
Beginning
fair value
|
-
|
95,570
|
|
Issuance
|
-
|
1,602
|
|
Change in fair value
|
-
|
(97,172)
|
|
Ending fair value
|
-
|
-
|
|
|
|
|
|
Non-employee options (Note 6(c))
|
|
|
|
|
|
|
|
Beginning fair value
|
6,191
|
205,120
|
|
Transfer
value on exercise
|
-
|
(23,040)
|
|
Fair value of options on vesting
|
1,820
|
2,452
|
|
Change in fair value
|
17,980
|
(171,443)
|
|
Ending fair value
|
25,991
|
13,089
|
|
|
|
|
|
Total Level 3 liabilities
|
25,991
|
13,089
|
Certain assets and liabilities are
measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing
basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of
impairment). There were no assets or liabilities measured at fair value on a nonrecurring basis during the periods ended
January 31, 2020 and 2019.
Earnings (Loss) Per Share
The basic loss per common share is computed by dividing net loss
available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common
share is computed similar to basic loss per common share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. For the nine months ended January 31, 2020, loss per share excludes 2,950,000
(2019 – 6,501,127) potentially dilutive common shares (related to outstanding options and warrants as well as shares
committed to be issued pursuant to the Fifth Promissory Notes) as their effect was anti-dilutive.
9
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
New Accounting Pronouncements
Leases
In February 2016, the FASB issued ASU 2016-02, as amended, Leases
(Topic 842), which requires a lessee to record a right-of-use asset and a lease liability for all leases with a term
greater than twelve months regardless of whether the lease is classified as an operating lease or a financing
lease. Effective May 1, 2019, the Company adopted the new standard under the modified retrospective approach,
applying the current-period adjustment method. Under the transition guidance of the modified retrospective
approach there are a number of optional practical expedients made available to simplify the transition of the new
standard. The Company has elected the following:
- The condensed consolidated balance sheets for reporting
periods beginning on or after May 1, 2019 are presented under the new guidance, while prior period amounts are not
adjusted and continue to be reported in accordance with ASC Topic 840, Leases. The Company did not recognize any
cumulative effect adjustment to the opening balance of deficit as there was no impact on adoption of the new
standard.
- The Company has elected to utilize the package of practical
expedients permitted under the transition guidance in the standard, which allowed the Company to not reassess (i)
whether any expired or existing contracts contain leases, (ii) historical lease classification, and (iii) initial direct
costs.
- The Company has elected to keep leases with an initial term of
12 months or less off of the balance sheet.
Upon adoption, the Company did not record any adjustments to the
balance sheet, statement of loss or statement of cash flows.
Fair Value Measurements
In August 2018, the FASB issued ASU No. 2018-13, "Disclosure
Framework—Changes to the Disclosure Requirements for Fair Value Measurement" which adds the disclosure of the range and
weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain
alternatives apply. This ASU is effective for interim and annual reporting periods beginning after December 15,
2019. The Company is assessing the impact of this standard.
3. MINERAL PROPERTY INTEREST AND DEFERRED DEVELOPMENT
COSTS:
Helmer-Bovill Property – Latah County, Idaho
The Company has an undivided 100% interest in 11 State of Idaho
mineral leases. The State of Idaho mineral leases are subject to a 5% production royalty on gross sales. The
mineral leases are in good standing until March 1, 2023 at which time they will be held by us contingent on
production.
In May 2017, the Idaho Department of Lands accepted our operation and
reclamation plan. Together with a water rights permit from the Idaho Department of Water Resources, we were able
to proceed with development and construction of the mine, subject to obtaining sufficient financing. As a result,
Management made the decision to begin capitalizing all development expenditures directly related to the Helmer-Bovill
Property. In February 2019, the Company determined that the Feasibility Study should be considered non-current and
accordingly, the Company has returned to the evaluation stage for accounting purposes.
10
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
4.
