UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
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For the month of September 2014
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Commission File Number 001-33439
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JET METAL CORP.
(Translation of registrant’s name into English)
Suite 1240, 1140 West Pender St., Vancouver, B.C. Canada V6E 4G1
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ¨ No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______________
EXHIBIT INDEX
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Exhibit
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Description of Exhibit
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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JET METAL CORP.
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By:
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/s/ Sheila Paine
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Sheila Paine
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Date: September 29, 2014
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Corporate Secretary
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JET METAL CORP.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIOD ENDED JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
NOTICE OF NO AUDITOR REVIEW OF
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.
The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.
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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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(Unaudited)
(Expressed in Canadian Dollars)
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JULY 31, 2014
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APRIL 30, 2014
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ASSETS
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Current assets
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Cash and cash equivalents
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$
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77,712
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$
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78,541
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Marketable securities (Note 4)
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-
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55,159
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Receivables
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6,363
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4,161
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Prepaid expenses
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63,854
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34,470
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147,929
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172,331
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Reclamation bonds (Note 6)
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28,096
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28,269
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Equipment (Note 5)
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86,465
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91,016
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Exploration and evaluation assets (Note 6)
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2,509,791
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2,509,791
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$
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2,772,281
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$
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2,801,407
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities
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Payables and accrued liabilities
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$
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177,172
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$
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256,201
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Due to related parties (Note 10)
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738,581
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632,749
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915,753
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888,950
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Future reclamation provisions (Note 7)
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19,652
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19,267
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935,405
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908,217
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Equity
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Capital stock (Note 8)
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87,411,032
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87,411,032
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Reserves
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21,475,351
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21,475,351
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Deficit
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(107,049,507)
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(106,993,193)
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1,836,876
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1,893,190
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$
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2,772,281
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$
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2,801,407
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Nature of operations and going concern (Note 1)
Subsequent events (Note 14)
Approved on September 26, 2014 on behalf of the Board of Directors:
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“M”Jay Sujir”
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Director
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“Stewart Wallis”
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Director
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Jay Sujir
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Stewart Wallis
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The accompanying notes are an integral part of these condensed interim consolidated financial statements.
JET METAL CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTH PERIODS ENDED JULY 31,
(Unaudited)
(Expressed in Canadian Dollars)
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2014
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2013
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EXPENSES
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Audit and accounting (recovery)
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$
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(20,617)
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$
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800
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Depreciation (Note 5)
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4,551
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5,689
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Exploration and evaluation (Note 6)
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4,106
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8,876
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Insurance
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7,350
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10,986
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Interest (Note 7)
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385
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357
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Investor relations
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1,262
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2,756
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Legal
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450
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5,658
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Management fees
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-
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80,033
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Office and administration
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8,881
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36,872
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Rent
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8,816
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13,666
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Share-based compensation (recovery) (Note 8)
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-
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(62,073)
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Transfer agent and filing fees
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9,630
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49,640
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Travel
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-
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212
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Wages and salaries
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29,076
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139,460
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(53,890)
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(292,932)
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Finance income
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-
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39
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Gain on foreign exchange
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25
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917
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Unrealized loss on marketable securities (Note 4)
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(2,449)
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(952)
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(2,424)
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4
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Loss and comprehensive loss for the period
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$
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(56,314)
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$
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(292,928)
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Basic and diluted loss per common share
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$
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(0.01)
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$
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(0.04)
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Weighted average number of common shares outstanding
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6,578,035
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6,578,218
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The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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JET METAL CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED JULY 31,
(Unaudited)
(Expressed in Canadian Dollars)
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2014
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2013
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss for the period
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$
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(56,314)
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$
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(292,928)
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Items not affecting cash:
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Depreciation
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4,551
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5,689
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Interest
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385
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357
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Share-based compensation (recovery)
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-
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(62,073)
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Unrealized loss (gain) on foreign exchange
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173
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(1,225)
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Unrealized loss on marketable securities
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2,449
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952
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Non-cash working capital item changes:
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Receivables
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(2,202)
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2,317
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Prepaid expenses
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(29,384)
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2,828
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Payables and accrued liabilities
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(79,029)
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(58,114)
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Due to related parties
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105,832
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43,406
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Net cash used in operating activities
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(53,539)
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(358,791)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Proceeds from sale of marketable securities
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52,710
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-
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Net change in cash and cash equivalents during the period
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(829)
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(358,791)
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Cash and cash equivalents, beginning of period
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78,541
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596,450
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Cash and cash equivalents, end of period
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$
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77,712
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$
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237,659
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Cash and cash equivalents
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Cash
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$
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54,712
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$
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214,659
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Liquid short term investments
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23,000
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23,000
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$
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77,712
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$
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237,659
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Cash (paid) received for
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Interest
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$
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-
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$
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-
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Taxes
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$
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-
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$
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-
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Supplemental disclosures with respect to cash flows (Note 9)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
JET METAL CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(Expressed in Canadian Dollars)
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Capital Stock
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Number of Shares
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Amount
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Reserves
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Deficit
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Total
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Balance, April 30, 2013
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6,578,218
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$
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87,411,032
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$
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21,520,601
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$
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(103,025,910)
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$
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5,905,723
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Share-based compensation (recovery)
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-
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-
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(62,073)
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-
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(62,073)
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Loss for the period
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-
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-
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-
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(292,928)
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(292,928)
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Balance, July 31, 2013
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6,578,218
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87,411,032
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21,458,528
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(103,318,838)
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5,550,722
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Common shares cancelled due to fractional rounding
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(183)
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-
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-
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-
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-
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Share-based compensation
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-
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-
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16,823
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-
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16,823
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Loss for the period
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-
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-
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-
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(3,674,355)
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(3,674,355)
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Balance, April 30, 2014
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6,578,035
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87,411,032
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21,475,351
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(106,993,193)
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1,893,190
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Loss for the period
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-
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-
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-
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(56,314)
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(56,314)
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|
|
|
|
|
|
|
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Balance, July 31, 2014
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6,578,035
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$
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87,411,032
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$
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21,475,351
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$
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(107,049,507)
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$
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1,836,876
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The accompanying notes are an integral part of these condensed interim consolidated financial statements.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
Jet Metal Corp. (the "Company" or “Jet Metal”) is an exploration stage company whose common shares trade on the TSX Venture Exchange and the OTC Markets Group’s OTCQB Marketplace. The Company is in the business of acquiring, exploring and evaluating mineral resource properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed. The Company is incorporated under the laws of British Columbia. All of the Company’s resource properties are currently located in North America. The address of the Company’s registered office is #1240 – 1140 West Pender Street, Vancouver, British Columbia, Canada V6E 4G1.
The Company is in the process of exploring and evaluating its exploration and evaluation assets and has not yet determined whether the properties contain ore reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The Company voluntarily delisted its common shares from the NYSE MKT and its common shares were transferred to and began trading July 1, 2013 on the OTC Markets Group’s OTCQB Marketplace. Subsequently, the Company voluntarily delisted its common shares from the Toronto Stock Exchange and its common shares were transferred to and began trading January 20, 2014 on the TSX Venture Exchange.
During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held (Note 8). All references to share and per share amounts have been retroactively restated to reflect this share consolidation.
These condensed interim consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) 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 for the foreseeable future. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.
These condensed interim consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.
As at July 31, 2014, the Company had a working capital deficit of $767,824 (April 30, 2014 – $716,619) and a deficit of $107,049,507 (April 30, 2014 – $106,993,193). At present, the Company has no producing properties and consequently has no current operating income or cash flows. The Company intends to finance its future requirements through a combination of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. These material uncertainties raise substantial doubt on the Company’s ability to continue as a going concern.
2. BASIS OF PRESENTATION
a) Significant accounting judgements and estimates
The preparation of the condensed interim consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, shareholders’ equity, and the disclosure of contingent assets and liabilities, as at the date of the financial statements, and expenses for the periods reported.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
2. BASIS OF PRESENTATION (continued)
a) Significant accounting judgements and estimates (continued)
Critical Judgements
The preparation of these condensed interim consolidated financial statements requires management to make judgements regarding the going concern of the Company, as previously discussed in Note 1, as well as the determination of functional currency. The functional currency is the currency of the primary economic environment in which an entity operates, and has been determined for each entity within the Company. The functional currency for the Company and its subsidiaries has been determined to be the Canadian dollar.
Key Sources of Estimation Uncertainty
Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates and such differences could be significant.
Significant estimates made by management affecting the condensed interim consolidated financial statements include:
Share-based Payments
Estimating fair value for granted stock options and compensatory warrants requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option or warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them.
Deferred Tax Assets & Liabilities
The estimation of income taxes includes evaluating the recoverability of deferred tax assets and liabilities based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets and liabilities will not be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development and commercialization of mineral reserves. To the extent that management’s assessment of the Company’s ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets or liabilities, and deferred income tax provisions or recoveries could be affected.
Recoverability of Exploration & Evaluation Assets
The Company is in the process of exploring and evaluating its exploration and evaluation assets and has not yet determined whether the properties contain mineral reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to complete the development of those mineral reserves and upon future production or proceeds from the disposition thereof.
Useful Life of Equipment
Equipment is depreciated over its estimated useful life. Estimated useful lives are determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset, the potential for technological obsolescence, and regulations.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
2. BASIS OF PRESENTATION (continued)
a) Significant accounting judgements and estimates (continued)
Key Sources of Estimation Uncertainty (continued)
Future Reclamation Provision
The Company assesses its provision for reclamation related to its exploration and evaluation activities at each reporting period or when new material information becomes available. Accounting for reclamation obligations requires management to make estimates of the future costs that will be incurred to complete the reclamation to comply with existing laws and regulations. Actual future costs that will be incurred may differ from those amounts estimated as a result of changes to environmental laws and regulations, timing of future cash flows, changes to future costs, technical advances, and other factors. In addition, the actual work required may prove to be more extensive than estimated because of unexpected geological or other technical factors. The measurement of the present value of the future obligation is dependent on selection of suitable discount rate and the estimate of future cash outflows. Changes to either of these estimates may materially affect the present value calculation of the obligation.
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b) Approval of the condensed interim consolidated financial statements
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The condensed interim consolidated financial statements of the Company for the three month period ended July 31, 2014 were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on September 26, 2014.