|
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:
|
|
|
January 31,
2020
$
|
April 30,
2019
$
|
|
|
|
|
|
Trade
payables
|
238,986
|
150,766
|
|
Amounts due to related parties
(Note 7)
|
190,523
|
190,480
|
|
Interest
payable on promissory notes (Note 5)
|
558,072
|
1,123,478
|
|
|
|
|
|
Total accounts payable and accrued liabilities
|
987,581
|
1,464,724
|
|
|
January 31,
2020
$
|
April 30,
2019
$
|
|
|
|
|
|
Third
promissory notes
|
23,493,003
|
20,908,690
|
|
Fifth promissory notes
|
2,793,833
|
1,776,847
|
|
Sixth
promissory notes
|
702,781
|
-
|
|
|
|
|
|
Total promissory notes
|
26,989,617
|
22,685,537
|
The Company has Third Promissory Notes, Fifth Promissory Notes and
Sixth Promissory Notes due to a company controlled by a director of the Company (the “Lender”). The Third
Promissory Notes were due on June 30, 2019. On June 28, 2019, the Company entered into an amending agreement with
the Lender extending the maturity date to October 31, 2019 for no consideration. The Fifth Promissory Notes were
due on December 31, 2019. On October 25, 2019, the Company entered into an amending agreement with the Lender
extending the maturity date for both notes, for no consideration, to the earlier of (i) June 30, 2020 and (ii) 60 days
after a pre-feasibility study has been filed on SEDAR. The Sixth Promissory Notes have the same maturity date.
In accordance with the guidance of ASC 470-50 and ASC 470-60, the
Company determined that the June 28, 2019 and October 25, 2019 extension agreements qualify as troubled debt
restructurings. However, as the Company did not transfer assets or grant an equity interest to the Lender and
since the carrying amount of the promissory notes at the time of the restructurings did not exceed the total future cash
payments specified by the new terms, there was no accounting impact from the debt modifications.
Certain conditions may result in early repayment including immediate
repayment in the event a person currently not related to the Company acquires more than 40% of the outstanding common
shares of the Company.
Third Promissory Notes
The Third Promissory Notes bear interest at the rate of 12% per annum
and during the nine months ended January 31, 2020, the Company recorded interest of $2,025,196 (2019 - $1,798,172), of
which $nil was capitalized to mineral property interest (2019 - $146,379) and $2,025,196 was expensed (2019 -
$1,651,793). Interest is payable semi-annually as calculated on May 31st and November 30th
of each year. Interest is to be paid either in cash, in common shares or deemed an advance of principal at the
option of the Lender. A 5% late payment penalty may apply if payment is not paid within ten days after the due
date. During the nine months ended January 31, 2020, the Lender elected to have interest payable from December 1,
2018 to November 30, 2019 of $2,584,313 deemed as advances.
11
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
Fifth Promissory Notes
On September 11, 2018, the Company entered into a Loan Agreement with
the Lender pursuant to which up to $2,500,000 will be advanced to the Company in tranches (the “Fifth Promissory
Notes”). As at January 31, 2020, the Company had received $2,500,000 (April 30, 2019 - $1,820,000) in advances
pursuant to the Fifth Promissory Notes.
The Fifth Promissory Notes bear interest at the rate of 14% per annum
and during the nine months ended January 31, 2020, the Company recorded interest of $257,587 (2019 - $46,011). Interest
is payable semi-annually as calculated on May 31st and November 30th of each year. Interest
is to be paid either in cash, in common shares or deemed an advance of principal at the option of the Lender. A 5%
late payment penalty may apply if payment is not paid within ten days after the due date. During the nine months
ended January 31, 2020, the Lender elected to have interest payable from December 1, 2018 to November 30, 2019 of
$276,638 deemed as advances.
The Company and the Lender agreed that the Lender is to receive bonus
shares equal to 6% of each loan tranche advanced under the Fifth Promissory Notes divided by the Company’s common share
market price up to a maximum of 1,054,097 bonus shares. During the nine months ended January 31, 2020, the Company
issued 1,054,097 bonus shares to the Lender at the fair value of $106,858. The fair value of the bonus shares was
determined by reference to the trading price of the Company’s common shares on the date the advances were received.
The aggregate finance fees (bonus shares) are recorded against the
promissory notes balance and are being amortized to the Statement of Loss over the life of the promissory notes using
the effective interest method. The accretion expense in respect of the debt discount recorded on the issuance of
bonus shares totalled $60,348 for the nine months ended January 31, 2020 (2019 - $23,813). The unamortized debt
discount as at January 31, 2020 is $nil (April 30, 2019 – $60,348).
Sixth Promissory Notes
On October 25, 2019, the Company entered into a Loan Agreement with
the Lender pursuant to which up to $700,000 will be advanced to the Company in tranches (the “Sixth Promissory
Notes”). On January 20, 2020, the Company entered into an amending agreement whereby the Lender agreed to advance
an additional $600,000 under the same terms as the Sixth Promissory Notes. As at January 31, 2020, the Company had
received $700,000 in advances pursuant to the Sixth Promissory Notes. Subsequent to January 31, 2020, the Company
received advances of $400,000.