These condensed interim consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries, and have been prepared on a historical cost basis, except for certain financial instruments classified as fair value through profit or loss, and available-for-sale, which are stated at their fair value. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for certain cash flow information.
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d) Statement of compliance
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These condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Boards (“IASB”) and in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting. The condensed interim consolidated financial statements do not include all the information required for full annual financial statements.
These condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended April 30, 2014.
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e) Basis of consolidation
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These condensed interim consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries, Target Exploration and Mining Corp. (“Target”), Crosshair Energy USA, Inc. (“Crosshair USA”), Gemini Metals Corp. (“Gemini”) as well as The Bootheel Project LLC (“BHP LLC”) in which the Company has a 81% interest. A wholly owned subsidiary is an entity in which the Company has control, directly or indirectly, where control is defined as the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. All intercompany transactions and balances have been eliminated on consolidation.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
2. BASIS OF PRESENTATION (continued)
e) Basis of consolidation (continued)
Details of the Company’s subsidiaries are as follows:
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Name
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Place of incorporation
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Interest %
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Principal activity
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Target Exploration and Mining Corp.
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British Columbia, Canada
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100% ownership by the Company
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Exploration and evaluation of mineral properties
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Crosshair Energy USA, Inc.
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Nevada, United States
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100% ownership by Target
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Exploration and evaluation of mineral properties
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Bootheel Project LLC
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Colorado, United States
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81% ownership by Crosshair USA
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Exploration and evaluation of mineral properties
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Gemini Metals Corp.
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British Columbia, Canada
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100% ownership by the Company
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In-active subsidiary
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3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the Company are set out in Note 3 to the audited consolidated financial statements for the year ended April 30, 2014 and have been consistently followed in the preparation of these condensed interim consolidated financial statements, except for new standards adopted as disclosed below.
New Accounting Pronouncement Adopted
The following accounting standard was adopted as of May 1, 2014 and did not have a material impact on the consolidated financial statements of the Company.
Amendments to IAS 32, Financial Instruments: Presentation, were effective for annual periods beginning on or after January 1, 2014 and relate to offsetting financial assets and financial liabilities.
New Accounting Pronouncement
The following accounting pronouncement has been made, but is not yet effective for the Company as at July 31, 2014. The Company is currently evaluating the impact of the amended standards on its consolidated financial statements.
In November 2009 and October 2010, the IASB issued IFRS 9, Financial Instruments (“IFRS 9”), which represents the completion of the first part of a three-part project to replace IAS 39, Financial Instruments: Recognition and Measurement, with a new standard. Per the new standard, an entity choosing to measure a liability at fair value will present the portion of the change in its fair value due to changes in the entity’s own credit risk in the other comprehensive income or loss section of the entity’s statement of comprehensive loss, rather than within profit or loss. Additionally, IFRS 9 includes revised guidance related to the derecognition of financial instruments. IFRS 9 applies to financial statements for annual periods beginning on or after January 1, 2018, with early adoption permitted.
Comparative Figures
Certain comparative figures have been reclassified in accordance with the current period’s presentation.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
4. MARKETABLE SECURITIES
| |
|
Canadian Zinc Corp.
(CZN)
|
|
Australian American Mining Corp. (AIW.A)
|
|
Expedition Mining Inc. (EXU.V)
|
|
Total
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| |
|
|
|
|
|
|
|
|
| |
|
|
|
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|
|
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|
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Cost
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Balance at April 30, 2013
|
$
|
2,695,052
|
$
|
97,024
|
$
|
1,000,000
|
$
|
3,792,076
|
|
Dispositions
|
|
(236,716)
|
|
-
|
|
-
|
|
(236,716)
|
|
Balance at April 30, 2014
|
|
2,458,336
|
|
97,024
|
|
1,000,000
|
|
3,555,360
|
|
Dispositions
|
|
(2,458,336)
|
|
-
|
|
(1,000,000)
|
|
(3,458,336)
|
|
Balance at July 31, 2014
|
|
-
|
|
97,024
|
|
-
|
|
97,024
|
| |
|
|
|
|
|
|
|
|
|
Adjustments to Fair Value
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Balance at April 30, 2013
|
|
(2,677,405)
|
|
(84,490)
|
|
(944,444)
|
|
(3,706,339)
|
|
Adjustment for the year
|
|
240,895
|
|
(12,534)
|
|
(22,223)
|
|
206,138
|
|
Balance at April 30, 2014
|
|
(2,436,510)
|
|
(97,024)
|
|
(966,667)
|
|
(3,500,201)
|
|
Adjustment for the period
|
|
2,436,510
|
|
-
|
|
966,667
|
|
3,403,177
|
|
Balance at July 31, 2014
|
|
-
|
|
(97,024)
|
|
-
|
|
(97,024)
|
| |
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
At April 30, 2014
|
$
|
21,826
|
$
|
-
|
$
|
33,333
|
$
|
55,159
|
|
At July 31, 2014
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
During the three month period ended July 31, 2014, the Company sold 54,565 common shares of Canadian Zinc Corporation and 2,222,222 common shares of Expedition Mining Inc. for net proceeds of $21,543 and $31,167, respectively.
During the year ended April 30, 2014, the Company exchanged 321,940 common shares of Messina Minerals Inc. for 54,565 common shares of Canadian Zinc Corporation as a result of the acquisition of Messina Minerals Inc. by Canadian Zinc Corporation. Prior to this exchange, the Company sold 31,000 common shares of Messina Minerals Inc. for net proceeds of $2,075.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
5. EQUIPMENT
| |
|
Exploration
Equipment
|
| |
|
|
|
Cost
|
|
|
| |
|
|
|
Balance at April 30, 2013, April 30, 2014 and July 31, 2014
|
$
|
298,586
|
| |
|
|
|
Accumulated Depreciation
|
|
|
| |
|
|
|
Balance at April 30, 2013
|
|
184,816
|
|
Depreciation
|
|
22,754
|
|
Balance at April 30, 2014
|
|
207,570
|
|
Depreciation
|
|
4,551
|
|
Balance at July 31, 2014
|
|
212,121
|
| |
|
|
|
Net Book Value
|
|
|
| |
|
|
|
At April 30, 2014
|
$
|
91,016
|
|
At July 31, 2014
|
$
|
86,465
|
6. EXPLORATION AND EVALUATION ASSETS
The following table illustrates acquisition costs:
| |
|
Central Mineral Belt (“CMB”)
|
|
|
| |
|
Moran Lake, Otter / Portage Lake
|
|
Silver Spruce
|
|
Total
|
| |
|
|
|
|
|
|
|
Balance at April 30, 2013
|
$
|
3,160,618
|
$
|
2,509,791
|
$
|
5,670,409
|
|
Impairment
|
|
(3,160,618)
|
|
-
|
|
(3,160,618)
|
|
Balance at April 30, 2014 and July 31, 2014
|
$
|
-
|
$
|
2,509,791
|
$
|
2,509,791
|
The following table illustrates the exploration and evaluation expenditures incurred during the three month period ended July 31, 2014:
| |
|
Bootheel Project
|
| |
|
|
|
Administration
|
$
|
6,230
|
|
Recovery – JV Partner
|
|
(2,124)
|
| |
$
|
4,106
|
The following table illustrates the exploration and evaluation expenditures incurred during the three month period ended July 31, 2013:
| |
|
CMB
|
|
Bootheel Project
|
|
Other
|
|
Total
|
| |
|
|
|
|
|
|
|
|
|
Administration (recovery)
|
$
|
560
|
$
|
13,169
|
$
|
(147)
|
$
|
13,582
|
|
Recovery – JV Partner
|
|
-
|
|
(4,706)
|
|
-
|
|
(4,706)
|
| |
$
|
560
|
$
|
8,463
|
$
|
(147)
|
$
|
8,876
|
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
6. EXPLORATION AND EVALUATION ASSETS (continued)
Central Mineral Belt (“CMB”)
Moran Lake Property
Pursuant to an agreement dated October 14, 2004, the Company acquired an option to earn a 90% interest, subject to a 2% net smelter royalty (“NSR”) and a 10% carried interest to the vendor, in the Moran Lake Property, a uranium prospect located in Central Labrador, Newfoundland and Labrador, Canada. The agreement was amended on March 1, 2005 to include additional claims adjacent to the Moran Lake Property, known as Moran Heights.
The Company previously issued 40,000 common shares, made cash payments totaling $575,000 and spent more than the required minimum $3,000,000 on project expenditures. In connection with the option agreement to earn its 90% interest in the Moran Lake Property, the Company was involved in a dispute with the original vendor of the Moran Lake Property, Mr. Murphy, regarding the timing of advance royalty payments. On December 5, 2011, the Company settled the litigation. Under the terms of the settlement, the Company made a cash payment of $600,000 and issued 119,361 common shares. All litigation was discontinued and Mr. Murphy acknowledged that the Company’s 90% interest in the CMB Uranium/Vanadium Project vested and any requirement for a bankable feasibility study was irrevocably waived. The Company was required to make advance royalty payments of $200,000 per year commencing in November 2012. Accordingly, the Company paid an advance royalty payment of $200,000 in November 2012. Had the Company brought the Moran Lake Property into production, the advance royalty payments would have been deducted against any NSR owed to the original vendor of the property.
On November 1, 2013, the Company exercised its right to abandon those mineral claims that form the Moran Lake Property and terminated the related agreement to discharge the Company from any further obligations with respect to the Moran Lake Property. As a result, the Company recorded an impairment of $2,484,868 to operations during the year ended April 30, 2014.
Otter/Portage Lake Property
Pursuant to an agreement dated December 2, 2005, the Company acquired a 100% interest, subject to a 1.5% NSR, in the Otter and Portage Lake Properties located in the Central Mineral Belt of Labrador.
During the year ended April 30, 2014, the Company abandoned these properties and recorded an impairment of $675,750 to operations in relation to the Otter and Portage Lake Properties.
Silver Spruce Property Amalgamation
In July 2008, the Company entered into an agreement with Expedition Mining Inc. ("Expedition"), formally known as Universal Uranium Ltd., and acquired all of Expedition's interest (60%) in its joint venture project with Silver Spruce Resources Inc. in Labrador. Currently the Company has a 100% interest in the property subject to a 2% net smelter royalty payable to Silver Spruce and a 2% net smelter royalty payable to Expedition Mining Inc. on 60% of any production from the Silver Spruce Property.
Bootheel Project
On March 31, 2009, the Company acquired an interest in the Bootheel and Buckpoint Properties in Wyoming, USA through the acquisition of Target. Under a series of agreements between UR-Energy USA Inc. (“URE”), several of its subsidiaries, Target and Crosshair USA, a wholly owned subsidiary of Target, the Company could earn a 75% interest in BHP LLC, subject to certain royalties, by completing expenditures totalling US$3,000,000 on or before June 7, 2011. The Company made these expenditures, and additional expenditures, which increased its holdings to 81%. The Company, through Target, has earned an 81% interest in BHP LLC, representing an 81% interest in the underlying Bootheel and Buckpoint Properties.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
6. EXPLORATION AND EVALUATION ASSETS (continued)
Bootheel Project (continued)
Under agreements dated February 5, 2008 between MJ Ranches Inc. and Crosshair USA as manager, BHP LLC leased MJ Ranches Inc.’s 75% ownership of certain minerals on fee land that adjoins the Bootheel Property. The initial term of the agreement was for five years with provision for two renewals. Payment for the initial five year term was US$252,651 paid in advance, increased for inflation for the renewal periods. The acquired mineral rights were subject to a sliding scale royalty tied to the sales price of uranium. The “Uranium Lease and Surface and Damage Agreement” and “Surface Impact Agreement” expired in February 2013. On June 7, 2013, the Company announced that BHP LLC has been unable to reach an agreement with MJ Ranches Inc. on terms which more accurately reflect current market conditions. Certain portions of the mineral resources included in the Technical Report issued by the Company, dated October 27, 2012, are located on those lands which were subject to the mineral lease with MJ Ranches Inc. Accordingly, during the year ended April 30, 2013, the Company recorded an impairment of $3,727,724 to operations.
Golden Promise
Golden Promise Property
On April 29, 2009, the Company acquired a 60% interest in the Golden Promise Gold Project in Central Newfoundland, Canada with an option to acquire an additional interest from Paragon Minerals Corp. (“Paragon”).
On May 31, 2013, the Company and Paragon terminated the Golden Promise Option and Joint Venture Agreement and as a result, the Company recorded an impairment of $1,401,128 to operations during the year ended April 30, 2013.
Southern Golden Promise (Victoria Lake)
The Company had earned a 62.02% interest in mineral claims located in the Botwood Basin area of Central Newfoundland known as Southern Golden Promise in consideration for issuing a total of 10,000 common shares and incurring a minimum of $1,750,000 exploration expenditures within specified deadlines.
During the year ended April 30, 2014, the Company abandoned the Southern Golden Promise property.
Reclamation Bonds
As at July 31, 2014, the Company had outstanding reclamation bonds for the Bootheel Property of US$25,800 (April 30, 2014 - US$25,800) registered with the Wyoming Department of Environmental Quality and State Office of Lands and Investment.
During the year ended April 30, 2014, the Company recorded an impairment of reclamation bonds in the amount of $41,852 due to collectability concerns in relation to properties that have been abandoned.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars
7. FUTURE RECLAMATION PROVISIONS
| |
|
July 31, 2014
|
|
April 30, 2014
|
| |
|
|
|
|
|
Beginning balance
|
$
|
19,267
|
$
|
37,161
|
|
Change in estimates1
|
|
-
|
|
(2,053)
|
|
Interest
|
|
385
|
|
1,427
|
|
Reclamation expenses incurred
|
|
-
|
|
(17,268)
|
|
Ending balance
|
$
|
19,652
|
$
|
19,267
|
1 The Company revised its prior estimates based on new information regarding potential future reclamation costs, and the estimated dates of abandonment of the interests in exploration and evaluation assets.
As at July 31, 2014, the Company has legal obligations associated with the Moran Lake property for cleanup costs. These costs are anticipated to be incurred through 2015.
The total undiscounted amount of estimated cash flows required to settle the obligations is approximately $20,000, which was adjusted for inflation at the rate of 2%, discounted at 8% and projected out to 2015.
8. CAPITAL STOCK AND RESERVES
Share and warrant issuances
There were no share or warrant issuances during the three month period ended July 31, 2014 or the year ended April 30, 2014.
During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held (Note 1). All references to share and per share amounts have been retroactively restated to reflect this share consolidation.
Warrants
The following is a summary of warrant activities during the three month period ended July 31, 2014 and the year ended April 30, 2014:
| |
|
Number of Warrants
|
|
Weighted Average Exercise Price
|
| |
|
|
|
|
|
Outstanding, April 30, 2013
|
|
917,246
|
|
$6.79
|
|
Expired
|
|
(917,246)
|
|
$6.79
|
|
Outstanding, April 30, 2014 and July 31, 2014
|
|
-
|
|
-
|
Stock options
The Company’s Stock Option Plan is a 10% rolling plan that allows a maximum 10% of the issued shares to be reserved for issuance under the plan. Options granted under the plan may not have a term exceeding 10 years and vesting provisions are at the discretion of the Board of Directors.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
8. CAPITAL STOCK AND RESERVES (continued)
Stock options (continued)
The following is a summary of stock option activities during the three month period ended July 31, 2014 and the year ended April 30, 2014:
| |
|
Number of Stock Options
|
|
Weighted Average Exercise Price
|
| |
|
|
|
|
|
Outstanding, April 30, 2013
|
|
599,963
|
|
$10.43
|
|
Forfeited
|
|
(187,250)
|
|
$6.75
|
|
Expired
|
|
(70,500)
|
|
$12.55
|
|
Outstanding, April 30, 2014
|
|
342,213
|
|
$12.01
|
|
Forfeited
|
|
(11,000)
|
|
$12.07
|
|
Expired
|
|
(56,625)
|
|
$10.80
|
|
Outstanding, July 31, 2014
|
|
274,588
|
|
$12.26
|
At July 31, 2014, the following stock options were outstanding to directors, officers and employees:
|
Outstanding
|
|
Exercisable
|
|
Exercise Price
|
|
Remaining Life (Years)
|
|
Expiry Date
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
28,088
|
|
28,088
|
|
$8.80
|
|
0.34
|
|
November 30, 2014
|
|
1,250
|
|
1,250
|
|
$8.00
|
|
0.39
|
|
December 21, 2014
|
|
8,750
|
|
8,750
|
|
$8.40
|
|
0.44
|
|
January 6, 2015
|
|
183,500
|
|
183,500
|
|
$14.40
|
|
1.39
|
|
December 21, 2015
|
|
10,000
|
|
10,000
|
|
$19.50
|
|
1.44
|
|
January 7, 2016
|
|
4,750
|
|
4,750
|
|
$11.20
|
|
1.67
|
|
April 1, 2016
|
|
38,250
|
|
38,250
|
|
$3.80
|
|
2.74
|
|
April 24, 2017
|
|
274,588
|
|
274,588
|
|
|
|
|
|
|
Share-based compensation
The Company recognizes compensation expense for all stock options granted using the fair value based method of accounting. For the three month period ended July 31, 2014, the Company recorded share-based compensation expense of $Nil (July 31, 2013 – recovery of $62,073) for options forfeited or vesting during the period. No stock options were granted during the three month period ended July 31, 2014 or year ended April 30, 2014.
9. SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS
There were no significant non-cash transactions affecting cash flows from investing or financing activities during the three month periods ended July 31, 2014 or 2013.
10. RELATED PARTY TRANSACTIONS
Related parties and related party transactions impacting the condensed interim consolidated financial statements are summarized below and include transactions with the following individuals or entities:
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
10. RELATED PARTY TRANSACTIONS (continued)
Key management personnel
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors, corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, and Vice Presidents.
Remuneration attributed to key management personnel for the three month periods ended July 31, 2014 and 2013 is summarized as follows:
| |
|
July 31, 2014
|
|
July 31, 2013
|
| |
|
|
|
|
|
Share-based compensation
|
$
|
-
|
$
|
7,948
|
|
Short-term benefits(1)
|
|
6,976
|
|
115,343
|
| |
$
|
6,976
|
$
|
123,291
|
|
(1)
|
include base salaries and directors’ fees, pursuant to contractual employment or consultancy arrangements, management and consulting fees
|
The Company had a consulting agreement with the former Executive Chairman of the Company that provided for a lump sum payment of $150,000 on termination or $450,000 in the event of a change of control of the Company. This agreement was terminated by the former Executive Chairman of the Company as of December 31, 2013 without any termination payment.
Other related parties
King & Bay West Management Corp. (“King & Bay West”): King & Bay West is an entity owned by the former Executive Chairman of the Company, who remains an insider of the Company, and provides administrative, management, geological, regulatory, tax, corporate development and corporate communications services to the Company.
Transactions entered into with related parties other than key management personnel during the three month periods ended July 31, 2014 and 2013 include the following:
| |
|
July 31, 2014
|
|
July 31, 2013
|
| |
|
|
|
|
|
King & Bay West
|
$
|
36,673
|
$
|
165,411
|
Amounts due to related parties as at July 31, 2014 included the following:
|
·
|
King & Bay West, controlled by the former Executive Chairman and insider of the Company - $646,706 (April 30, 2014 - $540,874)
|
|
·
|
MJM Consulting Corp., controlled by the former Executive Chairman and insider of the Company - $91,875 (April 30, 2014 - $91,875)
|
The amounts due to related parties are non-interest bearing.
Subsequent to the three month period ended July 31, 2014, the Company entered into a debt settlement agreement with King & Bay West and MJM Consulting Corp. (Note 14).
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
11. SEGMENTED INFORMATION
The Company operates in one reportable operating segment, being the acquisition, exploration and evaluation of mineral properties in North America.
| |
|
July 31, 2014
|
|
April 30, 2014
|
| |
|
|
|
|
|
Equipment
|
|
|
|
|
| |
|
|
|
|
|
United States
|
$
|
2,377
|
$
|
2,502
|
|
Canada
|
|
84,088
|
|
88,514
|
| |
$
|
86,465
|
$
|
91,016
|
| |
|
|
|
|
|
Reclamation bonds
|
|
|
|
|
| |
|
|
|
|
|
United States
|
$
|
28,096
|
$
|
28,269
|
| |
|
|
|
|
|
Exploration and evaluation assets
|
|
|
|
|
| |
|
|
|
|
|
Canada
|
$
|
2,509,791
|
$
|
2,509,791
|
12. CAPITAL MANAGEMENT
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and evaluation of its exploration and evaluation assets, acquire additional mineral property interests and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes its components of equity.