The Sixth Promissory Notes bear interest at the rate of 14% per annum
and during the nine months ended January 31, 2020, the Company recorded interest of $15,543 (2019 - $nil). Interest is
payable semi-annually as calculated on May 31st and November 30th of each year. Interest is
to be paid either in cash, in common shares or deemed an advance of principal at the option of the Lender. A 5%
late payment penalty may apply if payment is not paid within ten days after the due date. During the nine months ended
January 31, 2020, the Lender elected to have interest payable from November 1, 2019 to November 30, 2019 of $2,781
deemed as advances.
The Third Promissory Notes, the Fifth Promissory Notes and the Sixth
Promissory Notes are collateralized by the Company’s Helmer-Bovill Property.
The following table outlines the estimated cash payments required, by
calendar year, in order to repay the principal balance of the Third Promissory Notes, the Fifth Promissory Notes and the
Sixth Promissory Notes:
|
2020
$
|
2021
$
|
2022
$
|
2023
$
|
2024
$
|
Total
$
|
|
26,989,617
|
-
|
-
|
-
|
-
|
26,989,617
|
12
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
Common shares
Unlimited number of common shares, without par value.
The holders of common shares are entitled
to receive dividends which are declared from time to time, and are entitled to one vote per share at meetings of the
Company. All shares are ranked equally with regards to the Company’s residual assets.
During the nine months ended January 31, 2020, the Company completed
the following stock transactions:
|
i)
|
On December 17, 2019, the Company issued 1,054,097 common shares with a fair value
of $106,858. The common shares were issued as debt discounts pursuant to the Fifth Promissory Notes (Note 5).
|
During the nine months ended January 31, 2019, the Company completed
the following stock transactions:
|
i)
|
On July 30, 2018, the Company issued 600,000 common shares on the exercise of stock
options with an exercise price of CAD$0.10 per common share resulting in gross proceeds of CAD$60,000
($46,085).
|
|
ii)
|
On August 10, 2018, the Company issued 361,657 common shares with a fair value of
$81,000. The common shares were issued as debt discounts pursuant to the Third Promissory Notes (Note 5).
|
|
iii)
|
On January 22, 2019, the Company issued 1,882,503 common shares with a fair value
of $155,229. The common shares were issued as settlement of principal and accrued interest pursuant to the Fourth
Promissory Notes.
|
The Company has granted stock options under the terms of its Stock
Option Plan (the “Plan”). The Plan provides that the directors of the Company may grant options to purchase common
shares to directors, officers, employees and service providers of the Company on terms that the directors of the Company
may determine are within the limitations set forth in the Plan. The maximum number of shares available under the
Plan is limited to 10% of the issued common shares. The maximum term of stock options is ten years. All
stock options vest on the date of grant, unless otherwise stated. As at January 31, 2020, the Company had
6,423,021 stock options available for grant pursuant to the Plan (April 30, 2019 – 3,642,612).
The Company’s stock options outstanding as at January 31, 2020 and
the changes for the period then ended are as follows:
|
|
Number
Outstanding
|
Weighted
Average
Exercise Price
(in CAD$)
|
|
|
|
|
|
Balance
outstanding at April 30, 2019
|
5,625,000
|
0.26
|
|
Expired
|
(2,275,000)
|
0.25
|
|
Forfeited
|
(400,000)
|
0.30
|
|
|
|
|
|
Balance outstanding at January 31, 2020
|
2,950,000
|
0.26
|
|
|
|
|
|
Balance exercisable at January 31, 2020
|
1,700,000
|
0.26
|
13
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
Summary of stock options outstanding at January 31, 2020:
|
Security
|
Number Outstanding
|
Number Exercisable
|
Exercise Price
(CAD$)
|
Expiry Date
|
Remaining Contractual Life (years)
|
|
|
|
|
|
|
|
|
Stock options
|
200,000
|
200,000
|
0.25
|
August 4, 2020
|
0.51
|
|
Stock options
|
300,000
|
300,000
|
0.30
|
July 21, 2021
|
1.47
|
|
Stock options
|
1,000,000
|
1,000,000
|
0.25
|
April 20, 2022
|
2.22
|
|
Stock options
|
(1)1,450,000
|
(1)200,000
|
0.25
|
August 9, 2023
|
3.52
|
|
(1)
|
1,250,000 stock options vest on the completion of certain milestones including
equity financing, project financing, mine construction and achieving commercial production. 200,000 stock options
vested as to 25% every three months from the date of grant.
|
Non-Employee Stock Options
In accordance with the guidance of ASC 815-40-15, stock options
awarded to non-employees that are fully vested and exercisable in Canadian dollars are required to be accounted for as
derivative liabilities because they are considered not to be indexed to the Company’s stock due to their exercise price
being denominated in a currency other than the Company’s functional currency. Stock options awarded to
non-employees that are not vested are accounted for as equity awards until the terms associated with their vesting
requirements have been met. As at January 31, 2020, there were nil (April 30, 2019 – 100,000) non-employee stock
option awards that had not yet vested.