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets.
In order to maximize ongoing development efforts, the Company does not pay out dividends. Management reviews its capital management approach on an ongoing basis and believes that this approach is reasonable given the relative size of the Company.
The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company’s approach to capital management during the period.
13. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
The fair value of the Company’s receivables, payables and accrued liabilities, and amounts due to related parties approximate carrying value, due to their short-term nature. The Company’s cash and cash equivalents and marketable securities are measured at fair value under the fair value hierarchy based on level one quoted prices in active markets for identical assets or liabilities. The Company’s other financial instruments, being reclamation bonds, are measured at amortized cost.
The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk and price risk.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
13. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)
Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.
The Company is subject to credit risk on its cash and cash equivalents and receivables. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company has no investments in asset-backed commercial paper. The Company’s receivables consist mainly of Goods and Services Tax receivable due from the Government of Canada. The Company does not believe it is exposed to significant credit risk
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company manages liquidity risk through its capital management as outlined in Note 12. As a result of financing and debt restructuring completed subsequent to the three month period ended July 31, 2014 (Note 14), management believes the Company has sufficient funds to support ongoing operating expenditures and meet its liabilities as they fall due.
Market Risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, commodity and equity prices, and foreign exchange rates.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The risk that the Company will realize a loss as a result of a decline in the fair value of any short-term investments included in cash and cash equivalents is minimal because these investments generally have a fixed yield rate.
The Company is exposed to price risk with respect to commodity prices, particularly uranium, and equity prices, since the Company possesses investments in publicly traded securities. The Company closely monitors those prices to determine the appropriate course of action to be taken by the Company. However, there can be no assurance that the Company can exit these positions if required, resulting in proceeds approximating the carrying value of these securities.
The Company’s expenditures are predominantly in Canadian dollars, and any future equity raised is expected to be predominantly in Canadian dollars. As at July 31, 2014, the Company has accounts payable denominated in US dollars of US$57,654, cash of US$1,097 and reclamation bonds of US$25,800. A 10% change in the Canadian dollar versus the US dollar would give rise to a gain/loss of approximately $3,349.
JET METAL CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2014
(Unaudited)
(Expressed in Canadian Dollars)
14. SUBSEQUENT EVENTS
The following reportable events occurred subsequent to the three month period ended July 31, 2014:
|
·
|
On August 26, 2014, 1,000 stock options with an exercise price of $3.80 were forfeited.
|
|
·
|
On September 16, 2014, the Company closed a non-brokered private placement and issued 20,000,000 units at a price of $0.15 per unit for gross proceeds of $3,000,000. Each unit consists of one common share and one common share purchase warrant. Each common share purchase warrant is exercisable to acquire one common share for a period of 5 years at an exercise price of $0.25. The Company paid cash commission to certain arm’s length parties in the amount of $6,450.
|
|
·
|
On September 16, 2014, the Company entered into a debt settlement agreement with King & Bay West and MJM Consulting Corp. (the “Debt Settlement Agreement”) (Note 10). Under the terms of the Debt Settlement Agreement, King & Bay West agreed to forgive $246,063 payable by the Company, restructure $246,063 payable by the Company into a non-bearing two year term loan, and convert $154,187 payable by the Company into 1,027,916 fully paid and non-assessable common shares of the Company at a deemed price of $0.15 per common share. In addition, MJM Consulting Corp. agreed to convert $91,875 payable by the Company into 612,500 fully paid and non-assessable common shares of the Company at a deemed price of $0.15 per common share. The common shares for debt transactions remain subject to the approval of the TSX Venture Exchange.
|
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
GENERAL
This Management Discussion & Analysis (“MD&A”) is intended to supplement and complement the condensed interim consolidated financial statements and accompanying notes of Jet Metal Corp. (the “Company” or “Jet Metal”) for the three month period ended July 31, 2014. The information provided herein should be read in conjunction with the Company’s audited consolidated financial statements for the year ended April 30, 2014, the Company’s unaudited condensed interim financial statements for the three month period ended July 31, 2014, and the accompanying notes thereto.
All dollar figures presented are expressed in Canadian dollars unless otherwise noted. Financial statements and summary information derived therefrom are prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting.
Management is responsible for the preparation and integrity of the financial statements and MD&A, including the maintenance of appropriate information systems, procedures and internal controls and to ensure that information used internally or disclosed externally, including the financial statements and MD&A, is complete and reliable. The Company’s Board of Directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders. The Board’s audit committee meets with management quarterly to review the financial statements including the MD&A and to discuss other financial, operating and internal control matters.
The reader is encouraged to review the Company’s statutory filings on www.sedar.com and to review general information including reports and maps on the Company's website at www.jetmetalcorp.com.
FORWARD LOOKING STATEMENTS
Certain of the statements made herein may constitute “forward-looking statements” or contain “forward-looking information” within the meaning of applicable Canadian and United States securities laws. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the potential for additional mineralization at the Company’s properties, the estimation of mineral resource estimates, estimates of future administrative costs, statements about the Company’s future development of its properties and statements contained in the “Outlook” section of this MD&A. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to foreign currency fluctuations; risks inherent in mineral exploration and development including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and reserves and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; the potential for unexpected costs and expenses and commodity price fluctuations including the price of uranium; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk Factors Relating to the Company’s Business in the Company’s Annual Report on Form 20-F and in each MD&A.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Forward-looking information and forward-looking statements are, in addition, based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of commodities; that the Company can access financing, appropriate equipment and sufficient labour availability and that the political environment will continue to support the development and operation of mining projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. The Company does not intend to update forward-looking statements or information, except as may be required by applicable law.
NATIONAL INSTRUMENT 43-101 COMPLIANCE
C. Stewart Wallis, P.Geo., a director of the Company and a Qualified Person as defined by National Instrument 43-101 (“NI 43-101”), has reviewed and approved the technical information contained in this MD&A. Further information on the Company’s mineral properties can be found in the following NI 43-101 Technical Report which is available on SEDAR at www.sedar.com and the Company’s website:
|
·
|
CMB Uranium Project: The Technical Report titled “Technical Report on the CMBNW Property, Labrador Canada” dated June 22, 2009.
|
DESCRIPTION OF BUSINESS AND OVERVIEW
The Company is a mineral exploration company engaged in acquiring, exploring and developing mineral properties. The Company is currently focused on maintaining its uranium properties in North America, as well as investigating other mineral opportunities. The Company does not have any producing mineral properties at this time.
The Company’s common shares trade on the TSX Venture Exchange (the “TSX-V”) under the symbol “JET” and on the OTC Markets Group’s OTCQB Marketplace (the “OTCQB”) under the symbol “JETMF”. The common shares of the Company were voluntarily delisted from the NYSE MKT Stock Exchange prior to market opening on July 1, 2013. On the same day, the Company’s common shares were listed and began trading on the OTC Markets Group’s OTCQB Marketplace. The listing of the Company’s common shares in Canada was transitioned from the Toronto Stock Exchange (“TSX”) to the TSX-V on January 20, 2014.
In September 2013, the Company changed its name from Crosshair Energy Corporation to Jet Metal Corp. and completed a consolidation of its common shares on the basis of one post-consolidated share for every ten pre-consolidated shares. All references to share and per share amounts have been restated to reflect this share consolidation.
The Company currently maintains exploration and evaluation properties in the province of Newfoundland and Labrador, Canada and the state of Wyoming, USA:
|
Ø
|
Central Mineral Belt (“CMB”) Uranium Project in Labrador
|
|
Ø
|
Bootheel Uranium (“Bootheel”) Project with UR-Energy USA, Inc. in Wyoming
|
Central Mineral Belt (“CMB”) Project
The CMB Project currently consists of a total of 916 claims, located in central Labrador. Of these 916 claims, 451 of them are subject to a 2% Net Smelter Return Royalty (“NSR”) payable to Silver Spruce Resources Inc. The property is also subject to a 2% NSR payable to Expedition Mining Inc. on 60% of any production from the Silver Spruce Property. The most prospective area within these 916 claims is the Two Time Prospect (detailed below), which contains an Indicated Mineral Resource estimate of 2.33 M pounds of U3O8 (1.82 M tonnes grading 0.058% U3O8) and an Inferred Mineral Resource estimate of 3.73 M pounds of U3O8 (3.16 M tonnes grading 0.053% U3O8) and is open for expansion.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Two Time Prospect
Exploration activities on the Two Time Prospect during the 2011 and 2012 field seasons focused on investigating the down dip extension of the resource previously reported, as well as a number of coincident airborne radiometric geophysical and rock geochemical anomalies outside the Two Time Prospect. A total of 21 drill holes, totaling 4,206 metres were completed, the results of which confirmed uranium mineralization at the Two Time Prospect to extend to depths of over 500 metres. Drilling on the Firestone Prospect intersected a three and a half metre interval that returned 0.084% U3O8. Contained within this interval was a 0.5 metre interval that returned 0.519% U3O8. The only hole drilled on the Big Bear Prospect returned seven metres of 0.031% U3O8. Drilling at the three eastern-most prospects of South Brook, Running Man and Big Bear, was preliminary, with the program cut short due to inclement weather.
Specific results from the drilling on the Two Time Prospect are illustrated in the table below. Drill hole CMB-12-49 successfully intersected mineralization at the expected depth over a thicker interval, indicating the deposit is continuous to the south along strike and along dip. This hole represents a minimum 50m step out to the south from previous holes into the deposit. Four shallow holes drilled north of the Two Time Prospect to evaluate radon anomalies did not intersect uranium mineralization.
|
Hole ID
|
From
(m)
|
To
(m)
|
Interval
(m)
|
U3O8%
|
|
CMB-12-49
|
319.5
|
324.0
|
4.5
|
0.032
|
|
and
|
345.4
|
346.4
|
1.0
|
0.032
|
|
and
|
492.5
|
521.0
|
28.5
|
0.031
|
|
including
|
494.0
|
498.0
|
4.0
|
0.051
|
|
and
|
513.5
|
516.5
|
3.0
|
0.074
|
During the three month period ended July 31, 2014, the Company incurred acquisition costs of $Nil (Year ended April 30, 2014 - $Nil) and exploration and evaluation expenses of $Nil (July 31, 2013 - $560) related to the CMB Project. During the year ended April 30, 2014, the Company incurred only administrative costs as the Company abandoned various claims on the CMB Project.