The non-employee stock options are accounted for at their respective
fair values and are summarized as follows for the nine months ended January 31, 2020 and 2019:
|
|
2020
$
|
2019
$
|
|
|
|
|
|
Fair
value of non-employee options, beginning of the period
|
6,191
|
205,120
|
|
Transfer value on exercise of
options
|
-
|
(23,040)
|
|
Fair
value of options on vesting
|
1,820
|
2,452
|
|
Change in fair value of
non-employee stock options during the period
|
17,980
|
(171,443)
|
|
|
|
|
|
Fair value of non-employee options, end of the period
|
25,991
|
13,089
|
The Company determined the fair value of its non-employee stock
options as at January 31, 2020 and April 30, 2019 using the Black-Scholes option pricing model with the following
weighted average assumptions:
|
|
January 31,
2020
|
April 30,
2019
|
|
|
|
|
|
Stock
price (CAD$)
|
0.06
|
0.07
|
|
Exercise price (CAD$)
|
0.26
|
0.26
|
|
Risk-free
interest rate (%)
|
1.77
|
1.52
|
|
Expected life (years)
|
2.07
|
2.23
|
|
Expected
volatility (%)
|
126
|
64
|
|
Expected dividends ($)
|
Nil
|
Nil
|
14
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
The
non-employee options are required to be re-valued with the change in fair value of the liability recorded as a gain or
loss on the change of fair value of derivative liability and included in other items in the Company’s Consolidated
Statements of Loss at the end of each reporting period. The fair value of the options will continue to be
classified as a liability until such time as they are exercised, expire or there is an amendment to the respective
agreements that renders these financial instruments to be no longer classified as a liability.
As at January 31, 2020, the unamortized compensation cost of options
is $93,382 and the intrinsic value of options expected to vest is $nil.
Share-based payments are classified in the Company’s Statement of
Loss during the nine months ended January 31, 2020 and 2019 as follows:
|
|
2020
$
|
2019
$
|
|
Management and consulting fees
|
888
|
4,491
|
|
|
888
|
4,491
|
7.
|
RELATED PARTY TRANSACTIONS:
|
During the nine months ended January 31, 2020, management and
consulting fees of $72,000 (2019 - $72,000) were charged by RJG Capital Corporation, a wholly-owned company of W. Barry
Girling, Director. Wayne Moorhouse, Director, charged $12,486 (2019 - $4,406) in management and consulting
fees. Gary Childress, Director, charged $10,214 (2019 - $nil) in management and consulting fees. $16,484
(2019 - $16,595) was charged by Malaspina Consultants Inc. for the services of Matt Anderson, CFO, and are included in
professional fees.
Included in accounts payable and accrued liabilities are amounts owed
to directors or officers or companies controlled by them. As at January 31, 2020, the amount was $190,523 (April
30, 2019 – $190,480). All amounts are non-interest bearing, unsecured, and due on demand.
The promissory notes received from a company controlled by a director
(Notes 5 and 10) are related party transactions.
The Company considers its business to comprise a single operating
segment being the exploration and development of its resource property. Substantially all of the Company’s
long-term assets and operations are located in Latah County, Idaho.
9.
|
NON-CASH TRANSACTIONS:
|
Investing and
financing activities that affect recognized assets or liabilities but that do not result in cash receipts or cash
payments are excluded from the consolidated statements of cash flows. During the nine months ended January 31,
2020, the following transactions were excluded from the consolidated statement of cash flows:
|
a)
|
The issuance of 1,054,097
common shares at the fair value of $106,858 which was included in commitment to issue shares at April 30,
2019;
|
|
b)
|
The transfer of $2,863,732 of
interest payable on the Third, Fifth and Sixth Promissory Notes from accounts payable and accrued liabilities to
promissory notes; and,
|
|
c)
|
Deferred mineral property
expenditures of $50,062 included in accounts payable and accrued liabilities at January 31, 2020, less $57,744 included
in accounts payable at April 30, 2019 (net inclusion of $7,682).
|
15
I-Minerals Inc.