Due to the challenging economic environment, the Company does not plan to spend any additional funds on the remaining CMB Project claims until market conditions improve.
Bootheel Uranium Project
The Bootheel properties are currently owned by the Bootheel Project LLC and consist of 81 Federal Mining claims and one State lease. The Company currently has an 81% interest in The Bootheel Project LLC, subject to certain royalties. Under the terms of an agreement dated June 7, 2007, as amended December 21, 2007 and February 28, 2008, between UR-Energy USA Inc. (“URE”), several of its subsidiaries, Target Exploration and Mining Corp. (“Target”), a wholly owned subsidiary of the Company, and Crosshair Energy USA, Inc. (“Crosshair USA”), a wholly owned subsidiary of Target, the Company was able to earn an initial 75% interest in the Bootheel Project LLC, by completing expenditures totalling US$3 million and issuing 12,500 common shares on or before June 7, 2011. All the common shares have been issued and as of July 31, 2009, the Company exceeded US$3 million in expenditures on the property, thereby earning its initial 75% interest. As URE declined to participate in the fiscal 2012 exploration program, its participating interest was diluted from 25% to approximately 19%, and the Company’s participating interest increased from 75% to approximately 81%.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Under agreements dated February 5, 2008 between MJ Ranches Inc. and Crosshair USA as manager, the Bootheel Project LLC leased MJ Ranches Inc.’s 75% ownership of certain minerals on fee land that adjoined the Bootheel Property. The initial term of the agreement was for five years with provision for two renewals. Payment for the initial five year term was US$252,651 paid in advance, increased for inflation for the renewal periods. The acquired mineral rights were subject to a sliding scale royalty tied to the sales price of uranium. The “Uranium Lease and Surface and Damage Agreement” and “Surface Impact Agreement” expired in February 2013. On June 7, 2013, the Company announced that the Bootheel Project LLC was unable to reach an agreement with MJ Ranches Inc. on terms which more accurately reflected current market conditions. Certain portions of the mineral resources included in the Technical Report issued by the Company, dated October 27, 2012, are located on those lands which were subject to the mineral lease with MJ Ranches Inc. Accordingly, during the year ended April 30, 2013, the Company recorded an impairment of all of the capitalized costs of the Bootheel Uranium Project to operations.
Project Summary
The property has been previously explored for uranium by a number of companies in the 1970’s and again in the mid-1990’s by Cameco Corporation (“Cameco”).
The Bootheel Project LLC acquired a database from Power Resources Inc. that includes reports, gamma logs, drill logs and other data which primarily cover the Federal mining claims but also include some historic data from the surrounding fee land.
The calendar year 2008 drilling program, designed to further test the mineralized Sundance Formation, consisted of 93 vertical holes averaging 540 ft. in depth and totalling 50,163 ft. Of these holes, 12 were spot cored through the Sundance Formation resulting in 708.5 ft. of core. Drilling commenced in June 2008 and was completed on September 20, 2008. Results collected to date indicate that the majority of the uranium mineralization on the Bootheel Property is hosted by the Sundance Formation. Laboratory testing in calendar year 2008 demonstrated the potential for uranium mining by in-situ recovery (“ISR”). ISR techniques are more environmentally friendly and less capital intensive than conventional mining methods.
In addition to the calendar year 2008 drilling program, the historic holes were relocated and limited ground radiometric and water sampling surveys were carried out. On February 5, 2009, Target reported that preliminary bottle roll tests had confirmed historical metallurgical test work indicating uranium recoveries of 87% or better using sodium bicarbonate as a lixiviant.
The data acquired from Cameco were compiled by the Company’s geological team and were combined with the results from over 50,000 feet of drilling completed by Target at Bootheel during calendar year 2008. This compilation formed the basis for the Company’s 2011 drilling program which saw the completion of 76 bore holes, totaling 35,760 feet (10,900 metres). A synthesis of all of these data enabled the Company to generate an Indicated Mineral Resource estimate of 1.12 million pounds of U3O8 (1.570M tons @0.036%) and an Inferred Mineral Resource of 1.05 million pounds of U3O8 (1.315M tons @ 0.040%) for the 81 Federal lode claims and single Wyoming State lease that currently comprise the Bootheel Property. The following table contains additional detail.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
|
Formation/Classification
|
Section
|
Tons
|
Grade U3O8%
|
Lbs
|
|
Sundance:
|
|
|
|
|
|
Indicated
|
Section 6
|
943,000
|
0.040
|
751,000
|
|
Indicated
|
Section 36
|
627,000
|
0.029
|
369,000
|
|
Inferred
|
Section 36
|
1,007,000
|
0.031
|
624,000
|
| |
|
|
|
|
|
Wind River:
|
|
|
|
|
|
Inferred
|
Section 6
|
182,000
|
0.074
|
267,000
|
|
Inferred
|
Section 12
|
20,000
|
0.063
|
25,000
|
|
Inferred
|
Section 32
|
106,000
|
0.063
|
134,000
|
| |
|
|
|
|
|
Total Indicated
|
|
1,570,000
|
0.036
|
1,120,000
|
|
Total Inferred
|
|
1,315,000
|
0.040
|
1,050,000
|
The above Mineral Resource was estimated by C. Stewart Wallis, P. Geo, a Qualified Person as defined by NI 43-101, with an effective date of July 8, 2013. The Classifications of the Mineral Resources follow the CIM guidelines dated November 2010. Wind River resources were estimated using the polygonal method at an estimated cut-off grade of 0.02% eU3O8 over a minimum thickness of 4 feet and a minimum grade x thickness (GT) product of 0.15 ft% and a long term uranium price of $70 per pound. The Sundance resources were estimated using the contour method at an estimated cut-off grade of 0.015% eU3O8 over a minimum thickness of 4 feet and a minimum grade x thickness (GT) product of 0.15 ft% and a long term uranium price of $70 per pound. A tonnage factor of 16 ft3/ton was used for the Sundance Formation, and 15 ft3/ton was used for the Wind River Formation. There are no known legal, environmental or other risks that could materially affect the development of the mineral resources. The numbers in the table have been rounded.
While the above stated mineral resource estimates are encouraging, the continuing downward pressure on the uranium price, in addition to the overall poor state of the junior resource market, has led the Bootheel Project LLC to focus on reducing its expenditures to a minimum, while maintaining the integrity of its data and land package. During the year ended April 30, 2014, the Company released mineral claims that did not have any mineral resources identified on them or any significant prospectivity to contain such resources. This action reduced the total land package from 274 mineral claims and 2 state leases to 81 mineral claims and 1 state lease and allows the Bootheel Project LLC to keep the most prospective ground in good standing. A reversal in the state of uranium price specifically, as well as the junior resource market in general, may afford the Bootheel Project LLC the opportunity to further assess and evaluate its options for the future.
During the three month period ended July 31, 2014, the Company incurred acquisition costs of $Nil (Year ended April 30, 2014 - $Nil) related to the Bootheel Uranium Project. During the three month period ended July 31, 2014, the Company continued to focus on maintaining the claims in good standing and incurred net costs of $4,106 (July 31, 2013 - $8,463), including administrative costs of $6,230 (July 31, 2013 - $13,169) for insurance and renewals of claims and leases. These exploration and evaluation expenses were partially offset by recoveries of $2,124 (July 31, 2013 - $4,706) in relation to URE’s portion of exploration and evaluation expenditures incurred on the Bootheel Uranium Project. The decreased administrative costs incurred on the Bootheel Uranium Project during the current period is directly attributable to the land package reduction noted above.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Southern Golden Promise (Victoria Lake) Project
The Victoria Lake Project consisted of 70 claims covering 1,750 hectares. The Company completed several phases of exploration including prospecting, mapping, till and rock sampling as well as trenching on targets defined by the other works.
Work completed on the Victoria Lake Project to date confirmed the exploration prospectivity of the area; however, due to the current poor state of the junior resource market, the Company, in consultation with its joint venture partner, Paragon Minerals Corporation, decided to cease expenditures on the project and to return the claims to the original vendor. The vendor was notified and acknowledged receipt of this decision on April 30, 2014. The Company previously recorded an impairment against its exploration and evaluation assets in relation to the Golden Promise and Southern Golden Promise properties during the year ended April 30, 2013.
OUTLOOK
The Company successfully completed equity financing for gross proceeds of $3 million on September 16, 2014 which will allow the Company to acquire new prospective mineral properties, maintain or advance its current mineral exploration properties, and meet general corporate and working capital requirements. The Company’s evaluation of potential mineral property opportunities has been expanded to include commodities other than uranium, as the uranium price continues to languish. In light of the current poor macroeconomic environment, the Company will continue to manage and closely monitor its discretionary costs and resources.
REVIEW OF CONSOLIDATED FINANCIAL RESULTS
Results of operations for the three month period ended July 31, 2014 compared to the three month period ended July 31, 2013:
For the three month period ended July 31, 2014, the Company reported a net loss of $56,314 or $0.01 per common share, compared to a net loss of $292,928 or $0.04 per common share for the three month period ended July 31, 2013.
Expenses
Total expenses for the three month period ended July 31, 2014 were $53,890, representing a decrease of $239,042 compared to the same period of the prior year as a direct result of decreased overall Company activity during the current period as discussed in detail below.
The Company recorded a recovery of audit and accounting fees of $20,617 during the three month period ended July 31, 2014 as a result of reversing professional fees amounting to $26,117 as previous invoices received by the Company were revised. The recovery of professional fees in the current period was partially offset by accruals for the annual audit in the amount of $5,500. During the three month period ended July 31, 2013, the Company recorded audit and accounting fees of $800 as a result of revised audit fee estimates.
During the three month period ended July 31, 2014, the Company incurred exploration and evaluation expenses in the amount of $4,106 (July 31, 2013 - $8,876), including $4,106 (July 31, 2013 - $8,463) on the Bootheel Uranium Project, $Nil (July 31, 2013 - $560) on the CMB Project and $Nil (July31, 2013 – recovery of $147) on other projects. The current period decrease in exploration and evaluation expense of $4,770 compared to the same period of the prior year is due to the Company pursuing fewer projects as well as the Bootheel Uranium Project land package being reduced. Details of exploration and evaluation activities are further discussed in “Description of Business and Overview”.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Insurance expense decreased from $10,986 for the three month period ended July 31, 2013 to $7,350 for the three month period ended July 31, 2014 as a result of the Company adjusting its insurance policy to reflect corporate changes such as property abandonments and the Company’s stock exchange listings as previously discussed.
Management fees of $Nil (July 31, 2013 - $80,033) and wages and salaries of $29,076 (July 31, 2013 - $139,460) total $29,076 for the three month period ended July 31, 2014 (July 31, 2013 - $219,493) which represents a total decrease of $190,417 compared to the same period of the prior year as a result of decreased Company activities and personnel providing services to the Company. During the year ended April 30, 2014, a consulting agreement between the Company and the former Chief Executive Officer and a consulting agreement between the Company and the former Executive Chairman were both terminated.
During the three month period ended July 31, 2014, the Company recorded share-based compensation of $Nil as all outstanding stock options fully vested during the year ended April 30, 2014 and no stock options were issued during the current period. During the three month period ended July 31, 2013, the Company recorded a recovery of share-based compensation of $62,073 as a result of forfeitures of unvested stock options during the period. The recovery of share-based compensation expense had no effect on the Company’s cash flows.
Transfer agent and filing fees decreased to $9,630 for the three month period ended July 31, 2014 compared to $49,640 for the same period of the prior year, a decrease of $40,010. During the three month period ended July 31, 2013, the Company incurred increased regulatory costs as it transitioned from the NYSE MKT to the OTC Markets Group’s OTCQB Marketplace and filed its annual audited financial statements and Form 20-F during the first quarter of fiscal 2014.
Investor relations expense of $1,262 (July 31, 2013 - $2,756), legal costs of $450 (July 31, 2013 - $5,658), office and administrative expenses of $8,881 (July 31, 2013 - $36,872), rent of $8,816 (July 31, 2013 - $13,666) and travel expenses of $Nil (July 31, 2013 - $212) all decreased compared to the same period of the prior year as a direct result of decreased overall Company activities.
Other Income (Expenses)
Other income (expenses) for the three month period ended July 31, 2014 consisted of finance income of $Nil (July 31, 2013 - $39), foreign exchange gain of $25 (July 31, 2013 - $917) and an unrealized loss on marketable securities of $2,449 (July 31, 2013 - $952) in relation to fair value adjustments for marketable securities the Company held.
Working Capital
As at July 31, 2014, the Company had a working capital deficit of $767,824 compared to a working capital deficit of $716,619 as at April 30, 2014. The increase in working capital deficit of $51,205 was mainly due to increased amounts due to related parties and decreased marketable securities, which were partially offset by increased prepaid expenses and decreased payables and accrued liabilities. Refer to “Statement of Financial Position Information” for further details with respect to account balance changes for the three month period ended July 31, 2014.
Details of the Company’s plans with respect to its working capital deficiency are further discussed in “Outlook” and “Liquidity and Capital Resources”.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
SUMMARY OF QUARTERLY RESULTS
The following table summarizes the Company’s financial operations for the last eight quarters. For more detailed information, please refer to the consolidated financial statements.
|
Description
|
Q1
July 31, 2014
($)
|
Q4
April 30, 2014
($)
|
Q3
January 31, 2014
($)
|
Q2
October 31, 2013
($)
|
|
Total assets
Exploration and evaluation assets
Working capital (deficit)
Shareholders’ equity
Net loss
Loss per share
Exploration and evaluation expenditures (recovery)
|
2,772,281
2,509,791
(767,824)
1,836,876
(56,314)
(0.01)
4,106
|
2,801,407
2,509,791
(716,619)
1,893,190
(110,365)
(0.02)
(13,639)
|
2,923,397
2,509,791
(633,068)
2,006,326
(159,468)
(0.02)
18,596
|
2,958,270
2,509,791
(482,034)
2,159,102
(3,404,522)
(0.52)
20,392
|
|
Description
|
Q1
July 31, 2013
($)
|
Q4
April 30, 2013
($)
|
Q3
January 31, 2013
($)
|
Q2
October 31, 2012
($)
|
|
Total assets
Exploration and evaluation assets
Working capital (deficit)
Shareholders’ equity
Net loss
Loss per share
Exploration and evaluation expenditures
(recovery)
|
6,266,264
5,670,409
(255,927)
5,550,722
(292,928)
(0.04)
8,876
|
6,635,616
5,670,409
94,253
5,905,723
(5,267,909)
(0.80)
(213,831)
|
12,287,176
10,884,336
141,159
11,149,315
(828,327)
(0.13)
36,174
|
12,796,468
10,683,053
574,584
11,868,381
(3,225,473)
(0.49)
1,471,277
|
Historical quarterly results of operations and net loss per share data do not necessarily reflect any recurring expenditure patterns or predictable trends.
The decreasing net losses realized in the quarters ended January 31, 2013, July 31, 2013, January 31, 2014, April 30, 2014 and July 31, 2014 are a direct result of decreased overall Company activities as the Company attempted to maintain low levels of expenditures due to challenging market conditions. The increased net losses reported for the quarters ended October 31, 2012, April 30, 2013 and October 31, 2013 are explained by impairment losses recorded with respect to the Company’s exploration and evaluation assets.
LIQUIDITY AND CAPITAL RESOURCES
As of July 31, 2014, the Company had cash and cash equivalents of $77,712 (April 30, 2014 - $78,541) and a working capital deficit of $767,824 (April 30, 2014 – $716,619). The increase in working capital deficit is attributable to both decreased current assets and increased current liabilities. Changes in current asset and current liabilities accounts are further detailed in “Statement of Financial Position Information”.
At present the Company has no producing properties and consequently has no current operating income or cash flows. The Company intends to finance its future requirements through a combination of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. These uncertainties may cause significant doubt on the Company’s ability to continue as a going concern. See “Risk Factors”.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
The Company estimates corporate and general costs to maintain the requirements of a listed company to be approximately $500,000 per year. Fixed costs to maintain the Company’s existing exploration and evaluation assets are estimated to be approximately $30,000 per year. Therefore, minimum working capital requirements are estimated at $530,000 per year. With the completion of equity financing for gross proceeds of $3 million and concurrent debt restructuring on September 16, 2014, the Company has sufficient funds to meet estimated annual corporate and general costs and property maintenance costs. The Company currently has no other material financial commitments, but may incur additional costs should the Company investigate or pursue a prospective mineral property.
The Company’s cash and cash equivalents are held in a Schedule 1 Canadian financial institution and its affiliated brokerage house in highly liquid accounts and interest bearing investments. No amounts have been or are invested in asset-backed commercial paper.
To date, the Company’s operations, including its exploration and evaluation activities, have been almost entirely financed from equity financings. The Company will continue to identify financing opportunities in order to provide additional financial flexibility and to continue the development of its property portfolio, meet land claim expenditure requirements and other commitments. While the Company has been successful raising the necessary funds in the past, there can be no assurance it can do so in the future.
Operating Activities
Cash used in operating activities for the three month period ended July 31, 2014 amounted to $53,539, which consisted of the net loss for the period of $56,314 and adjusted for depreciation of equipment of $4,551, interest expense of $385, an unrealized loss on foreign exchange of $173 and an unrealized loss on marketable securities of $2,449. Net loss for the period was further adjusted to determine cash used in operating activities for changes in non-cash working capital items, including an increase in receivables in the amount of $2,202 for Goods and Services Tax input tax credits and other amounts receivable; an increase in prepaid expenses of $29,384 as result of renewing directors’ and officers’ insurance, incurring annual regulatory listing fees and maintaining annual claims for the Bootheel Uranium Project; a decrease of payables and accrued liabilities of $79,029 due to settling outstanding amounts; and an increase in amounts due to related parties of $105,832 attributable to services and funds provided by King & Bay West Management Corp.
Cash used in operating activities for the three month period ended July 31, 2013 amounted to $358,791, which consisted of the net loss for the period of $292,928 and adjusted for depreciation of equipment of $5,689, interest expense of $357, share-based compensation recovery of $62,073, an unrealized gain on foreign exchange of $1,225 and an unrealized loss on marketable securities of $952. Net loss for the period was further adjusted to determine cash used in operating activities for changes in non-cash working capital items, including a decrease in receivables in the amount of $2,317 for Goods and Services Tax refunds received; a decrease in prepaid expenses of $2,828 in relation to amortization of prepaid expenses, net of additions for renewing directors’ and officers’ insurance, incurring annual regulatory listing fees and maintaining annual claims for the Bootheel Uranium Project; a decrease of payables and accrued liabilities of $58,114 due to settling outstanding amounts; and an increase in amounts due to related parties of $43,406.
Investing Activities
Cash from investing activities for the three month period ended July 31, 2014 amounted to $52,710 and related to proceeds received from the sale of marketable securities.
There was no cash from or used in investing activities for the three month period ended July 31, 2013.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Financing Activities
There were no financing activities for the three month periods ended July 31, 2014 or 2013.
STATEMENT OF FINANCIAL POSITION INFORMATION
| |
As at
July 31, 2014
|
As at
April 30, 2014
|
| |
|
|
|
Cash and cash equivalents
|
$
|
77,712
|
$
|
78,541
|
|
Marketable securities
|
-
|
55,159
|
|
Receivables
|
6,363
|
4,161
|
|
Prepaid expenses
|
63,854
|
34,470
|
|
Reclamation bonds
|
28,096
|
28,269
|
|
Equipment
|
86,465
|
91,016
|
|
Exploration and evaluation assets
|
2,509,791
|
2,509,791
|
|
Total Assets
|
$
|
2,772,281
|
$
|
2,801,407
|
| |
|
|
|
Payables and accrued liabilities
|
$
|
177,172
|
$
|
256,201
|
|
Due to related parties
|
738,581
|
632,749
|
|
Future reclamation provisions
|
19,652
|
19,267
|
|
Capital stock
|
87,411,032
|
87,411,032
|
|
Reserves
|
21,475,351
|
21,475,351
|
|
Deficit
|
(107,049,507)
|
(106,993,193)
|
|
Total Liabilities and Equity
|
$
|
2,772,281
|
$
|
2,801,407
|
Assets
Cash decreased by $829 during the three month period ended July 31, 2014 which is explained by the Company utilizing proceeds from the sale of marketable securities to mostly offset its operating activities for the period as described in detail in “Liquidity and Capital Resources”.