Notes to the Condensed
Interim Consolidated Financial Statements
For the nine months ended January 31, 2020 and 2019
|
(Unaudited - Expressed in US dollars except where otherwise indicated)
|
During the nine months ended January
31, 2019, the following transactions were excluded from the consolidated statement of cash flows:
|
a)
|
The commitment to issue
1,016,111 common shares at the fair value of $124,575 and 139,984 warrants at the fair value of $1,602 pursuant to the
promissory notes;
|
|
b)
|
The transfer of $2,254,287 of
interest payable on the Third Promissory Notes from accounts payable and accrued liabilities to promissory
notes;
|
|
c)
|
The Company issued 1,882,503
common shares with a fair value of $155,229. The common shares were issued as settlement of principal and accrued
interest pursuant to the Fourth Promissory Notes; and,
|
|
d)
|
Deferred mineral property expenditures of
$76,840 included in accounts payable and accrued liabilities at January 31, 2019, less $140,561 included in accounts
payable at April 30, 2018 (net inclusion of $63,721).
|
Subsequent to January 31, 2020:
|
i)
|
The Company received advances of $400,000 under
the Sixth Promissory Notes (Note 5).
|
16
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report constitute "forward-looking
statements.” These statements, identified by words such as “plan,” "anticipate,” "believe,” "estimate,” "should,”
"expect" and similar expressions include our expectations and objectives regarding our future financial position,
operating results and business strategy. Forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other factors that may cause our actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by the forward-looking statements. Such
factors include, among others, general business, economic, competitive, political and social uncertainties; the actual
results of current exploration and development activities; changes in project parameters as plans continue to be
refined; changes in labour costs or other costs of production; future mineral prices; equipment or processes to operate
as anticipated; accidents, labour disputes and other risks of the mining industry, including but not limited to
environmental hazards, cave-ins, pit-wall failures, flooding, rock bursts and other acts of God or unfavourable
operating conditions and losses; delays in obtaining governmental approvals or financing or in the completion of
development or construction activities, as well as those factors discussed in the section titled "Risk Factors" in our
Annual Report on Form 10-K which was filed with the SEC on July 29, 2019.
Forward looking statements are based on a number of material factors and assumptions,
including the results of exploration/development and drilling activities, the availability and final receipt of required
approvals, licenses and permits, that sufficient working capital is available to complete proposed
exploration/development and drilling activities, that contracted parties provide goods and/or services on the agreed
time frames, the equipment necessary for exploration/development is available as scheduled and does not incur unforeseen
break downs, that no labour shortages or delays are incurred and that no unusual geological or technical problems occur.
While we consider these assumptions may be reasonable based on information currently available to it, they may prove to
be incorrect. Actual results may vary from such forward-looking information for a variety of reasons, including but not
limited to risks and uncertainties disclosed in the section titled “Risk Factors” in this Quarterly Report.
We intend to discuss in our Quarterly Reports and Annual Reports any events or
circumstances that occurred during the period to which such documents relate that are reasonably likely to cause actual
events or circumstances to differ materially from those disclosed in this Quarterly Report. New factors emerge from time
to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of
each such factor on our business or the extent to which any factor, or combination of such factors, may cause actual
results to differ materially from those contained in any forwarding looking statement.
CAUTIONARY NOTE TO
U.S. INVESTORS REGARDING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES AND PROVEN AND PROBABLE
RESERVES
The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” as
used in this Quarterly Report are Canadian mining terms as defined in accordance with Canadian National Instrument
43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and
Petroleum (the “CIM”) – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council,
as amended (the “CIM Definition Standards”). These definitions differ from the definitions in the United States
Securities and Exchange Commission (“SEC”) Industry Guide 7 (“SEC Industry Guide 7”) under the United States Securities
Act of 1933, as amended (the “Securities Act”). Under SEC Industry Guide 7 standards, a “final” or “bankable”
feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash
flow analysis to designate reserves, and the primary environmental analysis or report must be filed with the appropriate
governmental authority.
In addition, the terms “mineral resource”, “measured mineral resource”, “indicated
mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however,
these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and
registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a
mineral deposit in these categories will ever be converted into reserves. “Inferred mineral resources” have a
great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It
cannot be assumed that all, or any part, of an inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral
resource exists or is economically or legally mineable. Disclosure of unit measures in a resource is permitted
disclosure under Canadian regulations; however, the SEC only permits issuers to report mineralization that does not
constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures.
17
Accordingly, information contained in this Quarterly Report and any documents
incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar
information made public by U.S. companies subject to the reporting and disclosure requirements under the
United States federal securities laws and the rules and regulations thereunder.
As used in this Quarterly Report, unless the context otherwise requires, “we,” “us,”
“our,” the “Company” and “I-Minerals” refers to I-Minerals Inc. All dollar amounts in this Quarterly Report are in
U.S. dollars unless otherwise stated.
PART I