During the three month period ended July 31, 2014, marketable securities decreased by $55,159 which is explained by the sale of 54,565 common shares of Canadian Zinc Corporation and 2,222,222 common shares of Expedition Mining Inc. for net proceeds of $21,543 and $31,167, respectively. The Company also recorded an unrealized loss in the amount of $2,449 in relation to fair value adjustments.
Receivables increased by $2,202 during the three month period ended July 31, 2014 due to increased expense recoveries receivable, net of Goods and Services Tax input tax credits refunded.
As at July 31, 2014, prepaid expenses increased by $29,384 compared to the balance as at April 30, 2014 due to the Company renewing directors’ and officers’ insurance, incurring annual regulatory listing fees and maintaining annual claims for the Bootheel Uranium Project during the current period. These additions to the balance of prepaid expenses were partially offset by the amortization of prepaid expenses for the period, including insurance, listing fees, property claims and computer software licenses.
During the three month period ended July 31, 2014, reclamation bonds decreased by $173 as a result of an unrealized foreign exchange loss as the reclamation bonds are denominated in US dollars and registered with the Wyoming Department of Environmental Quality and State Office of Lands and Investment.
Equipment decreased by $4,551 during the three month period ended July 31, 2014 due to depreciation expense for the period. There were no additions to or disposals of equipment during the current period.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
There was no change in the balance of exploration and evaluation assets during the three month period ended July 31, 2014.
Liabilities
During the three month period ended July 31, 2014, payables and accrued liabilities decreased by $79,029 due to settling outstanding amounts due to various third parties. In addition, the Company recorded a recovery of audit and accounting fees during the three month period ended July 31, 2014 as a result of reversing professional fees amounting to $26,117 as previous invoices received by the Company were revised.
Amounts due to related parties increased by $105,832 during the three month period ended July 31, 2014 as a result of services provided by and arrangements with King & Bay West Management Corp. For further details with respect to related party balances and transactions, refer to “Related Party Transactions”.
During the three month period ended July 31, 2014, future reclamation provisions increased by $385 due to non-cash accretion expense.
Equity
There was no change in the balances of capital stock or reserves during the three month period ended July 31, 2014. There were no common shares issued or cancelled and no share-based compensation recorded during the current period.
Deficit increased by the net loss for the three month period ended July 31, 2014 in the amount of $56,314.
CAPITAL STOCK
The Company’s authorized capital consists of unlimited number of common shares without par value, and has securities outstanding as follows:
| |
|
As At
|
|
Security Description
|
|
July 31, 2014
|
|
Date of Report
|
|
Common shares – issued and outstanding
|
|
6,578,035
|
|
26,578,035
|
|
Director, employee and contractor options – vested
|
|
274,588
|
|
273,588
|
|
Director, employee and contractor options – granted but not yet vested
|
|
-
|
|
-
|
|
Warrants to purchase shares
|
|
-
|
|
20,000,000
|
|
Underwriters warrants – rights to purchase warrants
|
|
-
|
|
-
|
|
Common shares – fully diluted
|
|
6,852,623
|
|
46,851,623
|
Share and warrant issuances
There were no share or warrant issuances during the three month period ended July 31, 2014 or year ended April 30, 2014; however, there were shares and warrants issued in a financing that occurred subsequent to the three month period ended July 31, 2014. Refer to “Subsequent Events” for further details.
During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held. All references to share and per share amounts have been restated to reflect this share consolidation.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
RELATED PARTY TRANSACTIONS
Related parties and related party transactions impacting the accompanying condensed interim consolidated financial statements are summarized below and include transactions with the following individuals or entities:
Key management personnel
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors, corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, and Vice Presidents.
Remuneration attributed to key management personnel for the three month periods ended July 31, 2014 and 2013 are summarized as follows:
| |
|
July 31, 2014
|
|
July 31, 2013
|
| |
|
|
|
|
|
Share-based compensation
|
$
|
-
|
$
|
7,948
|
|
Short-term benefits(1)
|
|
6,976
|
|
115,343
|
| |
$
|
6,976
|
$
|
123,291
|
|
(1)
|
include base salaries and directors’ fees, pursuant to contractual employment or consultancy arrangements, management and consulting fees
|
Other related parties
MJM Consulting Corp. is an entity that is owned by the former Executive Chairman, Mr. Mark J. Morabito. The Company had a consulting agreement with Mr. Morabito and MJM Consulting Corp. whereby MJM Consulting Corp. provided management services to the Company. This agreement was terminated by Mr. Morabito as of December 31, 2013 without any termination payment. The management fee was consistent with what a company of similar size and asset base would pay for such services.
King & Bay West Management Corp. (“King & Bay West”) is an entity that is owned by Mr. Mark J. Morabito, the former Executive Chairman, and employs or retains certain directors, officers and consultants of the Company. King & Bay West provides administrative, management, geological, regulatory, tax, corporate development and corporate communications services to the Company. These services are provided to the Company on an as-needed basis and are billed based on the cost or value of the services provided to the Company. The fees are consistent with what King & Bay West charges its clients for similar services. The amount set out in the table below represents amounts paid or accrued to King & Bay West for the services of King & Bay West personnel and for overhead and third party costs incurred by King & Bay West on behalf of the Company.
Transactions entered into with related parties other than key management personnel during the three month periods ended July 31, 2014 and 2013 include the following:
| |
|
July 31, 2014
|
|
July 31, 2013
|
| |
|
|
|
|
|
King & Bay West
|
$
|
36,673
|
$
|
165,411
|
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Amounts due to related parties as at July 31, 2014 included the following:
|
·
|
King & Bay West, controlled by Mr. Morabito - $646,706 (April 30, 2014 - $540,874)
|
|
·
|
MJM Consulting Corp., controlled by Mr. Morabito - $91,875 (April 30, 2014 - $91,875)
|
The amounts due to related parties are non-interest bearing.
Transactions with related parties were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed by the related parties.
Subsequent to the three month period ended July 31, 2014, the Company entered into a debt settlement agreement with King & Bay West and MJM Consulting Corp. Refer to “Subsequent Events” for further details.
GOING CONCERN
The Company is in the process of exploring and developing its exploration and evaluation properties and has not yet determined whether the properties contain ore reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation properties and related deferred exploration costs are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The condensed interim consolidated financial statements of the Company have been prepared using IFRS 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 for the foreseeable future. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.
As at July 31, 2014, the Company had a working capital deficit of $767,824 (April 30, 2014 – $716,619) and a deficit of $107,049,507 (April 30, 2014 – $106,993,193). With the completion of equity financing for gross proceeds of $3 million and concurrent debt restructuring on September 16, 2014, the Company has sufficient funds to meet future estimated annual corporate and general costs and property maintenance costs, as detailed in “Liquidity and Capital Resources”.
At present, the Company has no producing properties and consequently has no current operating income or cash flows. The Company intends to continue to finance its future requirements through a combination of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such further financings or obtain them on favorable terms. These material uncertainties raise substantial doubt on the Company’s ability to continue as a going concern.
CRITICAL ACCOUNTING ESTIMATES
The preparation of the condensed interim consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, shareholders’ equity, and the disclosure of contingent assets and liabilities, as at the date of the financial statements, and expenses for the periods reported. Actual results could differ from those estimates.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Critical Judgements
The preparation of the condensed interim consolidated financial statements requires management to make judgements regarding the going concern of the Company, as previously discussed, as well as the determination of functional currency. The functional currency is the currency of the primary economic environment in which an entity operates, and has been determined for each entity within the Company. The functional currency for the Company and its subsidiaries has been determined to be the Canadian dollar.
Key Sources of Estimation Uncertainty
Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of condensed interim consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates and such differences could be significant.
Significant estimates made by management affecting the condensed interim consolidated financial statements include:
Share-based Payments
Estimating fair value for granted stock options and compensatory warrants requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option or warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them.
Deferred Tax Assets & Liabilities
The estimation of income taxes includes evaluating the recoverability of deferred tax assets and liabilities based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets and liabilities will not be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development and commercialization of mineral reserves. To the extent that management’s assessment of the Company’s ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets or liabilities, and deferred income tax provisions or recoveries could be affected.
Recoverability of Exploration & Evaluation Assets
The Company is in the process of exploring and evaluating its exploration and evaluation assets and has not yet determined whether the properties contain mineral reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to complete the development of those mineral reserves and upon future production or proceeds from the disposition thereof.
Useful Life of Equipment
Equipment is depreciated over its estimated useful life. Estimated useful lives are determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset, the potential for technological obsolescence, and regulations.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
Future Reclamation Provision
The Company assesses its provision for reclamation related to its exploration and evaluation activities at each reporting period or when new material information becomes available. Accounting for reclamation obligations requires management to make estimates of the future costs that will be incurred to complete the reclamation to comply with existing laws and regulations. Actual future costs that will be incurred may differ from those amounts estimated as a result of changes to environmental laws and regulations, timing of future cash flows, changes to future costs, technical advances, and other factors. In addition, the actual work required may prove to be more extensive than estimated because of unexpected geological or other technical factors. The measurement of the present value of the future obligation is dependent on selection of suitable discount rate and the estimate of future cash outflows. Changes to either of these estimates may materially affect the present value calculation of the obligation.
ACCOUNTING POLICIES
The accounting policies followed by the Company are set out in Note 3 to the accompanying condensed interim consolidated financial statements for the three month period ended July 31, 2014.
New Accounting Pronouncement Adopted
The following accounting standard was adopted as of May 1, 2014 and did not have a material impact on the consolidated financial statements of the Company.
Amendments to IAS 32, Financial Instruments: Presentation, were effective for annual periods beginning on or after January 1, 2014 and relate to offsetting financial assets and financial liabilities.
New Accounting Pronouncement
The following accounting pronouncement has been made, but is not yet effective for the Company as at July 31, 2014. The Company is currently evaluating the impact of the amended standards on its consolidated financial statements.
In November 2009 and October 2010, the IASB issued IFRS 9, Financial Instruments (“IFRS 9”), which represents the completion of the first part of a three-part project to replace IAS 39, Financial Instruments: Recognition and Measurement, with a new standard. Per the new standard, an entity choosing to measure a liability at fair value will present the portion of the change in its fair value due to changes in the entity’s own credit risk in the other comprehensive income or loss section of the entity’s statement of comprehensive loss, rather than within profit or loss. Additionally, IFRS 9 includes revised guidance related to the derecognition of financial instruments. IFRS 9 applies to financial statements for annual periods beginning on or after January 1, 2018, with early adoption permitted.
RISK FACTORS
The exploration of mineral deposits involves significant risks and uncertainties, which even a combination of careful evaluation, experience and knowledge may not eliminate. Certain of the more prominent risk factors that may materially affect the Company’s future performance, in addition to those referred to above, are listed hereunder.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
The successful start of mining development and operations into a commercially viable mine cannot be assured.
There are numerous activities that need to be completed in order to successfully commence development and production, including, without limitation: completing a formal feasibility study; optimizing the mine plan; recruiting and training personnel; having available funds to finance construction and development activities; avoiding potential increases in costs; negotiating contracts for the supply of power, shipping and for the sale of commodities; updating, renewing and obtaining, as required, all necessary permits, including, without limitation, environmental permits; and handling any other infrastructure issues. There is no certainty that the Company will be able to successfully complete these activities, since most of these activities require significant lead times, and the Company will be required to manage and advance these activities concurrently in order to begin production. A failure or delay in the completion of any one of these activities may delay production, possibly indefinitely, and will have a material adverse effect on the Company’s business, prospects, financial position, results of operations and cash flows.
As such, there can be no assurance that the Company will be able to complete development of its projects at all, on time or in accordance with any budgets due to, among other things, the delivery and installation of plant and equipment and cost overruns, or that the current personnel, systems, procedures and controls will be adequate to support operations. Failure to successfully complete these events as expected would have a material adverse effect on the Company’s business, prospects, financial position, results of operations and cash flows.
There is no assurance that the Company will ever achieve production or that the Company will ever be profitable if production is achieved.
The Company may experience difficulty attracting and retaining qualified management and technical personnel to meet its needs for growth.
The Company is dependent on the services of key executives and other highly skilled and experienced executives and personnel focused on managing the Company's interests and the advancement of projects and on identifying new opportunities for growth and funding. Due to the Company’s relatively small size, the loss of these persons or its inability to attract and retain additional highly skilled employees required for the development of the Company’s activities may have a material adverse effect on its business or future operations.
Titles and other rights to the Company’s projects cannot be guaranteed and may be subject to prior unregistered agreements, transfers or claims and other defects.
The Company cannot guarantee that title to its projects will not be challenged. The Company may not have, or may not be able to obtain, all necessary surface rights to develop its projects. Title insurance generally is not available for mineral properties, and its ability to ensure that we have obtained secure claim to individual mineral properties or mining concessions may be severely constrained. The Company’s projects may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. The Company has not conducted surveys of all of the claims in which it holds direct or indirect interests. A successful challenge to the precise area and location of these claims could result in the Company being unable to operate on all or part of its projects as permitted or being unable to enforce our rights with respect to all or part of the Company’s projects.
The Company needs to enter into contracts with external service and utility providers.
Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. In order to develop a mine, the Company will need to negotiate and conclude various agreements with external service and utility providers for shipping and power access, and these are important determinants that affect capital and operating costs. The inability to conclude any such agreements could have a material adverse effect on the Company’s financial position, results of operations and cash flows and render the development of a mine unviable.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
The Company's activities are subject to environmental laws and regulations that may increase the Company's costs of doing business and restrict the Company’s operations.
All of the Company’s exploration, potential development and production activities are subject to regulation by governmental agencies under various environmental laws, including with respect to air emissions, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Compliance with environmental laws and regulations may require significant capital outlays on behalf of the Company and may cause material changes or delays in our intended activities. There can be no assurance that future changes in environmental regulations will not adversely affect the Company’s business, and it is possible that future changes in these laws or regulations could have a significant adverse impact on some portion of its business, causing it to re-evaluate those activities at that time. Failure to comply with applicable environmental laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulator or judicial authorities, causing operations to cease or to be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.
The Company has a history of losses and expects to incur losses for the foreseeable future.
The Company has incurred losses since its inception and expects to incur losses for the foreseeable future. The Company expects to continue to incur losses unless and until such time as a project enters into commercial production and generates sufficient revenues to fund continuing operations. The development of the Company’s projects will require the commitment of substantial financial resources. The amount and timing of expenditures will depend on a number of factors, including the progress of ongoing exploration, evaluation and development, the results of consultant analysis and recommendations, the rate at which operating losses are incurred, the execution of any agreements with strategic partners and our acquisition of additional properties. Some of these factors are beyond the Company’s control. There can be no assurance that the Company will ever achieve profitability.
The Company’s securities are subject to price volatility.
In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations that have not been necessarily related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that fluctuations in the Company’s share price will not occur. It may be anticipated that any quoted market for our common shares will be subject to market trends generally, notwithstanding any potential success in creating revenues, cash flows or earnings. The value of the Company’s common shares will be affected by such volatility.
FINANCIAL INSTRUMENTS
The Company’s financial assets and liabilities are recorded and measured as follows:
|
Asset or Liability
|
Category
|
Measurement
|
|
Cash and cash equivalents
|
FVTPL
|
Fair value
|
|
Marketable securities
|
FVTPL
|
Fair value
|
|
Receivables
|
Loans and receivables
|
Amortized cost
|
|
Reclamation bonds
|
Held to maturity
|
Amortized cost
|
|
Payables and accrued liabilities
|
Other liabilities
|
Amortized cost
|
|
Due to related parties
|
Other liabilities
|
Amortized cost
|
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
The fair value of the Company’s receivables, payables and accrued liabilities, and due to related parties approximate carrying value, due to their short-term nature. The Company’s cash and cash equivalents and marketable securities are measured at fair value under the fair value hierarchy based on level one quoted prices in active markets for identical assets or liabilities. The Company’s other financial instruments, being reclamation bonds, are measured at amortized cost.
The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk and price risk.
Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.
The Company is subject to credit risk on its cash and cash equivalents, and receivables. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company has no investments in asset-backed commercial paper. The Company’s receivables consist mainly of Goods and Services Tax receivable due from the Government of Canada. The Company does not believe it is exposed to significant credit risk.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company manages liquidity risk through its capital management as outlined in Note 12 of the condensed interim consolidated financial statements. As a result of financing and debt restructuring completed subsequent to the three month period ended July 31, 2014, management believes the Company has sufficient funds to support ongoing operating expenditures and meet its liabilities as they fall due.
Market Risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, commodity and equity prices, and foreign exchange rates.
(a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The risk that the Company will realize a loss as a result of a decline in the fair value of any short-term investments included in cash and cash equivalents is minimal because these investments generally have a fixed yield rate.
(b) Price risk
The Company is exposed to price risk with respect to commodity prices, particularly uranium, and equity prices, since the Company possesses investments in publicly traded securities. The Company closely monitors those prices to determine the appropriate course of action to be taken by the Company. However, there can be no assurance that the Company can exit these positions if required, resulting in proceeds approximating the carrying value of these securities.
Jet Metal Corp.
Management Discussion & Analysis
For the three month period ended July 31, 2014
Date Prepared: September 26, 2014
(c) Currency risk
The Company’s expenditures are predominantly in Canadian dollars, and any future equity raised is expected to be predominantly in Canadian dollars. As at July 31, 2014, the Company has accounts payable denominated in US dollars of US$57,654, cash of US$1,097 and reclamation bonds of US$25,800. A 10% change in the Canadian dollar versus the US dollar would give rise to a gain/loss of approximately $3,349.
OFF BALANCE SHEET ARRANGEMENTS
The Company has not entered into any off balance sheet financing arrangements.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
There were no changes in the Company’s internal controls over financial reporting during the three month period ended July 31, 2014 that have affected, or which are reasonably likely to materially affect, its internal control over financial reporting.
SUBSEQUENT EVENTS
The following reportable events occurred subsequent to the three month period ended July 31, 2014:
|
·
|
On August 26, 2014, 1,000 stock options with an exercise price of $3.80 were forfeited.
|
|
·
|
On September 16, 2014, the Company closed a non-brokered private placement and issued 20,000,000 units at a price of $0.15 per unit for gross proceeds of $3,000,000. Each unit consists of one common share and one common share purchase warrant. Each common share purchase warrant is exercisable to acquire one common share for a period of 5 years at an exercise price of $0.25. The Company paid cash commission to certain arm’s length parties in the amount of $6,450.
|
|
·
|
On September 16, 2014, the Company entered into a debt settlement agreement with King & Bay West and MJM Consulting Corp. (the “Debt Settlement Agreement”). Under the terms of the Debt Settlement Agreement, King & Bay West agreed to forgive $246,063 payable by the Company, restructure $246,063 payable by the Company into a non-bearing two year term loan, and convert $154,187 payable by the Company into 1,027,916 fully paid and non-assessable common shares of the Company at a deemed price of $0.15 per common share. In addition, MJM Consulting Corp. agreed to convert $91,875 payable by the Company into 612,500 fully paid and non-assessable common shares of the Company at a deemed price of $0.15 per common share. The common shares for debt transactions remain subject to the approval of the TSX Venture Exchange.
|
ADDITIONAL INFORMATION
Additional information relating to the Company, including the Company’s Annual Report on Form 20-F, is on SEDAR at www.sedar.com.
APPROVAL
The Board of Directors of the Company has approved the disclosures contained in this MD&A.
Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate
I, Jim Crawford, Chief Executive Officer of Jet Metal Corp. certify the following:
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Jet Metal Corp. (the “issuer”) for the interim period ended July 31, 2014.
|
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
Date: September 29, 2014
“Jim Crawford”
_______________________
Jim Crawford
Chief Executive Officer
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
|
i)
|
controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
|
ii)
|
a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate
I, Kate-Lynn Genzel, Chief Financial Officer of Jet Metal Corp. certify the following:
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Jet Metal Corp. (the “issuer”) for the interim period ended July 31, 2014.
|
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
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3.
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Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
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Date: September 29, 2014
“Kate-Lynn Genzel”
_______________________
Kate-Lynn Genzel
Chief Financial Officer
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
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i)
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controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
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ii)
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a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
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The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
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